Low Cost, High Quality, Accessible Physician-Directed Health Care Delivery Models

The American health care industry is filled with opportunities to establish focused factories ranging from those that perform only one procedure, like cataract surgery, to those that provide the full panoply of care for a disease like cancer.

Regina Herzlinger, Market-Driven Health Care (Addison-Wesley Publishing, 1997)

The main problems facing health care and the reason for being of health reform are high costs, uneven quality, and limited access.

Is there any way of overcoming obstacles to good care in consumer-driven democracy other than government-mandated care?

Yes, said Regina Herzlinger, professor at Harvard Business School in her 1997 book Market-Driven Health Care.

Her answer was two-fold: value-hungry consumers and independent physician entrepreneurs satisfying that hunger.

The answer, she explained, resided in health-care “focused factories”, an off-putting term that appeared in a Harvard Business Review in 1974. The term meant focusing on a limited product, consumers, and efficiency throughout an entire organization.

In health care, a focused factory consists of groups of physicians working together to provide a clear, limited objective - the treatment of a specific health care problem or set of problems.

These problems might be surgical: cataracts, hernias, joint repairs, minor surgeries in ambulatory patients. They might be medical: diabetes, asthma, cancer, congestive heart failure.

Whatever the problem, the solution rests on these premises:

• Simplicity and repetition breeds competence.

• The treatment team is organized around patients’ every need and addresses every detail catering to that need.

Focused factories are proliferating around the U.S. They “focus” on the health care consumer. They are a factory in the sense they are efficient, safe, responsive, uniform, and fast in delivering a high quality product.

The “factories” often focus on a procedure, such as cataract surgery. They are comprehensive, anticipating and responding to the patients’ every need, being picked up and delivered to the factory, meticulously shepherding them through every aspect of the procedure, following up through patient phone calls and visits, and working hand-in-hand with the ophthalmologist-owners of the factory.

According to Herzlinger, “The driving force (behind focused factories) is a generation of consumers who are empowered, pragmatic, narcissistic and manipulative. They're the ones who have changed the rest of the economy and they're very interested in health care. There's no reason for any rational person to believe that they're going to say, ‘Oh no, leave health care in the hands of these people who are going to tell me what to do.’ Today's consumers simply won't accept that. The second driving force is technology, which has already vastly increased the quality and lowered the cost of health care.”

I believe there will be a third driving force: consumer-demands for direct, personal, accessible, cost-efficient health care without third-parties. Third party supervision, whether governmental or insurer administered, is costly, accounting for 40% to 50% of overhead in the typical physician’s office, and it is distracting, leading to 20% of physician time spend on paperwork rather than time with patients. These expenses and distractions have to end. One solution may be direct primary and surgical care, wherein costs are lower and care is more personal and immediate and known in advance.