McDonald’s medicine

February 5, 2011

Americans want instant gratification – that is true for fast food as much as it is for healthcare. Consequently, the traditional model of general practitioner in which you make appointments and then (a week later – if you are lucky) see a doctor is getting increasingly challenged. Patients have found the McDonald’s of healthcare. It is called the ER. You go there when you want and they will get you what you want. One stop shopping for all your healthcare needs.
In the following article, two ER doctors describe their view of the problem – and make us think if we have to invent the way we deliver care:,8599,2044392,00.html


Vaccines – producing more by starting sooner

October 8, 2010

The annual flu season provides many interesting lessons and observations for operations management. It was reported today in the WSJ (10/8/2010) that Novartis has teamed up with Synthetic Genomics to develop a process that will allow them to reduce the lead time to produce flu vaccines. The traditional process takes about 6 months from the time the WHO identifies the flu strains for the coming season to the time the flu vaccine hits the market.  “If Novartis’s venture is successful, the time savings would be dramatic, analysts say”.

The idea behind the new technology is to do some pre-processing. Novartis will “develop a bank of synthetically constructed seed viruses ready to go into production as soon as the WHO identifies the flu strains”. In short, they will artificially create a bunch of potential viruses in the hope that one of them will turn out to be the useful one for production.

What will this extra time give them? The biggest advantage seems to be additional capacity. If a facility can make X doses per week, then adding 4 weeks to the schedule means 4x more doses for the season, pretty much with the same overhead as before.

It is also important to note what this doesn’t give them – they still face forecast uncertainty and this extra time doesn’t seem to help them on that dimension. Nevertheless, the extra capacity lowers the cost to produce each dose, which makes forecast uncertainty less costly (the lower the cost, holding the selling price fixed, the less costly are demand/supply mismatches on a per unit basis).

Medical errors that shouldn’t happen

August 21, 2010

Summer activities have kept me away from blogging and I have a backlog of potential posts, but this one motivated me to finally break my inaction inertia:

The article is about medical errors in which patients are severely injured (or die) when the wrong tube is connected to them. For example, a blood pressure tube (which carries pressurized air) is accidentally attached to an intravenous line. There are two points to emphasize: (1) like many challenging quality problems, these errors are rare but not rare enough, especially if you are a victim of one and (2) the solution seems painfully obviously and surprisingly hard to implement.  Consider the frequency of this error. Nurses know that switching tubes can caused big problems and so they are very careful nearly all of the time. But given the number of patients each day that are at risk of a tube mismatch, errors will occur even if six-sigma quality is in place. The obvious solution is to eliminate this potential error by making the tubes incompatible – if the blood pressure tube can’t fit into the intravenous line, then even if the nurse attempts this connection, the error will be avoided.  The problem with this solution is that it requires coordination across numerous government agencies (within the U.S. and across countries) and many more companies. Nevertheless, failure to do something to do something seems negligent at best.

The article mentions another area in which the problem apparently has been solved – fuel filling stations. The idea is that you shouldn’t be able to put a gasoline nozzle into a diesel car and vice-versa. Of course, the number of fuels is much smaller than the number of tubes that can be stuck into a body, so you would think that at least this problem has been solved. But from personal experience I know that it was not solved (at least about 5 years ago) because I managed to fill my rental mini-van in France with 120 euros of petrol only to discover about 2 kilometers down the road that I had rented a diesel mini-van. (On a positive note, the white cloud that appeared behind our vehicle did amuse the kids in the car.) Nobody was injured but the engine needed (I was told) very costly repairs. Avis didn’t make a lot of money on that rental and I wonder why they don’t train their employees to mention to their customers that they really should pay attention to the fact that they are renting a diesel mini-van and not a gasoline mini-van. It is simply an important “safety tip”, like “don’t cross the beams” (for those of you who remember Ghostbusters).

Fixing health care – payment schemes and standardization

May 1, 2010

There is a lot of talk, as there should be, about fixing health care. Two articles in the NY Times this week discuss this – one describes a bad idea and the other a good one.

The first, (NY Times 4/29/2010) reports on a article just published in the New England Journal of Medicine on the work primary care physicians do.  First, they describe their pay …

Family doctors are paid mainly for each visit by patients to their offices, typically about $70 a visit. In the practice in Philadelphia covered by the study, each full-time doctor had an average of 18 patient visits a day.

Next they describe the work they do…

But each doctor also made 24 telephone calls a day to patients, specialists and others. And every day, each doctor wrote 12 drug prescriptions, read 20 laboratory reports, examined 14 consultation reports from specialists, reviewed 11 X-ray and other imaging reports, and wrote and sent 17 e-mail messages interpreting test results, consulting with other doctors or advising patients.

And now the interesting part…

The study, medical experts say, also suggests the direction of changes needed if family practices are to flourish and more effectively improve the health of patients and contain costs. It starts, they say, with compensating doctors for work other than patient visits.

Along those lines, from the article itself …

our internal compensation system now recognizes telephone calls and e-mails as part of our productivity metric.

In other words, the argument is (i) to care for patients physicians must do much more than just visit with them, (ii) these non-compensated tasks are providing a burden and so (iii) we should consider paying them for those tasks …

At a time when the primary care system is collapsing and U.S. medical-school graduates are avoiding the field, it is urgent that we understand the actual work of primary care and find ways to support it. Our snapshot reveals both the magnitude of the challenge and the need for radical change in practice design and payment structure.

I realize that we need many ideas to fix health care, but this one doesn’t hold water. It may be unfair to characterize the idea as “payment for emails” but that is the spirit of their pitch. As an educator I can sympathize with their woes  – nobody pays me extra to email with students! What a wonderful world that would be… If I were paid to email students, then I could figure out how to write a macro so that my computer sends out emails every five minutes to every student. Cha-Ching! But that is my point – if you can’t monitor quality, you shouldn’t pay for a tasks.  Unless we have people checking that the physicians are sending out legit emails and phone calls, it  doesn’t work to pay them for those tasks. So in the end, if the goal is to make primary care more attractive to medical students, then paying more than $70 per visit may be the better approach. But that just looks like paying physicians more, and so nobody will write that up in the NY Times.

The second article (NY Times 4/30/2010) discusses the aggravation physicians deal with when trying to figure out how to get paid for the care they provide their patients. The problem is that patients have different health care insurers and each insurer has its own complicated policies for what will and what won’t be covered. This leads to lots of confusion and frustration:

With each plan permutation, it becomes more and more difficult for a doctor to know how to provide care that will work with a patient’s particular coverage. One of the doctors who was surveyed in the Health Affairs study wrote: “It’s like going to the gas station to gas up your car and having to change the nozzle on the gas pump because you have a Toyota and the pump was made to fit Fords.”

So why don’t we have gas pumps dedicated to specific vehicles? Because no vehicle manufacturer could gain a competitive advantage by doing so. Whatever benefit of exclusivity would be small compared to the inconvenience it would impose on consumers. But health insurance companies seem to think differently. They appear to view their tangled mess of quasi-infinitely varying coverage plans as a source of competitive advantage. Nevertheless, it seems substantial value would be created by forming a standardized delivery means for these plans. McDonald’s and many other firms understand the value of process standardization and it would be interesting to explore whether this idea could benefit health care. It is disappointing that this idea seems to be absent from the national debate on health care reform

H1N1 Production and Forecasts

November 9, 2009

eggsThe following table provides a summary of the H1N1 vaccine forecasts and actual availability:

Date Forecast (million doses) Actual
7/30/09 120 by October.  
9/12/09 50 by Oct. 15,   
9/26/09 40  by mid October  
10/17/09 28-30 by the end of October. 11.4
10/26/09 30 by the end of October  
10/28/09   23.2

Why the error in their forecasts? My favorite quote (NY Times Oct 25, 2009) is

Dr. Thomas R. Frieden, the director of the Centers for Disease Control and Prevention, “We really thought that having five different manufacturers would buy us some insurance, that they wouldn’t all have problems.”

The implicit assumption in this quote is that yields would be independent across flu manufacturers.  This may be true if yield primarily depends on manufacturing choices that could differ across the 5 manufacturers. But the manufacturers all used the same seed stock (the virus injected into eggs that is suppose to replicate within the eggs to make the vaccine).  Consequently, if the seed stock isn’t very good, it doesn’t matter if you have one manufacturer or 100! If you are going to diversity your risk by choosing multiple suppliers, then you should make sure that their yields are uncorrelated. (On a related point, there was no shortage of nasal spray vaccine, because they had a much higher yield … and used a different seed stock.)

There are some other reasons for the errors.  In July the forecast was based on an assumption of a high yield. However, the actual yield would not be known until the first batches were completed in August. Therefore, it seemed premature to put any faith in the July forecast without better information.

So why were the September forecasts wrong? The government basically asked the manufacturers’ for their forecasts, and not surprisingly, they got optimistic numbers. I am not saying the manufacturers lied. Instead, they probably thought it was possible that they could improve yields quickly enough to make the numbers. For example Sanofi Pasteur’s initial yield was 1.5 doses per egg and they did manage to increase it to 3 doses per egg.

Some of the shortfall was due to shortages in parts. For example, MedImmune, maker of the nasal vaccine, had more vaccine than it could put into nasal sprayers (their yield was apparently 5 times higher than expected), despite having their supplier of nasal sprayers work 3 shifts, 7 days a week.

Finally, one of the manufacturers, from Australia, satisfied Australian demand first.

The lesson from all of this, dare I say, is “don’t count your chickens before they have hatched”! Production yields are uncertain, and the government could have benefited from learning more about what determines those yields, when information would be learned about those yields and relying less on manufacturers’ forecasts.

Capacity shortages of H1N1 vaccine

October 22, 2009

Have you been able to get your H1N1 vaccine? Probably not – it has been widely reported that there are delays in the distribution of this vaccine. The interesting question is why? Reading a bunch of articles on this topic doesn’t shed a whole lot of light. But one figure jumps out at you – as reported in WSJ (10/19/09 – Delay Undercuts H1N1 Vaccine Campaign), the U.S. government has ordered 251 doses from 5 manufacturers. The current U.S. population is just over 300 million, so they have ordered enough to vaccinate over 80% of us. To put this in perspective, the U.S. normally vaccinates about 100 million. In fact, 114 million dose of seasonal flu was ordered in addition to the 251 million does of H1N1. The two types of vaccines are made with nearly identical manufacturing processes. So that adds up to about 365 million doses of vaccines, which is at least 3 times the typical production volume.

Given that manufacturers had to more than triple their capacity, it is not surprising at all that they are behind schedule in production.  Making matters worse, the quick ramp up may have contributed to the their lower-than-hoped-for yields. 

So instead of complaining that you can’t get an H1N1 shot, maybe you should be thankful that they have been able to produce as much as they have. Given the number of deaths among children, let’s hope better news will come soon.

Quality, Incentives and Healthcare

October 5, 2008

The opportunities for improved quality in healthcare are enormous.  Now, there is more incentive for the industry to take quality seriously – Medicare will stop paying for 10 conditions that it deems to be “reasonably preventable”.  For example, Medicare will no longer pay for the treatment of patients who received incompatible blood transfusions. No doubt, some of the techniques that have been used to improve quality on the factory floor will also be useful in the hospital – reporting defects so that attention can be focused on them, changing labels on sensitive medications so that additional care is given to them, asking all attending a surgery to count sponges and instruments to confirm that no unwanted objects have been left in the patient, etc. And, additional quality improvement techniques may be developed that are tailored just for healthcare.

New York Times, Sep 30, 2008: