Improving Productivity In The Health Care Sector

Sarah Kliff points to this article from the New England Journal of Medicine which argues that the health care sector is growing faster than any other because health care workers are less productive than laborers in most parts of the economy:

Part of the problem is the outdated health care administrative system, its scant use of information technology and fee-for-service reimbursement structure that encourages unnecessary care. As the article notes, if the health care sector is to improve its labor productivity, “we will need to redesign the care delivery model much more fundamentally to use a different quantity and mix of workers engaging in a much higher value set of activities.” The health system will have to limit “time-wasting, low-value activities; increasing our use of technology, data, evidence, and teams; increasing standardization to avoid rework; and relying on evidence-based personalized care to avert complications.”

The Affordable Care Act invests in all of these areas through payment innovations, comparative effectiveness research, and health information technologies. In fact, economists estimate that health care system modernization could help lower administrative costs and consequently reduce the annual growth in health care spending. It’s still unclear if these efficiencies will work in a sector that’s as labor-intensive as health care or if policy makers and providers will adopt the changes to ensure that we create the right kind of jobs to help improve inefficiency and reduce the nation’s health care costs.