health care is a systems engineering problem

A new report by the  President’s Council of Advisors on Science and Technology (PCAST) is all about how health care needs systems engineering solutions [Press release here]. The report entitled Better Health Care and Lower Costs: Accelerating Improvement through Systems Engineering outlines the various ways in which industrial and systems engineering can help. Several OR methods and tools are listed in the report, including operations management, queuing theory, simulation, supply-chain management.

Rising healthcare costs are the motivation for this report. The United States spends more (much more!) for healthcare than any other country.

Healthcare costs by country, courtesy of the WSJ. “In 2011, the most recent year in which most of the countries reported data, the U.S. spent 17.7% of its GDP on health care, whereas none of the other countries tracked by the OECD reported more than 11.9%. And there’s a debate about just how well the American health-care system works. As the Journal reported recently, Americans are living longer but not necessarily healthier .”

Healthcare costs are expensive and rising in every country, but they are rising in the US much faster than any other country on the planet. It is unsustainable. If we forecast healthcare costs to our children and grandchildren, we can easily imagine a future where we spend so much on healthcare that we cannot sustain other important programs that benefit society (like education!).

Growth in healthcare costs is higher in the US than in other countries.

The report addresses the healthcare cost problem:

This report comes at a critical time for the United States. Health-care costs now approach a fifth of the U.S. economy, yet a significant portion of those costs is reportedly “unnecessary” and does not lead to better health or quality of care. Millions more Americans now have health insurance and therefore access to the health care system as a result of the Affordable Care Act (ACA). With expanded access placing greater demands on the health-care system, strategic measures must be taken not only to increase efficiency, but also to improve the quality and affordability of care.

Other industries have used a range of systems-engineering approaches to reduce waste and increase reliability, and health care could benefit from adopting some of these approaches. As in those other industries, systems engineering has often produced dramatically positive results in the small number of health-care organizations that have implemented such concepts. These efforts have transformed health care at a small scale, such as improving the efficiency of a hospital pharmacy, and at much larger scales, such as coordinating operations across an entire hospital system or across a community. Systems tools and methods, moreover, can be used to ensure that care is reliably safe, to eliminate inefficient processes that do not improve care quality or people’s health, and to ensure that health care is centered on patients and their families. Notwithstanding the instances in which these methods and techniques have been applied successfully, they remain underutilized throughout the broader system.

It makes 7 main systems engineering recommendations:

• Recommendation 1: Accelerate the alignment of payment incentives and reported information with better outcomes for individuals and populations.
• Recommendation 2: Accelerate efforts to develop the Nation’s health-data infrastructure.
• Recommendation 3: Provide national leadership in systems engineering by increasing the supply of data available to benchmark performance, understand a community’s health, and examine broader regional or national trends.
• Recommendation 4: Increase technical assistance (for a defined period—3-5 years) to health-care professionals and communities in applying systems approaches.
• Recommendation 5: Support efforts to engage communities in systematic healthcare improvement.
• Recommendation 6: Establish awards, challenges, and prizes to promote the use of systems methods and tools in health care.
• Recommendation 7: Build competencies and workforce for redesigning health care.