How hospitals make decisions

From operations research professor Michael Carter on The Science of Better:

If I went into a company, a private company, and said  “I can save you a million dollars day,” the CEO would implement it tomorrow. If I went into a hospital and said “I can save you a million dollars a day,” they’d they have to think about it, because the CEO would have to convince people this was a good idea. It would have to be good for the doctors, good for the nurses, good for the bean counters, good for the patients, good for patient quality, good for media. … All problems become multi-criteria problems. The good new is that things are so bad in health care we can always do that.

That matches my experience from when I used to work for a hospital.

Carter’s last line may not be clear in the excerpt above. In context, he’s saying that health care is so inefficient that an operations research consultant can always find ways to improve things, even though decisions have to satisfy numerous constituencies.

Nicholas Carr said something similar in his book Does IT Matter? Carr argues for most of the book that although information technology is important, it has become a given, like electricity. Then near the end of his book, he says that because health care IT is so far behind, his remarks don’t apply there.

10 thoughts on “How hospitals make decisions

  1. I’ve heard that healthcare OR is a hot area right now, in academic research and otherwise. It’s too bad that you provide a good reason for why this is.

  2. I imagine the situation is a little different in a civilized country, where no hospitals are for-profit businesses.

  3. I doubt that. The hospital I worked for was a non-profit, government-owned institution and I saw everything Carter talked about. And for-profit hospitals are so regulated and dependent on (indirect) government funding that they’re hardly different from non-profit hospitals.

  4. I’m not sure the intent of the comment but the premise is flawed and the multi-criteria aren’t a bad idea.

    Lots of businesses will not elect to save money if it compromises the quality of their product, the ability to innovate in their product, compromises the integrity of the company in the media, etc. So I take issue with the initial premise.

    Furthermore, thank goodness hospitals care about more than saving money. I’m certainly not arguing that all of their priorities are in the best orders or that they’re efficient. But I am actually glad that what you described occurs because it’s is extraordinarily unlikely that any consultant for a hospital will be able to take into account all of the very important factors that matter.

  5. In addition to the polite criteria Carter listed, there are also egos to be stroked, turfs to be protected, careers to advance, philanthropists to woo, etc.

    These things are not unique to hospitals. But hospitals are more political than corporations. The head of a hospital does not have the same authority as the head of a company.

  6. I think you are *far* too idealistic about private companies. You are assuming the CEO both understands the notion presented, and has the authority AND will to take action. This is very often not true.

    Worse, CEOs as often take action when unclear on the problem.

  7. There are always patients out there because there are hospitals. Medical doctors are the dirtiest businessmen, ever.

Leave a Reply

Your email address will not be published. Required fields are marked *