On his blog, Alyn Ford proposes an interesting calculation that could save healthcare billions of dollars.

Wait a minute....!!! That's all we're going to save?

Last week I spent a few days at the World Healthcare Congress just outside D.C..

Mercy St. Vincent Medical Center, located in Toledo and part of the Mercy Health and Catholic Health Partners organizations presented some very  astounding outcomes  they have experienced over the past two years.  In round numbers they reduced their length of stay from 5.2 to 3.8 days and at the same time reduced the operational costs to run their organization by a total of $48,000,000.  They were also able to claim a 75% reduction in preventable harm to their patient population. 

St. Vincent's is a average to large tertiary hospital...  So I started thinking to myself..., what if the same outcomes were achievable throughout the United States?...

For the sake of fairness, let's assume only half the savings are reasonably achievable by the average size hospital.  That's $12,000,000 per year.  Let's assume also that only half the hospitals in the nation achieve the same conservative amount of annual savings.  That's roughly 2,750 hospitals.

If you do the math, that's an annual savings of $33 billion.  If you follow the same logic the congressional budget office uses to calculate savings, this number must be extrapolated over 10 years.  So the projected savings if half the hospitals in the US achieve only half of what Mercy St. Vincent's experienced..., the savings would be $330 billion.

The congressional budget office's projection for the savings from the Accountable Care Organization strategy would be  $5.3 billion.

Hmmmm...,  $330 billion or $5.3 billion?  The projected savings from the accountable care strategy seems paltry.  It's only $530 million annually.  How can this level of savings be a solution to a trillion dollar problem.  It's less than 5/100 th's of the total issue.  It's kind of like living in a house that is two times what you can afford and thinking if you stop buying a coffee on Friday's, your cashflow problem will correct itself.

We need to change the debate....  We need to be talking about efficiencies that create at least $500 billion in annual savings...., and we need a bunch of these ideas.

Einstein said, "You can't expect the thinking that created the problem to also create a solution to the problem..." (paraphrased a little).  We have to get way outside the box...

(Disclaimer - I am assuming averages here for the number of hospitals when it comes to size.  Some would be larger..., some smaller than St. Vincent's.  Some would save more.  Some would save less.  The average assumptions work for the sake of argument.)