Healthcare, Toyota style

July 5, 2007

Free Market Foundation

Adoption of new technology is a major driving force behind recent U.S. increases in health care costs nationwide. As a result, many in the industry are looking to successful non-health businesses such as Toyota Motor Corporation to show how they can successfully achieve high value for their dollar, says Tom Emswiler, senior programme associate at the New America Foundation.

A vital Toyota principle is “use only reliable, thoroughly tested technology that serves your people and processes.” One way to follow this vision in health care would be for Congress and the president to establish an independently managed comparative effectiveness institute, says Emswiler:

The institute would help clinicians, insurers and patients compare the likely impact of various treatments by funding and organising clinical effectiveness research examining what treatments work best, for whom, when.

The institute would fund new research and organise current information so that it could be easily accessed; it would be transparent and readily available to the public.

Further:

The institute would not make coverage or treatment decisions; those would continue to be made by insurers and clinicians, respectively, who would use this new information as a tool.

Insurers could choose to further adopt reference pricing; for example, if two drugs or treatments were to have the same effectiveness, the patient would be forced to pick up the tab if they chose the more expensive route.

The patient receives appropriate care either way and the lower costs to the insurer result in more affordable coverage for everyone else.

A comparative effectiveness institute is the best way to increase health care quality and at the same time rein in cost, says Emswiler. If we value our health more than our automobiles, should we be satisfied expecting more value per dollar from Toyota than from our doctor?

Source: Tom Emswiler, Health care, Toyota style, Washington Post, June 15, 2007.

For text: http://www.washingtonpost.com/wp-dyn/content/article/2007/06/14/AR2007061401808.html

For more on Health Issues: http://www.ncpa.org/sub/dpd/index.php?Article_Category=16

FMF Policy Bulletin/ 26 June 2007