Doctors and hospitals look for ways to cut costs, improve quality

The "patient-centered" practices movement is growing in popularity, the New York Times reports. Primary care physicians in the practices "spend more time with patients, emphasize prevention and education" to keep patients healthy and "can handle many medical problems without referrals to specialists." Often, "this kind of care can reduce a patient's medical bills."

Dr. Jose Batlle, a doctor in the Bronx, for example, gives patients his cell phone number and helps his patients cut down on the number of prescription drugs that have him prescribed to them by multiple specialists. "I prefer to keep them healthy than treat them when they are sick," Batlle says.

"To make personalized care possible in an era when compensation is often tied to the number of patients they see, doctors use technology to streamline processes and reduce administrative costs," including online appointment scheduling, electronic medical records and "virtual visits" by phone or email. Dr. Lili Sacks, a "primary care doctor in Seattle, charges patients a "direct monthly fee" based on age and refuses to take insurance. "But she advises patients to obtain insurance plans to cover large, unexpected health costs like those to treat cancer or a heart attack." She it's like "having a car and paying for your own oil changes and tuneups, but getting insurance in case you need a big repair." Dr. John H. Wasson, a researcher at Dartmouth Medical School, says "that doctors who focus on reducing their costs can see fewer patients without sacrificing income"

The Times story includes a caution: "While the patient-centered movement is growing, the nation may not be able to afford to have all its primary care doctors reduce the number of patients they see. Across the country, primary care physicians are in short supply, in part because average salaries for family practitioners are the lowest of any medical specialty" (Weed, 6/6).

Meanwhile, while small practices are growing, some hospitals are "slashing labor costs and taking other measures" to stay solvent during difficult economic times, the Miami Herald reports. "Nine in 10 hospitals have made cutbacks," according to a trends specialist with the American Hospital Association. "The biggest cuts have been in administrative expenses, but almost half of the hospitals have reduced staff and one in five has cut services." But for-profit hospital stocks, which "have been popular with investors recently," are up 70% in the last three months, as hospitals have reduced the number of "overtime and expensive contract workers" (Dorschner, 6/6).

CBS News visited Virginia Mason hospital in Seattle and compares its success in reducing costs to  "on an unlikely model – the way Toyota builds cars." CEO Dr. Gary Kaplan "takes staff to Toyota's factories in Japan every year and practices what the car maker preaches. Just as the automaker's executives spend part of each day on the factory floor, Kaplan tours the hospital daily looking for problems and solutions. Everyone is encouraged to look for changes to make work more efficient." Then, "at a meeting each week the staff reviews the results of what Toyota calls 'Rapid Process Improvement Workshops,' looking for ways to increase efficiency." The process yielded "dramatic changes" in the hospital, "where treatment time was cut from an average of 66 days to 12" (Blackstone, 6/6).