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Wed Mar 16, 2016, 07:19 AM

Health care: Asymmetric Thinking about Return on Investment


We’ve attended many conferences about providing health care to patients with high medical and social needs — people with chronic illnesses who are frequently readmitted to the hospital. It seems as if every presentation refers to “return on investment” (ROI), which is invariably presented as a constraint — as in “Our program kept people out of the hospital, but we just couldn’t get the ROI to work.” Heads nod understandingly, and then participants move on to other topics.

At conferences about providing care for patients with cancer or other acute illnesses, by contrast, we almost never hear the term ROI. Instead, people talk about clinical gains, using understandable and patient-centered terms like “survival.” Though high drug prices are sometimes mentioned, no one ever says the ROI is prohibitive. No one mentions ROI at all.

There is no obvious reason why ROI is more relevant to some clinical situations than to others. So why do we focus so heavily on ROI when the topic is chronic illness but rarely mention it when the topic is cancer? A huge amount of the cancer care we deliver provides such small personal and social gains that, were those gains monetized, the endeavor’s ROI would be deeply negative. And yet we ask,

“What’s the ROI of that program that keeps chronically ill patients out of the hospital?” but not “What’s the ROI of treating advanced lung cancer?”

Comment by Don McCanne of PNHP:
The concept of return on investment (ROI) in health care may represent what is wrong with our system that causes it to be so expensive yet often mediocre by international standards.

Most health care professionals and institutions are largely fixated on their efforts to provide the best patient care they can with the given resources. But much of the medical-industrial complex is fixated on ROI, as is obvious by the examples of the private, for-profit insurers and the pharmaceutical firms with their egregiously high profits.

The authors of this article discuss trying to take care of cancer patients in which ROI standards are not considered since “monetized” gains for cancer patients would be “deeply negative.” They contrast that with readmissions of patients with chronic illnesses in which the ROI is important based on the penalties assessed for failing to prevent the readmissions.

On the one hand, the professionals and institutions are simply paid for providing appropriate care.

On the other, attempting to provide appropriate care is complicated by a necessity to consider the potential of a negative ROI because of financial considerations - penalties - which have nothing to do with the actual medical care being provided.

Instead of ROI driving motivation, the authors suggest that we reframe health care financing as “positive payments for noble work rather than punitive revenue reductions.”

They conclude, “As U.S. health care financing begins again to shift risks to hospitals and physicians through bundled payments or readmission penalties, the financing of the care for our most challenging patients might be better shifted in the other direction.”

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