In a blog post for Harvard Business Review, two professors argue that cutting the United States’ healthcare costs in half is not a preposterous notion. “After all, it’s been done in other industries, sometimes in less time,” the authors noted, mentioning computers and consumer electronics.
Auto manufacturing used to require a great amount of skill, an amount few people had. Then Henry Ford automated the process, bringing the price of cars from $2,000 in 1908 to $260 in 1925, according to the post. He didn’t lower the quality of the cars. Instead, he introduced mass production in a “focused factory” that involved interchangeable parts, specialization and, of course, the assembly line.
“Ford shifted the auto industry from craft to mass production, and the Japanese later took it a step further to lean production,” the blog authors wrote. “At each step, costs fell sharply yet quality improved.”
The professors argue that too much of healthcare is stuck in the pre-Ford, or specialized craft, mode. As the authors said, the healthcare industry is producing “a Rolls Royce” for each patient. Automation is a reasonable approach to certain types of care, namely for chronic conditions and end-of-life care.
“Why can’t U.S. healthcare go vastly [further] in streamlining operations, standardizing protocols and rationalizing facilities to create focused hospitals for heart surgery, hernia repairs, cataract surgery, hip and knee replacements, organ transplants, or even cancer treatment — anything that’s not an emergency procedure and can be scheduled in advance? the authors wrote.
They also compared healthcare costs in the U.S. to those in India. One Indian health system uses a “focused factory” approach to perform open heart surgeries, which cost about $3,000. That procedure in the states can cost $75,000 to $150,000, and it occurs about six times more frequently than it does in India.
More Articles on Healthcare Costs:
Study: Rising Healthcare Costs Due to Technology, Not Uninsured Patients
A Look From Within: Why Are U.S. Healthcare Costs so High?
The Only Industry Where Technology Increases Costs — Healthcare
