Real Talk

In healthcare, common words and phrases do not mean what you think they mean.  As a result, when we talk to each other or when we listen to the politicians, what is heard is often not what is said. It is as though we are hearing English when someone else is speaking French.

Simple examples in healthcare are as follows.

“Cost” to you and me means resources necessary to produce a product or to deliver a service. That is not what cost means when Washington uses the word.

You and I pay the “price” of a good or service. Price is not what is paid in healthcare, not even close.

In order to improve communication – to have real talk – between you, me and everyone else definitions are provided below.

• ADVERSE OUTCOME (ADVERSE IMPACT)

Means: an outcome where treatment makes the patient worse (harms the patient) or fails to make the patient better.
Contrast to:
• Error: An outcome is what the patient experiences. An error is a mistaken action by a provider: the correct action is known and the provider does something else.
• Unintended outcome: there can be both positive (benefits the patient) and negative outcomes (adverse to the patient) that can occur after health care.
Note: Most people assume that if a patient gets worse during or shortly after treatment, the treatment caused the adverse impact. This is often not true. In the majority of cases, the cause of patient harm is not known. Further, there can be effects–both positive and negative–years, even decades after treatment that might be caused by that treatment. Unfortunately, both patients and providers often fail to make this linkage.

• ALLOWABLE REIMBURSEMENT (PAYMENT)

Means: a fixed price or payment for health care services. This is an arbitrary payment to a provider–doctor, nurse or hospital–for a given service or product. These payments are pre-determined by payers such as the government agencies (MediCare or MediCaid) or private insurance companies. They bear no relation to the provider’s actual costs and generally or non-negotiable: providers must accept them or simply refuse to care for the patient. In many instances, the latter choice is illegal (mandated but unfunded care) and forces providers to take profits from insured patients to cover legally required care that is provided for less than cost or for free.

• CHARGE (AND PRICE)

Charge and price both mean what is written on a bill-for-health-care-services. It has NO relation to actual cost. Contrast charge in health care to everyday commerce. In our usual business dealings, charge is the same as price and is what the consumer pays. That is not true in health care where charge is an arbitrary number based on legal requirements and allowable reimbursements.

• COST

“Cost” must always be defined as cost-to-whom. See the book “Uproot Healthcare” for more detailed explanations.

1. For the general public, as in day-to-day commerce
2. For patients
3. For health care providers
4. For insurance companies
5. For government

The public sees “cost” as the sum of all materials and manipulations to produce a product or service, plus some profit. The true cost of a car includes: steel, plastic and leather + design and production + marketing and distribution + profit margin. In healthcare, those elements are not accounted and therefore true cost is unknown.
A patient’s cost is the cost of insurance plus any copayments. Many without private insurance are eligible for assistance programs such as MediCare or MediCaid and their out-of-pocket costs is usually zero.
Providers of health care, whether individuals or organizations (hospitals, HMOs, etc.), have all the usual costs-of-doing-business such as rent, supplies, insurances, staff salaries, capital expenses, amortization, and taxes. They must also factor in all the costs of providing care that is required by law though there is no payment source: (mandated but unfunded care). This so-called free care still produces large costs that must be paid by providers.
For insurance companies, cost is money paid out to provide care. Private insurance companies are for-profit and have a fiduciary responsibility to their shareholders to generate profit. The best way to generate profit is to reduce cost. Thus, they seek to delay or avoid paying for health care.
For government, cost is what they pay out. ALL organizations–not-for-profit private entities as well as government agencies–invariably have more requests-for-funds than funds available. To balance their budgets, they all seek to reduce costs. Whenever they say they are “cutting costs,” they mean cutting their costs not true costs. This translates to reducing payments to providers.

• DIAGNOSIS (includes “Etiology”)

Means: understanding the nature of something like an illness by using analysis. Diagnosis comes from Greek: dia = split apart and gnosis = learning or knowledge and is abbreviated DX.
Types of DX: descriptive, etiologic, differential.
Descriptive DX refers to what the doctor sees or the patient experiences. Fibromyalgia literally means pain (-algia) in connective tissues (fibro-) and muscles (my-). A descriptive diagnosis gives no reason for why the patient has the symptom(s). Many different illnesses (with very different treatments) can cause “pain in muscles and connective tissues”.
An etiologic DX is a why explanation. It indicates the cause for or mechanism of what the patient experiences. Angina pectoris–another descriptive DX–means pain in the chest but coronary artery blockage tells why the patient has the pain: the blockage reduces the flow to the heart muscle, injuring the cells; injured cells release substances into the blood that cause pain.
Doctors often refer to the differential DX meaning the list of possible causes for the descriptive DX. A patient with chest pain (descriptive DX) might have a differential diagnosis that includes pneumonia, coronary blockage, and acid reflux, which are all etiologic DX’s.

• ERROR (A mistake = an error.)

Means: a behavior that is incorrect. To commit an error requires that the correct behavior is known. Often in health care, the ‘right answer’ is not known.
Contrast to: adverse impact or bad outcome. An error is a behavior. An adverse outcome or impact is what a patient experiences, not what a provider does. Patients often have adverse outcomes without errors and conversely, there are frequent errors that do not harm patients.

• HEALTH CARE & HEALTHCARE

As two words, health care refers to the services provided and a relationship with providers. As a one-word phrase, healthcare means the system that supports providing those services.

• PROVIDER (of health care)

A health care provider is anyone who serves the health preservation or restoration of others. Providers can be direct as in nurses, doctors, physical therapists, social workers, etc. or indirect as in support, technical and administrative individuals.

• ROOT CAUSE

Means: either the or one of several reason(s) why something occurs. In health care, etiology means the same as root cause. A list of potential root causes in systems analysis for healthcare problems is the same thing as a differential DX for a sick person.

• “THINKING SYSTEM”

Refers to the two unique characteristics of human beings alone or in groups. 1) Unlike all other systems, humans can direct how and what they learn. 2) Humans can have multiple, sometimes quite contradictory goals in their decision-making, viz., saving money and providing all possible medical care. Thinking systems can actually have goals more important to them than personal survival, such as the NYC firefighters on 9/11.
This concept from systems thinking is included here because fixing healthcare (our sick system) requires that we understand the nature of healthcare, which includes the fact that it is a thinking system. For more details and examples, see “Uproot U.S. Healthcare” or the paper Thinking Systems Need Systems Thinking (in the Journal Systems Thinking and Behavioral Research 2007).