Measuring Baseball and Healthcare
How “Moneyball” might inspire a new kind of healthcare
an Article by Clive Riddle, President, MCOL
What
does professional baseball and healthcare have in common? It might be easier to
list what they don’t. One is sport and entertainment, the other is life, death
and everything in between. They’re not financed or consumed in the same way,
and as big as an industry that baseball is, healthcare operates on a much larger
playing field and scale.
But
among the various traits professional baseball and healthcare share, there is
the need and challenge of measurement. And both often share a status quo
executive management style that relies upon old standards of measurement that
don’t really answer the questions that need to be asked. Then again, in many
cases the challenge for both is actually finding the right questions, let alone
trying to then invent measurements needed to provide the answers.
An
excellent book, Moneyball (by Michael Lewis, W.W.
Norton & Company, 2003) pitches this issue for baseball. Michael Lewis
isn’t a baseball writer by trade. He’s a well-known author of such as other
books as the New New Thing and Liar’s Poker. Many have perceived Moneyball to
just be a story about the success of the Oakland A’s and their General Manager
in spite of a pitiful payroll. But even though the book follows the Athletics
and their General Manager through a season and more, they are just the vehicle
Lewis portrays to demonstrate a thesis: that
winning and financial success in professional baseball can benefit perhaps most
from a quest for baseball knowledge derived by measuring and analyzing the game
in a new and different way that challenges the status quo.
You can walk away from Moneyball
understanding that traditional baseball box scores, newspaper statistical
compilations and sports announcers may have emphasized the wrong measurements.
The baseball status quo has been built upon and rewards performance based upon
flawed statistics.
The management of healthcare has its own
status quo and box score measurements that need to be shaken up. How many
hospitals still use 1970s and 1980s measurements converting outpatient
statistics to inpatient equivalents, examine almost every cost first on a per
FTE basis and base their charges and operations around manipulating program and
managed care reimbursement? How many health plans still just focus on 1970s and
1980s measurements of medical loss ratios and patient days per 1,000, examine
almost every cost first on a pmpm or % of revenue basis, and base their
operations around manipulating greater revenue increases?
This isn’t to say that there aren’t a
lot of “new new things” going on in measuring healthcare. But as Moneyball
points out for baseball, the problem can be getting an audience with “good old
boy” executive management that still has problems just using e-mail, let alone
understanding or truly buying into making major executive decisions on new types
of measurements that tackle issues in a different light.
The root of Moneyball’s story goes way
back before the current Oakland A’s regime to examine the evolution of writer
Bill James, who built a cult following in his “Baseball Abstracts.” James
skewered management reliance on certain baseball statistics and advancing the
need to adopt various replacement measurements. Fielding statistics was a pet
peeve. James wrote “you have to do something right to get an error; even if
the ball is hit right at you, then you were standing in the right place to begin
with.” (Think of healthcare statistics measuring medical errors and mortality
rates, whereby physicians and hospitals that dare take on riskier cases are
statistically penalized.)
Bill James pointed out the overemphasis of
batting average, as opposed to on base percentage (hits plus walks/at bats) and
noted that team statistics are ranked offensively by batting average as opposed
to runs scored, when it is runs scored and not batting average that wins games.
How often in healthcare are we stuck on batting average type statistics, and not
on-base percentages or runs scored type statistics that better focus on
“wins” in healthcare?
Of course the problem in comparing baseball and healthcare even in this
light is that a “win” is universal in baseball, whereas a “win” in
healthcare depends upon the scenario. We’d all like to say the universal win
in healthcare is for patients to have great health outcomes, and everything else
will all fall into place. Unfortunately though, a “win” for a patient,
physician, hospital, health plan, pharmaceutical company, or employer in the
business of healthcare could mean different things. Thus taking on new ways of
measurement in health care could involve infinitely greater questioning and
analysis than in baseball.
Interestingly,
Moneyball illustrates a number or situations in which the Oakland A’s General
Manager and staff conduct Predictive Modeling. The Author, or the Oakland A’s
don’t call it that, but for those in healthcare starting to apply Predictive
Modeling that read the book, they’ll recognize it for what it is.
Those
following the consumer-driven direction of healthcare should pay close attention
to Moneyball. Writer Bill James arrives at a gold mine of statistically driven
new baseball knowledge that is powerful and compelling, and peddles it to the
status quo baseball establishment, who turns a deaf ear. Instead James
ultimately very successful business venture is based upon consumer (fan) demand
for the information.
The
point, however, in bringing Moneyball and healthcare together in one stadium is
not to continue to draw analogies between specific items in the book and
situations in healthcare. Rather it is to encourage healthcare professionals to
read the book as means to inspire them to become more creative in thinking of
health care questions in a new light that require answers that aren’t
currently available, but would be if we only measured things differently.
To look at some state-of-the-art approaches in health care measurement, consider checking out “Why Measurement Matters” A unique series of five online training workshops via live audio conferences, web summit presentations and CD-ROM toolkit. co-sponsored by Medstat and MCOL, From June 3rd through June 11th, 2004, with each session highlighting ways to use the principles of measurement to drive business results. The Medstat conducted sessions include: Measuring Financial Risk; Measuring “Book of Business’ Profitability; Measuring Disease Management Program Impact; Measuring Network Performance; and Measuring to Close Quality Gaps.
For more information or to register to go to http://www.healthwebsummit.com/measurement.htm
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