A Caveat on the Cheesecake Factory and Health Care

September 4, 2012

Atul Gawande’s latest article in the New Yorker magazine is a hot trending story in health care. It even spawned an editorial in the Wall Street Journal that seemed oddly confused about what Gawande was advocating.

In his article, Gawande talks about lessons learned from quality and cost control processes at a restaurant chain called The Cheesecake Factory, and argues these same approaches can and should be applied to health care. The analogy is somewhat limited: after all, we don’t really choose our health care the way Gawande chose his “miso salmon,” and there are lots of reasons health care doesn’t—and shouldn’t—work like the restaurant market.

Nevertheless, the basic point—how scale and standardization could improve health care—is certainly right. Large hospital systems are able to establish procedures and disseminate proven techniques for making care safer and more effective. And the evidence is clear that practice does make perfect: higher volumes of any one procedure by any one practitioner produce better outcomes overall.

There are some caveats, however, when thinking about scale in health care. One point Gawande notes but doesn’t explore is the difference between non-profit and for-profit health care. Shortly after his article came out, another story in the New York Times took a sweeping look at Hospital Corporation of America (HCA). The article covered multiple pages in the print edition: an unusual commitment of real estate for the Times, and an indication of the importance it placed on this investigation. Of course, the article comes on the heels of another story (also covered in the Washington Post, citing work done at CHRT about the high percentage of unnecessary cardiac procedures at HCA.

The point of this in-depth focus on HCA and its relevance to the Gawande article: size and scale mixed with for-profit care can result in negative outcomes in quality and efficiency. Specifically, profit trumps many other goals in a for-profit hospital system. It was stunning to read about HCA physicians who felt pressured to make clinical decisions based on the impact on the bottom line—whether it meant turning away patients from the ER (where hospitals are required to stabilize patients regardless of insurance status) or doing cardiac procedures whether necessary or not.

There are, of course, pressures on physicians to help with the bottom line at non-profit hospitals as well. A nun I knew who ran a Catholic hospital in Michigan liked to say, ”There is no mission without a margin.” But non-profit hospitals are legally required to commit to communities in a way that for-profit institutions are not. After all, for-profit institutions must be responsive to shareholders first. And, while good patient care and shareholder interests may certainly coincide, that is not always the case.

As hospitals costs have come under pressure from deficit reduction and cost-containment goals, some non-profit, community-based hospitals have looked toward for-profit institutions to take over their operations. These hospitals are looking for partners with resources and financial breadth. And while that can be very good, as I discussed in a recent guest column in the online magazine Bridge, larger institutions also tend to dominate the marketplace and can limit competition. So, as policy-makers encourage scale, it will be important for them to also encourage commitment to the community at large.

The experience at HCA should make it clear that communities, patients, and clinicians should proceed with caution down the for-profit road.