Dumb ways I’ve seen healthcare providers spend your money

I’ve worked with and at the top level at some of the most prestigious health institutions in the US (with a brief stint in the UK), and I can say with confidence most administrators on the provider side of healthcare have no idea what their care costs. This isn’t entirely their fault — depending on the institution and its particular challenges, this can be an indictment of one or many things — poor policy management, archaic and disorganized data structures, organizational incompetence, weird accounting procedures, market disinterest — the list goes on.

You would think that with such serious challenges facing healthcare institutions around cost that they would make smarter decisions about costs they could control and understand, but, alas, that has not always been the case.

One small but very prestigious institution threw a party following a data center migration. They shut down a museum and had all of the IT staff followed by paparazzi. The project they were celebrating was 18 months over their timeline and blew their budget by millions (partially due to having to pay for two data spaces at the same time).

One multi-site facility (think dozens of hospitals), in an effort to ‘gain negotiation traction’ with a vendor, refused shipment for a very specific and very expensive piece of equipment. They had grown tired of the vendor ‘jerking them around,’ so they then bought a competitor’s product to replace it. But this wasn’t some cart or something portable, this was a piece of equipment the size of a room and required vaulting. Because of the architectural changes to the space that this new, ‘lower priced’ equipment required, the space had to be completely rebuilt. Even with the modifications, the new equipment still had several major malfunctions due to those architectural changes (water leaked into it). As this was for a cancer treatment facility in a rural area, much of this money was from Medicare / Medicaid.

Another company insisted on keeping antiquated software in place despite the protests of nearly everyone due to the long standing relationship between two company’s executive team. Much of their business is propped up by Medicare / Medicaid.

Another small organization ran three concurrent electronic health record systems because they were incapable of getting staff to convert to one system or another — causing a 20% hole in their budget. Much of their budget is funded by HHS.

At the beginning of my career, we spent an inordinate amount of time dealing with porn. I clearly remember having to have a meeting with my boss’ boss (a medical director) early in my career to politely ask him not to store his porn on our DICOM image server. Another time, we had to rebuild an entire cancer treatment machine (the one controlling the linear accelerator) because someone was watching porn while treating a patient with radiation. We had to bring out a vendor field services tech. Again, this was largely funded by Medicaid and medicare, just by the payer mix of the patient population.

As the technology changes, so do many of the challenges. Structurally, the industry will need to deal with some serious problems in the years ahead, so it’s vital healthcare providers be able to address obvious organizational waste, but it often requires a self-awareness the industry lacks.