Where can open market help? Clearly we can gain transactional cost savings by allowing global insurance carriers to offer their products. Global prescription filling is another source of savings. How about increasing the physician pool? Although not proven, if we were to accept technology aided telemedicine as an option, we could easily double the number of physicians.
Let us set the baseline (all data points are based on informal research with Google as the dominant research platform). The healthcare expenditures are roughly 3 trillion annually in the U.S. There are about 15 million workers in the healthcare field including about three quarters of a million physicians. Healthcare costs are skewed in terms of a life cycle view, the first 6 months and the last 6 months of life consuming a major portion. Healthcare costs are also skewed with reference to complex cases – about 16% of patients consume over 50% of the costs. The average encounter time between a patient and physician is roughly 12 minutes and more than half of the diagnosis are inaccurate. Accurate diagnosis, specifically identifying the complex cases early, will save us at least 25% of the costs for treating complex cases. The cost of “overseas physicians” are significantly lower (about a third of the cost of physicians in U.S.). If we do the math (average cost of a US physician is about 200,000 dollars per year), the net savings therefore is in the hundreds of billions (about 300 billion based on my back of the envelope calculations). In addition the increased encounter time can reduce erroneous diagnosis further reducing healthcare costs. Sadly, United States is encumbered by a highly polarized and irrational political system. Technology will not be used to make such major strides. I hope I am wrong.
After thirty years in IT, I still wonder about metrics and measures for managing technology. A useful metaphor for IT Project Management can be drawn from health care, the life cycle of health care for an individual starts with enormous enthusiasm and joy at the early stages (birth to pre-school), where expenditures are not questioned. Planning sets in and health care insurance models are on auto-pilot during the middle years, and towards the latter stages, particularly the tail-end, the expenditures sky-rocket once more. IT Projects mirror this to an extent – initial stages are optimistic, rosy, all extra expenses magically treated as investment for the future, the middle stages reflect planning and control, but towards the end, completing it successfully overrides budgetary estimates. The result is overruns and significant mismatch between budgets and actuals. How many of your projects follow this metaphor? Most of us build IT to a budget – a metaphor very difficult to accept in healthcare.
I hosted a business forum at the Pasadena Convention Center. One of the speakers, Tom Bang, CEO of TrinovaMed discussed RMW (Regulated Medical Waste) – a $10B world wide market. TrinovaMed has a streamlined process that not only reduces costs, but they are also eco-friendly (low carbon footprint) and safe. One of the reasons I invited Tom at the Forum was to explore opportunities in India, where the United Nations has teamed up with the Indian Government in a $40 M pilot across five states.
Private-Public partnership is critical to address this market segment. The public component will provide the R&D funding, project opportunities, and rules for managing medical waste. The private sector, as evidenced by Tom’s company will ensure that the free market will facilitate innovation.
Facebook, Twitter, LinkedIn, you name it – we have it. Each of these are networks, we can create networks within these entities(I call these meta-networks). On the positive side, meta-networks have led to creation of social linkages that seek freedom of expression as evidenced by the events in Iran which could easily have been suppressed without these meta-networks. On the negative side, we have privacy violations with Facebook showing us what can happen when greed meets freedom.
Perhaps a good use of social networks is to realize the dream I had in my previous blog – a vast social network that becomes the virtual insurance and arbitrator of healthcare. And in my infinite wisdom, I referred to Facebook. Facebook, why did you become greedy?
Everywhere we turn, we are confronted with rising healthcare costs. My son, who has some history of Asthma, was denied coverage with us on the family plan when we had to switch coverage (after expiry of COBRA benefits). Naturally, the carrier offered separate coverage for him at a substantially higher cost. I chose the high deductible option making the coverage I have almost like a stop-loss insurance. In other words, I am for all practical reasons carrying my own insurance.
You will most likely contest any hypothesis I may make, so please permit me to dream. Assume a million like me formed a virtual social enterprise. That would give us a budget around 12 billion USD. Suppose further that we were able to carve out volunteers who would work a specified set of hours for reduced premiums (almost like a renter-manager in small apartments). Suppose further that we created a vast social network (no major investments: facebook will do fine, thank you). Since I am dreaming, nothing will stop me from assuming that a few amongst us are more inclined to contribute more time, experience and energy to this noble enterprise. These selected few negotiate contracts with physicians (my dream physicians are honorable and charge ethically), develop a global drug network (I mean the good kind of drugs – even in dreams I cannot think of evil), develop a self-claims process (I can do this – so this part of the dream is real), and reduce the administrative costs to near zero. We of course initiate health awareness programs (yoga is not a dream), we propagate that eating right, thinking right, and stress free life is essential. Needless to say of course that none in our network will be called to put in long stressful hours of work.
If I achieve this, what have I established? Have I made a dent or set a trend at least? Have I shown a way for all of us to think of healthcare differently? Or even to dream this is a dream?
Many feel that the “electronification” of medical records will lead to significant savings. Nothing can be farther than the truth – the reality is that while Electronic Health Records (EHRs) provide the structure to organize health related information, to make it really count, the practitioner has to adopt it as part of delivering care. There is a significant difference between EHRs and Electronic Medical Records , but for the purposes of this blog, we will use the phrase EHR to simply identify medical data in electronic form.
While EHRs will improve the efficiency of delivering care, they will have minimal impact on the efficacy of care unless they are incorporated into the process of delivering care. It is very clear that delivering better care has an order of magnitude more significant impact on healthcare costs than simply focusing on the administration of healthcare. Studies have shown that of the 2.7 trillion dollars in healthcare expenditure, improving efficiency will impact less than 15% of the costs. The focus of EHRs should be on delivering better care. While the challenges of integrating data across different disciplines and practitioners is really daunting, merely integrating data will not help improve the efficacy of care. Real improvements can only come if practitioners are given easy mechanism to interpret the data. Taking into context that the amount of time spent in interpreting the data is reducing each year, the ability of EHR vendors to facilitate interpretation of data will be crucial to delivering better care.
EHRs vendors today ignore the role of qualitative data (or practitioner’s notes). These notes play a very significant role in improving the quality of care delivered as these notes (along with the other empirical data) show the patients history. Integrating these notes across multiple disciplines and different timelines is extremely challenging. First the notes are unstructured and nearly free-form, and second, the depth and range of issues covered vary from discipline to discipline and from practitioner to practitioner. Despite these difficulties, EHR vendors should provide easy mechanisms to add some degree of structure to these notes and provide simple tools to collaborate across multiple disciplines. Semantic and fuzzy logic systems may lend some degree of relevance to this area, but much needs to be researched in this place. The main point of this blog is that EHRs are a distant ways from becoming a mature technology.
Physicians are faced with choice of increasing the use of technology. Specifically, they are assessing the benefits of using EMR. EMRs fundamentally change the workflow within the practice, and therefore, it is critical that the choices should not just be on the technology but on the long term objectives sought with implementing EMRs. Like all investments, the life-cycle costs and benefits must be assessed. Efficiency improvements from EMRs include reduced costs due to improved billing, improved appointment setting, and integration with other systems (example: e-Prescribing). Effectiveness of care improvements includes improved patient-physician interaction and patient centric quality of care. It must be noted that improvements in efficacy will far outweigh the improvements in efficiency, but they are harder to measure.
While there are 300 plus vendors, there is no simple mechanism to select the right one. Tax incentives are available, and in fact some vendors are offering free tools and services in exchange for the tax benefit. However, selecting the right vendor is a still a daunting task. The basic steps in selecting and implementing EMRs is to first understand the existing practice workflow, specify the goals, identify the requirements, and translate the requirements to desired features. Now the EMR tools can be compared against the desired features, ranked and scored to identify the top 3 to 5 EMR vendors. Choosing amongst the specific vendors and implementing them usually requires technical expertise. Fortunately a pool of EMR consultants are cropping up to help proliferation of EMRs.
The selection criteria centers around practice related features, vendor stability, and technology architecture. Practice related features include the ability to do quick charting/chart organization, interface with specific systems (hospital, lab, practice management, equipment), facilitate coding and billing/payment, facilitate appointments, manage referrals, educate and communicate with patients, e-prescriptions, and track progress.
Technical features to be considered include ability to use remotely – from home, hospital, ability to easily add new users (additional providers and staff), interface with other systems and hand-held devices like iPhone, interface with voice recognition systems such as Dragon Medical, decision support dashboards, and pre-built templates to facilitate documenting interactions with the patient. Architectural considerations are also important, including: cloud (SaaS) versus traditional installation, open source versus commercial platforms, interface with document management systems/work flow systems such as SharePoint, and interoperability with other entities (using XML or HL7 or other standards). In addition to practice related features and technology related features, vendor stability, ability to support the product, their track record, and certification for “meaningful use” are critical considerations.
For a free detailed step by step process, send an e-mail to Subbu Murthy at email@example.com