Monday, May 3, 2004

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Health care and techological innovation

Newt Gingrich and Patrick Kennedy have co-authored a New York Times op-ed on the need for the health care sector to embrace the information revolution. [Hey, wasn't this Catherine Mann's point in her essay on IT and outsourcing?--ed. Why, I believe it was one of them, yes.] They have some fascinating data:

The archaic information systems of our hospitals and clinics directly affect the quality of care we receive. When you go to a new doctor, the office most likely has little information about you, no ability to track how other providers are treating you, and no systematic way to keep up with scientific breakthroughs that might help you.

The results are predictable. For example, approximately 20 percent of medical tests are ordered a second time simply because previous results can't be found. Research shows that 30 cents of every dollar spent on health care does nothing to make sick people better. That's $7.4 trillion over the next decade for duplicate tests, preventable errors, unnecessary hospitalizations and other waste....

In addition, most referrals and prescriptions are still written by hand; computerized entry would eliminate errors caused by sloppy handwriting. Computer programs can warn doctors of possible adverse drug and allergy interactions, and remind them of new advances in evidence-based practice guidelines. Patients could also have easier access to their important health information, allowing them to be active participants in their own care.

Moreover, in a post-9/11 world, electronic health information networks would allow doctors, hospitals and public health officials to rapidly detect and respond to a bioterrorism attack.

Unfortunately, health care providers are famously stingy investors in information technology. The primary reason is that when new technology reduces the duplication, errors and unnecessary care, most of the financial benefits don't go to the providers who generate the savings, but to insurers and patients.

Therefore, widespread adoption of technology will depend in large part on federally organized public-private partnerships. Treasury dollars could help bring providers in a particular part of the country together to map out plans for a regional health information network, and to divide up the costs and the savings fairly between them. Medicare could sweeten the pot by reimbursing providers for money spent to use electronic health records connected to a regional network.

The one thing that Gingrich and Kennedy do not discuss is privacy concerns -- although if people are willing to have their financial information computerized, it's hard to see how health information is qualititatively different.

posted by Dan on 05.03.04 at 12:01 PM


There are 600-pages worth of regulations on medical privacy in a computerized world, issued fairly recently when Congress failed to meet a deadline in the Health Insurance Portability and Accountability Act of 1996 to pass legislation on this issue. Gingrich and Kennedy probably regard this issue as settled, at least from a legislative standpoint.

For you masochists out there, the rules, and summary of the rules are here:

posted by: Appalled Moderate on 05.03.04 at 12:01 PM [permalink]

Being a tax-and-spend liberal yet an ardent civil libertarian, I feel that there's a definite distinction between one's money and one's body in terms of how comfortable I feel about people knowing about it. I'm okay with filing a report of my income with the IRS, but if they want a blood sample, they're going to have to file a search warrant.

posted by: Maureen on 05.03.04 at 12:01 PM [permalink]

Doctors are often Luddites. Some feel that it is beneath them to learn how to use a computer. Andy Grove, the former CEO of Intel, found this out while seriously ill. His doctors were virtually useless. Grove had to do a lot of his own medical research. I found this 1998 cached copy of an article Grove wrote in 1998:

posted by: David Thomson on 05.03.04 at 12:01 PM [permalink]

"although if people are willing to have their financial information computerized, it's hard to see how health information is qualititatively different."

People might not mind having something like their political donations computerized for anybody to see. But thats because thats inherently a public matter, "I support this cause" so to speak. But people generally dont like the idea of their medical records being freely available.

Plus there is the fact that people might really have something socially embarassing in their medical record that they dont want publicized.

posted by: sam on 05.03.04 at 12:01 PM [permalink]

Before the parade of horribles begins, let's stipulate that a medical provider generally cannot realease personal health information to third parties without the consent of the patient. (There are exceptions, of course. Your employer isn't one of the exceptions, even if you are using their health plan.) Government regs also govern the steps medical providers and insurance companies must take to protect your info.

Whether these protections are enough or too much or absurd are issues the IT, medical and benefits communites have been shouting about since these regulations were proposed during the Clinton administration. However, there are governmental standards in place to protectprivacy. To the extent these standards are not met, folks can get fined, get audited, and maybe go to jail.

posted by: Appalled Moderate on 05.03.04 at 12:01 PM [permalink]

How seriously is patient records security taken within much of the medical field? I’ve spoken to two different attorneys who work for a medical insurance company. This institution knows that a law suit is almost certain if any patient’s records are stolen from its office. They have a group which meets periodically to discuss only security issues. Is a mere lock on the front door sufficient to prevent a law suit? Not in the least. They must prove in a court of law that they took “prudent” measures. What does that mean in the real world? This company spends a small fortune to lease two floors in a very expensive building offering superb security. At least one security officer must be on duty 24 hours a day. On top of that, they pay extra money for an outside security monitoring service to alert the security guards on duty and the local police department. I might also add that many medical related companies now even monitor their employees outgoing e-mails! They are set up to alert the managers when anybody is attempting to sneak out patient information over the Internet.

Most of the yelling and screaming concerning patient records isn’t valid. The complainers are often luddites who are contemptuous toward “the big corporations.” They are fearful of the modern world and might feel better off if they could go back in time to live in the 15th Century. Are there real concerns? Of course, but let’s take a chill pill before warning that the sky is falling down.

posted by: David Thomson on 05.03.04 at 12:01 PM [permalink]

Gingrich and Kennedy propose to create incentives for providers to update information systems. However, those incentives are lacking due to the very nature of health care provision. Their solutions will not work, as they are simply more top-down fixes to problems that would normally be handled by the market, if given a chance.

posted by: Jonathan Wilde on 05.03.04 at 12:01 PM [permalink]

I wouldn't say that physicians feel that it is "beneath them" to learn computer skills. It's more of a time issue than anything.

Our office is transitioning to an EMR system. The biggest fear is that computer use will slow us down too much. The more time on the computer, the fewer the number of patients seen. Since we are reimbursed by the visit, such a more may translate into diminished income. The group is making the transition anyway, as it will save money in personel and storage costs.

posted by: Galen on 05.03.04 at 12:01 PM [permalink]

Part of the problem is the challenge of selling and installing systems in a highly-dispersed industry like healthcare. Particularly if you are selling to individual physicians, the selling costs may be very high in comparison to the price of the system.

Another part of the problem is the narrow view some physicians seem to have of their professional responsibilities. Some of them don't seem to understand that they are not solo players but rather members of a team, and hence are unwilling to participate in systems that improve the productivity of others in the chain (nurses, pharmacists, etc) and the effectiveness of overall healthcare delivery.

I've written about this subject here:

posted by: David Foster on 05.03.04 at 12:01 PM [permalink]

Wrong link for the post on healthcare automation--here's the correct one:

posted by: David Foster on 05.03.04 at 12:01 PM [permalink]

Galen, this was one of the points Gingrich and Kennedy were making. Doctors get reimbursed by the visit or procedure; they get paid whether they treat the patient correctly or screw things up; and if they screw things up they get paid again to fix it. If my livelihood depended on maximizing the items I could get reimbursed for I'd probably resist learning a new information management system too.

Gingrich's idea -- all respect to Kennedy, but this has to come from Gingrich -- is to have government outflank the entrenchments of the health care industry by providing incentives for large providers to improve information system. In essence, he proposes trying to change behavior through subsidy rather than regulation.

I'm not sure about his solution for several reasons, one of which David Foster alludes to above. But having had to reinvent the wheel with several specialists trying to treat the same affliction I have no doubt as to the dimensions of the problem Gingrich and Kennedy describe. Actually they understated its dimensions in their NYT piece today, because they did not discuss how information management systems relate to the mechanics of billing patients, Medicare, and private insurers. In the case of complicated procedures like bypass surgeries completing billing can take months even assuming prompt payment by all responsible parties, and at the end of the process no one will be able to say reliably who paid for what -- because, among other things, medical providers, the government and insurance companies do not all use compatible information management systems.

posted by: Zathras on 05.03.04 at 12:01 PM [permalink]

I'm surprised no one has yet mentioned that one reason for the confusion is our multiplicity of health insurance providers, with slightly different requirements, benefits, copayments, second opinion rules, and so on. The receptionist at the pediatrician's office showed me last month how she has to use different forms depending on which insurance we have. Even if everything went digital, can you imagine having, say, 11 different data-entry programs, or even 11 different modules? Yet I believe my pharmacy takes at least 11 different health plans and the pediatrician at least four.

posted by: Andrew J. Lazarus on 05.03.04 at 12:01 PM [permalink]

Currently there are two polarized forms of reimbursement in medicine: fee for service, and capitation. Both have their advantages and disadvantages. Capitation would seem (in theory) to have an incentive to keep patients healthy, though in practice it translates into providing a financial incentive to provide as little care as possible.

I reject the notion, however, that a fee for service model encourages mistakes to generate more revenue (trust me, that's not how you want to generate more business) but it does encourage over-care, such as frequent monitoring of chronic health conditions. Over care is more costly, and may lead to problems in and of itself.

This brings us to a modality that I think your pointing at, which is reimbursement based on outcomes. Direct compensation for good health outcomes, and lesser compenstion for complications will provide real incentive for good care. It will also aid in the transition to things like EMR systems, as such things have tangible benefits in patient care (improved communication and reduced errors for starters).

You are absolutely correct about the current morass of third party payers, medicare, authorizations, and reimbursement. Health care would be cheaper and simpler if a huge amount of energy wasn't wasted on twisting arms to get payment from the government or third parties, usually months later. In our office, the paperwork generated provides full time employement for 3-4 people, easily costing a couple hundred thousand dollars a year in overhead.

posted by: Galen on 05.03.04 at 12:01 PM [permalink]

Reimbursements on outcomes can be complicated - good physicians catch things other don't - so what will that say about their outcomes? Do more referrals mean you are overtreating or are just more careful?

One of the problems I have with the delivery of health care is that there is a fundamental disconnect between what it takes to produce the 'goods and service' and what you get paid for producing that 'goods and service'. As a pathologist, what my office bills does not always relate to the time it takes me to diagnose the lesion. A single lesion may take a few minutes of time or hours to diagnose. I am paid the same for both in many instances.

Dunno the answer, quite frankly.

Better infrastructure couldn't hurt.

posted by: MD on 05.03.04 at 12:01 PM [permalink]

In essence, he proposes trying to change behavior through subsidy rather than regulation.

posted by: 沥青 on 05.03.04 at 12:01 PM [permalink]

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