Today my company held its annual Users Group Meeting. The keynote speaker was
Uwe Reinhardt (a past guest on Al Franken's show and Princeton colleague of our beloved Mr Krugman). He spoke about health economics in the U.S.
I have rarely been so inspired by a speaker in my life. I am placing as much of the speech as I can recall below the cut.
I would appreciate if you recommend this diary if you find it to be a worthwhile read.
Off-topic (since I have your attention) - I'll be in DC making trouble this weekend. I look forward to meeting fellow Kossacks while I'm there.
Would you believe it if I told you that several thousand healthcare professionals from all over the U.S. gave a standing ovation to a liberal proposal to reform American healthcare? The thing is, I identified the talk as liberal because when ideas get politicized, a lot of "common sense" falls on the side of "liberal." But the speaker was a PhD in economics who used research to support the conclusions he spoke about - he was trying to be accurate, not liberal. And the room was full of doctors, nurses, administrators, and IT folks who live in the real world of American healthcare every day and they were listening to the facts they already know well - they weren't thinking about the truth as "liberal" either. If your name is not George Bush, and you are not trying to skew the system to screw the poor, good old fashioned common sense and facts are not inherently political.
First, let me give you a picture of my own background that I brought with me into the session today.
Here is how a clinic works if they use paper charts:
As you read through this scenario, think about every time there is an employee or event mentioned that has NOTHING to do with caring for the patient - just paper getting pushed around, etc
Suzy Jones wants an appointment tomorrow. She calls and reaches a scheduler, who fortunately can squeeze her into an overbooked slot for the next day.
Her physician wants to review her chart before she comes in, so her chart is pulled a day in advance and brought up to the clinic from med records. The physician, Dr. Lee, has to flip through the chart searching for information she is interested in - current medications, problem list, the note from her last visit, most recent cholesterol test, etc. Dr. Lee has a full schedule - patients coming in back to back to back for 20 minute appointments all morning. Of course, a few patients typically will be no-shows.
When Suzy arrives, she goes to registration and confirms her address, employer, phone number, and insurance. Once checked in, she has a seat in the patient waiting area, holding the sheet of labels given to her at the registration desk. The medical assistant rooms her, takes her vitals, and asks about her current meds, allergies, and the symptoms that brought her to the doctor. She puts her notes in the chart and leaves the chart in the door as a visual cue to the doctor that the patient is ready.
The physician enters the room and performs the exam. She wants to order a few labs for Suzy and refer her to GI. She fills out the lab requisition forms and the LONG form for the referral to GI. She also writes a prescription for 2 drugs, one of which is a Schedule II controlled medication so she has to write it out in triplicate. She finishes up her "superbill" - the legal-sized doublesided piece of paper that lists just about any procedure, diagnosis, and level of service (which determines how the physician should be compensated for the exam) imaginable. The forms Dr. Lee fills out were created by medical coders. All procedures and diagnoses have standardized codes (CPT and ICD-9, respectively), used by and written for billing. The nomenclature used is anything but physician friendly - but by putting the most commonly ordered procedures and diagnoses for a particular specialty on one form, it is much more manageable for the doctors. At one point, Dr. Lee is not entirely sure of which procedure exactly she is trying to order for Suzy, so she finds the big book full of every CPT code known to man and spends 5 minutes flipping through it to find what she wants.
From here, we need to follow the orders, follow the doctor, and follow the patient.
The Patient Suzy presents at the lab for her blood draw and then heads home, going to the pharmacy on the way. The pharmacy takes about 20 minutes to fill her prescription, and then she continues home. One week later, she hasn't heard about her labs yet, so she calls the clinic and finds out that they were normal. She also calls the GI clinic to schedule her appointment for that referral, but it takes a few days before her referral was authorized and she can schedule the appointment. A week later, she receives a paper letter in the mail stating that her labs were normal.
The Orders The referral goes to a woman in the clinic who needs to call the insurance to get an authorization before she can send it on to GI and the patient can schedule the appointment. The labs go to the lab, where the specimen is drawn and the tests are performed. The prescriptions went off with the patient to the pharmacy.
Once the lab tests are done, those charges go to billing - along with the professional fee for the visit (the level of service). Medical coders check to make sure that for each test ordered using a CPT code, the appropriate diagnoses are associated with the test in the form of an ICD-9 code. If the right ICD-9s are not associated with the right CPT codes, then insurance will deny the claims (i.e. the healthcare organization will not get paid for the lab tests they performed). Finally, they go onto insurance, who pays for most of the tests. However, one of Suzy's tests was actually performed only 1 week prior to her appointment (at which time it was performed again), so insurance refuses to pay for the duplicate.
The Physician The physician returns to his office after seeing Suzy and dictates a note. Notes often take a "SOAP" format - Subjective, Objective, Assessment, Plan. Later that day, her medical assistant comes up to her and says that the pharmacy is on the phone - they cannot read her handwriting on Suzy's prescription. She flips through Suzy's chart to jog her memory and tells the MA, who tells the pharmacy. A day later, the physician receives Suzy's note back - her dictation has been transcribed. She signs the note and sends it to med records so it can be filed in the chart. After a week, her medical assistant brings her a letter along with several sheets of paper with Suzy's lab results - all normal. She signs the letter, and her medical assistant mails it.
How is this different with an integrated software system?
Suzy logs into her chart from home and directly schedules an appointment for the next day. When she presents for her appointment, she registers and has a seat in the waiting room. The medical assistant rooms her and takes her vitals, chief complaint, etc. When the medical assistant enters a chief complaint ("abdominal pain"), an order set for abdominal pain becomes available.
Dr. Lee is in her office, on the computer. She clicks through several areas in Suzy's chart, and notices from the schedule that Suzy is ready to be seen in room 4. When she enters the room, she chats with Suzy about the Bears win last weekend while scanning to see that the MA asked about allergies, tobacco history, chief complaint, etc. She notices the available order set and double clicks. This presents her with a list of available orders, medications, diagnoses, patient instructions, and note templates. She clicks what she wants and enters her password to sign the orders. An alert pops up telling her that one of the labs she is ordering was ordered last week (and shows her the result) - so she does not order that lab. The lab orders automatically transmit to the lab and the prescriptions fax to the pharmacy. The referral sends a mesage to the girl who needs to call for authorizations. Additionally, an alert popped up reminding the physician that Suzy hasn't had a flu shot yet this flu season. She asks Suzy, who says she would like one. She enters her password again and a blue dot appears on the schedule to tell the nurse that she needs to come administer the immunization. The MA prints Suzy's visit summary and hands it to her so she can see all of the instructions for her labs, medications, and referral. It also has a page or so of information about abdominal pain. From here, she goes to the lab for her specimen draw, to the pharmacy (who already has her prescription ready) and home. A week later, she receives an email telling her to log in and see her lab results. While she's online, an alert tells her that her referral was approved and she schedules her GI appointment there.
The physician returns to her office and opens the note template that was entered by the order set. Luckily, of the "SOAP" format, the "OAP" is already filled out with the patient's vitals, orders, diagnosis, and other info. She fills in the blanks on the subjective part of the note and signs the chart. Immediately, the charge for the immunization is transmitted to billing (along with the professional fee for the visit and other information). Luckily for the coders, all of the orders in the order set were coded correctly behind the scenes. For example, Suzy's insurance refuses to pay for an admin fee for immunizations (most insurances will pay it), so there was no charge sent for any immunization admin fee. A week later, the physician receives a message containing Suzy's normal lab results. She reads it and deletes it because she know that Suzy will automatically be prompted to check the results online.
I just completed the implementation of an outpatient electronic medical record at a large healthcare organization in California. The project took a team of about 14 people 11 months to complete. Ultimately, it should streamline processes in the clinics so that providers can spend their time and energy doing what they do best - caring for patients. Eventually, they will also have secure messaging functionality so that patients can directly see their lab results online and physicians can email with their patients. This should help the clinic in terms of costs because it will reduce their phone call volume, reduce costs of the number of results letters that need to go out (one customer of our software in Washington state releases 82% of all lab results online - you still get a phone call for things like positive HIV tests), and it decreases the no-show rate for patients because they can schedule their own appointments online. The electronic medical record reduces costs for transcriptions and chart pulls too.
Uwe's Talk (with my own editorializing)
Ok, onto Uwe's talk. The talk had 2 main parts. First he spoke about the breakdown of costs for healthcare in the US and how the US ranks worldwide in terms of healthcare spending. He tied that into the use of IT. He referenced 2 articles that I do not have a paid subscription to read - but you can see a blurb for each for free:
Strategic Action In Health Information Technology: Why The Obvious Has Taken So Long
Can Electronic Medical Record Systems Transform Health Care? Potential Health Benefits, Savings, And Costs
Then he spoke about HSA's (health savings accounts) and framed it in terms of moral values.
Healthcare, Admin Costs, and IT
Start with 2 numbers: We can cover all of our uninsured for $100b annually, and IT can save us $81b annually. The US spends a LOT of money each year on administrative costs for healthcare. These are the costs of creating and approving and signing and archiving HIPAA forms, coding claims, scrubbing claims, submitting claims, reviewing and analyzing denied claims, calling for appointments, calling to confirm appointments, calling to follow up with no-shows, sending letters to dismiss frequent no-show patients, etc etc etc. These costs are not paying for CARE. None of these things makes a sick patient well. None of these things prevent a well patient from getting sick.
I don't have the exact numbers, but Uwe showed graphs basically demonstrating that the US spends more as a percent of GDP and per capita than the rest of the world - but doesn't necessarily get more for it. One graph showed that between the US and Germany, we spent more on admin, but less on care. Just take this away, and trust that the numbers are there: the US spends too darn much on administrative BS for healthcare.
What is IT's role?
IT can help us cope with the administrative complexity of the nightmare we call insurance. If you re-read my 2 scenarios above, you will notice how many fewer support staff, chart pulls, papers, forms, and phone calls are required with software than on paper. This can go in two directions. One is that we can cope better with the complexity we've got (this is good). The flip is that it can enable insurance companies to increase administrative complexity (this is bad - but so far this side of the coin is winning).
From my own perspective in installing EMRs, here is just a small picture of what this complexity looks like. I try to help my customers install their software with the least amount of setup that will require heavy maintenance, the least amount of costly customizations, and the least amount of expensive third party tools (unless they are truly necessary ones).
One source of 3rd party content is a database of acceptable diagnoses for each procedure. Then, when the physician places an order and associates it with a diagnosis, it can alert him or her if the procedure will not be covered for that diagnosis (and a list of which diagnoses will be covered). Just imagine manually maintaining that database. A moving target of every procedure each with several diagnoses PER PAYOR, PER PLAN (and it changes MONTHLY). If each hospital had to maintain this database themselves, it would be impossible. If they maintained it just for their top 1 or 2 payors, it would still be rough. Using it as 3rd party content isn't so bad.
An area where 3rd party content isn't available (to my knowledge) is medication formularies. Each payor/plan has its own "formulary" (list of meds that are covered) - and formularies also change, requiring updates. The software has the capability of storing formularies and warning physicians if they order a non-formulary med BUT - who is going to manually keep up the formulary list? An organization that has all of their patients mostly from 1 payor might go ahead and put in the work and maintenance to do this, but if your patients have all sorts of different kinds of insurance it's probably not worth bothering. Furthermore, in the example above - the healthcare organization seeking reimbursement for services performed - the organization itself has an interest at stake. In this example, it would be a service to the patient to ensure that physicians only order medications from their plan's formulary, but it wouldn't be a financial hit for the healthcare organization since the pharmacy is the one dispensing the med and charging the patient or the insurance.
So, as insurance increases complexity - with IT in the picture - you can either make the IT staff's lives miserable (maintaining things on the back end), the physician's lives miserable (doing the running around on the front end), or the patient's lives miserable (paying for whatever IT and physicians fail to take care of upstream) as everyone jumps through administrative hoops. If this system is going to improve - IT can help but ultimately the administrative garbage coming down from the insurance companies needs to stop breeding. Centralizing the back end setup by creating and using 3rd party sources of content is helpful, but it does increase costs to the organizations paying for the 3rd party data.
Uwe's Talk about HSA's
Then Uwe addressed the idea of the Health Savings account. The idea is this: A normal family has low healthcare costs most years, with a few years where costs spike due to cancer, car accidents, etc. There are 2 types of HSAs:
- The employer contributes an amount per year, there is a high deductible (with everything above it paid by insurance), and the patient picks up the tab on the rest. In the good years, the money accumulates in the savings account, and in the bad years, the savings account money pays up to the deductible (with the patient hopefully not paying too much), and insurance picks up the tab on everything else.
- The patient contributes money up to a high deductible and insurance pays the rest.
Here are the issues with this plan:
First of all, it CAN be used to a good purpose. If the employer is putting enough $ in the account and paying the premiums, and the patient is not chronically ill, it can really help the patient out.
But, consider the 80/20 rule: 20% of patients (the chronically ill) use 80% of all healthcare services. These patients would have to pay up to their deductible every single year, which means it would be a huge financial hit for them, even if their employer was contributing. This system would put the worst burden on our sickest patients.
Second, consider a mother of 3 who makes $25k per year at Wal-Mart in Dallas, TX. Wal-Mart doesn't give her healthcare.
This was the part of Uwe's talk that made the biggest impression on everyone.
He looked up the plans available to this woman online. There were 2 - one with a ~$120/mo premium and a $10,000 deductible and $5 generic/$10 brand name drug copays, and one with a $160/mo premium and a $5000 deductible.
I unfortunately do not have the numbers in front of me, but he extrapolated out health care costs over the next 10 years using the 2 1/2 % rule (healthcare costs grow at a rate 2 1/2% higher than that of the GDP) and the calculations came out that this woman would have to spend something like 55% of her income on healthcare alone.
He said that the people who contribute the most to our successful society are mothers and high school teachers. The CEO of GE can put a bunch of engineers in a room and kick their butts so they work, but it was their mothers who really got them to that point where they were educated and capable of doing their jobs. He said this woman deserves a medal - or 3, one for each kid.
One more point he made to the audience - basically, if the system screws the patient and the patient doesn't have the cash to cough up, ultimately the costs will all wind up as bad debt for the hospitals. The entire room was filled with representatives of the largest and most prestigious healthcare organizations in the country, and they are familiar with the idea of bad debt. They want to provide care for their patients, and they don't want to create a system in which they get stuck with costs as bad debt. I can't remember more specifically what was said because I work in clinicals and have very little familiarity with billing, but it reminded me of the bankruptcy bill. The credit card companies can write the policies to screw the little guy by not allowing people to declare bankruptcy, but ultimately if the money isn't there, the money isn't there - it will just wind up as bad debt for the credit card companies anyway, meanspirited morally bankrupt bill or no.
He ended on this note: He said he is an economist, and it is not an economists job to tell you how to make moral decisions, but it is his job to point out when a moral dilemma exists. The case above of the woman spending 55% of her income to get healthcare is a moral dilemma.
[UPDATED 09/21/05 4:37 PM CDT]:
Today at work I discussed the Uwe speech with a fellow liberal friend. He said he felt like Uwe was one breath short of proposing socialized medicine the whole time, and he was surprised the audience reacted so favorably. The audience was a mix of everyone - and let me tell you, Texas *was* represented.
Someone brought up in the comments the further purpose of an electronic health record to save lives. While this isn't relevant to the speech about economics, it does deserve a mention.
Today I attended several talks given by a physician at the Cleveland Clinic Foundation about population management and diabetes management. One thing I took away from the talks was that a physician is good at using judgment, but the clinic staff is very reliable at following instructions if provided with them. Any electronic health record is garbage in, garbage out (he demonstrated by showing how the system would gladly let you diagnose a male patient with cervical cancer) but if you can set the system up well, it can dish out enough instructions to really make a difference in patient outcomes.
One caveat to the idea of using the system for alerts and health maintenance is that you need to build up a baseline of data for it to work. In other words, if your system is brand new, then it doesn't know who got their mammogram last week versus who's been overdue for two years. If you don't enter which patients have diabetes, then any system of alerting you to remember HbA1Cs and diabetic foot and eye exams won't return anything because it doesn't know that anyone is diabetic. To an impatient person like me who wants to get everything done yesterday, this is frustrating, but I've seen how painstaking the task of backloading patient histories into the computer can be and it really does take time. The light at the end of the tunnel is that once you do it, there is no limit to the amount of payoff you will get - it just depends on how organized and creative you can be in building alerts and reports and mobilizing end users to optimize their use of the electronic health record.
Our fight on the left isn't a question of "are EHR's good?" - Bush has been blabbering away about them since the last round of presidential debates and before. Of late, Hillary and Newt got all buddy-buddy in cheerleadering EHRs together (and remember how he called her a bitch?). Both sides of the aisle are on board with EHRs. But the right still has no interest in the moral value that the richest country in the world should provide healthcare to all.
[UPDATED: 9/21/05 6:11 PM CDT]: Someone in the comments mentioned the - I'm assuming rightwing - argument that giving people access to care that is covered by traditional insurance will lead to increased costs because they will go to the doctor all the time, even when they don't need to. Compare that to an HSA situation in which the patient only goes to the physician when he or she is very sick.
In a traditional insurance situation where most services are free to the patient or the cost of a $10 copay, the patient has no disincentive to go to the doctor for preventative care. However, if the patient has a high yearly deductible and a finite amount of available dollars in an HSA, they probably will skip the preventative visits to save money. Today I sat in on a presentation about the effects of preventative care for diabetes patients. By regularly testing eyes, feet, HbA1C, LDLs, and urine, you can decrease the number of hospital stays. This is win-win - better for the patient and better for the insurance. One healthcare organization estimates they save over 100 lives per year by tracking their diabetic population and intervening when necessary.
Also, as online access to medical charts increases in availability, more organizations are finding how involved patients will be in their own care when given the chance. At first there was a trend of wanting to give diagnoses and procedures "patient-friendly names" (so no one has to look at their chart and see the words "morbid obesity" for example) but then some places started to find that the patients didn't want a patient-friendly name because they wanted to research their conditions and treatments online. They also find that if you alert patients automatically online when they are due for an upcoming mammogram or pap smear, etc, they tend to go ahead and schedule it.
Even without online chart access, just the simple step of giving patients a paper summary of their visits will help patients take ownership of their own care. Patients have a large stake in their own healthcare and if given the opportunity, they are very responsible owners and managers of it. By seeing them as partners - instead of as costs who are trying to screw the system - everyone stands to benefit.