Health Care Reform is Coming -- But From the Bottom Up

The latest round of announcements from Google and Microsoft about their partnerships and initiatives to fix the US healthcare system reminds us all that it is seriously broken. Health care costs are growing at 4.4 times the rate of inflation and 3.7 times the rate of increase of the average workers earnings. They now exceed the average profit per employee at some of the largest U.S. corporations. There is an acute shortage of primary care physicians, Medicare costs exceed its revenues and without substantial change, meeting the health care needs of the boomers will subsume 30% of the national budget in 2030. As you might expect, there is no silver bullet, and neither government legislation nor unilateral actions on the part of large insurance companies or high-tech giants will fix the system. Not surprisingly, many of the changes we need are coming from the bottom up as patients, with the help of enterprising entrepreneurs, are relating to the health care system in fundamentally different ways resulting in far greater efficiencies than could be achieved by government mandates.

At the heart of this bottom up revolution is a concept called Health 2.0, which promises to do for medical care what the Web did for travel only a few years ago. When was the last time you called an airline to make a reservation, book a car, resolve a bill or check your frequent flyer miles? Well apply the same concept to your doctor's office except substitute travel issues with medical tasks like filling out a form, making an appointment, obtaining a prescription, paying a bill or in some cases obtaining a diagnosis. All of this is beginning to happen with the advent of physician's portals that connect doctors and patients electronically and enable the performance of these administrative functions and more. (Full disclosure -- I am a board member and investor in Medfusion, a leading provider of physician's portals in the United States.) But the physician portal is really just the plumbing, the pipe that enables all kinds of patient-centered applications. One of the prophets of the Health 2.0 revolution is Dr. David Kibbe, a principal in the Kibbe Group, who in a recent conversation suggested the following:

--Patients will have access to their complete medical record either on their desktop or from a remote server and it will be refreshed regularly by their physicians via the portal I just discussed;

--Hundreds of independent developers are working on applications that will fit on top of Microsoft and Google initiatives centering upon the EMR or electronic medical record. Applications include likely adverse reactions to a particular drug, access to expert information and relevant user groups in response to a particular diagnosis and actual in-home monitoring and testing with the results instantly posted to your personalized record;

--Third party payers (think Blue Cross-Blue Shield and Cigna) and the large HMO's are beginning to pay for virtual office visits (structured consultations with your doctor or his nurse via email) as well as providing online access to administrative functions that should make your relationship to your health insurance company more like the one you have with your airline; and

--Doctors practices are even beginning to reinvent themselves enabling scheduling via cell phone, posting waiting times on their web portals and eliminating virtually all paper forms in favor of a web based approach.

All of this is happening because the patients -- read customers -- are demanding it. Recent surveys suggest that consumers will switch from one medical practice to another based upon the availability of electronic access and this trend will only increase as the boomers descend upon the medical system with a vengeance. Virtually all patients will have access to high speed data lines, experience with online interactions and high expectations. But their demands should have a positive impact on the health care system: less expensive office visits, more efficient use of physician time, less paperwork and less postage for appointment reminders and bills. And with all of the entrepreneurial energy focused on this national crisis, the developments outlined here are just the beginning of Health 2.0, a bottom up revolution in American health care.

Comments

[Sundialsvc4]

Nice techno puff-piece, Buck, but no dice.

(Oh, you don't have to approve it, but at least you read it.)

The bottom line for the health care system is ... not simply that "it cannot afford to pay for itself", but ... that it can no longer afford the profiteering for which it has so-quickly become accustomed.

A weekend hospital stay. Poof! Bill Medicare for $34,000, and as soon as enough time has been spent by the "poor patient" to meet Medicare's guidelines, toss the patient out of the hospital in the middle of the night. Did this help the patient? Heck, no... but it got you $34,000, most of which you can book as profit since the hospital-supplies really don't cost that much and all the blokes who actually got to see him are on a salary.

How much ARE "health care costs?" You got it... as much as you say they are. $34K for a weekend.

The only thing that can bring this fat-n-happy status quo down is ... people who actually need medical help, and who arrive in such large numbers that you can no longer claim to make a profit from serving their medical needs. As long as you can "claim to" be serving the patient while merely serving yourself, you're okay. But when the day comes that patients actually need to be served...

[boltyboy]

I know something about this topic given that I'm a health policy wonk who also co-founded the Health 2.0 Conference (David Kibbe who's is quoted at length in the article is on my advisory board). (www.health2con.com)

Both Buck and his numerous grumpy commentators are right, but you are having different conversations.

We need both insurance reform (universal coverage, community rating, single pooling of risks) AND system reform to make the user experience better, less costly and less wasteful. These are two different things.

Health 2.0 is all about the latter, and it is also happening in countries like the UK, Germany, Netherlands, Australia, and others where the former problems of universal insurance were solved long, long ago.

I guarantee your commenters that Health 2.0 is not a scam developed by the insurance companies--they've barely heard of it yet. (And I for one have been very rude about their other scams to their face)

However, until we have new rules that fundamentally change how health care is financed and how insurance is distributed, the problems that the pro-single payer crowd are correctly concerned about will not go away. Health 2.0 cannot fix the fundamental issue of our health insurance market's assbackwards incentives.

Matthew Holt
www.thehealthcareblog.com

[SeriousBlack]

THANK you for a voice of reason.

[wolfgangmo]

Hey congrats on disclosing that this article is basically an advertisement for your investment in this company.

You may be marketing that health 2.0 will revolutionize health care and I say BULL.

It will do two things.

First, it will allow insurance companies to more easily cherry pick the profitable patients and drop anyone else for any reason [but not before taking years of premiums].

Second, it will push a bigger wedge between doctors and patients, making the computer the diagnostician and the doctors, in essence, more of a recipe follower then they are already forced to be. This is bad medicine.

Final thought. You have provided absolutely no proof that this will shift any costs except those that funnel right into your bank account.

This is, until proved otherwise, another scam.

[SeriousBlack]

And as followup to my previous posts (sorry for the angry tone of them but I can't even get health insurance because I have a pre-existing condition so I live in constant fear of finding out I have something serious like cancer and not even being able to get treatment for it - even though that treatment might have good odds of saving my life. Wow what a great health care system we have in this country, huh?):

http://www.huffingtonpost.com/norman-solomon/death-under-the-guise-of_b_108315.html

[dadw5boys]

SO THEY DON'T EVEN WANT TO SEE THE PATIENT NOW????

[WASanford]

I'm a Kiaser Permente patient and all of my medical records have been "computerized." My doctor does see me. When we're in the examining room, she can pull up any of my records from past years. This protects me from having her prescribe medicines that are dangerous when taken together. it may be an added convenience, but I consider it to be dammed dangerous. Some fool is going to lose a laptop with every one's medical records on it or the mainframe will be hacked into. But what's worse this is not going to give us what we so badly need; affordable single payer health care for everyone.

[dadw5boys]

Don't be fooled Veterans are not fooled when the V.A. says a LAPTOP with million of names and Social Security Numbers were lost!!!!!

We know that laptop was LOADED AND SOLD to the Insurance Clearing Houses. These UNDERWRITERS are just organized crime, GAMBLERS, who decide to issue a policy or not!!!!!

So like any smart gamblers they fix the game!

[Aaror]

There is a government regulation that would revolutionize health care-well, a repeal of a regulation.
And I am not saying allow everyone to buy into medicaid, thought that would be great.
If you ever use Mutual of Omaha, and have wondered at the name, they used to be a Co-Op, like a credit union. For years you could buy into your own health insurance provider, and since they worked for you... they worked better.
Then the other big health insurance companies complained to congress that this was unfair competition, since Omaha didn't have to pay shareholders. Congress agreed, and forced Mutual of Omaha to become a corporation. I beleive even then the company tried to fight back by issueing the stock to the insured instead of selling it on the market. But now they are like all the other corps.
So bring back the Mutual Insurance Company, let the insured own the insurance, and watch costs drop and service improve. Then watch half the current health insurance corps go out of business, and the rest suddenly discover how to cut costs and be efficient. This is one place where the free market is a wonderful thing...

[emerywood]

Electronic access is what patients demand ?
I must be living in another planet. In my physician's office, most patients are elderly, debilitated and some are even confused. I don't think many of them know how to use a computer or would use one to communicate with their physicians. Younger patients are usually healthy and have minor problems and they come and go in a hurry. I have never seen a patient demanding their complete medical records ever, except those who contemplate suing their physicians. Only plaintiff lawyers demand complete medical records. Most patients don't understand the medical jargons or diseases anyway.
If you consider the high cost of obtaining electronic access versus the benefits to the physicians and the patients, I bet you your business will be flourish.

[emerywood]

The last word should be " limited ", not " flourish".

[berensma]

Respectfully, I think you're all missing an important point here. Electronic medical records (EMRs) and full computerization of physician office tasks are a huge part of the collective wet dream of the medical academic/opinionmaker class, and the O**** campaign is fully on board.

Assuming a democratic win, this is coming, and it is going to be funded, and companies like this one are going to explode. So I think we'd all be well advised to educate ourselves on EMRs, to think about what would constitute smart implementation, and what we want and don't want to see, rather than dismiss it.

[RoloTomassi]

"And with all of the entrepreneurial energy focused on this national crisis, the developments outlined here are just the beginning of Health 2.0, a bottom up revolution in American health care."

BULL. This is just another free-marketer ploy to subvert real efforts in developing a real UHC system.

Granted, the online interface could add a lot of value, but what you are pushing is merely a tool, and the value of a tool comes not from its mere existence, but in how it is used.

If you care to focus all of the "entrepreneurial energy" you're so full of now into a single-payer, Medicare-for-all system as presented in bill HR 676, then I'm all for it; otherwise save us the pain of searching through HC propaganda looking for a modicum of genuine value.

As presented, it doesn't exist in this article.

[joebaggadonuts]

I agree with the other people posting here. Single Payer solves these problems unlike your proposal which merely makes it easier for the insurance industry to pull another fast one and puts something else between the patients and their doctors. I don't fault you for trying, but the paradigm of "healthcare delivery" is STOOPID in this country. All around us other nations have solved these problems because they don't have greedy "healthcare insurance" and "healthcare provider" companies skimming as much as they can off every procedure and visit.

There was a time before these so called healthcare entities existed. Doctors provided patients with medical care. We need to get to that again. Single Payer is the only viable solution. Cut out the so called healthcare industry and you save at least 30% right off the top. This is low hanging fruit. Let's pick it.

[GLHorton]

I'm retired for 6 years and on Medicare A & B-- I refused to sign up for part D drug coverage because it is so distorted by Big Pharma lobby interests as to be Evil!-- and I have been to a doctor only once since I retired. (I needed penicillin for an infected cat scratch). Medicare does not cover physicals and preventive care. I miss the psychological comfort of an annual physical and the sense that I have a doctor who knows me whom I can trust to give me good advice. I don't see any proposal on the horizon that will fix this in the USA-- although through international writers' groups I know many people who live with Universal Health Care (not Insurance) systems that supply them with preventive medicine, good advice, and a doctor (or Nurse Practictioner) they trust. 

[ZingoBonMot]

Annual physicals started to disappear about the time PPOs and HMOs came into vogue.

[wolfgangmo]

So did doctors visiting instead of only having time to ghost into and then out of the room to start with their paperwork fight with the insurance companies to get paid.

[GLHorton]

Between us, two retired folk with 2k per year income to live on, we are paying 18% of our income for "coverage" before any actual care and associated out-of-pocket expenses. That 18% is our single largest expense: we don't spend that much on food, and the mortgage is paid off on our 4-room apartment. But how can people low-income paying rent or a mortgage live, when even taxpayer-subsidized insurance absorbs these percentages? Plus, I've read that many people who have signed up for the mandated insurance are paying for insurance but not using services as planned because there is an acute shortage of Primary Care physicians and people therefore have no doctor for routine treatment or referral to specialists -- they are still going to Emergency rooms, the most expensive care. If this continues the out-of-pocket costs may double again next year: the companies are allowed to do that, and to change other rules: there is no way to determine whether people are being treated by what is most effective and economically defensible, or by treatment that gets reimbursed at the most profitable rate. 18-30% of lower-earning people's income for "coverage" is just not sustainable! 20% of GDP for incomplete and partial "coverage" by our dysfunctional health system is insane.

[WorkingClass]

This is crap. Maybe you can push some administrative costs off on patients. Americans want, deserve and will have universal, single payer health care. The greedy, crooked insurance companies (extortionists) will be out of business.

[Paul]

Exactly.

[ThomH]

Balderdash. Almost 1/3 of premium payments are wasted on the (truly) gross margins of the insurers plus the costs that treatment providers must expend to get treatments approved for payment. Applying modern IT will save only a small fraction of these wasted costs, whereas moving to single payer would almost eliminate them, IT or no.

So we continue to pour $1 billion per day down the drain, which will total $3 trillion over the ten years it will likely take us to get single payer, which majorities of tax payers and physicians already want.

The insurers use their financial clout to frighten or buy our politicians, making it "politically impossible" to move to single payer now. So we sew patch after useless patch onto our crazy quilt of a healthcare system, just to keep the insurers in the act.

Single payer would not only save almost all of the costs we now expend (waste) on the insurers, it will actually slow the growth of healthcare costs and open up new opportunities for reining them in.

For more, see http://whatsnotso.blogs.com

[wolfgangmo]

I agree. As a clinic manager I have seen the insurance companies pull dirty trick after dirty trick. If they are now starting to 'pay' for virtual visits [our clinic charges for phone visits but not for email at this time] then they are 20 years too late to the table.

Get rid of the insurance companies and you will not only eliminate the waste within the insurance companies [estimated conservatively at 27% of overhead - WOW] but also the waste within the doctors offices wherein most docs spend up to 1/2 their time fighting the insurance companies and every office has at least a few billing specialists whose job is just to keep up with the insurance companies paperwork storm.

I estimate that we could drop costs on doc visits by 40% at our clinic IF we didn't have to deal with the insurance companies paperwork. Heck, we are a 2 doc shop and we have one printer that does nothing but copy documents all day long for insurance APPEALS.

Give me single payer, or give me death.

[BonnieJW]

Absolutely. I was in health care for 20 years and saw the millions of dollars paid to ADMINISTRATION - billing, filing insurance claims, a budget dept., an accounting dept., an auditing dept., all of which had NOTHING to do with patient care. It was all dedicated to collecting money and making a profit. Doctors and nurses want to do what they were trained to do - take care of sick people and hopefully make them well. They don't want to spend 50% of their time pushing paperwork.

[SeriousBlack]

"As you might expect, there is no silver bullet, and neither government legislation nor unilateral actions on the part of large insurance companies or high-tech giants will fix the system."

BULL.

Resolved: That providing health care is a HUGE problem in this country.

Do you agree with that?

Following from that, sometimes, it is PRECISELY ***MAJOR*** government legislation that is needed to fix a truly huge problem. An example (in magnitude, NOT in nature) might be slavery.

It took a monumental governmental decision and decree to change the path that this nation was on in any reasonable timeframe, led by Abraham Lincoln and his Emancipation Proclamation. We need a similar proclamation with respect to providing each and every American citizen with health care.

With a problem as big and intractable as the health care crisis in this country (chiefly because of the singular element of the health care system being HEALTH CARE ***INSURANCE*** COMPANIES), it would similarly be only by major governmental intervention that it could be fixed.

And paradoxically enough, even though that is in my opinion the essential solution, I doubt that it will happen in my lifetime. (Even though I'll continue arguing for it and fighting for it.) Pretty sad commentary. (After all, we expect our government to effect a change that big and dramatic NOWADAYS, when we can't even find the cahones to impeach Bush and Cheney for at least 10 major things they SHOULD be impeached for?!)