04/16/2013 02:42 pm ET Updated Jun 16, 2013

Innovating the Business of Healthcare

You live in America. It's 4:30 at your doctor's office when a nurse calls your name, and your 4:00 appointment begins. She weighs you, checks your blood pressure and writes some notes in your file.

At 4:50 the doctor enters the examining room, asks about the family and opens your file. On top is a report that had been faxed over from a lab across town (the nurse had asked you where that report was). You'd had blood drawn last week, at which time you showed your insurance card and handed the clerk a script specifying the tests your doctor wanted; it was a handwritten scrawl you couldn't decipher. "Is this for PSA?" the technician asked. No, you say, cholesterol. "Oh, yes, I see."

"Your numbers look good," the doctor says. He rifles through the file. "Are you taking any other medications?" Just the aspirin a day he had suggested, you reply. "How old are you?" he continues. "Have I sent you in to get your PSA test?"

The doctor takes a small tablet and writes something in Latin. At the checkout station you hand over a $20 co-pay and gaze upon the floor to ceiling shelves of manila folders as you wait for a receipt.

Now you drive the little piece of paper your doctor gave you to a pharmacy near your office. The GPS unit in your car alerts you to traffic snarls and reroutes you. At the pharmacy you trade the piece of paper for three months of pills, after once again showing your insurance card and then waiting another 25 minutes for the prescription to be filled. Finally, you are out of the pharmacy at 6:00 p.m., realizing you might not make it to the airport in time to pick your son up from his 7:00 p.m. arrival. Fact is, he will most likely need to take a taxi. You send him a text message, using your phone.

Now let's create one more scene later that night, just to drive our message home. It's 10:30 p.m. and your son is watching a basketball game on TV, playing an online game with participants all over the globe, sending instant messages to three friends, and purchasing movie tickets online.

As you prepare for bed, you suddenly feel weak and dizzy. You have a smashing headache. It is scary. Your spouse calls 911. Two emergency medical technicians who have never seen you in their lives show up, check your vitals and encourage you to go to the emergency room. There, sitting with a receptionist, you fill out several forms and hand over your insurance card. You wait 56 minutes. A nurse directs you to an examining area, checks your vitals again and writes on a paper chart. Eventually a resident, still in training, shows up, takes the chart, and asks, "Are you taking any medications?" You don't see a manila folder, but you suspect it's lurking somewhere.

Why does this happen?

Critical issues for Healthcare Delivery Today

Let's analyze the healthcare delivery system from the perspective of information flows. We have a wide variety of players: doctors, hospitals, insurance companies, employers, government and researchers, all operating in an environment that makes up a complex supply chain. And for this complex supply chain, transparent business models and processes need to be established to enable collaboration.

Healthcare service providers have historically spent far less than what other industries spend on technology investments to create better information flow and cross-boundary collaboration.

The problem is that vital information is missing throughout the entire healthcare supply chain. What information is available is often transferred laboriously by paper, and databases in hospitals and doctors' offices are unable to talk to each other because there are no data standards. In some settings doctors and nurses spend as much time on paperwork as they do treating patients.

Business Innovation for Healthcare Delivery

We have to start believing that patients should have access to their medical records and be full participants in the health care process. This means that healthcare services must maintain systems that provide full accessibility to physicians, clinicians, and patients respectively.

Legacy health records and medical delivery systems were never designed for transparency and portability. Actually, they were designed precisely with the opposite intent. The result has been a collective system that isolates information from the people who need it to make faster, better decisions. This chaos literally costs billions of dollars annually in bloated health care expenses.

For example, today a hospital can easily develop better patient information management that gives better control over the dissemination of patient data and expedites decision-making, resulting in:

  • Reduced patient errors through electronic physician order entry.
  • Elimination of transcription errors.
  • Reduced pharmacy errors because all prescriptions are sent electronically.
  • Reduced dosing errors in pediatrics, where dosing is calculated by weight and age.

Fewer patient errors means lower costs and better outcomes.

A Real-life Case Study

Dr. Richard Salluzzo is a double board-certified physician and the former CEO of Wellmont Health System, a 13-hospital system with 7,000 employees and facilities in Tennessee and Kentucky. He discovered the need to change the application of technology after changing his organization's objectives to focus on customer service.

"By concentrating on customer service excellence, we increased our patient volume, and in turn our revenues. I used tools to measure and to benchmark the quality of our services against other hospitals in the U.S. Our emergency department went from 60,000 visits annually to 92,000 annually," Dr. Salluzzo said in an interview with the BTM Institute. "ER patients saw a doctor within 40 minutes. We had a 90 percent or better score for our ER customer service."

Dr. Salluzzo doubled the company's revenues and made it profitable. He explains:

"For example, we put in room service so patients can order food from 6 a.m. to midnight. This process has empowered our staff to speak with patients and to manage their diet as part of a team with a clinical nutritionist. Our price per meal decreased from $1.80 to $1.60 with room service. Room service has taken a lot of work off nurses. We now provide better meals at a lower cost and with less waste."

The Promise of Tomorrow

We are accustomed today to seeing twice as many office staff as medical personnel in a doctor's office. That will change. There will be fewer visits to the doctor; information will be exchanged electronically. There will be fewer repeat tests. Doctors on rounds in a hospital will have everything they need to know in a small device hanging on their belts. Patients will have access to their medical records online, and so will the emergency room. But all this will require change, and change is not easy.

Actually, we already have the technology we need. For example, we already have EHRs, electronic health records, which capture every piece of information about a patient and are accessible to qualified medical personnel online. In an emergency the patient doesn't have to remember drugs he's taking and nobody has to track down a manila folder.

Nevertheless, when studies indicate that only about half of all patients get widely accepted and uncontroversial advice from their doctors -- such as taking aspirin for heart conditions -- it's time we consider something new. Moreover, if we had a national, intraoperative, medical information network, we would be able to see patterns in the aggregate data. We could learn, for example, whether a certain test is actually worthwhile in a certain situation. The quality of healthcare would go up and the cost would go down.

Although some progressive healthcare providers have begun to transition to digitization, enabling faster and more complete access to patient data, we still have a long way to go toward achieving seamless process and business innovation in healthcare.

For more by Faisal Hoque, click here.