Health Affairs, 24, no. 5 (2005): 1266-1268 doi: 10.1377/hlthaff.24.5.1266 © 2005 by Project HOPE	New Online   How Would Obama, McCain Cover The Uninsured?   Debating Cost Of Uninsured   Try Medicare-For-All   HA Blog Top 10

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Health Information Technology Policy

PERSPECTIVE

Wiring Health Care

Abstract

 
Health care is in need of an industrial revolution. To reform health care delivery, improve quality, and address the economic burdens that health care places on business and individuals in this country, we must first have access to the data that will allow us to create meaningful process improvements and reforms. Only by implementing computerized care tools can we gather the data. The government—and Medicare in particular—should fund this effort and use its purchasing power to ensure that our health care infrastructure is brought up to the level that all other key industries demand.

Agreement with Kleinke. I believe that J.D. Kleinke is entirely accurate in his contention that computerizing care ought to be a national top priority—if not the single top priority now.¹ Health care cannot be reengineered without that basic foundational tool—data. GE cannot achieve Six Sigma results without data; the same is true of health care. The only viable source of these badly needed data is the computer. Patients’ medical records need to be computerized before a value-based health care marketplace can truly exist.

Kleinke also correctly concludes that the government should step forward to force that system into existence. A well-connected, easily accessible, fully interoperable system should be a major government goal, with appropriate funding to support the agenda. That would not be an entirely new step for our government to take. This country has undertaken massive, environment-changing agendas and initiatives before when the need was great and the potential benefits even greater.

For example, the Hill-Burton Act gave us a national infrastructure of hospitals. Before its passage, there was a real shortage of hospitals. We needed hospitals in a lot of settings to foster both local economic development and better local health care. Those new hospitals and hospital expansions now make care better and more accessible across the United States. Those hospitals would not have been as successful—and many would not exist—without the Hill-Burton funding.

Likewise, the Rural Electrification Act of 1936 turned relatively poor rural America into a livable world economic giant. The Federal-Aid Highway Act of 1956 made interstate commerce much easier and created a great state-to-state economic engine and transportation infrastructure. Another example Kleinke mentions is the national railroad agenda. Each of

We now need an equivalent transformation of our health care economy. We need that same level of progressive strategic and operational thinking applied to health care. We cannot wait ten years for that agenda to happen on its own. Medicare must step up to the plate now to provide the funding and the financial incentives that will completely wire U.S. health care in the next half-decade.

Why should Medicare help fund this initiative? For one thing, Medicare will benefit immediately. The potential administrative savings and care-efficiency improvements are pretty obvious. Take just one condition. More than 25 percent of all Medicare dollars are spent today on people with diabeties.² A 2003 RAND study showed us that 55 percent of those diabetic patients receive inadequate care.³ The kidney dialysis units of this country are filled with people whose diabetic care was inadequate.

A computerized care system with tools that remind doctors of what care to provide to their diabetic patients at each visit could easily make a 10 percent improvement in the cost of care for those patients. That 10 percent improvement would reduce total Medicare costs by 2.5 percent, which would equal $6.6 billion each year—more than enough to prime the health care electronic system pump, if the money were used wisely.

As Kleinke suggests, Medicare should simply refuse to accept claims after a certain future date from any unwired care provider. Medicare should also help fund the systems that providers select. That strategy will do more to ensure Medicare’s long-term viability than any other policy agenda discussed or proposed up to this point. It’s an obvious choice.

Disagreement with Kleinke. However, I disagree with Kleinke on a few of his other points. He suggests that there should be only one medical records system. That would be like telling every bank in the United States to use one government-designed banking administrative system. This would not enable efficiency, flexibility, creativity, progress, or customer-benefiting service differentiation strategies. What U.S. banks did instead was create across-the-board interoperability data standards—not a single system. That is a brilliant approach. Health care should follow that lead.

I also believe that Kleinke is off point in suggesting that health care providers deliberately and consciously provide inadequate care at the patient’s expense purely for personal financial gain or even greed. No one has been more critical of fee-for-service (FFS) payments and their incentives than I have been; I have written articles and books on the perverse results of that payment system for more than two decades. The incentives themselves are perverse, but the amazing thing is that FFS providers themselves do not believe that they are intentionally creating an inefficient, wasteful, costly, and wealth-inducing system. Most of them truly believe in FFS payment as an appropriate way of delivering the best care—not greed-based worst care. Many are passionate ideological proponents of FFS payments for reasons other than personal greed.

Although prepayment or outcomes-based reimbursement can contribute to the solution, it is not an easy fit for all providers; however, those kinds of reimbursement systems do create great incentives and great outcomes when done well. One other area of disagreement—where Kleinke may be pleased in the very near future to discover that some of his conclusions are in error—relates to the future role of health insurance companies in data connectivity and interoperability. Some of the positions Kleinke describes for health insurers are relatively accurate as recently as a couple of years ago. Today, however, the major insurers are working hard to create a bank-like level of data interchange and interoperability. Insurers are also working hard to use their available claims databases to create transferable, easily accessible personal health records for their patients. The health insurance data-flow revolution has begun; the first pilots are successes. Major insurers are working to create that level of information flow and connectivity.

A claims-based approach is not and cannot be as good or complete as a fully automated electronic medical record (EMR). Those of us who already have gone the next step to install such EMRs can make a much broader and more complete set of information available to both patients and caregivers. Systems with EMRs will still have a data-flow advantage, but the electronically accessible, claims-based individual health record strategy is also revolutionary, and it goes a very long way toward resolving most of the problematic issues Kleinke outlines for health insurers. Administrative costs will drop, data accuracy will improve, and consumers will have at least a basic set of health information data available wherever and whenever they receive care. Even in Las Vegas in the emergency room at 2:00 a.m.

The times are a- changing. Smart people would have wagered heavily that this particular health insurance data-flow development would never happen. It may still fail, but it’s on the track right now and heading for a robust rollout in the next year or so. One interesting danger of that claims-based "individual health record" data agenda could be that it might temporarily delay the movement toward the far more useful and complete automated medical database that this country so badly needs.

In any case, Kleinke’s passion for health care electronic connectivity is both well founded and well expressed. It’s time to wire health care. Paper kills.

Editor's Notes

 
George Halvorson (george.c.halvorson{at}kp.org) is chairman and chief executive officer of Kaiser Foundation Health Plan Inc. and Kaiser Foundation Hospitals in Oakland, California.

NOTES

Top NOTES

 

1. J.D. Kleinke, "Dot-Gov: Market Failure and the Creation of a National Health Information Technology System," Health Affairs 24, no. 5 (2005): 1246–1262.[Abstract/Free Full Text]
2. Centers for Medicare and Medicaid Services, "Medicare Awards for Programs to Improve Care of Beneficiaries with Chronic Illnesses," 8 December 2004, www.cms.hhs.gov/media/press/release.asp?Counter=1274 (21 June 2005).
3. E. McGlynn et al., "The Quality of Health Care Delivered to Adults in the United States," New England Journal of Medicine 328, no. 26 (2003): 2635–2645.

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