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Catastrophic Insurance Coverage to Reduce Healthcare Costs
By Carl Witonsky
Expanding on Dr. Dan Fields’ point number nine in his excellent 16-point program on how to reduce healthcare costs and improve outcomes, I think there is a potential to save $100 billion a year by employers buying catastrophic insurance for their employees and giving them an HSA account funded with $5,000.
The employee would then pay for all doctor, pharmacy, and outpatient visits with their HSA credit card. NO CLAIM FORMS would be created. The doctor would update the patient’s EMR with the patient complaint, clinical findings, treatments, etc. The catastrophic insurance would kick in when the employee’s out-of-pocket hits $2,500 (above the company-funded $5,000) so insurance claims would be confined almost exclusively to inpatient stays.
The last time I checked, there were five billion claims processed a year in these United States. I estimate that four billion are not related to an inpatient stay. If the total cost for a typical physician claim is $25 between the provider and payor to process (current studies report that a two-doctor family practice costs $70,000 per year per physician for claims-related work), that is a $100 billion cost reduction per year.
I am continuing to research this subject and would be very receptive to critical comments and suggestions.
Clearly all the payors would be up in arms against losing their lucrative administration fees and doctors might attempt to raise the price for office visits, so we will still need insurers / government to negotiate fair fee schedules. The key is to make health care insurance like home insurance — catastrophic-only — and reduce the enormous administration cost of the paper chase to the absolute minimum.
Carl Witonsky is managing director of Falcon Capital Partners of Radnor, PA.
Any Sufficiently Advanced Technology is Indistinguishable from Magic – Remember, Clarke’s Third Law?
By Shabbir Khan
I have been reading HIStalk for couple of years. In addition to saying that your HIStalk posts have always been timely and informative, I wanted to express my kudos to you and Inga for always staying objective.
I have also been reading Dr. Gregg Alexander’s posts on HIStalk Practice with great interest. I am in total agreement with him on the need for giving the physicians and their nursing / office staff a basic tool to help them build their own apps and user interfaces for documenting and sharing patient data with each other using lightweight portable devices.
Physicians have always proven themselves pragmatically wise in adopting and using a new technology if it works for them and if they see a real value in using it. They are not averse to adopting a new technology if it helps them in treating their patients while increasing their productivity. They have enthusiastically adopted a great variety of new technologies in the past. Some examples of the technologies adopted include the use of IV drip line, medical ventilators, and medical imaging equipment. We have also witnessed rapid adoption of many other technologies by the medical community including the use of fax machines, pagers, cell phones, transcription technologies, Internet, and more recently, smart phones (with computer brains) running on 3G networks.
These technologies have made physicians and nurses more productive, improved their workflow, and enabled them to spend more time with their patients. Importantly, these technologies have given the control back to the physicians, nursing staff, and ordinary technicians to use these technologies without needing any outside or specialized help. For example, today nurses routinely use an IV drip line to administer medicine to a patient intravenously without needing any assistant from an IV drip line specialist or from an IV drip equipment vendor. A lab technician can easily fax a lab report to a physician’s office without worrying about HL-7 compatibility on the other end.
Electronic health record systems of today put physicians at the mercy of EHR vendors. Therefore, Dr. Alexander’s post regarding the need for achieving more simplicity and giving more control back to the physicians reflects a more practical approach.
Today, each EHR vendor offers you a unique, “one shoe fits all” solution. Each vendor claims that customizing their system is easy and inexpensive. However, your intuition tells you that the reality is totally different. Using existing technologies and current processes to re-configure, re-program, re-build, and re-deploy poorly designed software is an extremely arduous, expensive, and a painfully slow process as it requires an army of non-clinicians to do it correctly, e.g., programmers who speak such a wide diversity of languages it’s as if they are still living in a Migdal Bavel today.
No wonder the adoption rates for EHR systems have stayed in single digits for so many years. This has been the case despite all of the brilliant marketing tactics used by the EHR vendors. The insurance industry has also been lobbying hard for faster adoption as it eliminates its own data entry costs and gives it a very powerful tool to reduce its medical loss ratios by getting its hands on all patient charts in the entire nation for free. Then, they’ll use the data, that was provided by the physicians to begin with, against the physicians after data mining it extensively.
In addition to the massive lobbying efforts of the insurance industry, other efforts for increasing EHR adoption are also failing, including the relaxation of the Stark Law and a variety of financial incentives being offered by the Federal and state governments.
Physicians are sticking to their paper charts for now.
Building a simple, but a separate smart phone application for each little thing is also not a good solution. Juggling through multiple apps during a very short session (15-20 minutes with a patient) will prove to be too cumbersome for the physician and their nursing staff. It will slow them down. The small size of an iPhone or similar smart phone (e.g., a palm prē) is another limiting factor that will force clinicians to stare at a computer screen for too long while flipping through a myriad of small screens just to get to the right page to enter or display the required information.
An ideal solution requires two important things to happen:
a) Availability of better hardware with larger screen size for quicker access to the data in a patient’s chart and faster means of data entry.
b) Development of a brand new class of software.
I live in Silicon Valley. Better hardware is coming soon (as early as the summer of 2010). However, development of the necessary software will continue to prove to be a more daunting task as it requires a totally new kind of thinking. It requires the development of a brand new and a revolutionary software technology that will be highly disruptive to the status quo.
Both Dr. Alexander and I have been looking for a sufficiently advanced technology that is indistinguishable from magic. Although I’ve developed pretty good intellectual property to make this magic happen (e.g., making it easier for the clinicians to define and build their own apps), it is very difficult to get funded in today’s environment to build such a disruptive technology.
Who wants to fund a Robert Gaskins or Dan Bricklin in today’s economic climate?
Shabbir Khan is a Silicon Valley entrepreneur who is proud of being a nerd.
By Chris Joyce
Thank you for posting the interview with Dr. Hau of Shareable Ink. Dr. Hau’s comments really resonate with those of us that have been evangelizing for more intuitive documentation solutions and a different approach to healthcare IT for years. Every week we get calls from frustrated docs and CIOs that have purchased a big-box EMR, yet are struggling to adapt their workflow and make the jump.
Fortunately, the industry is finally catching onto the source of the poor adoption rates — the user experience! Many HIS/EMR vendors have adopted a web and/or SaaS architecture which solves the IT deployment, cost, and support challenges, but doesn’t address the practical usability for the providers. We’ve seen the same issues with the adoption of EDC in clinical trials. These users are often mobile and offline in spotty wireless environments such as the OR, making a Web application that’s expecting primarily keyboard input unacceptable. Not to mention the horrible bedside manner of being behind a laptop during the encounter.
The solution must be integrated so they have real-time validation, access to previous notes, and don’t have to re-enter patient demographics/history. At the same time, the interface needs to be natural and flexible so the provider can enter structured discrete data as well and notes / annotations to encourage more complete documentation. As Dr. Hau states, if the providers aren’t using it, it is worthless and you won’t be able to address meaningful use or safeguard against RAC audits.
For these reasons, we embraced the tablet in our Logical Ink solution where can truly eliminate paper without giving up the speed/intuitiveness of a pen interface that is so patient/physician-friendly. The user can combine the power of pen, voice and keyboard input instead of choosing just one approach. It is baked into the user experience instead of the “bolt-on” approach many take. We take advantage of the powerful computing device to make the form(s) interactive: interfacing with devices, validating the data in real time, and performing calculations. And the large screen maintains the familiar paper metaphor. Finally, we can work disconnected for periods of time and sync the documentation with the HIS/EMR via industry standards like HL7, for seamless integration into the hospital workflow.
I’m hopeful the industry is moving towards us and that more vendors will renew their focus on physician-friendly documentation.
Chris Joyce is founder and president of Logical Progression of Cary, NC.