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Readers Write 12/10/09

December 9, 2009 Readers Write 7 Comments

Submit your article of up to 500 words in length, subject to editing for clarity and brevity (please note: I run only original articles that have not appeared on any Web site or in any publication and I can’t use anything that looks like a commercial pitch). I’ll use a phony name for you unless you tell me otherwise. Thanks for sharing!

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.

carlwitonskyThe 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.

shabbirToday, 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.

Physician-Friendly Documentation
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.

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Currently there are "7 comments" on this Article:

  1. To me, the most powerful part of Carl’s approach is that it shifts the role of the patient towards being the consumer/payor.

    It could be a good thing, because it would drive competition, commoditization of basic services, interest in preventive care, etc

    But on the flip side there would be a large need to educate the patient on the cost component of their “informed consent”. I’m not sure that providers are equipped to have those conversations.

    I think that’s perhaps where Personal Health Record technology can come in – to empower the patient with the right information ( cost and otherwise), to make the right decisions.

  2. Carl,

    Your approach sounds theoretically valid. However, after working with my small company in selecting the medical plan, I can say we would pass for the following reason.

    For the employee the 2.5K is too high for potential onetime payment. Most of our employees making sub $50K, like having a deductable capped at $300.00 they can cover that (300) if something happens. However, if we move that threshold up to 2.5K they do not have the liquidity to handle that. By having a low deductable with a monthly premium payment we more or less set up a finance plan for their healthcare. They pay monthly for something they can use up front. In aggregate, the payments might workout the same at the end of the year; but the timing of the cash out lays is too much of barrier.

  3. My employer (an HISTalk sponsor, for what it’s worth) recently changed insurance plans to something similar to what Mr. Witonsky suggested. We now have a high-deductible insurance plan with a Health Savings Account. It took a while to grasp the concept, but eventually it did sink in what a good idea this approach is.

    The key benefit that I see for me with this approach is that for the first $5K, I pay absolutely *nothing* out of pocket, because it comes from the employer-funded HSA. Only when my total medical expenses exceeds $5K do I have to pay anything, and then, my out of pocket is still capped at $2.5K. With traditional insurance, I was paying a co-pay for each visit, plus the initial deductible for services, plus a constant percentage after the deductible is met (10% for a generous plan) for in-network inpatient services. That brought my maximum out-of-pocket (OOP) much higher than the simple $300 deductible under traditional insurance.

    You can’t compare the $2.5K max OOP against the $300 deductible. You have to compare max OOP against traditional insurance’s max OOP, which (in my limited experience) is often more than $2.5K for a family.

    Once I got past the initial ?huh? factor, and realized how much information and control over my care I now have, I finally realized what a great deal this HSA strategy is.

  4. Carl does not undertand the widespread lack of understanding and disinterest by patients. The patients are not doctors nor do they want to be. Shabbat Khan makes excellent points and ought to be highlighted. What Chris suggests ought to be subject to a clinical experiment with objective outcomes.

  5. Carl,
    Good idea..but it would only fly in a Republican dream world.

    Look what happened recently with the mammogram screening mess. Using an evidenced based medicine analysis a federally sponsored group comes out and says screening women under 50 years old is not only cost inefficient, it can be medically harmful.

    What happens? The lobbying groups scream…every woman should have the ‘right’ to get screened. And it should be covered by insurance or government.

    From my 35 years experience in this health industry, both as a consumer and provider of health care, I have come to the conclusion that in order to control the costs of health care you must get ALL parties to agree on one question first.

    That question is: Is health care a ‘privilege’, or is it a ‘right’?
    If a right then all care at all levels must be free (paid for by society in general), if a privilege then your idea might work, and if both (where we really are now and have been for decades) where does the ‘right’ end and the privilege begin? Unfortunately it’s a tug-o-war that will go on infinitum.

  6. With 300/100% plus $1606 premiums, we have the following:

    * Minimum OOP: $1606
    * Maximum OOP: $1906
    * Expenses paid by plan before first out-of-pocket expense: $0

    With Carl’s HSA approach we get the following:

    * Minimum OOP: $0
    * Maximum OOP: $2500
    * Expenses paid by plan before first out-of-pocket expense: $5000

    So – if my total coverable expenses are less than $6906, then Carl’s HSA is a better deal for me, because up to that point, my out of pocket will be less than the $1906 I’d pay under Too Expensive’s traditional insurance. With a catastrophic illness and expenses more than $7500, the traditional insurance approach saves me $594.

    Most families will not consume $6906 of medical expenses in a single year, and – unlike FSAs – HSAs carry over the unused balance from year to year. When examining total actual OOP expenses across multiple years, Carl’s HSA approach will be less expensive for most employees than Too Expensive’s traditional insurance approach. For the rest, there’s a pretty small difference in the maximum out of pocket for these two specific examples.

    Even so, we’re comparing a relatively average HSA proposal with a relatively generous traditional insurance plan. An employer with a generous 100% coverage after deductible could be just as generous by funding the HSA at $5600 instead of $5000, or by capping the max out of pocket at $1900 instead of $2500. For example, my employer’s HSA plan is more generous than the one Carl proposed, and I’ll actually pay less than $1900 of my own money even with a pregnancy or catastrophic illness – making it a better deal for me in every single case than even Too Expensive’s generous traditional insurance plan. I don’t want to go back to the old traditional insurance after finally “getting” how the HSA really works.

    It’s a good thing for patients to become informed about their healthcare. The HSA approach, when done right, can be a very effective carrot. It doesn’t have to be a stick.

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