Technology Innovation, US Healthcare and Health Reforms
This article authored by me has been published as cover story in Healthcare Reform magazine [ http://www.healthcarereformmagazine.com/article/technology-innovation-us-healthcare.html ] and also in Medical Tourism Magazine, which is sold in more than 30 countries [ http://www.medicaltourismmag.com/article/technology-innovation-us-healthcare-and-health-reforms.html ].
Bookstores went online and companies like amazon brought down the cost of books by cutting down entities involved in the supply chain. There are numerous such examples across various industries where technology has played key role.
However, Technology innovation has not worked as well with US healthcare industry as it did with other industries; it is one of the reasons why America spends 17.2% of GDP or about $2.5 trillion on healthcare. The healthcare expenses have been growing at significantly higher rate than inflation. U.S. healthcare system stands last for its performance among seven industrialized nations, despite spending the most, according to a new Commonwealth Fund report 2010.
Technology innovation has not succeeded in improving US healthcare the way it did in other industries and the actions being taken by federal government to promote Healthcare IT.
1. Slower Adoption of technology: Implementation of innovations that could bring down costs has been slow in US healthcare industry. Implementation of Electronic Health records is one such example. Partial to full penetration of EHRs in European nations such as Norway, Sweden is about 90 % whereas it stands at meager 23% in USA, according to a report. Administrative efficiencies could be achieved with innovations such as Real time claims adjudication and ICD 10 implementation.
CMS report suggests that hospital productivity gains have been “small or negligible” over the past quarter century. The usage of basic communication medium like E-mails also is not widespread between patients and doctors. Usage of smartphones in healthcare is catching up, however it still has long way to go.
2. Higher Costs of Technology: Due to patent protection laws, manufacturers need not worry about price competition when they launch new medical equipment/drug; emphasis is on recovering the costs before patent expires. Insurers do not have enough bargaining power to negotiate lower prices on these costly treatments. Because of this, technology drives up the healthcare costs.
3. Consumer price insensitivity: Once members pay the premium, there is decreased motivation to opt for drugs, treatments that cost less as members tend to believe that costlier treatment is better. Costlier treatments and equipment are demanded by patients and physicians on the grounds of quality. Cost of new technology consistently accounted for 20 percent to 40 percent of the rise in health expenditures over the past forty years. Perverse incentives like this push the healthcare costs up despite innovations happening in the system.
4. Limited incentives for doctors / hospitals for cost reduction: Many of the technology innovations have not lead system efficiency or reduced healthcare costs. On the contrary, Congressional Budget Office estimates that an astonishing half or more of the increased spending on health care in past decade is due to technological, surgical and clinical advances. An article in The Journal of the American Medical Association points out that simple surgery that eases pressure on the nerves has been replaced by complex fusion surgery to relieve lower back pain. Surgeons were paid 10 times as much for the complex surgery, hospitals were paid three and a half times as much, and manufacturers made $50,000 worth of implants for the complex surgery compared with little or no profit from the simpler fusion surgery.
5. Overutilization of technology: Overutilization of technology, increases spending with limited additional benefits. At the same time, market-based competition among provider organizations to use the latest equipment increases the utilization of expensive technology at the expense of older, less expensive alternatives. This clearly seems to be the case with US healthcare where returns in terms of improved healthcare are not in proportion to investments on technology.
6. Lack of innovation in chronic disease prevention: Prevention is the key to both better health and lower healthcare costs. One third of American population is overweight (about 97 million people) and America spends whopping 75% on chronic diseases which can be prevented to large extent by closely working with consumers. However the focus is more on disease care rather than on preventive care. According to a recent New England Journal of Medicine article, over 2 million Americans die due to preventable reasons like smoking, high blood pressure, obesity, diabetes etc. United Health Group estimates that Diabetes may cost America approximately $3.4 Trillion in the next 10 years. Improper eating habits and unhealthy lifestyle are prime reasons behind these problems. Innovative ways to promote prevention may go long way to bring down healthcare costs. Solutions need to be introduced and implemented to involve all stakeholders and push consumers to lead healthier lifestyle. Health 2.0 technologies could go long way to promote healthier lifestyle.
7. Defensive Medicine costs: In many cases, physicians opt for comprehensive treatment that include extra tests and scans to make sure that they don’t have to face litigation for medical malpractice. This practice of defensive medicine costs $55.5 billion to US healthcare every year according to a study. Doctors also pay hundreds of thousands of dollars a year in malpractice insurance. These expenses can be limited to an extent with Electronic Health records implementation.
8. Failure in reining the inefficiencies: Significant innovations are required to rein in the key areas of system inefficiency such as administrative inefficiency, Provider errors, lack of care coordination, unnecessary care, fraud and abuse etc. $40 billion of costs could be saved in the U.S. health system in terms of inefficiencies reduction with implementation of EHRs, according to Mckinsey report. Fraud and abuse are prevalent, more prominently in Medicare. Healthcare costs would be significantly lower (A Thomson Reuters report claims that almost $700 billion are spent in wasteful spending and significant chunk here can be saved) with innovations in this area which has not happened so far.
Federal government is pushing the changes which would enable Healthcare IT to usher into new era where technology would simplify healthcare with big ticket implementations such as HIPAA 5010 changes, ICD 10 implementation, Grants of $19.2 Billion to address the meaningful use of health records and privacy / security concerns associated with the electronic transmission of health information as part of ARRA act of 2009.
PPACA act of 2010 has outlined various changes with regards to healthcare IT. The proposed changes include implementation of health benefit exchanges, promoting administrative simplification with enhanced interoperability, promoting new models such as Accountable care organizations which would need various technology innovations ( Remote health monitoring, telemedicine) to be successful, creating Innovation Center within the Centers for Medicare and Medicaid Services and performance bonuses for organizations that demonstrate successful implementation of HIT initiatives among other steps.
The change that all these reforms are set to bring in would not be easy on stakeholders involved in US healthcare, however if Healthcare industry has to be transformed into an efficient one, this change is a bitter pill that the stakeholders would have to swallow!!
iphones replace Stethoscopes: Advent of Smart Phones
A recent news reported that iPhones – with inbuilt sensors – can now replace the stethoscope, the equipment which symbolized medical profession over decades. More than 3 million doctors have downloaded the app invented by Peter Bentley, a researcher from University College London which turns an Apple iPhone into a stethoscope, allowing doctors to measure heart beat. Last week a free version of the app was introduced, which is now being downloaded by more than 500 users a day. According to an article in Canadian Medicine, 80 per cent of doctors will be listening to their patients’ hearts with their iPhones in two years.
This innovation has brought the spotlight on mobile health, practice of medical and public health, supported by mobile devices like mobile phones, smart phones and other wireless computing devices. The application could be as simple as using phones to communicate with patient and as complex as using a tiny device that measure vitals (blood sugar, blood pressure, glaucoma), deliver the data via wireless link to tracking software and then sound an alert when necessary.
These innovations point towards paradigm shift in Healthcare delivery mechanism. The technology is heading to be more mobile, compact, more sophisticated and helpful. Doctors are not known for the quick embrace of technology. However gradually they are getting hooked to smart phones like iPhones and blackberries which provide thousands of medical apps.
There are nearly 6,000 applications related to health in the Apple App store. Smartphone technologies enable patient’s vitals monitoring, technology-based diagnosis support, remote diagnostics, telemedicine, web browsing, and access to patient information with EMRs, EHRs. Smartphone technologies are now in the hands of a large number of physicians and other healthcare workers.
Another couple of good examples of how smart phones are making difference is a Pittsburgh-based insurer Highmark Inc., which recently rolled out a free iPhone application to help members, wherever they may be, locate participating Highmark providers, look up medical information and get wellness tips. At Kaiser Permanente in Southern California, patients with diabetes, hypertension or both who e-mailed their physician had significantly better health outcomes than non-users of its secure messaging system, Health affairs magazine reported.
Experts are betting big on increasing usage of phones in healthcare delivery both in developed and developing world because number of global mobile phone subscribers in 2007 was at 3.1 billion and is expected to grow to 4.5 billion by 2012 which means mobile phone is the technology that connects significant population of the world.
Manhattan Research, in its annual “Taking the Pulse” study of physicians and health care technology, reported in late April that 72% of doctors use smartphones personally and professionally, with that number expected to jump to 81% in 2012. By comparison, less than 20% of the general adult population in the United States uses smartphones. ABI Research reported that mobile data services for health care will grow to $7.7 billion worldwide by 2014 and healthcare will account for 10 percent of all mobile data service revenues in 2014. Another research by Parks Associates reported that the U.S. market for wireless home-based healthcare applications and services will grow at a five-year cumulative annual growth rate of over 180 percent and become a $4.4 billion industry in 2013.
With the above numbers, it is evident that we will witness sea change in healthcare delivery. People on the move can connect with the providers, Smartphone apps could save lives in case of emergency with various medical apps and remote patient monitoring would be possible within environments of limited resources and beds.
In developing nations like India, smartphones could be boon and help healthcare to reach grass root level.
Reforming Claims Processing with Real Time Adjudication
This article authored by me has been published in Asian Hospital and Healthcare management magazine. The article can also be accessed on their website at http://www.asianhhm.com/healthcare_management/reforming-claims-processing-real-time-adjudication.htm
Unlike sectors such as banking and retail where business transactions with consumers take place over few minutes, US healthcare still lags behind on efficient transactions processing front. After patient visits provider and receives the services, it takes days to settle the claim for various reasons. This scenario however could be reformed with implementation of real time claims processing.
The American Medical Association in its National Health Insurer Report Card 2010 has stated that seven major payers which received claims submitted electronically took 5 to 13 median number of days to respond with claim processing details. There are delays in provider’s office as well while submitting the claim owing to various activities such as documentation, medical coding and billing.
As a result of the rising healthcare costs, patients are paying more out of their pocket for their healthcare which puts increased burden on providers to seek collections from patients. It may take days to know amount payable by members, after which members would initiate payment settling process with providers. This factor is even more prominent in Consumer driven Health plans where members pay larger amount out of pocket. A Report by AHIP shows that the number of people covered by high-deductible health plans (HDHPs) totaled 10 million in January 2010. With growing number of CDHP members, account receivables due from patients are going up and increase the risk of bad debt and reduce the cash flow for providers.
As CDHP enrollment grows, medical offices that experience growing receivables have a promising option in real-time claims adjudication. With the Real-Time Claims Adjudication system, provider may collect the member payable amounts at the time of member office visit after services have been provided and the claim has been processed real time. Providers would be able to bill for service and receive an explanation of benefits (EOB) at the point of service before the patient leaves the office premises.
Here is an example as to how it would work. Member Greg goes to see the physician Dr Derek and seeks healthcare services. Dr Derek examines and renders the services to Greg. Right after services are provided, Dr Derek / his support staff verifies that Greg belongs to plan which supports real time claim processing. Staff member then files the claim with help of EHRs or payer website. Payer’s system processes the claim real time and sends the details of payable amount to the provider and the amount owed by patient. Greg could make the payments while he is in hospital and discuss with the staff about any queries he may have pertaining to bill. Dr Derek would receive amount payable by payer within a day or two with Electronic fund transfer (EFT). The whole process could be as quick and simple as this, from the present scenario where it takes days to settle a claim.
Benefits with RTCA implementation
RTCA implementation helps reduce administrative burden and excess paperwork which eventually helps to cut down the costs related to administration.
Members need not spend time and energy to follow up and resolve their health care billing issues. They need not wait for weeks to receive statement in the mail. Members also can discuss the EOB with hospital staff while they are in hospital.
Provider staff would spend less time on administrative activities such as following up with payer on overdue claims. The risk of bad debts associated with patients receivables would go down as providers would be able to collect these while patient is in hospital.
Providers would receive the payment from member right after the encounter and the remaining payment from payer over Electronic Fund Transfer in few days. Quick turnaround in reimbursement improves the cash flow of providers / hospitals.
Payers would have fewer people working the telephones to answer claim and benefit inquiries. The satisfaction levels of providers and members would go up due to efficient claims processing systems and payers would be able to use this as a differentiating factor.
Challenges
RTCA implementation substantially alters the existing workflow of providers. Claims need to be keyed in while patient is in hospital. When patients get their bill in real time, they would have questions about bill and would expect the answers from the staff in hospitals which mean hospitals will have to invest on personnel and infrastructure to support real time processing.
Many providers are not able to prepare bills for claims submission for at least few days owing to various activities involved. The hospital staff needs to navigate through thousands of diagnostic and procedure codes while generating the claim. This activity gets even more complicated when the provider is a generalist and deals with large number of medical conditions.
Provider offices have been keying in the claims in a batch mode system for long time. Change in mindset would be required to implement RTCA, it also would have financial and administrative implications for provider.
Providers need to have proper practice management setup to submit real time claims. This could be accomplished by implementing Electronic Health record systems. However, EHR implementation could be financially burdensome and impact productivity of provider and staff by about 30% over first year of implementation.
Along with providers, payers also need to upgrade their systems to support RTCA. However, not all payers offer this option of RTCA to providers. Payers’ claims processing for long have relied on batch processing. Migration to real time processing would be costly and complex.
Road ahead
RTCA significantly reforms how healthcare claims are submitted, adjudicated, remitted and paid today and helps make the process far more efficient. In future, we may see administrative simplification mandates driving real time claim processing.
While it may still seem far off, progress is being made towards the adoption of real-time adjudication with payers like Humana, BCBS FL, BCBS Highmark, and BCBS WV implementing and pushing RTCA usage. There is also increasing interest among providers about usage of RTCA systems. With EHRs being implemented as part of HITECH act across USA, we may expect significant growth on RTCA implementation front.
Implementation
The Real-Time Claim Adjudication process provides the capability to submit and receive ASC X-12N transactions in a real-time mode. Payers need to implement functionalities that will have members’ benefit details and provider’s contracted rates and can accurately process submitted claims in a matter of seconds.
Providers need to set up IT infrastructure and communication channels with specific payers which are offering this service. RTCA uses the electronic data interchange (EDI) channels for communication with payers. Communication can be performed through web link, a B2B software setup or third party vendor.
Providers could deploy Electronic health record systems to enter claims, submit the claim to the Payer with a click of a button and within seconds have a response back about adjudicated claims.
Usage of smart cards for patients would help providers to collect member information related to eligibility and personal health record instantly and eliminate manual information keying in part.
Health 2.0 : Smarter patients, smarter healthcare
The below article authored by me has been published in Asian Hospital & Healthcare management magazine. The link to the article is http://www.asianhhm.com/healthcare_management/health-2.htm
Primary role of Technology has been to make life easier and bring down the associated costs for end user. Be it banking, retail or healthcare domain, this basic definition of technology holds good. The way we pay our bills has changed dramatically over the years. Gone are the days when we used to stand in queue to pay the bills, all we need is a few clicks of mouse sitting in the drawing room today to make those payments.
US Healthcare industry has been relatively slower when it comes to technology adoption. We see many big ticket technology implementations happening within Healthcare right now with Electronic Health Record implementation, EDI 5010 changes and ICD 10 implementation. These projects call for investments worth billions of dollars and promise big returns in terms of better healthcare and cost effectiveness in long run. There is another set of innovation happening backing on concepts of health 2.0 which is making difference in our day to day lives.
Health 2.0 has evolved from the concepts of Web 2.0. The term Web 2.0 is commonly associated with web applications that facilitate interactive information sharing, interoperability, user-centered design, and collaboration on the World Wide Web. Examples of Web 2.0 include social-networking sites like Facebook and Orkut, blogs, wikis, video-sharing sites like YouTube, hosted services, web applications etc.
On the similar lines of web 2.0 definition, health 2.0 can be defined as use of a specific set of Web tools (social media, blogs, communities, Podcasts, search, wikis, etc) in healthcare that promote the collaboration among doctors, patients, and other stakeholders in healthcare eco system. Defining characteristics of health 2.0 are active participation, with direct communication – between patients, between professionals, and between patients and professionals.
If the jargon used in above paragraph sounds a bit overwhelming, let us talk about how health 2.0 applications are helping us in day to day life with examples. A decade ago, when someone in my family fell sick, I would have identified the doctor specializing in the treatment related to the ailment, I perhaps would have spoken to family and friends to identify the doctor. Doctor would then render services to treat the patient. Often times, I would not know much about the medical condition and go by what doctor would advise.
Back to present, when someone in my family fall sick today, I may log on to one of health 2.0 based portals like zocdoc.com or vitals.com for scheduling appointment where I would identify the doctor who treats the medical condition and is contracted under my health plan. I would also read the reviews about the doctor before I schedule the appointment online. After the doctor identifies medical condition during hospital visit, I would go back and read details pertaining to the cause of medical condition, precautions my family member needs to take, experience of other patients who have been treated for similar medical condition on various health content websites like webmd.com. My sick family member could also join support community for specific medical condition on portals like dailystrength.com and derive inspiration from other patients and also make friends on the portal.
I can keep track of my health records online to make sure that I don’t end up spending for unnecessary tests. I could directly upload information from health and fitness devices in moments, automatically to my online health record with help of portals like Google health, MS Health Vault, myoptumhealth.com.
I can compare various health insurance plans in my locality on portals like vimo.com before I zero in on the right plan based on various factors like cost and benefits. I could check for drug interactions, side effects, symptoms or abnormal lab tests to see if drugs are causing those by visiting websites like doublecheckmd.com.
Doctors may interact with each other on social media platform like osmosis that enables verified U.S. licensed physicians to exchange medical knowledge which helps improve patient care.
And the best part is all these innovations in health 2.0 do not cost much to end user. These rather help entire healthcare eco system by transforming patients into active partner in healthcare delivery process where patients make sure they understand the diagnosed medical condition, take extra effort to stick to medication and healthy diet. health 2.0 would make it possible to stem the increase in healthcare expenses, relieve the pressure on staffing levels in hospitals and make healthcare system more efficient.
Health 2.0 would shift the spotlight back onto most important aspect of healthcare, the prevention of various diseases with emphasis on healthier lifestyle, which may bring down the costs substantially
The Medicare Conundrum
Medicare program in USA was established in 1965 under Title XVIII of the Social Security Act to provide health insurance to individuals age 65 and older and individuals under 65 with certain disabilities. As of 2010, 47 million people rely on Medicare for their health insurance coverage: 39 million people age 65 and over and 8 million people under age 65 with disabilities. Medicare benefit outlays stand at around $504 billion in 2010.
Medicare program is divided into four parts, each covering different benefits. Part A covers inpatient hospital services. Part B helps pay for physician, outpatient, home health, and preventive services. Part C, also known as the Medicare Advantage program, allows beneficiaries to enroll in a private plan for healthcare. Part D, the outpatient prescription drug benefit, was established by the Medicare Modernization Act of 2003 (MMA) and provides the prescription drug coverage to enrollees.
For decades, seniors have been looking forward to Medicare program to address their healthcare needs. Medicare program has been facing challenges in terms of rising healthcare costs, payment methods that could be more effective at bringing down costs and delivery mechanisms. This article would however focus on a specific problem that may jeopardize Medicare program in years to come. Medicare program seems to be entering the rough water starting 2011. Over years, an entire generation starting to retire in 2011, would pose difficult questions to the very existence of Medicare program in its present form.
The post-World War II baby boomers generation — approximately 79 million infants born between 1946 and 1964 – will start reaching age 65 this year and continue to cross the 65 age mark over next 20 years. The Baby Boomer generation accounts for 26% of the total U.S. population. The government expects Medicare beneficiaries’ count to touch 80 million by 2030. Currently there are 3.5 people of working age supporting every retiree. The number of workers supporting retirees will fall down to 2.3 by 2030.
At the same time, health care costs are projected to outpace inflation. Medical advances are extending lives which would further strain the program’s finances. Medicare program is expected to cost $929 billion by 2020, from $504 billion in 2010. Spending on the program is projected to expand from 3.6 percent of GDP in 2009 to 6.4 percent in 2030. Medicare’s unfunded liability runs as high as $38 trillion over the next 75 years.
A Research by economists Eugene Steurle and Stephanie Rennane of the Urban Institute show an average couple with combined annual incomes totaling $89,000 who retire this year would have paid $114,000 in Medicare taxes however the value of health care received by that same couple would be more than three times higher than what they paid in at about $355,000. US healthcare will also need more primary care doctors, nurses, gerontologists, nursing home workers, and physical and occupational therapists to provider healthcare services to retiring population but these medical professionals are in short supply.
The prospect of funding healthcare needs of growing senior population that is living longer and costing more is bound to put more pressure on US government which may have to reduce Medicare benefits, increase cost sharing, increase Medicare taxes or raise the qualifying age for Medicare benefits as Medicare program becomes financially unsustainable.
With affordable care act, President Obama has introduced measures to increase efficiency and reduce frauds in Medicare, reduce federal payments to Medicare Advantage plans and establish a new Independent Payment Advisory Board to recommend ways to reduce Medicare spending and include several payment reforms. Affordable care act also is introducing delivery system reforms which include a pilot program related to post-acute care, value-based purchasing for providers and the establishment of Accountable Care Organizations (ACOs).
However, federal government would need to do more than these measures to counter increasing costs owing to baby boomers population turning 65.
To save the Medicare system, Americans may end up working for longer years and put up with system which may reduce their health benefits. There are difficult choices to be made and the sooner government makes these choices, the better it would be for future generations of America. Else the future generation may end up paying greater amount of their income as taxes to pay for Medicare system.
Indian Healthcare and Health Insurance industry: Road ahead
Over the last month, health insurance industry in India witnessed certain developments that might have far reaching implication on how it would shape up over next few years. Public sector health insurance companies, that have 70% of market share in insurance industry, suspended about 150 hospitals from their list of Preferred Providers Network and stopped cashless hospitalization services to policy holders in these hospitals. Insurers alleged that the hospitals were billing insured patients higher charges than to uninsured patients since patients were not paying the bill. Health insurance industry may find itself in difficult situation with increasing healthcare costs if this trend continues.
Let us take a look at the statistics that would provide a perspective on Indian health industry.
Overview of Indian Healthcare:
India’s healthcare industry accounts for about 5.2% of its US$1.2 trillion GDP. Below comparison chart elaborates on how India measures against some of developing and developed economies on healthcare front.
| Country | Health Expenditure as% of GDP | Per Capita Health spend PPP $ | Infant Mortality Rate (per 1000 births) | Life Expectancy in years |
| India | 5.2 | 91 | 56 | 63 |
| China | 4.7 | 277 | 23 | 72 |
| Sri Lanka | 4.3 | 163 | 12 | 71 |
| UK | 8.1 | 2560 | 6 | 77 |
| USA | 15.4 | 6096 | 8 | 75 |
Indian healthcare market is estimated to touch US$77 billion by 2013. Private healthcare is expected to form a large share of the healthcare spend, and is expected to be around US$33.6 billion in 2010. Health insurance is one of the fastest-growing businesses in India recording a 35% annual growth in the past decade to reach $1.8 billion in 2009-10. With less than 10% of the population covered under health insurance, there is a huge potential to be tapped. The industry is expected to grow at a compounded annual growth rate (CAGR) of 15% for the next 15 years and income from medical insurance premium is expected to be around US$3.8 billion by 2012. Indian population is young; the number of people above 60 yrs is about 8% today.
At this nascent stage, the health insurance industry has become unprofitable due to various reasons such as increased claim payments, wasteful healthcare spending and frauds. The industry’s loss ratios are running in excess of 120%. The main problem at present is that insurers have limited influence over healthcare delivery network. Lack of standardization & accreditation in most healthcare facilities lead to difficulty in judging the authenticity of procedures & costs. There is no incentive for private healthcare providers to reduce cost for insured patients. In fact, the incentives seem to be for exactly the opposite. To make up for increased claims payment, insurers would be pushed to raise premium which is not a good move so early in the industry life cycle. Insurers instead went ahead with the alternative option of dropping cashless facilities to control costs. This move is further going to deter consumers from buying health insurance which does not augur well for industry.
Road ahead for Indian Healthcare and insurance industry:
India has a universal healthcare system; however the government sector is understaffed and under-financed to provide services to all. Poor services at state-run hospitals force people to visit private medical practitioners. Indian healthcare system was modeled after the UK’s. However, India needs to chart its own course to have competitive healthcare industry.
In order to make sure that health care becomes competitive over the next decade, India needs a strong public healthcare that would work closely with private sector that has well-defined rules for all stakeholders and rules are effectively implemented. It will not be possible to provide healthcare for all with only public or private option. Both the players need to work together and make healthcare work. The approach is elaborated below.
There is need to strengthen the public healthcare by increasing the spending on public health. India’s expenditure on health is lower compared to most of nations across the globe. Public spending on healthcare stands at about 1.3% of GDP.
There has been plenty of innovation happening in public private partnership space. For example, Yeshasvini cooperative health-care scheme for Karnataka farmers started in 2003 and collected Rs 36 crore premium (Rs 150 per head) in 2008-09, received government funding of Rs 30 crore and handled 75,000 surgeries which was 2.46% of enrollment at very competitive prices. The Rajiv Arogyasri healthcare scheme in Andhra Pradesh for below-poverty-line families has since April 2007 till now pre-authorized Rs 2,000 crore in treatment. HMRI (Health Management Research Institute, Hyderabad) initiatives in AP are one more case in the point where latest technologies such as Telemedicine are successfully being used to provide the care at grassroots level. There are many such examples where excellent healthcare has been provided at very competitive prices in India and various developing nations. Government further needs to encourage such examples – poor pay small premiums, government provides monetary and logistics support and healthcare delivery is handled in collaboration by private and public sector.
All stakeholders involved in private healthcare delivery – payers, providers and members need to understand that they need to co-exist in order to make healthcare industry work for all. One stakeholder should not grow at the expense of the other because it would lead to an unviable business proposition. There is an urgent need to make sure that the health insurance industry’s growth over this decade doesn’t result in higher healthcare costs. Insurers and hospitals need to determine the standard rates for procedures, the treatments and costs need to be standardized, and accreditation process for participating hospitals need to be reinforced. Insurers need to build a strong customer base to mitigate the risk.
Innovation is required in terms of pricing strategies of services, usage of technology to reduce the costs (Technologies like Telemedicine, Mobile Health), ease of use and expand the accessibility for rural population. Private healthcare players can target vast lower income groups in these remote areas and launch innovative business models that benefit everyone, on the similar lines of success of telecom industry.
Indian healthcare has a lot to learn from its western counterparts and other developing nations, implement the best practices and make sure that mistakes repeated there are not repeated in Indian context.
References:
IBEF report on Indian Healthcare
PWC report on Healthcare
Business Standard website
Indian Express website
Outlook website
Innovations in US Healthcare Industry
Over past few years, Healthcare industry has witnessed various innovative solutions which promise to address challenges faced by the industry. The industry is attracting technology giants like Microsoft, Google and startups with promising ideas that are coming up with innovative solutions and promise to make life of patients and doctors easier.
Let us talk about few of the core areas where innovation promises to help Americans lead healthier life.
Health Records:
USP: Improved decision making, reduction of cost and better record keeping
Picture this. You can organize all your health information in one place online and doctors can access this record when you visit clinic. This could help avoid redundant lab tests and provide comprehensive information to doctors.
Patients could log on to secure portal, access and share their medical records, check lab results, renew prescriptions, deal with insurers, and communicate with doctors and nurses. Portals like Microsoft HealthVault and Google Health are examples of Personal Health records sites. OptumHealth’s myoptumhealth.com is another example on similar lines.
Your health record could be managed by your PCP as well with help of EMRs. However, during your visits to various hospitals, your record could be fragmented across various systems. With help of Electronic Health records, these records can be integrated together. EHRs / PHRs promise significant cost savings and better healthcare for patients and industry. Various players like Epic, Allscripts, NextGen are in this space. Over next 5 years, with federal stimulus of $19 Billion, The $1.2 billion EHR market is expected to expand by 2013 to be $9.3 billion business.
Evidence-Based Decision Making:
USP: Improved decision making, reduction of costs
Evidence-based decision making helps doctors take informed decisions while treating their patients. Electronic Health records help doctors with decision making as doctors can go by the best evidence for treatment. EHRs remind doctor of the test patient might need, pointing out trends in patient’s health history, warning against prescribing the wrong drug, and providing instant access to textbooks and journals. The Obama administration has earmarked $19 billion as part of American Recovery and Reinvestment Act (ARRA) of 2009 for EHRs implementation.
Telemedicine:
USP: specialist care at remote places, reduced costs and better utilization of doctors
With innovations in medical devices and technology industry, we have systems in place that allow doctors to capture various health data, like blood sugar, blood pressure, and heart rate, while videoconferencing with a patient to treat for the medical condition. The convergence of convenience, low cost and accessibility could soon help telemedicine go mainstream while providing specialist healthcare to people living in remote areas. The North American telemedicine market is expected to grow 46 percent over the next five years to more than $6 billion by 2012.
Health 2.0:
USP: Better informed patients, simpler healthcare delivery, reduced costs
In my earlier blog, I had written about how Health 2.0 is shaping innovation in healthcare. health 2.0 can be defined as use of a specific set of Web tools (social media, blogs, communities, Podcasts, search, wikis, etc) in healthcare that promote the collaboration among doctors, patients, and other stakeholders in healthcare eco system. Defining characteristics of Health 2.0 is active participation with direct communication – between patients, between professionals, and between patients and professionals.
Retail clinics:
USP: Reduced costs, improved access to doctors
Retail clinics are health care clinics located in retail stores, supermarkets and pharmacies that treat uncomplicated minor illnesses and provide preventative health care services. They are usually staffed by nurse practitioners, physician assistants or physicians. There are over 1,000 retail clinics located throughout the United States and the number is estimated to go up to 3200 clinics by 2014. Retail clinics are more cost effective for routine care. According to one analysis, the typical cost of diagnosing an ear ache was $59 at a retail clinic, $95 in doctor’s office, $135 at urgent care, $184 in an emergency room.
Real Time claims processing:
USP: Reduced administrative costs, improved efficiency in healthcare delivery
Real time claims processing involves processing an electronic claim while the patient still is at a physician’s office and sending back a payment commitment to the physician before the appointment is complete. At present, for the seven major insurers, the response to electronic claims stood within the median number of days ranged from 5 to 13. With the seven major insurers it studied, the median number of days for responses ranged from 5 to 13. However, with increasing penetration of Electronic Medical records and push from health insurers, real time claims processing is actually happening. With real time claims processing, administrative costs of Healthcare which stand at about $ 200-250 Billions can be significantly brought down.
With the emphasis on Health records implementation from federal government and various other innovations, let us hope that we start witnessing desired outcomes in years to come in US healthcare Industry.
Reference links:
Deloitte Centre for Health study reports
My Thoughts on Healthcare 