What is a PHR Anyway?

The problem: a caregiver needs to know your medical history, but your patient records are scattered with many individual providers. Your dermatologist has some of your medication history and knows you have an allergic reaction to penicillin. Your urologist has the lab results from a creatinine test done on your blood from a year ago. And your primary care physician has a ten-year history of your weight, vitals, and overall health.

How do you bring them together? (Other than with a hailstorm of faxes?)

Enter the PHR, the personal health record. The PHR takes a step to address this problem by creating a place for all your medical history (allergies, medications, encounters, etc.) to be stored. Best of all, you own it and manage it. Many products (Google Health, Microsoft HealthVault, etc.) are being raced to market in the hopes of being the place where you deposit this information. Let's face it, the first place you put it will probably be the place your history stays since you won't want to move your information once you put it there.

An important feature of a PHR allows you to grant access to caregivers not only to view your health information, but also to add to it in a structured fashion. The information systems that your hospital, your physician, and your other caregivers use (such as Epic, Meditech, eClinicalWorks, GE Centricity, etc.) will have interfaces to your PHR to do this, or will through a health information exchange (HIE). The individual contributions of each of these providers will accumulate in your PHR and form a much more complete picture of our medical histories.

In my opinion, putting the right information in the hands of your caregivers is the best use of information technology for improving the health of people, and for improving outcomes.

Can We Be Friends?

Quick sidebar: Economist Arthur Laffer (of the famous Laffer Curve) wrote an editorial in the WSJ this morning that makes a similar argument as I did in this blog for stripping the insulation from healthcare costs (he calls it the "healthcare wedge") that may be an alternative to the current plans being offered for healthcare reform. He argues the point more eloquently than I did, though. Check it out!

It's no secret that most Americans have a deep mistrust of their health insurance company. We firmly believe that it's in the company's best interest to take as much as the market will bear from us in terms of monthly premiums, and give as little as possible in the way of payments when we seek care.

But what if there was a way that our insurance companies could cut costs, and we could be truly, genuinely be healthier because of our relationship with said evil company?

I think there's a way to do it, and it's through predictive analytics.

Health insurance companies have a wealth of historical information about subscribers in the form of claims data. Every time I go to the doctor, or have a test done, or see a specialist, my healthcare professional would like to get paid for their services, and so they file a claim with my insurance company.

Over time, the millions of claims being filed by healthcare professionals for services performed on all of us becomes a treasure trove of data for analysis. Each one of those claims is coded with certain pieces of information, and something that's present on every claim is an element called a "service type code", or in other words "what kind service did I perform on the patient?"

Imagine if we performed an analysis on the dates of service and service type codes and found a statistically significant pattern of claims that looked like this:

Patient: Male, age >55, smoker, BMI >28.7
Claim 1, Day 1: Office visit
Claim 2, Day 3: Lipid profile
Claim 3, Day 30: Office visit
Claim 4, Day 35: Emergency room admission, heart attack

This is a simplification, but it's to illustrate a point. If this pattern had predictive power, wouldn't it be a great win for both the patient AND his insurance company if they made a call to his doctor on day 31 saying, "we've noticed that your patient has just fallen into our high-risk profile for heart attack in the immediate future. Please make a wellness outreach and begin an immediate statin and anticoagulant regimen if appropriate." (This assumes healthcare professionals get paid for proactive outreach, which is a topic for another day.)

I know I'd appreciate not having the heart attack, and certainly the health insurance company would like to avoid paying the tens of thousands of dollars it would cost to save my life. I benefit, and they benefit.

If this were done for all of us, we might have more reasons to like our health insurance companies!

Stripping the Insulation from Healthcare

First, a shameless plug for my suggestion to reform Medicare first before asking the American people for more responsibility: Peggy Noonan, an editorial writer for the Wall Street Journal makes the same suggestion,in the ghostly form of FDR, in her weekly Declarations column on August 1, 2009. Maybe I'm not crazy after all!? Link here.

So, in my previous blog entries, I wrote that by making consumers and providers more aware of the real cost of care, we would take a step towards reforming the system. In this entry I will walk through a very simplified ripple effect of how it might work.

• People know the cost of their care (e.g., my angioplasty costs $7500)
• People pay more up-front for their care with Medicare's new high deductables (e.g., I pay $5000 out of pocket for that angioplasty. Ouch!)
• More physicians get paid more directly, and more quickly (claims have a lot of friction, cash is immediate and transparent)
• More physicians want to take Medicare patients into their practice (now Medicare pays well, and quickly)
• Brief tangent: as a whole, reimbursement rates for healthcare professionals usually do not cover the cost of care. For example, the doctor incurs 100% of the cost of your checkup, and your insurance company decided that 60% of that amount is "reasonable". This leads physicians to be tempted to "cost shift" and perform services that have higher reimbursement rates in order to cover what they should have been paid in the first place. How would you feel if the government declared that you were being paid 40% too much for your job?
• Over time, more med students and RNs go into primary care to get paid Medicare's higher reimbursements instead of the current trend of more students and RNs fleeing into higher-paid specialties.
• As supply of primary care physicians increases, prices decline, quality increases (simple elasticity of supply)
• As Americans realize cost of care, they proactively take better care of themselves, use services less, pay smaller premiums and copays (simple elasticity of demand)

In the end we have more docs, willing to provide more care, at lower cost, higher quality, and healthier Americans. No, this is not a silver bullet (this is) and there are many other pieces to the puzzle, such as policy changes in subsidies that make unhealthy food cheaper than healthy food, and the inevitable cultural angst we will feel with changing from conspicuous consumption to consumption with integrity. In other words, if you exercise your freedom to engage in unhealthy behavior, you have the integrity to exercise your freedom to pay for it.

And as an old friend of mine mentioned, this plan should not include people with congenital illnesses or genetic causes to what ails them. I do believe we are a fair, generous, and compassionate nation, but if we are to take good care of the people who truly need it, we must take better care of ourselves first with better information and better choices. We are insulated from the cost of care, and strippling that insulation away might yield some unexpectedly positive results.

Breaking the Triple Constraints, or, Why I Like Lasik

In an earlier post I suggested that lawmakers fix Medicare before asking the American people to support an even larger healthcare system. Controlling the cost of Medicare, without harming benefits, is essential to buildingthat trust. How can we do that?

In considering how it can be done, I can't help but think about Lasik, the elective eye surgery that many people get to correct their vision, and when successful, to live without glasses or contact lenses.It changes lives, but it's paid for entirely out of pocket.

When Lasik was first introduced, it was expensive, and few doctors could perform it. Years later, the cost has come down, the quality has gone up, and the number of doctors who perform it has increased as well.

Isn't this what we want for the rest of healthcare: lower costs, higher quality, more accessibility? And somehow, it happened without government intervention or subsidy. Adam Smith would be proud.

But how and why did it happen? Certainly the fact that it's an elective procedure played a part (elasticity of demand for you economics geeks out there). But there's an aspect of human behavior involved that I want to point to and suggest it might be the key to breaking the triple constraints of healthcare and here it is: knowing the cost of your care before you need it makes a material difference.

I found some testimony given to the House Ways and Means Committee which supports this idea.The original text is available here.

It's not a dry read - it's conversational and moves quickly.

I'll draw your attention to one specific part of the testimony, where Ha Tu of the Center for Studying Health System Change and Dr. Regina Herzlinger of the Harvard Business School are testifying about high-deductible plans (i.e., plans where patients have more financial skin in the game and therefore more of an interest in how much their care costs).

In the text, search for the words: "Mr. McCrery" to get to it quickly. They testify that evidence shows that as people become aware of the cost of care, they do two things:

1) Decide not to get the care, because they don't really need it (this applies mostly to elective procedures) but more poignantly,
2) Their outcomes improve because patients know how much it's going to cost them if they don't comply with their medication schedules, follow-up appointments, checkups, etc.

As the testimony cautions, we don't want to oversell the benefits of this model, but how much could we reform healthcare if consumers knew the real cost of care, and had more of a stake in their own healthy choices?

For example, heart disease is the leading killer of American men and women, and is highly preventable through behavioral changes such as smoking cessation and weight loss years before the adverse event happens. If you knew today that a heart attack would cost you $20,000 (and not just your $500 deductable) do you think you might take a little better care of yourself?

Put another way, if you can see how putting calories or fat content on restaurant menus might make a positive difference in diners' choices, it shouldn't be much of a stretch to understand how seeing the cost of your future care might positively influence your present choices.

In another blog entry I will walk through a simple example ofof how removing the insulation from cost that we have might have a positive ripple effect through the entire healthcare system.

Questioning A Given

Health information technology (HIT) is often cited as a means to achieve improvements in efficiency and savings. But, I was wondering today: has anyone conducted any studies on what, if any, tangible improvements a healthcare provider enjoys after the adoption of HIT.

I wanted to question the assumption that HIT makes anything better for providers. So let's start from the beginning and ask this question:

What precisely gets better with the adoption of HIT into a practice?

I did some Googling and searched some academic databases through my alumni accounts, and there are many individual studies and articles on the subject. I managed to locate a research article that first appeared in the Annals of Internal Medicine in 2006 by Chaudhry et al. that conducted a literature review of over 250 studies on the impacts of information technology on healthcare, which is a lot more exhaustive and scientific than my own random searching could ever hope to be. Here is a link to the original paper.

The results were interesting, and perhaps not what one would expect. According to the research, information technology improved healthcare in four key areas:

1) the adherence to treatment protocols
2) the surveillance of diseases
3) the reduction in medication errors
4) the decrease in utilization of care

The first three improvements can be grouped together as improvements in the quality of care: patients were treated according to the plans with the best clinical outcomes, more data on diseases were gathered and used to proactively identify high-risk patients, and mistakes in prescribing drugs to patients were reduced.

The fourth improvement is different in that it suggests a gain in efficiency. Apparently, when clinicians are exposed to the cost of a given treatment, especially in the areas of diagnostics and imaging, utilization of these services decreases. This does not imply that the patient's treatment outcomes were better as a result of this efficiency, just that the efficiency appeared.

There is a robust debate about the place of information technology in healthcare, and I hope that by understanding how it can help a practice we can help to set our expectations appropriately. If we can do that for ourselves, and for our clients, HIT implementations will have a better chance of being perceived as a success and might be used to do what they do best: get better information in the hands of our caregivers when they need it.

Advice for Healthcare Reformers

Our nation's healthcare system as been referred to with many labels: "broken" and "unsustainable" are two that there seems to be little argument about. Our President and the Legislature have been insisting that reform is not only necessary but imminent. It's going to happen, it's just a question of when. Healthcare reform is paramount, they say, because healthcare costs are rising as a proportion of Gross Domestic Product (GDP) at an unsustainable rate.

But more recently, a growing number of Americans have been expressing their concerns about the cost of "reform". On July 14, when the Congressional Budget Office issued its nonpartisan assessment that the latest healthcare reform bill being submitted would not only increase the national debt by over a trillion dollars over the next 10 years, but also that there would be no cap on that figure (meaning, it could be even more expensive), it dealt the supporters of big change in healthcare a significant setback. The original letter from the CBO is here.

In order to rebuild the American people's confidence that Washington can reform healthcare, my advice is to start with two human service programs it already manages on our behalf: Medicare and Social Security. Here's a chart that illustrates my point (click on it for a larger version):

[source data: Office of Management and Budget, Historical Federal Outlays, 1962-2008]

Side note: wherever possible, the data I present here are from primary source material. I am not giving you data regurgitated from a talking head somewhere. These are the data from the original sources. You can (and should) look this material up yourself and get informed.

If this truly is the time to reform healthcare, and our current slate of Representatives, Senators, and President are the people to do it, can they start by reforming a program already fully under their control? Show us how efficiently Medicare can be run, and how well costs can be controlled through efficiencies, then we will gladly buy into a new government-reformed healthcare system. Show us Medicare's costs can be contained; it's already the largest consumer of healthcare in the nation, and wholly under Federal control.

I believe that if Medicare or Social Security become models of government management excellence, then the American people will have no reason to fear that the system we have, as "broken" and "unsustainable" as it may be, will be worse off when Washington "reforms" it.

Healthcare's Triple Constraints

The other day I was reading an article in the WSJ about President Obama's press conference on the topic of healthcare in the United States.

In the commentary, and in thinking about the various positions on what needs to be done with the system, I was reminded of a useful metaphor I learned about in project management: the triple constraints.

If you're not familiar with the triple constraints, imagine an equilateral triangle. At each corner of the triangle is a constraint: cost, time, and quality. The concept is simple: pick any point within the triangle and you'll see what the trade-offs in your project will be at your chosen point. For example, if your spot is precisely between "cost" and "time", implying that you want the perfect balance of the lowest cost and fastest time possible, then you will be the farthest away from "quality" possible.

Applying this to healthcare, I would argue that the constraints in our current situation are:

1) Quality (receiving the best care from the best professionals with the best outcomes)
2) Accessibility (how many people can get the care)
3) Financial Sustainability (how long we can afford to pay for the care)

The picture looks like this (image just below):

So for example, if you were to pick a point that was on the line between "Quality" and "Accessibility", meaning we want the perfect balance of the highest quality possible and the most accessibility possible, we are the farthest away from "Financial Sustainability" possible.

In my opinion, another dimension of the debate is: who gets to choose where your particular point within the triangle is? In our pseudo-free market system, we consumers have our own ability to select where in the triangle we are. In single-payer, well-meaning Federal agencies would make the decision for you.

How confident are you that the point they pick and the one you would pick for yourself would be in the same place?