Monday, January 01, 2007
It's Not A Healthcare/Insurance Crisis - It's A Software Issue
In the January 2007 issue of Healthcare Informatics, features editor Stacey Kramer wrote an editorial entitled "Buying Power", which I highly recommend you read. Her article on the advent of consumer-driven healthcare (CDHC) was insightful, but the actual content of CDHC may be somewhat misinterpreted. Robert Booz quotes, “What consumers want...is useable, accessible, extemporaneous information”. While correct the why of such information is off-target. Mr. Booz’ assertion of healthcare consumers looking for products and services they can tailor to meet specific needs is right on the mark.
It is after this wonderful introduction that Ms. Kramer seems to take a slight turn. She frames all of these comments with the assumption that the status quo of insurance companies, albeit with HSA’s will remain intact. Data stewardship should already be the norm, as it is in some Latin America countries. Total transparency of charges facilitates the consumers’ ability to select, not only insurance providers, but healthcare providers as well. It should be possible for consumers, who are going to pay more “out of pocket” expenses, to be able to pick a pharmacy plan from insurance company "A", and an office visit plan from insurance company “B”. At the same time, the consumer should be able to take their composite insurance to clinic “A” for diagnostic services, while seeing a provider in clinic “B” for treatment. This type of composite health care plan (CHCP) is entirely possible for given our current level of technology.
With total transparency, the consumer would be able to see not only the charges for services, but the breakdown of those charges as well. If you are having diagnostic testing (phlebotomist services, lab work, and radiology) done then you could pick the clinic that would be the best value for your HSA buck. Let us look at a possible example. A patient needs three diagnostic procedures performed before seeing their doctor, a blood draw, the associated lab work, and an X-ray. They check and find that clinic "A" spends $89 per patient per procedure in software licensing fees while clinic "B" spends only $39 per patient. This would mean that by going to clinic "B" the patient would save $150 of precious HSA money, all other charges being equal.
We have heard a lot about the “crisis in healthcare” and the ever-rising cost of healthcare insurance. With increasing calls by politicians for “health care as a right” and ever increasing numbers of companies not offering healthcare packages as part of their benefits, we are overlooking one of the obvious answers – CHCP. We are not talking about a healthcare crisis, or even an insurance crisis, but a software problem that is easily fixed.
However, it would take the insurance companies breaking down their “plans” into affordable components that consumers could choose based on their individual needs. Nothing is ever going to take the place of preventive medicine, and educating the American public on dangerous habits (such as smoking) and benefits of good habits (such as regular exercise, diet and nutrition) should always be of paramount importance for government and other civic organizations. Nevertheless, people are still going to need medical attention, and they should be able to pick the plan that they feel will work best for them. Now we have a system where a large number of insurance providers allow medical facilities, both large and small, access to systems for filing claims online with payments via electronic transfer. The same system would work through a program at regional health information organizations (RHIOs) that would allow medical facilities to enter a patient’s identification number and then file the necessary claims based on the class of service received. The bottom line for the insurance companies would be a greater ROI as services are streamlined. For medical facilities, it would mean a faster turn-around on electronic payments as verification would be virtually automatic, and for patients, it would mean more affordable healthcare. With free market forces at work within the healthcare systems, you will see a much more efficient system of care, using disruptive innovative theory to set and maintain improvement trajectories in healthcare delivery systems.
It is after this wonderful introduction that Ms. Kramer seems to take a slight turn. She frames all of these comments with the assumption that the status quo of insurance companies, albeit with HSA’s will remain intact. Data stewardship should already be the norm, as it is in some Latin America countries. Total transparency of charges facilitates the consumers’ ability to select, not only insurance providers, but healthcare providers as well. It should be possible for consumers, who are going to pay more “out of pocket” expenses, to be able to pick a pharmacy plan from insurance company "A", and an office visit plan from insurance company “B”. At the same time, the consumer should be able to take their composite insurance to clinic “A” for diagnostic services, while seeing a provider in clinic “B” for treatment. This type of composite health care plan (CHCP) is entirely possible for given our current level of technology.
With total transparency, the consumer would be able to see not only the charges for services, but the breakdown of those charges as well. If you are having diagnostic testing (phlebotomist services, lab work, and radiology) done then you could pick the clinic that would be the best value for your HSA buck. Let us look at a possible example. A patient needs three diagnostic procedures performed before seeing their doctor, a blood draw, the associated lab work, and an X-ray. They check and find that clinic "A" spends $89 per patient per procedure in software licensing fees while clinic "B" spends only $39 per patient. This would mean that by going to clinic "B" the patient would save $150 of precious HSA money, all other charges being equal.
We have heard a lot about the “crisis in healthcare” and the ever-rising cost of healthcare insurance. With increasing calls by politicians for “health care as a right” and ever increasing numbers of companies not offering healthcare packages as part of their benefits, we are overlooking one of the obvious answers – CHCP. We are not talking about a healthcare crisis, or even an insurance crisis, but a software problem that is easily fixed.
However, it would take the insurance companies breaking down their “plans” into affordable components that consumers could choose based on their individual needs. Nothing is ever going to take the place of preventive medicine, and educating the American public on dangerous habits (such as smoking) and benefits of good habits (such as regular exercise, diet and nutrition) should always be of paramount importance for government and other civic organizations. Nevertheless, people are still going to need medical attention, and they should be able to pick the plan that they feel will work best for them. Now we have a system where a large number of insurance providers allow medical facilities, both large and small, access to systems for filing claims online with payments via electronic transfer. The same system would work through a program at regional health information organizations (RHIOs) that would allow medical facilities to enter a patient’s identification number and then file the necessary claims based on the class of service received. The bottom line for the insurance companies would be a greater ROI as services are streamlined. For medical facilities, it would mean a faster turn-around on electronic payments as verification would be virtually automatic, and for patients, it would mean more affordable healthcare. With free market forces at work within the healthcare systems, you will see a much more efficient system of care, using disruptive innovative theory to set and maintain improvement trajectories in healthcare delivery systems.
