Automating the Office

January 25, 2009 by admin  
Filed under BBW News

A couple of articles in the New York Times draw attention to business models in medicine that slow the rate of improvement in medical service delivery.

Two main causes of the system’s ills are century-old business models, for the general hospital and the physician’s practice, both of which are based on treating illness, not promoting wellness. Hospitals and doctors are paid by insurers and the government for the health care equivalent of piecework: hospitals profit from full beds and doctors profit from repeat visits. There is no financial incentive to keep patients healthy.

“The business models were all created decades ago, and acute disease drove those costs at the time,” says Steve Wunker, a senior partner at the consulting firm Innosight. “Most businesses in this industry are looking at their business model as entirely immutable. They’re looking for innovative offerings that fit this frozen model.”

Why have old business models lasted so long in medicine? It seems hard to price wellness maintenance as compared to pricing procedures and consultations. How to incentivize individual doctors to keep patients healthy? It is a lot easier to say it is a worthy goal than to describe a system for doing it that would work financially. Anyone have suggestions along these lines?

I would like to see far more automation of diagnosis. This requires wider spread use of electronic medical records so that the data which medical expert systems need will exist in electronic form. It also requires an economic model for medical care that provides incentives for automation. Medical expert systems can make better diagnostic decisions because the huge and growing quantity of medical test results and the large number of diseases and treatments really test the limits of the human mind to process all that information. Medical expert systems can free up smart doctors to do more original creative work such as medical research and product development.

Most doctors in private practice still do not use electronic medical records systems, making them outliers in a world where a very large fraction of all high information work is done using electronic information systems. Digital medical records make the discovery of better medical practices possible.

The Marshfield Clinic, a large doctors’ group in Wisconsin, shows that computerized records can indeed improve the quality and efficiency of medicine. Yet the Marshfield experience suggests that the digital record becomes truly useful only when patient information is mined to find patterns and answer questions: What treatments work best for particular categories of patients? What practices or procedures yield the best outcome?

This group of doctors have used their medical software system to help cut total costs by allowing them to manage diabetic care more efficiently.

From mid-2004 through the third quarter of this year, the percentage of the clinic’s diabetic patients with blood cholesterol at or below the recommended level rose to 61 percent, from 40 percent earlier. The percentage with satisfactory blood pressure increased to 52 percent, up from 32 percent.

Over the same span, hospital admissions among Marshfield’s diabetic population fell — to 311 per 1,000 patients a year, from 360. Because a hospital stay for a diabetes patient ranges from $8,000 to $22,500, according to national statistics, Marshfield’s results translate into an annual cost saving of $7.3 million to $20.5 million.

But for the average private practice a reduction in the hospitalization rate of patients isn’t going to boost revenues. The money saved probably all flows to insurers. The system lacks incentives for most medical providers to go after these forms of savings and care improvement.

A medical marketplace which rewards use of expert systems, electric patient records, and reduction of total costs by use of more effective and productive methods of purveying treatments is what we need. How do we get there?

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