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Electronic Health Records – The Bane of Medical Progress?

For years, indeed decades, Americans have reluctantly confronted the traditional ritual of having to manually complete paperwork before seeing a healthcare provider. Recollection of dates, medical conditions, and other important and critical medical details are challenging to put on paper prior to meeting with a new provider unfamiliar with our past medical history. Additionally, obtaining access to personal health records from one health provider to another has been a test of endurance for patients and caregivers alike.

With these and countless other challenges of providing accurate, up-to-date, and complete information about patients at the point of care, it is no wonder that a push to overlay medical records with sophisticated technology was long overdue. Electronic health record (EHR) goals are widely accepted to be the rocket fuel that helps ignite a very complex and grossly underperforming U.S. healthcare system:

  • Enable quick access to patient records for more coordinated, efficient care
  • Securely share electronic information with patients and other clinicians
  • Help providers to more effectively diagnose patients, reduce medical errors, and provider safer care
  • Improve patient and provider communication and enable health care ‘convenience’
  • Enable safer, more reliable prescribing
  • Promote legible, complete documentation and accurate coding and billing
  • Enhance privacy and security of patient data
  • Help providers improve productivity and work-life balance
  • Enable provider to improve efficiency and meet their business goals
  • Reduce costs by having decreased paperwork, improved safety, reduced duplication of testing and improved health

Yet, this belief that EHRs will enhance efficiency and promote safe and effective care may not be hitting its intended bull’s-eye – at least for the present time. A recent joint article, “Death By 1,000 Clicks: Where Electronic Health Records Went Wrong,” researched and written by Kaiser Health News and Fortune Magazine reveals that EHRs have grossly underperformed on many key fronts.  In fact, EHRs are proving to have more unintentional consequences that cause patient harm and accentuate job burnout for many providers using them.

Applying shovel-ready financial stimulus money to jump start the economy during the Great Recession, which began in 2007, the federal government, thanks to legislators passing the HITECH Act in February of 2009, infused a huge chunk of change ($36+ billion) to incentivize hospitals and physicians to embrace health information technology into their practices.

How many other industries are given ‘free’ government money to motivate the use of information technology? Off the top of my head, very few – if any. Usually, due to market forces dictating improved efficiencies, most business sectors allocate their own financial resources to reinvest in information technologies. I realize there are tax incentives for doing this, but having manna fall from the sky – much like HITECH – is truly a gift that should have paid great dividends to all – including U.S. taxpayers.

In fairness to healthcare providers and software vendors, the HITECH approach was much too optimistic and ambitious to succeed during a relative short period of time. As this story indicates, there were too many cooks in the kitchen, in addition to the crazy requirements that software vendors required of their healthcare clients, including gag-clauses on flawed software.

Since implementation of the HITECH Act, there have been thousands of reports of deaths, injuries and near misses linked to the shortcomings of digital systems. Equally frustrating is that many patients continue to report difficulties on receiving copies of their complete electronic files. Take heart, however, proposed federal rules by the Department of Health and Human Service should, according to Sen. Lamar Alexander (R-Tenn.), “make it easier for patients to more quickly access, use and understand their personal medical information.”

Because the U.S. has many different software manufacturers in the healthcare space, each attempting to maintain their own ‘proprietary’ domain for exclusivity purposes, the EHRs are similar to the existence of diverse human languages that occurred in Genesis 11 when many different languages were spoken during the construction of the Tower of Babel.

With new scrutiny of the current EHRs, it is time to re-calibrate the existing cocktail of EHR-systems and determine what makes the most sense to patients, providers – and taxpayers. Singing from the same sheet of music would be a great start.

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20th Iowa Employer Benefits Survey Now Underway!

At Haystack Rock in Cannon Beach, Oregon (2002).

This year marks the 20th year that we have been performing the Iowa Employer Benefits Study©. When this study began in 1999, I had two toddler daughters, one of which is now two years post-college and working in the Twin Cities, while the other is about to graduate from St. Olaf College. Between my daughters and this survey, it’s easy to measure just how fast the years have flown by!

With the 2019 survey, as in the past, we plan to randomly survey at least 1,000 Iowa employers from a variety of sizes and industries. We have found this number of respondents to be extremely beneficial when comparing various industries and size categories to one another.

However, contrary to the past, this year’s survey is being conducted three months earlier in the year, allowing the study to become available in July. By doing so, many employers will have access to these results while strategizing potential changes to their benefit plans during the fall renewal season. Because of this, we are excited about performing this survey process earlier.

If you happen to be an employer who is randomly-selected to participate in this year’s survey, we would greatly appreciate you taking the time to share your confidential data with us. By doing so, you will receive, via email, the Iowa Employer Benefits Study© report that summarizes key findings. Please know that your information will only be used on an aggregate basis and combined with data from other participating employers. Most importantly, we will protect your anonymity and the confidentiality of your responses to the fullest extent.

Twenty years is a milestone for us. As mentioned, much has changed over these two decades, but during this time, I have always been very grateful to all Iowa employers who have taken the time to share their information with us. We take our work seriously and will always value your trust in our survey.

To stay abreast of employee benefits and healthcare issues, we invite you to subscribe to our blog.

Eliminating Unnecessary and Inappropriate Care – Could Health Premiums Drop to 2010 Levels?

Here’s a quiz regarding the estimated annual cost of inappropriate and unnecessary healthcare in the U.S.  Please select the answer you believe reflects the best cost estimate:

a. $210 billionInstitute of Medicine (2013)
b. $265 billionOliver Wyman (2017)
c. $393 – $958 billionGoodman, et al. (2011)
d. $1 trillion + – Various sources
e. No one really knows

The correct answer is, “e,” as measurements vary widely based on different methodologies – such as the year it was performed, and just how broad the term, ‘inappropriate,’ was used in each analysis. However, as new reports become published, unnecessary care is typically considered between 20 and 30 percent of overall needed care. In fact, based on a 2017 study of surveyed physicians regarding unnecessary care, physicians reported that more than 20 percent of overall care was not needed. Yes, even physicians acknowledge that at least one-fifth of care is not appropriate!

Despite the ABIM Foundation’sChoosing Wisely” campaign, which began in 2010 and has been widely adopted by at least 80 specialty societies, 75 percent of physicians believe unnecessary care is still a serious problem. Additionally, 69 percent said the average practitioner ordered useless tests and procedures at least once a week. Noted physician, Marty Makary of Johns Hopkins University, theorized that “Ninety percent of C-sections are unnecessary; 80 percent of stents are inappropriate; and 30 percent of people with cancer get the wrong treatment.”

But our broken healthcare ‘system’ allows for defective and unsuitable care to be paid out anyway. In a $3.5 trillion healthcare industry, inappropriate costs can account for as much as 30 percent of the total healthcare economy, or over $1 trillion annually. To put this number into perspective, the Congressional Budget Office reported that U.S. defense spending during fiscal year 2017 was $590 billion.

The above estimates do not specifically include another form of ‘waste’ as it relates to the fragmentation of care – the complexity of administering healthcare. This complexity leads to additional indirect costs and duplication of effort because there are so many different health plan payers with a myriad of administration functions. Functions which cause providers to hire additional staff to meet health plan requirements, like pre-authorization, administering various billing methods, etc. This is yet another problem with add-on costs that provide little-to-no value in a system already wrought with excessive waste of unnecessary care. I will not be addressing waste due to indirect costs in this blog.

Unnecessary and Inappropriate Care

Unnecessary and inappropriate care commonly consists of wasted spending due to ‘defensive medicine,’ whereby physicians order more (than necessary) tests and procedures to avoid potential malpractice lawsuits. Some studies suggest this amount of waste is not as great than commonly thought, perhaps less than three percent of overall costs. Another reason for inappropriate care is due to patients wanting unnecessary care. Misdiagnosis (overdiagnosis or no-diagnosis) also impacts the overall cost of healthcare. Of course, medical mistakes, both preventable and otherwise, also greatly impact healthcare costs, in addition to societal costs for patients and our communities.

Put another way, if inappropriate care could somehow be scrubbed from the healthcare system, it would make sense that our costs (premiums and, consequently, out-of-pocket expenditures for care) would correspondingly drop by a commensurate amount. According to the Kaiser Family Foundation, employer-sponsored health coverage continues to cover more American workers than earlier this century. Employer-sponsored plans in 2017 covered 156 million people, dwarfing the next largest form of health coverage, Medicaid (74 million).

Employer plan costs would be greatly impacted by eliminating inappropriate and unnecessary care. Another big takeaway: Employee takehome pay would increase, providing an economic boost.

Paying 2010 Premiums

In 2018, the 19th Iowa Employer Benefits Study© reported that the average monthly single and family health premiums were approximately $573 and $1,454, respectively. If about one-third of inappropriate care was eliminated, these rates would also be reduced, presumably by the same ratio (if we assume waste is across the board in all medical settings and procedures – and it appears to be). The newly-adjusted (unscientific) rates would now become $401 (single) and $1,017 (family) – rates that we have not seen in Iowa since our 2010 Iowa Employer Benefits Study©.

If we could eliminate ineffective, harmful and wasted care, we could revert to paying insurance premiums we paid eight years ago – even without eliminating bloated administrative costs. In the past, medical cost trends have historically exceeded the consumer price index, but by eliminating this excessive waste, and assuming the waste is continuously ‘engineered out’ of the delivery system, the medical-cost trend should be more favorable in the future. The problem, however, is not a small one. This problem comes from the idiom, “One man’s loss is another man’s gain.”

No organization or practitioner desires to lose revenue, because their income would be adversely impacted. Yet, obfuscating the cost by using chargemasters, backroom discount pricing methods and other unorthodox means to keep costs opaque serve no one other than those who allow our system to be ‘gamed’ for profitable purposes. Smarter regulation, appropriate technology and quality improvements can all reduce waste. Additionally, we must find the antithesis of greed.

As a country, think about how such ‘savings’ could be diverted to fund other programs that would proactively impact population health. We live in a world of trade offs, and trading wasted care (and its’ associated cost) with preventive health-related programs seems to make a lot of sense.

Market-Based Healthcare?

Let’s be honest. Our healthcare ‘system’ is not a true market-based model. It is different from any other part of our economy. True market-based models are characterized by three things not currently found in U.S. healthcare:

  1. Transparency in cost and quality.
  2. Accountability for care across the continuum (payment would be connected to outcomes that really matter).
  3. Information that allows for consumer choice and competition – patients need to be treated as consumers when appropriate.

All three allow us to get to the value of care, and ultimately, a market-based model that would theoretically provide checks and balances to keep the system ‘honest.’

Overall, a market-based model has more clarity around the producer, the seller and the buyer.  Historically in healthcare, the buyer (consumer) has not been part of the equation.  It is not yet clear the role in which the buyer will play as the healthcare system evolves. Currently, healthcare services are paid by somebody else – such as employers (offsetting employee pay), insurance companies or the government. This disconnect between the seller and producer from the ultimate consumer allows for perverse behaviors which are not commonly found in other market-based systems.

Payments Must Incent Appropriate Outcomes

Until we have payment systems that reward appropriately-determined outcomes, a market-driven system in healthcare will be merely a dream, not reality. In fact, if our hodge-podge system continues without much needed disruption, a true market-based system may not have a chance to see daylight. Market systems may wring out the unnecessary additive costs over time, but this cannot be done without having the three components in place as mentioned earlier.

The simple question is this: How can we turn back the clock to eight years ago and pay what we really should be paying today? Eric Coldwell, an analyst with Baird Equity Research put it quite succinctly when describing the push for transparency and value-based care: “The U.S. healthcare system is a sandcastle and the tide is coming in.”

To stay abreast of employee benefits and healthcare issues, we invite you to subscribe to our blog.