As I wrote last year, health care in the U.S. is one of the least transparent markets imaginable.
It’s getting slightly less opaque — but only slightly.
Maybe the urgency of responding to the threat of Ebola will help. Now that an Ebola patient has turned up in New York, the urgency of coordinating medical responses to possible pandemics is more pressing than ever. (Not to mention the need to get ready for the flu season, which is actually a more serious threat at the moment.) But one major factor hampering medical coordination is the almost complete lack of transparency in the U.S. health care system, from top to bottom.
Right now, for consumers, health care is like a flea market where you don’t know the price of anything, or its quality, or really much about it — until you’ve bought it, taken it home, and used it up. Then you find out whether it works or not.
And then you get the bill.
It’s even more complicated than that, because the bill is probably not paid by you — it’s paid largely by an insurance company (if you’re lucky). But there’s little transparency in the market for insurance, either.
And, as my colleague Mark Sullivan reported earlier this month, consumers aren’t the only ones in the dark. Not only do hospitals charge wildly varying prices for the same procedures, but also many hospitals don’t have a good handle on what those procedures cost.
The simple act of giving doctors information about the costs of the services they provide, while they’re providing those services, can help cut costs by as much as 10 percent.
It’s a measure of how truly opaque the health care market is that such measures are considered new and remarkable.
But it’s also a sign of opportunity.
We’ll find out more about that opportunity next week at VentureBeat’s second HealthBeat conference, October 27-28 in San Francisco. I’m looking forward to the conference because the last one opened my eyes about how truly crazy our health care system is — and how much potential digital technology has to transform it for the better. (Click here to register. If you use the discount code “DylanTweney20,” you’ll get 20 percent off the ticket price.)
Here’s why I’m so excited, as a journalist, to cover this digital upheaval:
Going digital — at long last
The key to transformation in health care is the digitization of health care records. Electronic health records, or EHRs, replace the bedside charts and manila folders full of notes that most doctors, clinics, and hospitals used until quite recently.
The Hitech Act, passed by the U.S. Congress in 2009, provided incentives for hospitals and doctors to switch from paper records to EHRs. The results have been dramatic. According to a report prepared by the U.S. Department of Health and Human Services this month (.pdf), 59 percent of hospitals have “at least a basic EHR system,” an increase of 47 percentage points since 2009.
With more widespread use of digital records comes the possibility of increasing efficiency and transparency across the health care system. Everyone from patients to health care providers to insurance companies will more easily be able to access health data, use it, analyze it, and make decisions based on it.
But there are still hurdles. As the HHS report notes:
… practice patterns have not changed to the point that health care providers share patient health information electronically across organizational, vendor, and geographic boundaries. Electronic health information is not yet sufficiently standardized to allow seamless interoperability … thereby limiting the potential uses of the information to improve health and care. Patient electronic health information needs to be available for appropriate use in solving major challenges, such as providing more effective care and informing and accelerating scientific research.
Standardization is a big challenge, because right now most EHR providers are proprietary and haven’t put much effort into making their systems interoperable with other EHRs. In fact, there’s been little incentive for them to do so, until recently.
Competition from Internet-centric EHRs, like Practice Fusion, may help break this logjam. Customer demand might do it too. Either way, it seems inevitable to me that the demand for interoperability will eventually trump EHR providers’ desire to keep their systems closed.
Déjà vu all over again
It’s not unlike the market for enterprise IT in the late 1990s. I was covering that market as a junior reporter for InfoWorld at the time, and it was clear that big, legacy providers of IT would do anything they could to avoid having to reckon with the Internet. But eventually, the advantages of a standards-based, interoperable, open system became irresistible. Companies that didn’t move to open standards quickly enough got swept aside. Some of the giants persisted, but only by embracing openness to a far greater degree.
It was a transition that took more than a decade and is still ongoing. It involved the reallocation of trillions of dollars in enterprise tech spending (according to Gartner, worldwide IT spending will be about $3.8 trillion this year). Now we’re going to see a similar transformation in health tech.
We spend $3 trillion for health care in the U.S. — 18 percent of our gross domestic product — and according to some estimates, a third of that is waste spending. That’s a trillion dollars in waste, much of it brought about because the market is so opaque.
So I say, bring on the digitization of health records. Bring on the interoperability and the transparency. And bring on the competition.
We’ll soon see just how much of our health system is wasteful, inefficient, and poorly managed — and we’ll be able to make much better decisions about how to fix it.
And, with luck, we’ll be better able to coordinate our responses to pandemics — before they even happen.
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