Sick System
Because Bush has chosen to take on Social Security as his top-line domestic policy agenda item this year, we’ve been talking a lot about theoretical deficits and shortfalls 40 years in the future. In fact, the country faces a bigger financial problem in the here-and-now, as revealed yesterday when revised budget estimates showed the costs of the Medicare “reform” passed in 2003 (after some serious hardball by the Administration against its own skeptical partisans in Congress) are a little less than double what was first anticipated.
The upward spiral of medical costs are nothing new. Bill Clinton made the issue the center of his successful 1992 campaign, though his proposed solution to the problem famously went down to defeat. Al Gore and John Kerry in particular offered some extremely insightful and practical proposals aimed at the most egregious problems in the system, namely the high cost of catastrophic care and prescription drugs. But oddly, while health care is considered a fundamental right in every other developed country in the world, American citizens remain reluctant to confer that right on themselves. Except in cases of age or extreme poverty, many Americans prefer to ration access to health care according to personal wealth and occupation, rather than by the other methods used elsewhere in places like Canada and the EU.
It must be said that Bush is not without proposals in this area, though typically, he is using a genuine issue more as a springboard for partisan maneuvering and hollow symbolism than as a way to actually solve the problems of real people. The three pillars of the Bush health care plan are Medicare reform (already done, with the failures and cracks beginning to show even before it goes into full effect), tort reform, and technology improvements.
I’ve already written about tort reform, so I won’t belabor that point. The high cost of malpractice insurance is not a trivial problem, especially for medical care providers in rural communities. But it’s a problem that avails itself of a much simpler and more modest solution than applying across-the-board caps to civil penalties in malpractice cases. Apparently something like 98% of gross malpractice incidents are caused by something like 2% of practitioners, but insurers are not permitted to apply the kind of actuarial analysis they use in almost all other situations to the medical profession. If Bush and the Republicans were not intent on using this issue to punish the legal profession for their financial support for Democrats, they would see that it would not be terribly difficult to solve through effective legislation that limits the intrusion of government into private disputes between malpractice victims and rotten doctors.
Technology improvements are where the real savings are to be had. I’m doing some work on this issue now for my client, the Borg, which of course has a vested interest in promoting IT-based solutions for practically everything, so take the following with a grain of salt. However, what I’m learning is that something like 35% of the hundreds of billions of dollars Americans spend annually on health care is consumed in administrative costs that add no value to the process.
To a greater extent than practically every other industry and profession, medicine remains in the Victorian age of hand-written paper documentation and the most rudimentary processes for communication, collaboration, information search and retrieval, scheduling and management. Those IT systems that exist are hideously expensive and proprietary, based on user-unfriendly technology developed in the 1970s and furnished by a few small companies with a vice-grip on the market.
At the same time, medicine is exceptionally bureaucratic and paper-intensive, as anyone who has visited a doctor’s office knows. Nurses – trained health-care professionals – spend upwards of 60% of their time on record-keeping, filing insurance paperwork, doing routine low-value activities like scheduling, and keeping colleagues up to date on information. They spend an average of 5 hours of an 8-hour shift searching for information, usually paper records in filing systems. It’s not hard to see how costs skyrocket when so much productivity is squandered when skilled workers have to spend so much time doing menial, repetitive tasks rather than focusing on the craft of patient care.
The center of the problem is the patient record, the basic unit of information in the medical system. Currently, there is no standard form that captures patient information in a way that is standard across health-care providers. There are no practices for sharing patient records electronically from clinic to clinic. If you arrive at a hospital emergency room down the street from your doctor’s office, there is simply no easy way for the ER staff to obtain critical information about your medical history, allergies, blood type, or other basics that would be nice to know to maybe save your life.
Creating a standard electronic patient record that is private but rapidly searchable and transferable, easy to update, and comprehensive, is the first step toward squeezing a huge amount of waste and cost out of the American medical system. Bush talks about this often, and has set a ten year (or seven, depending on who you ask) time frame for the adoption of this approach. It is, for once, a policy goal that’s actually responsive to the problem at hand with a minimum of hidden agendas.
Needless to say, this noble goal that could realize a trillion-dollar return on investment in its first few years, is completely unfunded in the federal budget. While the UK is putting up the equivalent of US$15 billion of public funds to modernize its system, here in America, we expect those costs to be borne by a medical-insurance-industrial complex that’s already crushingly overpriced. We are happy to dole out overages in Medicare benefits to the tune of $350B at minimum, cut medical services to the poor, allow hospitals and emergency rooms to go out of business due to rising costs, and tolerate rising medical costs that outpace inflation by 9-10 percentage points per year, but we can’t find, say, $60B in public money to invest in technology that will nearly guarantee a 10- to 20-fold payback in dollars, lives, time and productivity. It’s not even certain that the federal agency responsible for setting the guidelines for the electronic patient record initiative will receive funding (about $50M in the 2005 budget, which was never approved by Congress).
Obviously what’s at issue is the matter of public investment, and the Republicans’ aversion to it at all costs. It’s maddening when a good solution to a serious problem is at hand, but the policy-makers in charge refuse to consider it on ideological grounds. It’s like doctors having antibiotics available, but preferring to treat the patient with leaches.
The market is already moving in this direction, but it needs help. Development of this kind of infrastructure doesn’t happen overnight, and it’s very hard to build when the initiative is uncoordinated and the money has to be pried loose from the hands of millions of already put-upon doctors, hospitals, state agencies and insurance companies. The medical industry will benefit from the adoption of a standard electronic patient record at least as much as other segments of the economy have benefited from the Internet, the space program, and the interstate highway system – all developed at public cost. Moreover, the American people will benefit in terms of greater access to the world’s finest medical care and best doctors. If we don’t want to make medical care free for ourselves, at least we can try to make it a little cheaper.
8:50:34 AM 
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