A Management and Information Perspective on Healthcare

By Faisal Hoque  |  Posted 09-18-2009

A Management and Information Perspective on Healthcare

It's 3 p.m. on a Thursday. You've got a doctor's appointment in an hour; he wants to follow up on a cholesterol drug he prescribed. You turn to the screen on your desk and study the dashboard. All company systems in all regions are in the green zone. The logistics problem in Phoenix yesterday has been solved. No news on your competitors today. The system will shoot a note to your Blackberry if anything comes up. You email your wife about dinner and check your son's flight on your screen - he's coming home from college. Off you go.

At the doctor's office you approach the receptionist. She looks through a stack of manila folders and finds yours. She asks for your insurance card and makes a photocopy of it. You sit and thumb through a three-month-old news magazine. At 4:30 a nurse calls your name, and your 4:00 appointment begins. She weighs you and checks your blood pressure and writes some notes in your file.

At 4:50 the doctor enters the examining room, asks about the family, and opens your file. On top is a report that had been faxed over from a lab across town, but only after the nurse had asked you where the report was. You'd gone there last week to have blood drawn. You had shown your insurance card and handed the clerk a script specifying the tests your doctor wanted; it was a handwritten scrawl you couldn't decipher. "Is this for PSA?" the technician asked. No, you say, cholesterol. "Oh, yes, I see."

"Your numbers look good," the doctor says. He rifles through the file. "Are you taking any other medications?" Just the aspirin a day he had suggested, you reply. "How old are you?" he continues. "Have I sent you in to get your PSA test?"

You show the doctor an article you found on the Internet about the effect of grapefruit juice on cholesterol drugs. "I haven't seen this," he says, handing it back. You had this because you had set up your home page to collect news on cholesterol. You also use another site to shoot you emails with such news.

The doctor takes a small tablet and writes something in Latin. At the clerk station you hand over the $15 co-pay and as you wait for a receipt you look at the floor to ceiling shelves of manila folders. You gaze up at the smoke alarm on the ceiling.

Now you drive the little piece of paper your doctor gave you over to a pharmacy near your office -- battling afternoon traffic for a half-hour. The GPS unit in your car alerts you to current traffic snarls. At the pharmacy you trade the piece of paper for three months of pills, after once again showing your insurance card and then waiting another 25 minutes for the prescription to be filled. Finally, you are out of the pharmacy at 6:00 p.m., realizing you might not make it to the airport in time to pick your son up for his 7:00 p.m. arrival. Fact is, he will most likely need to take a taxi. You send him a text message, using your phone.

Now let's create one more scene, just to drive our message home. At 10:30 p.m. that night your son is watching a basketball game on TV, playing an online war game with participants all over the globe, sending instant messages to three friends, and purchasing movie tickets online.

As you prepare for bed, you suddenly feel weak and dizzy. You have a smashing headache. It is scary. Your spouse calls 911. Two emergency medical technicians who have never seen you in their lives show up, check your vitals and encourage you to go to the emergency room. There, sitting with a clerk, you fill out several forms and hand over your insurance card. You wait 56 minutes (the average in California). A nurse directs you to an examining area, checks your vitals again and writes on a paper chart. Eventually a resident, still in training, shows up, takes the chart, and asks, "Are you taking any medications?" You don't see a manila folder, but you suspect it's lurking somewhere.

A Nation of Luddites

Why do you put up with this? 

You would long ago have cleaned up such an inefficient process in your company. Indeed, if your company insisted on operating this way, it would go under. You have brought technology into your professional and personal life to make you aware and efficient. And yet when it comes to your health, perhaps even your life, you must submit yourself to an antiquated and dangerous paper "system."

Oh, we are quite innovative when it comes to medical discoveries. American-born scientists working in the United States have won 12 Nobel Prizes in medicine over the past decade. Three more have gone to foreign-born scientists working in the United States. By comparison, researchers outside of the U.S. have earned just seven.

But when it comes to using technology to build a business model for health care delivery, we are Luddites. In recent years U.S. health services have ranked 38th among 53 industries in business technology investment per worker. Health services spent less than one tenth what banks and other industries spent. That's why the afternoon visit to the doctor we imagined for you was so disjointed.

This is not about your inconvenience. Various studies have yielded this alarming picture:

•    Every year medical errors cause 98,000 deaths (some studies suggest the number is twice that) and one million injuries. This is not a statistic. This is a national health emergency. And a scandal.

•    Medical errors kill more people each year than breast cancer, AIDS, or motor vehicle accidents.

•    Little more than half of patients receive the known best practices in care.

•    Less than half of doctors in large practices provide the recommended care for patients with chronic diseases.

•    Thirty to forty percent of the money we spend on health care - more than half a trillion dollars a year - is spent on costs associated with "overuse, under-use, misuse, duplication, system failures, unnecessary repetition, poor communication and inefficiency."

•    One-fifth of medical errors are due to the lack of immediate access to patient information.

•    Eighty percent of medical errors were initiated by miscommunication, including missed communication between physicians, misinformation in medical records, mishandling of patient requests and messages, inaccessible records, mislabeled specimens, mis-filed or missing charts, and inadequate reminder systems.

•    Three out of every 10 tests are reordered because results cannot be found. Patient charts cannot be found on 30 percent of visits.

•    As much as $300 billion is spent each year on health care that does not improve patient outcomes - treatment that is unnecessary, inappropriate, inefficient, or ineffective.

Follow the Information

Why do we put up with this?

We know about at technology-enabled business models in corporations, social enterprises and government. We have seen the need for leadership at the top and collaboration across silos and boundaries. We talk about the need to get information flowing across these walls. And that's essentially what we are looking at here, except on a massive scale. We have a gaggle of players: doctors, hospitals, insurance companies, employers, government and researchers, all operating in an environment that just sort of happened.

This "system" is usually analyzed by following the money. The explosion in medical knowledge over that past half century and the creation of new diagnostic and treatment procedures and equipment have sent the costs of medical heavenward, and the game has been shifting those costs around.

Patients whose care is paid for by employers or the government have no reason to not take advantage of it. Employers reduce benefits and raise premiums or drop medical insurance coverage altogether. Insurance companies hold doctors responsible for the amount of care they dispense and dispute more and more claims. Hospitals send patients home earlier than ever. Doctors spend less time with patients and worry if they order too many tests, because the insurance company will ding them, or order too few tests, opening them up to lawsuits. Patients make endless calls to scream at insurance companies about denied claims. And on it goes.

Let's analyze the system from the perspective of information flows. Think about the model introduced earlier for corporations - the need for information to flow within the organization, to and from partners and from the external environment. Processes need to be established to enable collaboration. In the same way, a doctor needs information about a patient - current condition, medical history, information about the patient held by other doctors and institutions, and knowledge of the latest research and thinking about the condition affecting the patient.

The problem is that vital information is missing in one out of every seven primary care visits. Information is often unreliable - it's estimated that pharmacists make 150 million calls to doctors every year to clarify prescriptions; only about nine percent of U.S. doctors use an electronic system for prescriptions. What information is available must be transferred laboriously by paper; databases in hospitals and doctors' offices are often unable to talk to each other, because there are no data standards.

Creating all these silos of data is no small task: in some settings doctors and nurses spend as much time on paperwork as they do treating patients. Did you know that the 130,000 pages of Medicaid and Medicare rules and regulations are three times the size of the Internal Revenue code? Did you know that a Medicare patient arriving at the emergency room must sign eight different forms?

When all of this is resolved, and we think it will be eventually, the real innovation will not be the technology. It will be how the medical community rewires the way it works and collaborates. It's a people and organizational issue. We are accustomed today to seeing twice as many clerks as medical personnel in a doctor's office. That will change. There will be fewer visits to the doctor; information will be exchanged electronically. There will be fewer repeat tests. Doctors on rounds in a hospital will have everything they need to know in a small device hanging on their belts. Patients will have access to their medical records online, and so will the emergency room. But all this will require change, and change is not easy.

We Have the Technology

Actually, we already have the technology we need. A few examples:

We have CPOEs, computerized physician order entry systems, with which doctors can file prescriptions and give orders for lab work. These can issue alerts on possible adverse drug interactions. Mistakes are reduced, as are time and costs.

We have EHRs, electronic health records, which capture every piece of information about a patient and are accessible to qualified medical personnel online. In an emergency the patient doesn't have to remember drugs he's taking and nobody has to track down a manila folder.

We have CDSS, clinical decision support systems. These advise doctors on the latest best practices in diagnosis and treatment, allowing them to customize what they do for an individual patient. This is controversial terrain. There is obviously a difference between what is known in the aggregate and what is right for an individual. And nobody wants insurance companies to use this information to turn doctors into robots; there is enough policing of physicians in the name of cost-containment today.

Nevertheless, when studies indicate that only about half of all patients get widely accepted and uncontroversial advice from their doctors - such as taking aspirin for heart conditions - it's time we considered something new. Moreover, if we had a national, interoperative, medical information network, we would be able to see patterns in the aggregate data. We could learn, for example, whether a certain test is actually worthwhile in a certain situation. The quality of healthcare would go up and the cost would go down.

Innovation Underway


Here is a sampling of innovative work in health care today.

The Veterans Health Administration Service is the largest integrated health system in the United States, with 5.3 million patients and 1,400 sites of care. Although it has not had a sterling reputation in the past, the VHA today is on the leading edge of innovation. It won the 2006 Innovations in American Government Award presented by The Ash Institute for Democratic Governance and Innovation at Harvard University's John F. Kennedy School of Government.

The VHA has created a system -- Veterans Health Information Services and Technology Architecture (VistA) -- that allows clinicians to view and edit electronic health records, and provides access to images such as x-rays, photos or documents, throughout its system. Veterans increasingly have access to their records and more opportunity to successfully manage their own health. The results are eye opening:

•    VistA's computerized system checks for incompatible medications. While one in 20 outpatient prescriptions are complicated by medication errors nationwide, VHA's process fails at a rate of only seven per million.

•    The use of clinical decision support and performance measurement to improve pneumonia vaccination rates helped save the lives of 6,000 veterans with emphysema. As VHA's vaccination rate became the national benchmark, pneumonia hospitalizations were halved even while VHA's patient population doubled -- all while reducing taxpayer costs by $40 million.

•    The President's Information Technology Advisory Committee (PITAC) estimates that nationally one in five lab tests are repeated because previous test results were not available at the point of care. The cost of maintaining VistA is $87 per patient per year, only slightly more than the cost of one unnecessarily repeated lab test.

•    Adjusted for inflation, VHA care is 32% less expensive than a decade ago, although health care costs generally went up 50 percent. And the VHA has measurably better outcomes in quality, satisfaction, access and patient function. The VA outperforms all other sectors of American health care in of 294 measures of quality in disease prevention and treatment.

Wouldn't you like to be in that system?

We're all more aware of the threat of terrorist attacks and natural disasters. When hurricanes Katrina and Rita struck the Gulf Coast in 2005, the VA Medical Center in Gulfport, Mississippi, was destroyed, and the New Orleans VA Medical Center in New Orleans was evacuated and closed. Nevertheless, medical records for 40,000 veterans in the area were almost immediately available to doctors across the country, and veterans could resume their treatment and refill their prescriptions.

What is going on at VHA and at private clinics around the country will transform the practice of medicine. Business technology first brought efficiency and speed to corporations. Then it began to change the conduct of business. In the same way, technology has begun to improve the productivity of health care, but in the future it will bring hard to imagine changes in how we treat disease and keep people healthy.

The Mayo Clinic in Rochester, Minnesota, is one of the organizations at the forefront. Ironically, we might blame the clinic for the manila folder. Henry Plummer, the fourth physician at the clinic, which opened 100 years ago, pioneered the idea of having one record for each patient, which would travel with the patient, replacing ledgers and various notes written and kept by individual doctors in their offices. He also studied how the industry moved information, and created a system of conveyors and pneumatic tubes to swish the records around the clinic.

This evolved into thick plastic jackets bulging with color-coded paper records. One patient might have as many as 40 of these jackets.

That's all gone now. The clinic has digitized 4.4 million patient records in a unified system. The system must handle 1.5 million outpatient visits and 60,000 hospital admissions each year. It is used by 15,000 caregivers and staff, who have access to 15,000 terminals across the Mayo campus. Every week, about 55,000 clinical notes are added to the system, and 125,000 outpatient orders are made electronically for diagnostic tests, medications or consultations.

This is the productivity phase, in which accuracy, speed and connectivity improve exponentially. Doctors on opposite sides of the campus can call up a patient's record on their screens and discuss it intelligently. Everything is in there - medications, history, even x-rays. This kind of technology is the norm in the corporate world.

The Coming Revolution

Beyond this, however, lies the revolution. Using IBM's Blue Gene supercomputer, the clinic will mine all patient data, transcribed doctors' notes, outside databases, outside research and gene and protein knowledge to put right in front of the doctor everything that should be known about a patient. What has been learned from other patients and what is being discovered in the labs will be right there. You won't have to print out articles from the Internet and carry them to your doctor any longer! It can take 17 years for new research to make it into a doctor's office today. Not anymore.

Kaiser Permanente, the nation's largest HMO, which serves 8.2 million patients, is moving down a similar path. One of the new things these systems offer is the ability of the patient to see his or her own medical records, make appointments online, get reminders for drug refills and appointments, and see test results. This gives the patient more involvement in his or her own care and is likely to make them a better patient. 

Dr. Robert Pearl is Executive Director and CEO of The Permanente Medical Group in Northern California. His advocacy of electronic medical records flows from personal experience. A few years ago his father, who lived half the year in New York and half in Florida, had his spleen removed. His doctors in both places were excellent. But each assumed the other had administered a post-operative vaccine that is common after these surgeries. One day at Dr. Pearl's home in California he found his father on the floor. He had succumbed to pneumococcal septicemia.

"He died because medical care has become incredibly complex and because as a nation we have not devoted enough attention to implementing electronic medical record systems and other methods to ensure patient safety," Dr. Pearl wrote.

One of his father's physicians, Dr. Pearl has said, relied on his father to remember what medications he was on. His father kept a list on a worn piece of paper in his pocket.

**The above article is adopted from the author's book, Sustained Innovation.

Faisal Hoque is an internationally known entrepreneur and author, and the founder and CEO of BTM Corporation (www.btmcorporation.com). His previous books include Sustained Innovation and Winning The 3-Legged Race. BTM innovates business models and enhances financial performance by converging business and technology with its products and intellectual property.
© 2009 Faisal Hoque | info@btmcorporation.com