Saturday, April 9, 2011

Medical informatics aligned with health costs

I have been asked if medical informatics, computers and software in medicine, the field I am getting a PhD in, can reduce medical costs. I think medical informatics CAN reduce medical costs with emphasis on CAN if and only if there is motivation to use computers and software to reduce medical costs.

Computer systems can track, remind, enable reuse of medical data like images, increase efficiency, reduce errors, determine the most cost effective treatments - reducing costs. All these good things ONLY end up reducing costs if our medical system is structured to motivate the stakeholders involved to reduce costs. I have heard one use of electronic medical records to increase the bill. It turns out when you go to the hospital and a dizzying assortment of physicians, nurses and medical specialists visit you and you receive a separate bill from almost every single person that saw you, they often forget to bill you for something. Electronic medical record systems can be used to make sure nothing was left off the bill and increase the cost to the patient.

What happened to efficiencies reducing medical costs? If a business increases efficiency but if the customers don't actively look for cheaper costs the business will simply keep the extra profit instead of passing the saving on to customer who is the patient in this case.

In what passes for a health system in the USA employers are given tax advantages for paying for employees health benefits instead of paying the employee the extra money and letting the employee buy their own insurance. The insurance is getting paid out of what would have been the employees' salary reducing the salary but the employees frequently don't know how much they are losing out on and how expensive the insurance actually is. Many higher level plans, especially the so call "Cadillac" plans only require a small co-pay for the patient. The insured patients don't care what health care costs because they have already paid for it through reduced salary. We can't expect the customer/patients who have already paid a very high price for health care to try to get a better deal on health care when it won't even reduce the patients' out of pocket expenses. The clinicians are busy treating patients and don't deal with bills much so they don't care about reducing costs either. The medical administrators that handle the business of health care don't care about reducing costs because the patients don't choose heath care providers on cost; clinics are not competing with each other on cost or efficiency. The insurance companies are about the only stakeholder interested in reducing costs and they can increase premiums to offset the higher medical costs to keep the same profit margin.

Employers should be taken out of the health care business if they are not actually health care businesses. It is not their business and I am sure they would like to focus on their business instead of being a health care insurer. They would have the added benefit of not having employees pick employers based on health care benefits which I know does happen. To get employers out of health care the tax deduction for employer based insurance should be ended. Hopefully the current health bill will allow private customers to purchase reasonable insurance. Co-pay should be a percentage of the bill or even the full cost up to some deductible limit, even a 5% co-pay on the full bill of  many treatments could bankrupt patients. This way patients know the full cost of their insurance and treatment and have to pay something based on the price so they are motivated on cost. Health care providers need to provide the costs to patients so that patients can compare providers easily. Emergency care is a different case, no one has time to shop around for emergency medicine. These costs would have to be controlled by negotiations between insurance and hospitals. After the people involved are motivated to control costs then medical information system case be used to increase effectiveness and reduce costs.

Medical costs can be reduced with the right motivation. Most types of medical cost are going up. Dentistry and especially plastic surgery are two types of medicine that are actually going down in cost while up in quality. They are also often not covered by insurance, patients pay most of the costs out of their pocket. Patients are motivated to find the best deal and providers are motivated to provide the best deal. Dentists and plastic surgeons are also known to use medical information system to make their practices run more efficiently, effectively and reduce costs and pass those reductions in cost on to the patients.

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