Data: It's good for what ails healthcare

The trend toward consumer-driven healthcare sends providers and data to the examining room.

by Robert Ebisch

The world of healthcare is changing dramatically. New medical technologies, increasing competitive pressures, rising costs, more intense government regulations and a dizzying array of health plans and coverage options mean that patients—and physicians—have a higher stake in managing treatment and billing.

"We have a lot of challenges in the healthcare industry," admits George Isham, chief medical director and chief medical officer at Minneapolis-based health plan HealthPartners. Health plans must transform themselves, he says, and industry-specific information systems solutions will be critical to creating value.

Consumer-driven healthcare
Healthcare industry spending on information technology in both the United States and Western Europe is projected by various sources to grow by up to 8% over the next few years. The increase is likely influenced by the fact that employers are demanding more accountability from providers and health plans. For example, U.S. employers saw 2004 healthcare premiums increase 11.2%; meanwhile, the workers who help pay those premiums only saw their earnings increase by 2.2%.

"Part of what's been broken in healthcare is that the people writing checks aren't getting the service and aren't getting to make the decisions," says John Cochran, executive vice president with Meridian Health Care Management in Woodland Hills, Calif. The trend is toward increasing the responsibility of healthcare consumers by changing health benefit features, such as coinsurance, medical savings accounts and consumer-driven health plans (CDHPs).

This intense focus on the consumer is even leading some health plans and employers to offer information such as hospital report cards directly to consumers. "In healthcare, there isn't a Consumer Reports out there saying Community Hospital is great for chronic disease care but doesn't have a good record when it comes to invasive cardiac surgery," Cochran says. "Rather, it's based on physician recommendations or somewhat blindly based on what's available in the community."

The Holy Grail, he says, is when consumers have access to quality comparisons, cost information and other statistics, theoretically empowering them to buy healthcare the way they buy a car. Healthcare companies can only reach this Holy Grail through the collection, maintenance and management of an unprecedented amount of data. Traditionally lagging other industries in IT initiatives, healthcare now faces the challenge of partnering with consumers in managing their medical care and insurance decisions with more data.

An automated future
Consumers aren't the only factors healthcare companies must consider. CDHP management, claims management, cost reduction and improved quality of care are becoming increasingly complex tasks that represent a growing trend toward a total IT integration—and automation—of the healthcare system.

For example, the industry is slowly easing into electronic claims adjudication, which today accounts for as much as 40% of medical claims submitted to insurance companies. The percentages would be higher if not for the complexity of healthcare contracts and benefits, as well as a lack of investment in administrative technology by insurance companies and their IT vendors. However, with advancing technology and systems capacity, the opportunity to automate is growing.

Some companies automatically process up to 90% of their claims for complex benefits automatically, without the need for claims staff to review payment. This type of automated adjudication, with high first-pass-through rates, reduces administrative costs.

The industry is approaching the ability to do it in real-time. "Ultimately, when a consumer visits a physician's office, there's no reason why the office shouldn't be able to process (the transaction) like a credit card and know at the point of service what the provider is going to get paid and what they should collect from the consumer," Cochran says. "It's a little ways off, but the technology to do that is there."

Facing the challenges
Effective information management is absolutely critical to more effective medical management, such as developing comprehensive solutions that address the cost of, say, diabetes. For medical managers, Isham says, "the challenge is making sure they have accurate demographic data on the patient population, collecting information from the medical record and from the employer and, in a sense, creating a data warehouse so you know the people who have a condition and can get in touch with them."

There is also the IT systems challenge of gathering information, ensuring confidentiality, reporting back to benefits providers the number of people found with a disease and making estimates of a disease's impact on various population groups.

"It has to do with deploying health-risk assessment cheaply and effectively," says Isham, "setting up systems and processes to identify consumers with risk factors, educating them and giving them the tools to lead a healthier life."

Aggregated lab and pharmacy data might generate Web site pop-ups to alert doctors that a particular patient is a diabetic and has not had a certain diagnostic blood test within the recommended timeframe. Warehoused medical record data can generate lists of patients who need appointment reminders or coaching on how to manage blood sugar, blood pressure or cholesterol.

Going digital
Healthcare IT integration is almost overwhelming in its complexity, but a bright spot is the trend toward electronic health records, more commonly known as electronic medical records (EMRs). EMRs digitally store healthcare information from an individual's lifetime of contacts with healthcare providers. While the use of EMRs in primary care is slowly catching on in the United States, it currently is much lower than in Europe, according to Frost & Sullivan, possibly because of European "governments' reimbursement schemes for the purchase and use of hardware and software systems in healthcare."

In fact, the European EMR market grew by 19.2% in 2003 and is expected to reach €688 million—nearly a four-fold increase—by 2010.

Technologies such as EMRs and radio frequency identification (RFID) may seem to generate information most important at the hospital or physician level. But across the entire healthcare system, whether it's physician behavior or a nurse giving drugs or a case of drugs in shipment—all of the information going into a data warehouse provides system-wide visibility.

Seamless integration
At some point in the process, these data streams and their applications will all intersect. For example, once nurses have administered so much of a drug, the database might trigger a call to a distributor, who then sends another RFID-tagged shipment of the drug down the supply chain.

Healthcare too is only beginning to scratch the surface of the kind of database and structures needed for delivery organizations.

"We feel like, in our organization, we're doing exciting things as far as some components of it, but it's such a big puzzle," Cochran says. "Everything in healthcare is 10 times more complex than it really appears."

That, of course, presents a huge challenge for information systems, from patient interactions to automated interfaces between EMRs, employers and insurance companies.

"Many different functions have to have access to this information and be able to use it," says Isham. "It's absolutely imperative that all this works from frontend to backend in a seamless and smooth fashion." T

Robert Ebisch has written for USA Today, The Washington Post and Science News.