Healthcare Musings November 2010

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The Coming Tsunami in Healthcare

By David Winn, M.D., FAAFP

Dr. David WinnNovember 1, 2010 - U.S. deficit spending has fallen off the cliff. The Congressional Budget Office forecasts U.S. deficit spending “forever.” Unfunded mandates for Medicare, Medicaid and Social Security exceed 50 trillion dollars and U.S. debt to GDP is at a historic 84%. Given the magnitude of the country’s debt, compounded by a weak retail economy, the GDP is unlikely to grow fast enough to prevent an inevitable currency collapse (hyperinflation) or sovereign default. Since the U.S. can always print money, hyperinflation is the more likely outcome.

Canada had a similar nightmare scenario in the 1990’s with debt reaching 120% of GDP! As their currency devalued, their exports became cheaper and they were able to grow out of debt by growing their exports and GDP. They made deep cuts to unfunded mandates and managed to survive. The U.S. will face its own crisis in the very near future. A few Wall Street insiders (see Ferguson’s documentary “Inside Job”) and an inept government have brought the U.S. to its own financial precipice. Will voters elect candidates with the courage to make difficult and painful spending cuts? Will we make the hard choices as Canada did to prevent financial collapse? Perhaps we will know more after tomorrow’s elections.

What does the current financial reality portend for healthcare?

Healthcare at 18% of GDP today is 80% higher than any other industrialized nation and, according to the World Health Organization and other health grade organizations, the U.S. ranks at the bottom of all industrialized countries on access and quality, especially when adjusted for value received per dollar spent. Between insurance company profits, administrative expense, waste, and fraud, 40% or more of every healthcare dollar is not spent on medical care delivery. Also, while the general inefficiency of our healthcare system is well known, what’s less understood is how the profit motive can impact both cost and quality. One example is the use of scientifically unproven procedures. Although many invasive interventions seem intuitively correct, some of them have not been subjected to rigorous scientific scrutiny before becoming mainstream. These procedures command high premiums and financially reward those who perform them. Physicians are not immune to financial temptation. It is easy to convince oneself of the value of a procedure that is highly lucrative.

The U.S. is facing some very difficult choices. When the hammer eventually drops – and it will – the government will have to cut deeply and swiftly. Unfunded mandates, which are technically already insolvent, will cease to exist in their current form. Fee for service medical care delivery and the insurance industry middlemen are huge targets from which the government will look to recover several hundred billion dollars per year in savings. No other industry has as much fat and potential for savings through efficiency improvements as healthcare. Fee for service healthcare is on life support and will soon be declared dead in my opinion.

What will replace it? The only rationale answer is a fixed budget, so the government knows what its annual cost will be, and quality accountability for the care provided within that budget. Paying healthcare providers an “adjusted risk” (capitated) fee based on their individual patient panel severity, plus a bonus for delivering measurable, reproducible quality and outcomes, greatly increases accountability and limits waste, fraud and abuse.

This will only be possible with open, interoperable technology that can measure the illness severity of an entire patient panel and adjust “payment risk” based on the level of care more ill patients are likely to require. Vendors of proprietary electronic health records must be legislated into compliance with open HIE (Health Information Exchange) standards – and those standards need to be precisely defined sooner, rather than later. A physician will need to be able to access and exchange any patient information equally, regardless of which EHR they use. Islands of patient information inaccessible to healthcare providers outside of a hospital network or geographic region are simply not acceptable and should no longer be tolerated.

I have concerns that the U.S., as the single payer of last resort, will ruin deployment of this model by overburdening it with bureaucracy and inadequate reimbursement, but the alternative of an unsustainable, fee for service, insurance based healthcare industry is no longer affordable – or desirable. Perhaps the one good thing to come of this is the trial lawyers will have to look elsewhere for their carrion.

Something has to give and healthcare is the weak link in the chain. Regardless of what kind of healthcare system we may personally wish for ourselves and our families, bankruptcy is staring our country in the face and hard choices will have to be made.

Author's note: "This article is my opinion only and does not reflect the opinion of e-MDs - David Winn, M.D., FAAFP, Founder, Chairman e-MDs"

About the Author

Dr. David Winn  founded e-MDs in 1996. Today, e-MDs is rated highest overall among ambulatory electronic health record vendors by multiple medical societies including the AAFP and ACP. Dr. Winn programmed the prototype EMR software and used it in his medical practice, which contributed to phenomenal efficiency and profitability. He also has been active in the community with 15 years of service to the Hill Country Medical Ministries as a volunteer physician and medical director. He is the recipient of numerous awards including the Service to Mankind Award by Sertoma for the southwestern United States. He has also served on the board of a publicly traded technology company, Computer Language Research. He graduated from Baylor College of Medicine in 1981 and completed his residency in Family Medicine at the Southwest Memorial Hospital in Houston, Texas. Dr. Winn is board certified and a fellow of the American Academy of Family Physicians.

Dr. Winn is very active nationally in EHR promotion and technical specifications development. He is a founding member of EHRVA (Electronic Health Records Vendors Association), and was appointed to CCHIT for 2005 (Certification Commission for Healthcare Information Technology), an organization tasked by HHS to establish EHR standards. Dr. Winn has also been very active in promoting semantic interoperability between vendors, first with his involvement with CCR and second with e-MDs planned release to the open source community of e-MDs Medicapaedia, an interface terminology designed for electronic health records and mapped to SNOMED CT, LOINC, ICD-9, and other codified medical vocabularies.

Dr. Winn’s statements calling into question the safety of certain medical procedures is timely, considering a November 2010 investigative report in Discover magazine that speaks to America’s misguided trust in the safety of mainstream medical procedures.

Dr. David Winn can be reached at 512.257.5200.

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