Making Healthcare Work
Three healthcare groups deliver better care and improve efficiency.
by David Rosenbaum, August 2009
Cost, quality, and access—the three most important tenets of healthcare—are getting a shot in the arm. With President Obama’s signing of the healthcare-related provisions of the recent stimulus bill, the United States is embarking on the electronic modernization of its healthcare system. It’s no secret that the U.S. healthcare sector has lagged in implementing the interoperable systems that could provide better access and empower both healthcare service providers and patients. Today, physician electronic health record (EHR) adoption in the U.K. is at an estimated 90 percent; in the U.S., it’s about 10 percent. The pressure to catch up is coming both from above, in the government’s insistence on reform, and even more importantly from below, as patients—the ultimate end users—demand greater input into their own care.
A Healthy Result
For decades, healthcare reform has been a Gordian knot, resisting all attempts to cut through the tangle of relationships between caregivers, payers, and patients. This has led to costs that are overwhelming federal and state budgets. In 2008, according to the National Coalition on Health Care, total healthcare spending represented 17 percent of the U.S. gross domestic product (GDP). At the current rate of growth, it is estimated that by 2015 the U.S. government will be spending more than US$4 trillion on healthcare, or 20 percent of GDP.
But the healthcare crisis is not just about money. According to a January 2009 Deloitte Consulting study, the dollars being poured into healthcare are not translating into either great patient experiences or improved patient outcomes. The U.S. trails most Westernized systems in patient satisfaction and lags in comparative mortality and morbidity results. The Deloitte report points to an estimated annual 100,000 U.S. deaths due to preventable medical error. It’s clear that investments in preventive and proactive care result in more-cost-effective care and better outcomes. The barriers to meaningful reform are both structural, because providers today are paid for performing more procedures instead of fewer, and cultural, because patients have not demanded change. As the Deloitte study notes, “Consumers spend more time selecting cars than choosing physicians and hospitals, where outcomes and safety vary widely.”
Many experts agree that the current model is unsustainable. However, Paul Keckley, executive director of the Deloitte Center for Health Solutions, sees two rays of hope. First, the new U.S. administration is committed to reform—and willing to finance and enforce it through the American Recovery and Reinvestment Tax Act of 2009. Second, healthcare information technology (HCIT), which can aggregate and analyze data and make it broadly accessible, is empowering organizations and individuals.
“HCIT can take avoidable visits out of play,” says Keckley, noting that this will lower costs for payers, providers, and patients. It can “provide a platform for eliminating waste through manual and paper-based handoffs between hospitals and labs, and it can distribute data without having Dr. A calling up Dr. B and maybe getting the information wrong.” Healthcare providers that have achieved successful collaborative patient-caregiver relationships find that they not only reduce the cost of care, thus increasing revenues and margins, but also improve satisfaction for patients, families, employees, and medical staff. Providers that leverage Web-based tools are reaching into patients’ homes to identify and track various conditions through online self-assessments based on clinical indicators.
“The biggest new cost saver,” states Keckley, “is prompting—alerting and reminding clinicians that there’s an x percent chance of this reaction to this medication or treatment, meaning you should go this or that route.” Not only does HCIT have the potential to improve outcomes, but a 2005 RAND Corporation study cited by the Congressional Budget Office in a 2008 report to Congress estimates that if all providers and hospitals adopted HCIT appropriately, it potentially could produce annual net savings in the healthcare sector of US$80 billion. Although the RAND analysis focused on potential savings, healthcare organizations abroad and in the U.S. have already achieved improved outcomes and real cost savings by implementing HCIT, enterprise resource planning (ERP), and collaboration technologies.
The Ottawa Hospital: Leveraging Scale to Save Money and Improve Quality
Last year, Dale Potter, then CIO of a global metal manufacturer, received a call from the Ottawa Hospital (TOH), in Ontario, Canada, asking him to apply for the CIO job. Potter, now senior vice president and CIO at TOH, was intrigued by the challenge of helping make TOH “one of the top 10 academic healthcare institutions in North America.” The fact that TOH’s ERP system was from Oracle, and that Potter had implemented Oracle solutions many times, made his decision easier.
TOH is the product of a 1998 merger of four Ottawa hospitals, each with its own ERP system. The four hospitals unified on Oracle’s system because, as Potter says, “it was by far the most advanced solution.” Today, with a billion-dollar annual operating budget, 1,100 in-patient beds, approximately 13,000 employees, 1,250 physicians, and another 3,600 residents and students, TOH is one of the largest teaching hospitals in Canada, serving a population of 1.5 million in Ottawa and Eastern Ontario. TOH also supports 20 other hospitals within the Champlain Local Health Integration Network (CLHIN).
TOH has what Potter terms a “fairly mature electronic health record system.” TOH’s EHR system integrates lab results, digital imaging, and key pharmacy information and gives physicians “a pretty complete view of the patient,” says Potter. “Because not all information is in the EHR, our doctors and other caregivers rely on paper charts managed by our health records department,” he adds. For all of the medical advances in technology, paper is still one of the greatest challenges in improving quality of care while reducing the duplication of services.