The Government’s vision to create a Health Information Exchange (HIE) has the potential to provide a comprehensive patient history at the point of care. In addition to this data exchange, Internet and “meaningful use” of electronic health records will have a positive and significant impact on the delivery of healthcare and its associated costs. This new arrangement will improve the collaboration among providers and health facilities.  The integrated medical groups like Kaiser Permanente, the Mayo Clinic, the Cleveland Clinic, and University of Pittsburgh Medical Center are extensively utilizing technology to improve access.  These big groups are combining doctors, clinics, hospitals and often some insurance and capturing the financial savings from electronic health records.

However, despite all the benefits, adoption of technology is slow in most of the small practices.  It is surely a change in “status-quo”, and as such small practices do not get financial incentives to use computerized medical records and for some practices it is very time consuming process to convert paper records into electronic records.

“And there are privacy and patient centered concerns as well” said Dr. Donald Tavakoli; a Philadelphia based Psychiatrist. “Obviously for psychiatrists, mental health issues and therapy notes raise a major concern of “discoverability” and differ from the rest of medicine (at least in some people’s minds).  Not to mention, typing with a patient in front of you, which happens a lot with electronic systems, takes away from the doctor patient relationship.  On the other hand, legibility, access to records, and streamlining for billing purposes can increase efficiency and decrease redundancy in testing etc.”

Dr. Tavakoli said “technology being incorporated into practice is a good thing as it increases access (as DocAsap proves), increases efficiency, and decreases risk of errors.  And at the end of the day, it is inevitability.  Increasingly, I’m hearing about things like Ipad’s being considered as notepads for clinicians, which could offer simply touch screen checklist items to mark off during evaluations, this not only reduces medical error but healthcare costs as well.  And it is possible increased technology and Electronic record systems dovetails with increased “checklist” medicine.  The big concern is that in healthcare, sometimes the art of medicine can have immeasurable value, and the doctor patient relationship is crucial (and mental healthcare tops that list, especially with psychotherapy, but it is true in all of medicine).”

Please check Dr. Tavakoli’s profile at DocAsap

Dr. Jamo Rubin, the founder and president of Medical Present Value and chairman of PTRX, spoke in my Wharton eHealth class last night, and led an interesting talk about medical claims and entrepreneurship.  In talking about the “black box” that doctors face when submitting claims to insurance companies, he told a story about how twenty years ago when he was practicing, he tried to find out why a major insurance company only paid back $980 of a $3000 surgery bill.  After asking around the hospital, someone told him that the $980 was 120% of Medicare’s reimbursement for the surgery, but not being satisfied with that answer he tried to look up the Medicare payment formulation.  However, after realizing the 65-variable formulation model for allowable Medicare reimbursements was also a mystery to the public, he began to doubt that the private insurers could have figured out all the Medicare variables.  He came to realize that almost all doctors have no idea what their claims reimbursement will eventually be, leaving the doctors to send patients bills saying “Do Not Pay” until insurance companies pay a portion of their claim months later and to collect money from patients later if the claim is rejected.  All of this opaqueness and delay in private insurance reimbursement created a huge opportunity for MPV to create rule-based software that checked actual payments against the contract that the doctor signed with the insurer, helping doctors attain 4-7% more revenue on average from private payers as Dr. Rubin stated.

So why has this system persisted, where doctors are underpaid by private insurers by an average of 7%, according to Dr. Rubin’s experience?  First, the incentives for private insurance companies to underpay or delay payment are high, considering they audit, decide and pay claims.  Second, insurer contracts are often too complex, vague, or non-standard by region for them to even process properly (though he mentioned that insurers like UnitedHealthcare are standardizing their contracts now).  And last, private insurers themselves often only process claims, with self-insuring employers often being the reason for underpayment.  Dr. Rubin ultimately stated that the need for determining reimbursements more precisely will take center stage for doctors in the coming years, which should be good for MPV’s business.

At the end of the class, Dr. Rubin shared his experiences on the three usual failures and successes of startups:
Three failures
1) Judgment, in terms of failing to be brutally realistic about one’s business
2) Foresight, in terms of failing to see where trends are headed
3) People, in terms of becoming siloed from fellow employees

Three successes
1) Perseverance, in terms of sticking to a good idea even if others denigrate it
2) Focus, in terms of solving one key problem first instead of getting distracted on numerous other opportunities
3) Good investors, in terms of getting investors that know one’s business

I agree that start-ups that don’t address the three failures don’t ultimately last long, though I do believe that companies with strong products and market leads can afford short-term mistakes as long as they correct them in the long-term.  Regardless, I found Dr. Rubin’s presentation insightful, and appreciate him flying from Texas to visit Wharton.

One interesting HCIT-related clause in the $787 billion stimulus bill states that the Feds will work toward the “Promotion of the interoperability of clinical data repositories or registries.” While the still-evolving HL7 and other patient data standards are getting the most push from interoperability advocates, there is not currently a universally agreed-upon standard for storing and sending patient data in the U.S. much less internationally.  In W. Ed Hammond’s Health Affairs article on data interoperability, he highlighed the main obstacles of data standardization so far, such as doctor’s idiosyncratic ways of storing patient information, the still-evolving nature of HL7, and the difficulty in getting EMRs to support one data format.   The stimulus bill currently has those issues in mind by letting the CCHIT and HITSP work together under the auspices of the ONC to pick a data standard, and only reimbursing CCHIT-certified EMR purchases.

This data standardization push is welcome, as the current reality is that doctors and patients have a very hard time keeping track of past clinical data unless the patient has stayed in the same hospital network his or her entire life.  Currently, the biggest repository of patient data resides with the payers (i.e., insurance companies and Medicare and Medicaid), as they typically can aggregate data from hospital and doctor visits, pharmacy benefit managers, and wellness/disease management programs across various providers over time.  However, for patients who are part of regional insurance companies who move to a new region, or simply those who switch insurance providers, many will most likely will lose their clinical data forever, as there is no easy way for a patient to record and transfer data their health data to a new provider.   While the EMR and data interoperability initiatives imbedded in the stimulus bill eventually seek to help doctors provide better care by having access to past clinical data and help patients hold on to their personal health record, these benefits will be years in the making.  Still, the stimulus bill gets high marks from us in its extensive protections of data privacy, as those sharing patient data for marketing or non-sanctioned purposes can be severely penalized.