Health Information Technology (HIT) – Hype or Promise of a Better Healthcare System?

Salim Kizaraly, Founder & SVP of Business Development at Stella Technology, a healthcare information technology start-up, talked about the promise of  Health Information Technology in solving care coordination, physician collaboration, and system integration challenges to improve healthcare, at a recent http://www.bio2devicegroup.org event.

Kizaraly began by sharing the known fact that the mounting and huge healthcare costs in the US, that do not result in significant improvement in health, are not sustainable.  According to some estimates, almost 18.3% of GDP in the US, goes towards healthcare expenditure.  If the cost of healthcare continues to rise at historical rates, the share of GDP going towards healthcare in the US, is projected to reach 34%, by 2040.  While the costs continue to rise, gains on health improvement do not keep pace.  For instance, life expectancy in the US is only 78.4 years and US ranks 27^th out of 34 industrialized nations.  In this study of industrialized nations, US had highest to near highest infant mortality rates.

Kizaraly discussed the three defining historical events that got the ball rolling on healthcare transformation.  In 2004, President Bush announced that in the next 10 years, by 2014, every American would have an access to electronic health records. We have a long way to go, but certainly we are moving in that direction.  In 2009, HITECH (Health Information Technology for Economic & Clinical Health) Act, enacted as part of the ARRA (American Recovery & Reinvestment) Act, was signed into law, to promote the adoption and meaningful use of HIT and included incentives for faster adoption of EMR (Electronic Medical Records).  In 2010, the Affordable Care Act or Obamacare, with its mandate to expand coverage, cemented the case regarding the need towards transformation.

Barack Obama signing the Patient Protection and Affordable Care Act at the White House (Photo credit: Wikipedia)

The Affordable Care Act’s most significant contribution is to creating ACOs or Accountable Care Organizations.  An ACO can be defined “as a set of health care providers, including primary care physicians, specialists, and hospitals that work together collaboratively and accept collective accountability for the cost and quality of care delivered to a population of patients”. There are incentives to keep patients out of the extreme settings of care, including hospitals and nursing homes.  Different models are emerging of how these organizations put this into practice.  Underlying issue is that hospitals have to get better at treating patients.  Hospitals are bracing for lower revenues as they get better at keeping patients out of hospitals.  Different models of care are emerging.  Technology will be a big enabler to change workflow, rethink care, as homes emerge as places of care.  Here is link to my article on Keynote by Dr. Toby Cosgrove, CEO of Cleveland Clinic, at 2014 J P Morgan Healthcare Conference in San Francisco –http://bit.ly/1c3EyBB .  Cosgrove also said, that hospitals will not longer be epicenters of care, and while a few hospitals (e.g Cleveland Clinic) will be super high tech, they will partner and share resources with other care providers, to offset costs.  The disruptions will eventually enable us to “build a healthcare system that is humane, high quality, and sustainable”, said Cosgrove.

Kizraly discussed several national initiatives that are implemented or partially implemented to enhance collaboration among care providers and integration of information.  For instance, if a person experiences an emergency visiting New York, then eHealth Exchange will make it easy to get their health records from the state of their residence. Similarly, Blue Button makes it easy for Americans to get easy, secure, online access to their health records, with a single click.

Stella Technology is a self-funded health information technology services and product development company that focuses on care coordination, patient access, and information exchange projects.  Kizraly shared use cases and information on how Stella is helping providers, with great success, in integrating care.  Through aggregating data from a variety of sources, through identifying gaps in care, and with real-time, proactive analytics, Stella’s technology identifies care opportunities that can be improved and accordingly targets interventions.  In the long term these kinds of strategic technological interventions will enable care providers to curtail expenditure, while improving care. In the interim, we still have a long way to go and there are many opportunities for entrepreneurs to use technological advancements in big data, cloud, machine learning, (IOT) internet of things, and enable US healthcare system to become more efficient, with lower costs and improved outcomes.  Kizraly’s talk was followed by Q&A.

JPM 2014 – Dr. Delos M. “Toby” Cosgrove, CEO & President, Cleveland Clinic: on Challenges, Opportunities & Affordable Care Act

During the luncheon keynote, Cosgrove began by quoting Lenin, “there are decades when nothing happens, and then there are weeks when decades happen”.  Clearly there is tremendous activity and major and disruptive overhaul happening in the healthcare sector.  To meet increasing demands proactively, Cleveland Clinic has made some significant changes in how they operate.  These include, one year contracts for employees, eliminating tenure tracks, implementing annual performance reviews, offering high deductible insurance policies, and greater transparency throughout the system, said Cosgrove.  Many other businesses are also moving towards some of these reforms.   In the new healthcare environment, retail clinics like Walmart and CVS will play a significant role.  Over 813 branded clinics and hospitals and other providers are partnering with these retail clinics, in anticipation of the shortage of physicians that will hit the system.  Cost pressures will also intensify as providers are increasingly pressured to move from the volume based system of providing care to value based system, linked with outcomes, said Cosgrove.  Cost pressures are coupled with pay cuts in education for physicians and other practitioners and there less money coming from VC funding sources.

Among the challenges, are hidden opportunities that can help overhaul the system to make healthcare better.  For instance VC funding for Health IT has gone up, M&A continues at rapid pace, and some of the focus on behavior changes is yielding good outcomes, said Cosgrove.  Genomics and behavior modification represents some of the largest unmet challenges and they account for 70% of premature deaths in the US.  At CC, with a relentless focus on behavior modification, employees collectively lost 430,000 pounds.  Similarly, genomics has opened up a huge opportunity in healthcare.  Approximately, 4300 single gene diseases have been so far been identified, and the cost of sequencing of full genome is dropping rapidly.  Other huge opportunities are with respect to patient health records and management of big data in healthcare.  CC has given 1.8 million patients access to their electronic health records.  Quoting “IBM’s Watson Computer”, Cosgrove observed that artificial intelligence is opening huge opportunities in healthcare.

All the disruptions in the healthcare should eventually enable society to “build a healthcare system that is humane, high quality, and sustainable”, said Cosgrove.  But this transformation will not be painless.  It will require a great shift in mindset for physicians and also in how people view healthcare, in society at large.  Roles of care providers are changing rapidly.  Only about 10 years ago, hospitals used to be epicenters of care.  Now increasingly care is delivered outside the hospitals and we need to develop systems that support and scale out of hospitals care delivery, said Cosgrove.  A few hospitals will need to be very high tech and to offset costs, they will need to share and partner with other care providers.  Cosgrove gave the example of CC’s high tech data center built at the cost of $170 million.  Cosgrove said, healthcare is the only industry that has not consolidated and it will need to consolidate in the coming years.

The only criticism Cosgrove offered with the implementation of affordable care was that it has not built in incentives for wellness.  Obesity is sharply rising in the US and it needs to be contained, in order to control costs, said Cosgrove.  Affordable care bill is not perfect and there will be unintended consequences, but they can be dealt with.  One of the shocking thing that Cosgrove opined upon was that US will one day have a single payer system, with basic healthcare provision for everyone, and optional choices in supplementary insurance on top of that.  This was an exciting keynote.  The whole bar in healthcare is being raised and Cleveland Clinic is clearly taking a leadership role in meeting the challenges head-on.