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Washington, Please Don’t Bail Out the Health Care Industry

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By RICK PETERSCapital

A health care Marshall Plan — $50 Billion stimulus to get electronic health records (EHRs) in every doctor’s hands or $50,000 to each physician -– what an incredible marketing job.

Detroit, are you listening? Stop whining to Congress that you need a bailout. Tell them you want to be the new alternative energy Manhattan Project, get the money, and then keep building SUVs and flying around in corporate jets.

To Congress, Daschle, and Obama, please don’t do this. Our industry, health care, combines the worst of the Big Three automakers with the worst of the hubris, dishonesty, and failure of the public trust of Wall Street. Please do not bail us out.

The health care information technology (IT) industry is a close analog
of the auto industry circa the 1970s. A few large players who build
big, expensive systems on outdated technology platforms dominate the
industry. There are some Toyotas, Hondas, VWs, and BMWs in the mix, but
the big players dominate the industry forums, standards organizations,
and mindshare of the institutions – our academic medical centers and
large health care organizations. They sell the institutions Cadillacs
and Lincolns with big fins that wallow and weave as you drive down the
road and they offer the rest of us Pintos and Vegas – smaller versions
of the big systems that unpredictably catch on fire.

Unlike other industries, however, (again, listen up Detroit) there is a peculiarity to health care IT relative to government regulation. The large health care IT companies love regulation and they love government mandated standards. You might wonder, no other industry has government setting standards, why health care?

It’s simply because HITSP and ONCHIT, the organizations set up by industry and the government to mandate standards, are controlled by the large archaic systems vendors.  Standards selected and set by these organizations are unnecessarily complicated, expensive to implement, and protective of the big players. They stifle innovation and like the Big Three automakers, keep health care IT completely out of step with the general computer industry.  Health care IT and HITSP standards are at least a decade behind the open data standards and open-source progressivism of the general computer industry.

In a nutshell, do not pour more money into this industry without completely rethinking how we drive innovation. Currently available EHRs from the major, CCHIT certified vendors will not save us money. Any assumptions about improvements in quality or patient safety will be offset by an across the board loss of clinical efficiency, a loss of productivity and a counterintuitive increase in the number of personnel, and increased clinical and administrative errors due to system and user interface complexity.

Across the board the decisions by CCHIT have narrowly defined the criteria that constitute a ‘certified’ EHR.  They have made the hurdle artificially high and they have made the process as well as the required standards expensive for smaller innovative vendors to comply with and time consuming to implement. EHRs are not the solution, and this is very sad for me to say having devoted most of my professional life to them.

Apologies that this is out of left field but please spend our taxpayer dollars on the following:

A) Allocate $25 million and fund five efforts at $5 million each to build a scalable, XML, and cloud-based claims adjudication, public health, and quality reporting system to replace the entire archaic mainframe systems at CMS.  Make the winning solution open source, implement it for Medicare and the CDC, and offer it free to every state Medicaid program and all the commercial payors.  In addition make public and open source all Medicare and state Medicaid payment adjudication rules and payment edits.  If you want to regulate something, make disclosure of adjudication rules and payment edits mandatory for all public and private health plans and PBMs.

B) Allocate $12.5 million (five efforts at $2.5 million each) to build an XML and web-based, completely secure and confidential patient registration, master person index, eligibility management, claims submission, and explanation of benefits/remittance system that interfaces seamlessly with Item A, above.  Involve the patient privacy experts integrally in the selection of the winner and make the winning entry open source and free to all physician practices, hospitals, nursing homes, and ancillary facilities.

C) Allocated $10 million (five efforts at $2 million each) to build an XML and web-based, completely secure, confidential, and digital signature-based integrated ePrescribing and order entry (CPOE) system.  Make the winner open source and mandate that all physicians, all hospitals, all institutions, all laboratories, all pharmacies, and all ancillary services use this integrated and uniform prescribing and order entry system for all inpatient and outpatient transactions.

D) Allocate $10 million (five efforts at $2 million each) to build an XML, open source PDF, and web-based, completely secure and confidential results reporting system. The winner would be open source, it’s use mandated, and must generate identical report formats for each type of result independent of source – in other words the onscreen and print based display of a urinalysis, culture, and sensitivities; an imaging report; and all other results would be uniform across the country and across practices, labs, radiology groups, and institutions.

E) Allocate $12.5 million (five efforts at $2.5 million each) to build an XML and web-based, completely secure and confidential clinical and administrative decision support engine that operates seamlessly with C and D, above. Make the winner open source and the solution has to provide open source authoring tools so that academic, public health, and institutional sources can publish plug-and-play guidelines, protocols, and recommendations for cost and clinically effect and evidence-based prevention, diagnosis, treatment, and patient safety.

A, B, and E will save a phenomenal amount of money for providers, payors, and the entire health care system, and C, D, and E will do more for patient safety than all the EHRs in the world. That’s for $70 million — not billion — and remember, the ‘experts’ and the established vendors will say this can never be done for this little money.  I’ll take that challenge.

Let the existing health care IT vendors build charting systems, scheduling systems, and implementation platforms for the above technology.  They’ll make plenty of money and unlike the Big Three might actually survive.

Rick Peters is an emergency physician, founder and former CEO of the EHR vendors Oceania (now Cerner) and iTrust (now Medplexus), and the PBM PTRX. He has been integrally involved in health care standards and health care consulting.

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  16. Message sent to my Congressmen and Senators,I cannot believe that this government has reached a conscious to support a bill that gives ILLEGAL ALIENS healthcare. Is the government becoming dumber by each day, secondly the people that made it possible to vote you into congress should have a say in what is provided in the HC Bill, you(government) will ration what medical needs a person has, remember we the people are paying for this not the government, what you first need to do is tort reform, secondly hold a vote to the people to see if they want a HC Bill, just as you provide information during your re-elections also provide information on the HC bill to the people, this is like taxation without representation. Where is the logic to provide healthcare to illegal aliens, for that purpose just open the borders and let them in. This government has become a disgrace to the people it serves, I am embarrassed to call my self a DEMOCRAT any longer. Washington has forgotten the needs of the people. REMEMBER this is a government for the people by the people, not a government for your own interest. Do any of you realize what most citizens are going through currently, have you honestly seen what your communities are living, or have you all become so complacent in your jobs that you do not care. We have senators and Congressmen getting favors for there posts, this is shameful to read in the newspapers, all of you should be voted out of office in the next election. You all promised to do a better job for your communities, ask yourselves deep down if you are truly doing the right thing for the people, this was once a proud country, the nation in the world everyone looked to in a time of need, what are we now, are we better than the Soviets in there time, we critize Cuba for being communist but they at least have one of the best health care systems in the world. I am truly sorry that I voted for any of you.

  17. I believe this whole health care debate has gone on long enough in Washington DC. The last three adminstrations have tried and failed to come up with a bill every POLITICAL PARTY could agree on. I say well now its time to use the demorcratic process to make a decision. If our Congress can’t decide then the people of this country should make the decision. I believe that the major versions of the health care bille should be placed on a national balot. The political parties could then campain for their version and provide the education of their version to the public.

  18. I just don’t understand the logic of those who are advocating socializedl health care! It seems to me that they have the proverbial “Cart-Before-The-Horse.”
    In order for the health insurance industry to pay out billions in health care claims each year it has to at least take in billions of dollars in premiums.
    What are the percentages and the amount of the health insurance industry’s profits, and through conjecture – who and how many might those profits insure?
    Why is not this the debate – instead of the ill-defined and nebulous cries of those who claim to be so well-informed in this blog?
    Why aren’t President Obama and Congress focusing on the cost of health care treatment in America? Insurance premiums are always the consequence of the analytical cost of anticipated claims.
    It’s hard for me to believe that the cost of health insurance in America is our #1 problem, but more so, merely the symptom of waste, inefficiency, profiteering, greed and largess at the inception and delivery of our medical treatment.
    I, for one would like for all this uproar and attention be directed as to why the least expensive stay in a hospital in America is close to $1,500 a day and why a patient is charged $9 for a box of Kleenex on the nightstand. We cannot hold the insurance industry responsible for these shameful charges.
    It is apparent though that there is a wide discrepancy in both the quality and the cost of coverage from one insurance company to another. If the government needs to intercede with something similar to the Food and Drug Administration (FDA), or other federal watchdogs, I believe our nation and Congress would stop this entire inflammatory idiom that is dividing our nation.
    In all likelihood the only other answers for President Obama and Congress [if there is one] is to legislatively freeze medical costs in America with price controls, or use our tax dollars to pay doctors and hospitals for the medical treatment of those who either claim indigence, or are in fact indigent.
    Annihilating the health insurance industry in America and replacing private health insurance with a government plan would temporarily lower premiums and therefore insure more Americans. However, medical claims would soon skyrocket and give America, President Bush and Congress a much, much greater challenge than they are facing today.

  19. If anyone really thinks this health care “INSURANCE” program is anything other then a move to force within 5-10, a GOVERNMENT RUN health care like Canada and Britain then read the document yourself. Obama himslef stated in 2004 “I would think we could see the private insurance disappear within 5-10 years” and the real reason for this “I support a SINGLE-PAYER” healthcare system” He says he doesnt support it now because we are on the cusopice of throwing him abnd everyone who voted on this monstrousity out with the baby water come 2010 election time. The Public Option is merely the first step to force private insruance to end. The next thing you are going to hear is “ALL Private insurance must meet PUBLIC Option criteria or stop sproviding insurance”. Thus ending the private option and leaving only the public option. Canada and Britain BOTH admit they wish they had not ever done this and now we are looking done the same road with the path this governement is taking us. This is the first step to the loss of all you liberty. Why does the governemnet require all access to your private bank accounts with the ability to extract via direct withdrawl? THAT is in the BILL !! If this is not a step toward socialism and total government control of your life. IN Ex-Governor Deans recent statement, “Having a single payer public option is going to be the only viable option for the citizens to have in the future” C-Span2 0945 CST 08/14/2009.

  20. I think that the Democrats can’t do a good job of changing the Health Care, because they owe to much to the Lawyers, Insurance Companies ans Unions. But, here is an idea, if the Government Run Insurance is a fact, theb all Federal Employees should be under that one plan, that includes the President, the Congress, The Senate etc. No more cadilac insurace subsidised by the people.

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  22. Go after the overpriced drug makers who are driving up health care costs. People should not have to go bankrupt because they cannot afford their prescription drugs.

  23. Please visit the free video at Google, “The Solution for brain injuries and bankruptcies” it outlines a self reliant system funded by users, in use in Michigan only for 35 years. This Model provides unlimited medical benefits by using a simple idea, and is the only system with hundreds of millions in annual excess! This Model prevents bankruptcies due to medical bills and assures Hospitals and providers get paid, and will save States billions in Medicaid costs. The Federal Government should not attempt to bail out the Health care industry. Great Post!
    http://www.myspace.com/thesolutionguy

  25. I am against Washington bailing out the health care industry. I do not see how we can keep bailing out everything and everyone.

  28. Well-written and very informative article, Rick. Great ideas and maybe this can be part of the solution for the healthcare issues we are facing. Obama’s initial health care reform could be impressive and we are all waiting as it progresses.

  29. Taxpayer investments in HIT need to be analyzed like any other business investment….and your Post is a critical step in this direction. With a national health expenditure exceeding $2.2 trillion dollars and with over 300,000+ physicians, 5,800+ LTAC/IRF/Acute hospitals, 18,000+ LTC/SNF providers and 300+ million patients the solutions to health care reform will be complex and dramatic.
    The HIT solution will be challenged by the fact each service setting has its own assessment instrument ( DRG in Acute-MDS in SNF-PAI in IRF-OASIS in HHA-RAI in LTC). Before meaningful HIT changes can be implemented the payment system needs to be consolidated into a single bundled payment for each episode of illness. Fragmentation leads to unnecessary cost. The logical development of new HIT needs to be based on a uniform assessment tool in all sectors of the health care delivery system. Solutions exist for meaningful reform such as those recently offered by the CBO in their landmark December 2008 report. Technology only supports a rational solution in health care reform….it never represents the solution.
    HIT is an intregal part of health care reform but it should be the final step in a restructured and more rational delivery system. Hopefully the rush to stimulate our economy will not overshawdow the thoughtful development of a new model for service delivery.

  30. Bailout dollars for tax dodgers like HIMSS, a so called industry trade association?
    When 501c 6 status is claimed we the taxpayers subsidize the operation of money grabbing carnival operators. The question is should bailouts and tax subsidies go to those who violate human rights in the work place and claim to offer guidance to our elected officials. No… this is horse crap. Its one thing to put on a carnival, its another thing to violate human rights and public policy. The voice of these blogs is essential to spreading the truth.

  31. Thank you so much for this post. I’ll be contacting my reps with this. While we all have hopes that Obama will bring real change, his proposals so far are a zero. Does his solution in anyway start with identifying the problem? Isn’t it cost and the unfortunate side effect of bankrupting patients? Obama’s solution proposes another huge boondoggle to benefit his donors. This will greatly expand the Novation monopoly tax on “care” while doing nothing to help us – nothing to help with health care or provide jobs since companies like athenahealth outsource to private pools in India.
    All the Obama believers should do some serious research on this before we throw billions of dollars at another non-solution.

  32. There was a time when, if you wanted to become a physician, acquiring the requisite funds required more than the mere velleity of making the choice and having the financing appear, as it does today.
    Then in the 1950’s and 1960’s the (then) HEW came up with what seemed a simple solution to the health care conundrum: financial aid to medical schools. They planned to flood the market with new MD’s and so cause increased competition to lower the cost factor attributable to doctors’ incomes.
    In the mid 1970’s I was a dinner guest of a brilliant couple of Washington health apparatchiks. He was (among other things) guiding the nascent EPSDT program. And she (the sister of one of the Brookings Institution’s leading economists) was eventually to become the Director of the National Center for Health Statistics. In short, not only were they broadly wired into the beltway health establishment, they had their hands on the steering wheel.
    Another guest that evening was the wife of a health economist who had recently been jilted by her co-researcher husband. And she was getting back at him by blabbing about the results of their latest research prior to their publication: financial support of medical education was having the opposite effect on health costs than had been anticipated (and hoped)!
    Although the increased support given to Medical Schools had worked to increase the supply of physicians, there hadn’t been the expected depressive influence on doc’s incomes. They had found that wherever there were new MD graduates, they would produce more medical procedures and earn a handsome income while doing it.
    By producing more Docs, Washington had increased the supply of industrious medical care providers who continued to command a gratifiying return on the investment the government had made in their education.
    There was amused consternation around the dinner table. Medical Economics had not responded to the “Law” of supply and demand. “Well, maybe we’ll do better with this new entity, the HMO.”

  33. Rick- Hooray for your article ! We aren’t lacking technology in Health Care- We’re lacking common sense !

  35. “Of course, you mean Billions in A-E, not Millions.”
    No the numbers cited are even too high at the multiple tens of millions. $10 to $20 million donated to the Apache Software Foundation or comparable organization to aid the establishment of an EMR/PM top-level project is much more than sufficient to create an outstanding FOSS software product very quickly.
    Otherwise Mr. Peters is exactly on target.

  36. I read this a couple a weeks ago and was certainly doing the normal head nodding but then out of left field an unrelated piece of data came along that just blew my mind.
    A vendor in another industry pointed me to http://www.programmableweb.com This is a site that writes about 3rd party APIs and how to use them to move your company to the Web 2.0/3.0 world.
    Here’s the kicker, there isn’t a single healthcare API listed! Does this not say it all.
    How hard would it be for the people who have commented here to simply start specifying the APIs for the health subsystems that are listed in the post.
    Why not do it the Net way, rough consensus and working code?
    Jordan Glogau
    CTO
    Preferred Health Resources
    http://www.medicalbillingphr.com

  37. Well written and represents a refreshing well-thought out veiwpoint! I remember when I first started complaining about CCHIT 2 years ago all over the place, very few were listening (one important fellow being Dr. Silverstein above, BTW).
    Now, there are few that agree with CCHIT, although it continues its work simply because of the 3 year government contract which hopefully will end in 2009. We need for more folks to write position papers like this…
    Happy New Year to one and all!
    Al Borges, MD
    “What is Wrong with HIT in the USA?”, downloadable at http://www.msofficeemrproject.com/

  39. Re: “There are 500+ health plans, but 5000+ rules sets associated with the various benefits plans.”
    =====
    An interesting way to eliminate this problem would be to ban private insurance for Core Health Services such as “Hospitals, Labs, Physician’s Services, and Medications”. This is what we did in Canada. This system of Universal Health Care depends upon doctors having to make a choice: they must either entirely opt out of the one payor system, or entirely opt in. You cannot bill patients privately and through the public system for insured services.
    It’s not complicated.
    While on the topic, the President Elect should keep all the money he can to reform the failing US Health Care System first, then tackle EMR. Computerizing an inefficient, archaic, decrepid system won’t solve anything.
    I’d be interested how you might compare the ideas presented here with IHE.
    http://www.ihe.net/
    Great BLOG

  40. Fantastic original post and subsequent commentaries. As a primary care physician who purchased an EMR 6 years ago I recall how challenging the task was. Since then I have watched many of my colleagues purchase expensive systems without having stated goals and an understanding of what they were getting into. The IT industry is not too dissimilar from the pharma industry in that the docs rely too much on what reps say.
    How is the average doc supposed to get access to the issues raised in these postings? How are we to be protected from making expensive mistakes? We are hearing about P4P and PCMH and that EMR must be a part of these movements. Then we go out and purchase an expensive system to find out that the costs outweigh the benefits but by then it’s too late.
    Many of us are trying to do the right thing by spending our money to improve care. But there are many sharks in the waters and we need unbiased advice…a Medical Letter of EMRs so to speak.

  41. The issues, proposed solutions, and desired results that Rick Peters outlines are worthy. But I expect, based on my long experience, that the people who show-up to do the work will be the very same people who are currently active in standards, HITSP, and CCHIT today. Results are generally determined by who shows up to do the work.
    It’s true that large healthcare IT vendors, US government agencies, and a cadre of consultants dominate healthcare IT standards development organizations, HITSP, CCHIT, and NHIN. Yet it’s equally true – and disappointing — that representatives from providers, health plans, consumer groups, healthcare professional organizations, and other stakeholders are in the minority despite many calls for participation.
    The creation of standards and their implementations does not create adoption. Free and open technology has a cost for acquisition of operating hardware, staffing, documentation, training, ongoing operations, maintenance, and scaling to handle growth. One key barrier is the lack of capital investment funds. Reimbursement levels barely fund operating costs. A massive migration to a new technology base is unlikely, even by fiat. So what about the transition? How do we get there?

  42. Great post, and many thoughtful comments – to which I have to add.
    1. Business Model
    Any worthwhile endeavor needs to make a profit. So if the government is to be the financier in creating an Open Source EHR/PHR it needs to have equity and expect a return.
    Similarly, every Health care organization should want to have a share of it. It is in their best interests to see a competitive no/low/free cost system to put pressure on Epic/Cerner et al. Funds used to finance this venture would be returned by better terms, and provide a hedge against proprietary dominance.
    To make money the organization would have to add value to its open source. One way would be to host the software as an ASP (Salesforce.com) for the benefit of smaller providers who do not want to run their own IT organization. For larger providers, there is a consulting business for customization and integration with their legacy systems.
    Another model might be to become a worldwide distributed, interoperable, health care social network – with any service provider being able to attach themselves and extract revenue in any form they can – advertising.
    Existing Health care providers should want this because they have the potential to become the best networks – paying patients as customers, qualified, knowledgeable providers, no need to take advertising. However they lack technical expertise which Open Source software can provide them with.
    Consumer information providers (Google, Yahoo, Microsoft…) should want it. They have – technical expertise, fleeting customers, no sustainable revenue stream. With Open Source they could leverage their ability to operate at huge scale to work cooperatively with the Health care providers.
    2. Technology
    Health care is a federated, distributed system. The domain has thousands of concepts, the data sets are huge and need to be maintained in time series. Every technology that has tried to meet these demands has failed.
    Rick and others have identified some requirements of a system, namely:
    a. Conceptual.
    The software system has to be able to directly represent the concepts we deal in, which means it needs to digest information models and turn them into executable code. The conceptual formalism needs to be simple and extensible and not tied to UML.
    b. Interoperable
    There are several HC models (HL7, OpenEHR, DICOM …) – the system needs to be able to digest every one of them – (and any more we come up with) and ensure they are semantically reduced to the same concepts, so they can inter-operate at a primitive level.
    c. “Interfaceable”
    There will always be legacy systems (as will this become) that will need interfacing. Proprietary Health care software offers no such thing as a standard interface, therefore any new system has to have creative ways of reaching in to whatever is offered – SOAP/WebServices, HL7, ODBMS … by any means possible (pub/sub. polling …).
    d. RESTful
    Ability to expose every Health care conceptual “object” on the Internet as a uniquely addressable URL, which can be mashed up in a social network. So that I could for example paste the URL of the Ultrasound image of my son in the womb, where the image is being hosted by my Health care provider, on my FaceBook page. Or, I could put the URL of my PHR in the address book of my mobile phone, so that a first responder could locate it in an emergency and better treat me.
    e. Secure
    Every Healthcare URL that referred to me, secured and controlled and owned by me. So that I could decide whom I wanted to share it with. Logging of all access to these URL’s, with access to the logs, which in turn identified the accessor by a similar URL.
    f. Massively Scalable
    The sort of cloud file and database storage techniques used by Google, Amazon, Yahoo et al. will be needed to run it. Take a look at “Hadoop.”
    g. Coded in Java
    To attract the largest number of developers in the Open Source community.
    h. Continuous
    The ability to morph and apply changes to the system as it is running so that as a new concept that is realized or any new interface needs to be added – this can be done without taking the system down.
    Meet all these requirements and we have the killer Health care app.

  43. The issue is not EMR’s, the issue is integrated health care.
    Buried in your article was the answer to why the healthcare delivery system is having such difficulty in adopting IT the way it has been adopted in virtually every other industry. Mayo and Geisinger have made EMR work because they are integrated systems. Contrast this with the norm in healthcare delivery – independent, small practices focusing on acute rather than chronic care. This model has given us higher costs and poorer outcomes than in any other developed nation, and many less developed countries.
    Imposing EMR on the current system, whether government funded or by fiat, will only exacerbate already dysfunctional practices. If the Obama administration is serious about reforming healthcare it will have to focus on rethinking the delivery system at the same time it sets out to provide greater access to the system. One without the other is not sustainable. A truly integrated healthcare system will demand IT and it will be made to work. That is the place to start.

  44. I agree with your ideas – the current crop of large vendors are doing nothing to improve the health system where ever they are deployed in the world.
    My concern is that open source by itself is NOT a panacea for this problem. The current lack of interoperability and computability of data is the largest issue to be solved. Open source apps such as Vista are excellent applications, however they still use ‘proprietary’ and non standard data formats and are not interoperable with anything else. Open source does promise cheaper software, but many health services are still very nervous about using open source software (usually for all the wrong reasons).
    Simple XML schemas just don’t cut it in the clinical space which is THE most complex information domain.
    We need a platform that enables interoperability so that we can develop SOA type applications. Imagine a hospital that has an EHR service, with a whole lot of other services such as clinician and patient indexes. Imagine software that just plugs into these services because they are based on open standards which are independent of vendor and technology. No integration costs, with data that can be used for third party decision support etc etc. Imagine software produced by relatively small vendors for specific niches in the health system that fit perfectly into a more complex whole. Imagine primary care physicians who have software that can understand data at a semantic level that comes from other clinicians and health services.
    All this is possible now…
    openEHR is one such standard which is now gaining a large mindshare in the UK, Europe (especially Denmark and Sweden), South America, Japan, Australia and New Zealand with increasing interest in Canada and the US.
    Lets not replace a proprietary EMR based on non standard and non interoperable data with an open source one that is also based on non interoperable data.