The Health Insurance EHR

Kaiser Health News recently published excerpts of an interview with the CEO of Aetna, Mark Bertolini. Interesting article and interesting subject, but one thing Mr. Bertolini said in connection with Aetna’s acquisition of Medicity, a vendor of Health Information Exchange (HIE) platforms, caught my attention: “We are as much a health information technology company as an insurer”. United Healthcare has also been engaged in significant HIT acquisitions for quite some time. They bought an EHR, Care Tracker, and an HIE vendor, Axolotl, amongst other things. According to the Aetna CEO, in order to create a system that functions properly, insurers “have to be able to provide an infrastructure”.  So is this the future? Will health insurance giants be providing insurance coverage to customers, and HIT infrastructure, including EHR software, to physicians and hospitals?

Most HIT experts are forecasting consolidation in the EHR market, which is currently fragmented into hundreds of less than optimal disparate software products, but is anybody seriously contemplating that the emerging forces in health care technology will be the payers? If you think about this for a moment, and if you remember doctors’ plight that EHRs mostly benefit payers, this outcome doesn’t seem so far-fetched. After all, selling health insurance and selling EHRs follows pretty much the same paradigm.

  • Company Website – Health insurance companies have beautiful websites loaded with pictures of happy people and the cutest babies. EHR vendors have equally high-gloss websites with lots of Flash banners, happy doctors holding shiny tablets in pristine clinics, and, strangely, some also have the cutest babies and toddlers bouncing on every page. Neither one has any useful information for someone shopping for a product unless, of course, you provide them with your contact information, in which case you will be getting a very energetic sales call.
  • Price Transparency – When you buy an insurance policy, all you know for sure is what premium you will have to pay every month. Most folks don’t realize until it is too late that they will have to pay for all sorts of other things that are “not covered”. Similarly, when you buy an EHR for $399 per month, little do you know that there is at least the same amount of hidden charges, and unexpected “upgrade” fees imposed whenever the vendor feels that it needs to improve its top line.
  • Contracts and Policies – Health plans have notoriously long and convoluted policy documents aimed at confusing the buyer. I don’t know too many people who are competent enough to read and understand their content. EHR vendors are a bit ahead of the game here since they also have carefully staged vaporware demos and their contracts, although shorter, are as good as the payers’ policies in obfuscating real terms and conditions, which become painfully evident only when disaster strikes.
  • Freedom of Choice – Most people, including the vast majority of employed citizens, has increasingly little to say about which health insurance plan they end up with. Employers, who pay a large portion of the cost, either pick a plan based on business considerations, or just self-insure. Employees are forced to do the best they can with whatever they were dealt. As more and more independent physicians are being acquired, and salaried, by large systems, they too have very little to say about what EHR will end up in their exam room. Those who are still somewhat independent, but herded into various affiliations, are rarely able to check a gift horse in the mouth and end up taking whatever the large system is providing under Stark law relaxations.
  • Rationing – Health insurance is expensive. The wealthy and those with large and conscientious employers are able to gain access to fairly decent insurance coverage. Some may even have so called Cadillac plans. The poor and unemployed must shop for insurance with no bargaining power and their dollar usually buys a lot less coverage. Large hospitals and specialty medical groups can afford to buy the fancy gold-plated EHRs and they often do. Small and rural primary care practices can’t even come close to being able to afford an EHR from an industry leader. And similar to the private insurance market, a solo doc, with no bargaining power, will end up paying more than a physician in a large practice for the exact same EHR.
  • Government – Unless you live on a deserted island, you know that by 2014 the individual mandate will be kicking in and everybody will have to buy insurance or pay a penalty. Also by 2014, every American is supposed to have an EHR, which means that every physician will have to buy EHR software, or pay a penalty in the form of reduced Medicare reimbursement down the road. Both regulations may be viewed as voluntary since you could choose to pay the penalty, which is much lower than the price of the mandated products. And in both cases Government proposes to determine the minimum requirements for what you can buy to avoid penalties.
  • Product Design – We all know that health insurance policies are designed by bureaucrats and bean-counters to maximize payer profits, with complete disregard for patients’ lives and doctors’ advice (or at least that seems to be the common wisdom). The parallel mythology asserts that EHRs and HIT products are created by “programmers” and other “geeks” with no knowledge of, and no respect for, established clinical workflows and with the same disregard for patients’ lives and safety.
  • Good Ole’ Days – Ah, those days gone by, days of beautiful simplicity, when Government minded its own business, and everybody paid for medical care out of their own pocket, except those who had nothing in their pocket. Those days of wonder when the most medicine could offer was lancing boils and mustard plasters in return for a hefty slice of rhubarb pie, and an amputation went for a couple of chickens. The olden days with hospitals run by selfless nuns in full habit, doing God’s work on earth, where the very sick were freely admitted, but nobody was ever discharged. A gentler era when people died at home from romantic ailments like consumption, surrounded by family and friends, or succumbed en-masse to plagues with mysterious “putrid” origins. The days of golden fountain pens and neatly stacked notecards in little clinics manned by workaholic doctors and spinster nurses clad in white starched uniforms.  Yeah, well, that’s over now.

We are entering the Big is Beautiful era in health care. Big government with big regulations, created in deference to big corporations, will only allow big insurers and big health care delivery systems to thrive. They will be using big computer programs with big algorithms simulating big artificial knowledge and intelligence, administering to the big needs of big populations with big risks and big payoffs. Not to worry though, big insurance has figured this all out, as evident from Mr. Bertolini’s big vision:

“We will shift risk (financial responsibility for medical costs) to the provider system. We’ll provide them cover with capital as re-insurers. We will be the Intel-inside, if you will. We have dozens of these conversations going on with major systems. We spend $400 million a year on new developments: We are as much a health information technology company as an insurer. Our U.S. health system is not really a system as much as a bunch of independent players. How do we create a system that functions properly? When my dry cleaner knows more about the whereabouts of my shirts than my doctor knows about the whereabouts of my X-rays, we have a problem. We have to be able to provide an infrastructure. ”

Yes, just like dry cleaning. We find the X-rays and we’re all good. Brilliant!

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5 replies »

  1. Some of this certainly makes sense to a degree with insurers starting to rule the money roost and what’s next for acquisitions, the EHR vendors, keep your eyes open. As far as the government and their algorithms, don’t they are there yet but trying to build infrastructures where ever they can and remember insurers do claim processing where the government never had the opportunity to build an IT infrastructure.


    All the HIE and HIT software and development just might eat up all the ACO and meaningful use bonus money too in time as it’s not cheap and all entities of insurers put money to the bottom line, first obligation is shareholders.


    It is tough with laws today and lack of digital literacy as the algorithmic business models of a company can change in a few hours and our lawmakers can’t keep up. The latest example is Grassley wanting the Medicare claims on line, no clue as to the cost while everyone else is cutting and in view of how the MD ratings services go and the huge data sets it will not show doctors in the correct light and frustrate consumers.


    Top that all off when it comes to judges making decisions, shoot they can’t even keep track of their own conflicts of interest with all the mergers and acquisitions (I call this subsidiary watch) so how expertise are they with interpretations with allowing some of the buyouts and mergers we see? There’s a lot to question for sure so again the ability to either allow or disallow an acquisition I feel today is not completely understand as to what this means, how data is combined and extreme steroid intelligence is being used, especially with predictive behavior analytics.


  2. Brilliant analysis (and quite scary) but I do think you have found some profound insight into our current miasma.
    I do think you are wrong about the x-rays, though… they still won’t be able to find them and will have to repeat the tests.