Further thoughts on reducing health care costs

In my previous post on health care costs, I argued for further adoption of technology to help alleviate the long term cost issues that are plaguing Medicare. I briefly mentioned the impact the transparent appointment system we are creating at SavvyDoc will help to alleviate the over-crowding in emergency rooms. I was prompted to spend today relating the trickle down effect of web based doctors appointments on the ER because of this Wall Street Journal Health blog post describing recent research showing that the uninsured are NOT to blame for ER overcrowding. This is a common misconception that I am glad the WSJ picked up on. The uninsured unfortunately avoid health care all together. The cost of an ER visit is significantly more expensive than an office visit, so to think that uninsured patients are going to the ER for a bad cold is a false premise. The question then becomes why are insured patients visiting ER’s with such frequency? Thanks to the work being done at the Institute for Health Care Improvement a lot of the reasons for this phenomenon have been illucidated.

Before I go further, the primary source for the statistics in this post come from this JAMA article by Dr. Mark Murray (the link is to the abstract, you will need to visit your local library or have a JAMA account for access to the full paper).

In his paper Dr. Murray argues that issues with health care access are actually due to delays in obtaining care. For instance, in 2001 it was found that 40% of ER visits are not urgent and could in fact be seen in a primary care office setting. I have not seen recent research on this, but as the population ages I would imagine this percentage is increasing. Imagine for a moment the improved wait times in an ER if half of these patients were able to easily obtain a last minute office appointment rather than going to the ER. Realizing that the median ER visit is four to five times more costly than an office visit, think of the economic implications of patients easily finding an open office appointment rather than going to the ER. There are billions of dollars to be saved just by fixing this one problem in our health care system!

The follow-up question: why do patients see it as easier to sit in an ER for hours rather than going to a doctor’s office? Well, at least patients know they can be seen in a somewhat timely fashion in the ER. In 2001 1 in 3 patients reported an inability to find a timely appointment this increased from approximately 1 in 4 patients in 1997. Again, this number is likely rising as our population ages. It does not take a stretch of the imagination to realize patients who cannot find a timely office appointment are deciding to go to the ER for care.

Solution. A transparent wed based appointment system would allow patients to look for any last-minute appointment openings. Patients who desire last-minute care would prefer to see the doctor they are familiar with. Searching for that doctor on SavvyDoc, will allow patients to see if there is availability within the next 24 hours. If that doctor does not happen to be available then further searching will allow patients to find a doctor within their area that is available. The alternative is to walk into a crowded ER waiting room where the patient has no information on who their doctor will be. Our market research to this point has shown that patients overwhelmingly see the value of making on-line appointments with their doctor. Patients are becoming more savvy about how to use the internet for researching information on doctors as well as information on their health. Providing the opportunity for patients to have more control over the appointment making process has wide ranging benefits, this impact on reducing unnecessary ER spending is one of the most significant.

The Doctor’s dilemma: How to maintain a profitable practice?

Last week I commented on the role IT has in reducing healthcare costs and in particular how adopting web based appointments can provide doctors with an immediate ROI whereas other IT tools are viewed as long term investments. In doing more research on the financial stress placed on doctors as Medicare reimbursement decreases, I came across an essay by Dr. Sandeep Jauhar that I believe is particularly good at framing the issue of high healthcare costs from the doctor’s perspective. Dr. Jauhar, a cardiologist from Long Island, argues that patients undergo unnecessary tests and procedures because of a combination of pressure from patients wanting everything done for them and the need to counteract low Medicare reimbursement with increased volume. A pointed example is given where a cardiologist describes needing to perform 10 non-stress tests a month to break even. As a physician that was a difficult example to read because despite the reality of this doctor needing to run a profitable practice I cannot help but consider the implication that there are patients undergoing tests at the end of a month not because it’s medically indicated but because the doctor needs to break even for the month. My comments are not here to condemn doctors, we are doing the best we can to treat as many patients as possible within the confines of a complicated system that forces the healthcare provider into moral dilemmas. It does not take a rocket scientist (or neurosurgeon) to realize the easiest why for a doctor to maintain a profitable practice in the face of decreased reimbursement is to see more patients in clinic, order more tests and perform more surgeries.

To maintain profitability there is a heavy focus by doctors on maintaining their revenue and there has been little attention to decreasing the costs of running a medical or dental practice. The seeds for a transition to making health care more efficient are being planted by such organizations as the Institute for Health Care Improvement , a non-profit where one of their stated goals is to improve efficiency in health care. They provide doctors with tools to learn more about the inefficiencies in their practice. There are many suggestions for improving office workflow. One recommendation in particular is to match the supply and demand in an office practice. We believe web based scheduling is an IT tool that can be used to help private practices match supply and demand. When a practice uses web based appointments a doctor’s patient population can quickly and easily make appointments or change appointments in a way that matches supply with demand. If a doctor finds that on Friday afternoons he or she has low demand but on Wednesday morning demand exceeds supply, that doctor can place open appointment slots for Friday afternoons and encourage their patients to seek open appointment times. This type of system has the added benefit of preventing patient dissatisfaction on Wednesday mornings that inevitably occurs from long wait times. Implementing IT tools like SavvyDoc allows the doctor to maintain profitability, increase patient satisfaction and avoid the moral hazard described by Dr. Jauhar.