Shift from information scarcity to abundance will transform health care

October 9, 2013
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Health care is an information business. That’s how Dr. Bill Tierney, CEO of the Indianapolis-based Regenstrief Institute, put it to me in a talk we had last summer.

Doctors spend most of their time collecting information from patients (we call it examinations, blood tests and X-rays, but it’s all just information). Finally, when a doctor gets enough of the right information, he or she can make a diagnosis and, from there, a prescription for treatment.

Tierney acknowledged this is not everyone’s view of health care. Indeed, judging by the past actions of Indianapolis-area hospitals and doctors, reasonable people might conclude that health care is a real estate business or a high-end hospitality business. Judging by the past actions of health insures, one might conclude that their business is risk avoidance and rent seeking.

But more recently, Tierney’s “information” view seems to be gaining traction among the entrepreneurs, hospitals, doctors and insurers helping to develop new technologies to track, test, diagnose and treat patients. I wrote about some of these new technologies—many of them being developed right here in the Indianapolis area—in a story published this past weekend.

This information transformation could finally bring to health care some of the cost and quality benefits that most other industries have exploited during the past 25 years.

Since the time of Galen, doctors have operated in a state of information scarcity—they only received information about patients when the patients could come meet the doctor and undergo questioning or testing. Phones and even e-mail have not altered this a bit.

In this mode, the only way to treat more patients was to train more doctors—or nurses and physicians assistants—and to build more health care facilities where patients could come to be assessed and treated.

But health care is rapidly moving into a state of information abundance—where remote monitoring via smartphones, social media, prescription drug sales data and the rapid transfer of digital medical records will overwhelm the information that a single health care provider can gather from occasional patient visits.

“Data is going to be the new currency of health care,” predicted Brian Norris, who was a nurse for 15 years in Fort Wayne, then went back to school to get degrees in informatics.

Norris has now founded Social Health Insights LLC in Fishers. The company has been trying to sort through comments on Twitter to spot spikes in disease outbreaks. It has also developed tools to help health care providers achieve the federal government's rising “meaningful use” standards with their electronic medical record systems.

But this is not just a technology story. The reason startups like Social Health Insights are gaining customers and attracting investors is that the rules of the game are changing for health care. Those rules are being altered partly by the requirements of Obamacare and partly in response to the new financial pressures the law brings on various parts of the health care system. Also, the financial crush of treating a wave of aging baby boomers is forcing a lot of these changes.

The federal Medicare program and private insurers such as WellPoint Inc. are ramping up programs that pay providers to manage the overall health of patients. Soon to come will be bonuses (and penalties) based on how patients’ health improved (or didn’t) under the providers’ care.

Basically, that means insurers are giving a financial incentive for health care providers not only to keep patients healthy, but in addition to that, to figure out where the least expensive place to treat them is.

“If you harness that information, you can start to look at processes and inefficiencies in conjunction with costs,” Norris said. “Where should I be delivering that care? Should it be in the hospital or should it be in the patient’s home or should it be in a clinic?”

Those questions mark a 180-degree turn from the past 45 years, during which health care providers consistently sought to maximize revenue and health insurers, by and large, just passed the bill on to employers. If health care providers and insurers, en masse, start asking questions about how to save patients’ money, it will, indeed, transform health care into something we've never seen before.

  • Privacy and Cyber Liability Exposure
    Medical providers are facing new and unique liability exposures as a result of digital information in their possession. It is important for them to recognize this exposure and purchase insurance to protect against network breaches and inadvertant (or hacked) disclosures of information as part of this transformation. The provider's normal liability policy and professional liability insurance does not protect against cyber threats. There is a good link I found (below) describing this issue. Digital information is becoming more and more prevalent. Business Owners need to make sure they are properly protected.

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