Software // Enterprise Applications
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12/8/2006
12:20 PM
Rob Preston
Rob Preston
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Down To Business: Attack The Root Of The Health Care Mess

We need to rein in costs, not try to hide them. Part of the solution involves getting more advanced IT tools into the hands of health care providers and better information into the hands of patients.

The U.S. health care system is dysfunctional, and the best course of therapy isn't to shock it with more government or corporate funding. The problem is that health care costs are rising three times faster than inflation and now eat up close to 20% of gross domestic product. This country must figure out ways to rein in those costs rather than simplistically try to burden someone else with them--especially when we'd all end up footing the bill anyway in the form of higher taxes and/or product prices.

Part of the solution involves getting more advanced IT tools into the hands of health care providers and better information into the hands of patients. Dossia, a project launched last week by Intel, Wal-Mart, and a few other big companies, is a step in the right direction. The multimillion-dollar initiative will start by giving the member companies' employees online access to their personal health histories and other data, helping them make better, more cost-efficient medical decisions and, hopefully, stimulating healthier competition among providers.

Managed correctly, the program also could grow into something of a buying cooperative for the companies involved. Perhaps members, acting on behalf of their millions of employees, can finally drag the health care industry's legion IT laggards into the 21st century by refusing to do business with hospitals, clinics, and practices that don't digitize their records and adopt open architectures for sharing information. Why, as Intel chairman Craig Barrett has observed, can people track their FedEx packages online minute to minute but not their medical status? Because FedEx customers can and will go to UPS or DHL or some other competitor if they're not being served with the latest and greatest tools. Patients exercise no such purchasing power.

Most of us never question the cost of a doctor's visit or procedure or special test. A big reason health care costs are out of control (and workers are required to pay 81% more for their coverage than they did four years ago) is because we don't have enough information, leverage, and incentive to act like thinking consumers rather than charity recipients.

On that last front--giving consumers incentives to be more selective in their health care purchases--some companies already are making progress, without alienating the rank and file. Whole Foods decided two years ago to stop paying for routine medical care for its tens of thousands of employees. Instead, the plan reimburses its people for medical claims and prescriptions only after they have spent a set amount of their own money. Whole Foods also caps employees' out-of-pocket spending and deposits a sliding scale of money into employee personal wellness accounts, whose unused dollars are rolled over year to year. Whole Foods estimates that its health care costs dropped by 42% in that first year, while employees overwhelmingly supported the plan. (This year, the company ranked 15th on Fortune's list of 100 Best Companies To Work For.)

Currently, no other industry, with the possible exception of primary education, is less responsive to its customers than health care is, Intel's Barrett says. And until we can make the system more efficient and responsive through programs such as Dossia, the only way to reduce costs is to ration care. (We won't even go there in the space of this column.)

The current health care system is "out of control, it's unstable, it's bankrupt, it gets worse each year, and all we do is tinker around the edges and we need some major fixes," Barrett told a health care conference in September. Clearly, he and his Dossia compatriots have bigger ambitions than just providing employees with better information.

There are plenty of reasonable reform options out there--there's no single IT or other solution to this complex, seemingly intractable problem. But we must isolate and attack the cost problem itself, not try to hide the costs by shuffling them around.

Rob Preston,
VP/Editor In Chief
rpreston@cmp.com


To find out more about Rob Preston, please visit his page.

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