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By Ken Congdon, Editor In Chief, Healthcare Technology Online

The election two weeks ago of Republican candidate Scott Brown to fill the Massachusetts Senate seat held by Democrat, Edward M. Kennedy for over four decades has dealt a serious blow to the healthcare reform efforts in the 111th Congress. It becomes clearer by the day that the prospect of healthcare reform in the United States is likely still a long way off. While efforts toward reform will undoubtedly continue, we can expect these efforts to be long, drawn out, and fervently debated.

Meanwhile, our existing healthcare system is hemorrhaging — the skyrocketing cost of healthcare now consumes 17% of the U.S. GDP (gross-domestic product) and more than one-sixth of Americans are uninsured. If a sweeping healthcare reform package is not in the cards for the near term, what else can be done to stop the bleeding? Many experts suggest that the best way to fix the existing healthcare system is to focus on small, well defined, and fiscally responsible steps. It may be in the country's best interest to have a fair number of these steps focus on getting the U.S. healthcare system's information technology infrastructure up to speed. While the stimulus funds allotted by ARRA (The American Reinvestment and Recovery Act) for EHR (electronic health record) and telehealth adoption are a great first step toward this end, more needs to be done to drive IT forward in healthcare.

Currently, healthcare and education are the least automated industries in the United States. This is a frightening thought when you consider that a successful healthcare transaction involves getting the right information to the right people in a short amount of time. With much of this information being muddied by manual, paper-based processes, it's no wonder the U.S. healthcare system is in the shape it's in. Currently, 31% of healthcare spending is dedicated to administrative costs. Creating electronic document workflows that eliminate paper-based inefficiencies across several departments can go a long way to reduce these administrative costs. This concept has been proven by several healthcare facilities, including Fox Valley Cardiovascular Consultants and Appalachian Regional Healthcare System. Through use of EHR and practice management technology solutions, Fox Valley Cardiovascular Consultants is saving approximately $295,000 per year, improving revenue 23.5%. Likewise, Appalachian Regional Healthcare System reduced its accounts receivable cycle by 34 days as a result of implementing a revenue cycle management system.

With results like these, one might ask why so many other healthcare facilities have yet to implement similar technology systems. Several reasons account for the lack of automation in healthcare. One is the fact that the vast majority of the healthcare delivered in the United States (nearly 80%) is delivered outside of hospitals or healthcare systems. Smaller healthcare facilities have difficulty cost-justifying information technology expenditures. Another common issue is that physicians (in both small and large healthcare facilities) can sometimes be technology averse. Furthermore, while initiatives for EHR adoption have been unveiled, interoperability of these systems is still an issue. Finally, it's important to note that the high administrative costs in healthcare aren't solely the responsibility of the healthcare industry — insurance companies share a large portion of the blame. This last point is validated by a recent article by L. P. Casalino, S. Nicholson, and D. N. Gans titled, "What Does It Cost Physician Practices to Interact with Health Insurance Plans?" The key findings of this article showed:

1. Physicians, on average, spent 142.3 hours per year interacting with health plans, or 3.0 hours per week and 2.7 physician work weeks per year.
2. Nursing staff spent an additional 23 weeks per year per physician interacting with health plans, while clerical staff spent 44 weeks and senior administrators spent 2.6 weeks doing so.
3. Converted into dollars, practices spent an average of $68,274 per physician per year interacting with health plans; primary care practices spent $64,859 annually per physician, nearly one-third of the income, plus benefits, of the typical primary care physician.

With reform efforts stalling, perhaps the federal government would be more fruitful in reducing healthcare costs by focusing more of its efforts on addressing the information technology issues stated above. For example, programs could be developed to make it more cost effective for smaller healthcare organizations to deploy the technology they need, or incentives could be provided for them to join larger healthcare systems that already have the technology in place. The federal government, along with healthcare industry leaders, can join together to force the IT vendor community to establish a set of standards to ensure interoperability between systems. Finally, government officials and healthcare leaders can persuade the insurance industry to adopt standardized automated systems and processes to eliminate much of the wasted administrative communication that currently exists between providers and health plans. While not full system reform, these efforts can lay a foundation toward that end while cutting costs and improving service.

Ken Congdon is Editor In Chief of Healthcare Technology Online. He can be reached at ken.congdon@jamesonpublishing.com.