Cutting Through The Complexity Reveals a Path to Smarter Healthcare
(Editor's note: This guest blog is written by Dan Pelino, General Manager, IBM Healthcare and Life Sciences.)
At many hospitals, there is a virtual turnstile at the front door -- clicking every time someone walks in. As a hospital administrator, you win by 15 percent if the patient walking in is privately insured but you take a six percent hit if they are on Medicare, and worse yet, your losses rise to 15 percent for Medicaid patients. Sadly, the odds are making it tougher just to break even.
As a result, we will soon see a rash of hospital mergers and consolidations as well as doors closing at some of the lower performing hospitals as 32 million additional Americans are placed into the system. Healthcare providers must take bold steps to ensure they are performing at better-than-optimal levels just to keep afloat while addressing the waste, fraud and misuse that inflates costs.
So why is it like this and what can be done?
Much of this unsustainable trajectory can be attributed to the complexity of our healthcare system. It consists of vast networks of physicians, specialists, patients, pharmacies, insurers and hospitals. All of which are exchanging millions of claims, forms, diagnoses, prescriptions, referrals and medical research every day.
However, the problem with our healthcare systems is not necessarily that it is complex. There are plenty of complex systems in our world that run efficiently. The problem is there is still little coordination of data, care or services. Diagnoses are based on experiential information, with little or no evidence. And information lives on islands, unavailable to the physician at the moment of care.
Yet inside vast amounts of data generated by patients and caregivers lies valuable insights that can dramatically improve care and efficiency. This same insight can be used to diagnose and treat patients with greater quality, efficiency and purpose. Standards can be defined and data can be exchanged.
But where do we start? Waste, duplication and disconnected systems are crippling caregivers, forcing doctors and hospitals to spend precious hours administering a system set up for the benefit of insurers, lawyers or pharmaceutical companies ... not patients.
To address this, individual providers must work to simplify, streamline and automate their processes to reduce costs and improve service. Whether it's a five-physician private practice or a 2,000-bed hospital network, this process includes everything from increasing asset utilization to improving staff productivity. It involves supply-chain optimization, operational analytics and even fraud detection. It is about applying some of the same techniques that optimize operations in finance, retail or manufacturing to the healthcare industry.
As a result of the recent election, political and ideological debates continue to rage over the direction of our healthcare system. These are important issues, matters of life and death. And there are serious and worthy perspectives on all sides. But one fundamental reality is clear: to keep the doors to our hospitals open to everyone, At many hospitals, there is a virtual turnstile at the front door -- clicking every time someone walks in. As a hospital administrator, you win by 15 percent if the patient walking in is privately insured but you take a six percent hit if they are on Medicare, and worse yet, your losses rise to 15 percent for Medicaid patients. Sadly, the odds are making it tougher just to break even.
As a result, we will soon see a rash of hospital mergers and consolidations as well as doors closing at some of the lower performing hospitals as 32 million additional Americans are placed into the system. Healthcare providers must take bold steps to ensure they are performing at better-than-optimal levels just to keep afloat while addressing the waste, fraud and misuse that inflates costs.
So why is it like this and what can be done?
Much of this unsustainable trajectory can be attributed to the complexity of our healthcare system. It consists of vast networks of physicians, specialists, patients, pharmacies, insurers and hospitals. All of which are exchanging millions of claims, forms, diagnoses, prescriptions, referrals and medical research every day.
However, the problem with our healthcare systems is not necessarily that it is complex. There are plenty of complex systems in our world that run efficiently. The problem is there is still little coordination of data, care or services. Diagnoses are based on experiential information, with little or no evidence. And information lives on islands, unavailable to the physician at the moment of care
Yet inside vast amounts of data generated by patients and care givers lies valuable insights that can dramatically improve care and efficiency. This same insight can be used to diagnose and treat patients with greater quality, efficiency and purpose. Standards can be defined and data can be exchanged.
But where do we start? Waste, duplication, and disconnected systems are crippling caregivers, forcing doctors and hospitals to spend precious hours administering a system set up for the benefit of insurers, lawyers, or pharmaceutical companies…not patients.
To address this, individual providers must work to simplify, streamline, and automate their processes to reduce costs and improve service. Whether it’s a five-physician private practice or a 2,000-bed hospital network, this process includes everything from increasing asset utilization to improving staff productivity. It involves supply-chain optimization, operational analytics, and even fraud detection. It is about applying some of the same techniques that optimize operations in finance, retail or manufacturing to the healthcare industry.
As a result of the recent election, political and ideological debates continue to rage over the direction of our healthcare system. These are important issues, matters of life and death. And there are serious and worthy perspectives on all sides. But one fundamental reality is clear: in order to keep the doors to our hospitals open to everyone, our healthcare system needs to become smarter -- more transparent, more efficient, more accessible, more connected, more resilient, more patient-focused. And that will only happen if all stakeholders are at the table, and if industry leaders with vision are willing to make that happen.