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Healthcare Meets 21st Century Technology

Jonathan D. Linkous
December  2021

Although lagging many other industries, the use of advanced technology in healthcare is nothing new.  Primary care physicians use apps to identify potential drug interactions when writing a new prescription.  Patient records are electronic in almost all hospitals and most doctor’s offices.  The coming decade will witness an even more dramatic transformation in the delivery of healthcare through artificial intelligence, automation and robotics.

Bertalan Meskó, M.D., PhD, Director of the Medical Futurist Institute, has identified nine areas of medicine that are already experiencing significant automation-related disruption.Anchor

  1. Mining medical records
  2. Designing treatment plans
  3. Assisting repetitive jobs
  4. Getting the most out of in-person and online consultations
  5. Health assistance and medication management
  6. Precision medicine
  7. Drug creation
  8. Open AI helping people make healthier choices and decisions
  9. Analyzing a healthcare system

Image Analysis - Medical imaging is the first area of medicine to witness the transformation resulting from AI.  The days of holding an image up on a light board have long past.  Computers can often use today’s digital images to diagnose images much more accurately and incorporate vast amounts of related data such as lab tests, medical history, prior images of the patient, similar images of thousands of other patients, and research findings from millions of relevant clinical studies.  Philips, Siemens AGFA and IBM are already integrating AI into their medical imaging software systems.  Years of studies in automated interpretation of radiology and pathology images and cardiac scans have shown that computers are becoming (or have become) superior to humans in identifying abnormalities.  The visual examination of PAP smears is time consuming and expensive and successful efforts to automate the analysis have existed for more than 60 years.  The results of many electrocardiograms (ECGs) are read by the software first and only then reviewed by the provider.  Today, very few doctors would dare to read an ECG without having it first read by a computer, if it is available.

Robotics – Medical robots are already used to perform repetitive tasks and those that require intense dexterity.  Robotic surgery has been in use for over 30 years and by 2025, surgeons could perform as many as 170,000 new robotic procedures annually.  InTouch Health, manufacturer of telemedical robots that enable a provider to remotely move around a hospital is used in over 2,000 health facilities has already had 750,000 clinical encounters.

Clinical Decision Making – Science fiction has long depicted how computers can provide medical care.  But it’s not all science fiction, multiple projects using AI to help make medical decisions and provide treatment are here today.  Many such applications use deep learning, a technique similar to our brain’s neural network by sifting through vast unstructured, seemingly unrelated data to teach itself and identify relationships, make classifications and formulate predictions.  It’s similar to the intellectual process used by skilled experts to make instant judgements based on years of experience and knowledge from a variety of sources.  In medicine, deep learning is being used to predict patient outcomes and identify treatment plans including procedures and medications tailored to the patient and based on volumes of historical data and research.  Such exciting applications are starting to be used for everything from cancer to depression.  Even apps that help patients diagnose themselves are in experimentation.

Effects on the Medical Profession - AI, automation, and robotic applications in medicine are called “decision support” implying that the doctor is still in control.  However, these “virtual assistants” are learning fast and some medical professions could see a time when such advanced technologies are more reliable, productive, and trusted by the patient.  That could result in a redistribution of some types of providers.  But, like other industries, change has been constant in medicine and, like other industries, such change is getting faster.

It’s no surprise that advanced technologies are being used in healthcare.  Transportation, finance and entertainment already widely uses artificial intelligence.   With the cost of healthcare spiraling and the population aging its time to discover and deploy the benefits of technology to help us take better care of ourselves.

AI’s Problem with History

NOTE: While I am a proponent in the use of advanced technology, such as AI, automation, and robotics, in the delivery of healthcare, effectively supporting such change requires identifying areas where we can and must make improvements.

In 2018, Amazon announced that it disbanded an AI tool used to recruit new employees in the company.  It turns out the application showed bias in scoring applicants.  According to the article: “That is because Amazon's computer models were trained to vet applicants by observing patterns in resumes submitted to the company over a 10-year period. Most came from men, a reflection of male dominance across the tech industry…In effect, Amazon's system taught itself that male candidates were preferable. It penalized resumes that included the word "women", as in "women's chess club captain.”Anchor

This reflects a problem with some approaches to machine learning.  Many applications are based on absorbing and manipulating huge volumes of data.  The program’s intelligence derives from what it learns.  If it learns only from skewed data, it will reflect that in its results.  Of course, emerging areas of artificial intelligence includes more than just rote learning.  For example, the use of neural networks could allow the application to discover new ways to approach a problem heretofore unknown.

How is this applicable to healthcare?  Let’s look at ulcers.  For many years the medical profession taught and understood that ulcers were caused by stress, spicy foods and too much acid.  Then, in the mid 1980’s a gastroenterologist discovered that a bacterium, Helicobacter pylori, is often the culprit and its long-term effect could even lead to cancer.  The discovery met with widespread opposition as common wisdom, based on historical thought, did not include reference to bacterial infection.  Similar controversy surrounded the discovery of the cause of mad cow’s disease (prions) and the idea of recessive and dominant genes in heredity, which overturned a substantial history regarding simple blended inheritance.  Because the discoveries were new and not drawn from existing studies, they were ignored.

Now suppose a machine learning diagnostic-and-treatment application tackled one of these issues at a time prior to the discoveries.  The application could churn out lots of intelligence based on current thought and prescribe commonly reasoned treatment (e.g. reduce stress for an ulcer) which may not have any affect at all.

This is not a lesson to distrust AI.  But to remind us that must make way for breakthroughs and new discoveries into the algorithms, even if they challenge the status quo.  We are still in the initial stages of this new revolution which needs constant monitoring, quality control of results and continuous input of new data, which are critical to success.

Healthcare professionals have strict rules about continuing education.  The same should be true for medical computer algorithms of the future.

Stop Throwing More Money to Fix the Problems We Created with EHRs

The move to implement electronic health records has been a major improvement.  Bob McNellis MPH., PA at AHRQ recently noted the historical expectations of electronic records: “EHRs carried tremendous promise for improving care.  Healthcare innovators envisioned a day when a primary care clinician had a patient’s latest medical history at his or her fingertips – the cardiologist’s most recent consult note, the immunizations given by the local pharmacist, a link to last month’s hospital discharge summary, and a real-time run-down of lab results.  And, oh, by the way, notes f​rom today’s visit would be sent to patients before they leave the office.”[1]

President Bush set as a goal that every American would have an electronic health record by 2014.  President Obama signed the HITECH Act in 2009, which provided over $30 billion for health systems and doctors to adopt electronic medical records.

Today, we have pretty much achieved Bush’s goal of having an electronic record for every American as well as practically every hospital, health clinic and physician’s office has an electronic record.  But now, we have too many.  Personally, I estimate that I have at least fifteen EHRs strewn throughout three or four states.  Visits over the past decade to different primary care providers, urgent care facilities, dentists, and specialists have all resulted in a record.  But of course, none are connected!  With the mergers and aquisitions in healthcare and the move by various clinical departments to implement their own system even the same institution has multiple EHRs.  HIMSS Analytics estimates that the average hospital has 16 distinct health records platforms.[2]

Today, we are awash in an ocean of uncoordinated health data.  Collecting and storing patient data has created amounts of electronic information so huge that a major problem for Chief Information Officers is how to store it all.  Dr. John Halamaka, CIO at Beth Israel Deaconess Medical Center, estimates that the average patient there will generate 80 megabytes per year (4 megabytes of text and 76 megabytes of images).[3]  No person could possibly sort through all of that information for one patient, let alone for the average panel of 2,300 patients per primary care physician.[4]

We now have a forest of large silos.  EHRs are plentiful but are solitary soldiers in the fight for health and its one of the largest drivers of increased healthcare costs.  In 2017 the American Hospital Association estimates that the cost of meeting EHR and related meaningful use requirements is nearly $39 billion per year.[5]  But it is not all costs to the healthcare providers.  One of the selling points by EHR vendors is the fact that using electronic records helps a healthcare facility or physician increase revenue by capturing costs that might have gone unnoticed and making sure they are using payment codes that yield the highest payment from insurers.  

Now that we have spawned thousands of independent EHR platforms, there is an outcry about how electronic health records need to be interoperable.  A recent survey of health providers revealed that “Ninety-one percent of the participants believed that EHR interoperability can improve clinical outcomes, and 89% said the same of fiscal outcomes.”[6]  During my tenure as CEO of the American Telemedicine Association a popular complaint was that interoperability was needed to make full use of telemedicine.  I agreed.

There are many incentives to not share data, too much interest  by vendors to create more silos, way too much complexity to create full interoperability and no business case to create it.  Its a disincentive for EHR companies and even for health systems that don't want a patient to walk out with all their records to go to a competing hospital.  We even have yet to coordinate the records between the DOD and the VA, two federal agencies that have simultaneously spent millions building electronic records to serve the same patients!  After a decade of endless spending and untold expense I am wary of the call for prioritizing efforts to fix what has already been created. 

Some are calling on spending additional millions (or billions) to develop even more standards, certifications, testing and reworking existing systems.  Others are calling for a complex framework, categories and set of procedures that sound like a consultant’s full employment program.  We do not need to spend another $30 billion to solve the problems of the last HITECH Act.

Instead, simple solutions are being developed and even available now thanks to emerging technologies.  The use of AI and machine learning can be employed to join such disparate databases into formats that can then subject to algorithms that manipulate the data and create clinical value out of the rubble for patients in particular and for healthcare in general.  Lets employ 21st Century technology to do what the government, health systems and vendors can't.

Meanwhile, the cost of healthcare services continues to grow and increasingly on the backs of consumers.  Let us allow advanced technology do the job for us and for once focus on technology and applications that actually delivers services rather than building back room frameworks and platforms.  The next $30 billion should be spent on designing and implementing services using the confluence of AI, automation and robotics and telehealth.  That would put the emphasis on directly improving care rather than just data sets.



Mergers, Affiliations and New Entrants Accelerate The Use of Technology

The CVS purchase of Aetna made a splash last week. This week it is the possible merger of Ascension and Providence St. Joseph Health, which would result in a health system with 191 hospitals. For years I have talked about the “land grab” going on among health systems and other health institutions. That is but one of several transformations that is reshaping the industry.

Hospital consolidations: From 2004 to 2014 the total number of hospitals have remained about the same: 4,919 to 4,926. But the percent of hospitals that are part of health systems increased 19%. But including health system consolidations the number is even larger. In 2015 alone, there were 102 merger and acquisition (M&A) deals affecting 265 hospitals. Most of the media surrounding the mergers have focused on potential cost savings and improved quality. But such moves are also a result of efforts to gain market share, the golden prize sought by many CEOs and enabling them to negotiate better deals with payers.

Health system networks: Several years ago, John Noseworthy, the CEO of Mayo, announced a goal that the health system Goliath would serve 200 million patients by 2020. They may meet that goal but not by having all those people check into one of Mayo’s three centers. In 2011 Mayo launched the Mayo Clinic Care Network. Organizations that join the network pay a subscription to access Mayo Clinic's research and expertise and use the organization's brand and patients can access Mayo doctors through “e-consults.” Mayo is not alone in setting up affiliated networks: Cleveland Clinic, MD Anderson, and Duke University Health System all have similar programs. Such programs are important branding initiatives, allowing a local hospital to gain market share and allowing the large health system to gain referrals, often more complicated and more costly patients. Mayo claims that 80% of its e-consults (mostly oncology) allow the local hospital to keep the patient. Of course, this also means that 20% of the patients are transferred, no doubt many to Mayo. Associated with such changes are the establishment of micro hospitals, small facilities owned by the larger health system providing outpatient services, emergency care, imaging and lab services.

New players: The CVS/Aetna move is indicative of a third transformation: the entry of new types of providers. Urgent care, retail clinics and online providers make up the continuum of new entrants. The first target of services is primary and urgent care, followed by a few specialties such as mental health and dermatology.  Traditional health systems are competing by establishing their own urgent care services and starting their own online care sites. But since these new entrants are not providing critical care, the biggest segment affected is the individual provider practices and private labs. 

What does these changes mean for the use of technology to provide patient care? Here are four suggestions:

  1. The management of chronic disease through patient engagement, telehealth and remote monitoring – is a fundamental aim of the CVS-Aetna acquisition. The Minute Clinic network already has over 1,000 locations in 33 states all sharing a single EHR system (Epic).  But CVS owns 9,700 stores providing ample ground for expansion.  When CVS eliminated sales of cigarettes it also boasted of a smoking cessation services allowing it to develop a database of smokers, the COPD and related chronic care patients of the future, with an opportunity to do more than sell medications to them.
  2. The branding and franchising of large hospital systems provide greater opportunities to share high-demand but short supply specialty services and to expand the ability of nurse practitioners and physician assistants to provide more complex clinical services through smart technology.  Micro hospitals can and do rely on telemedicine to allow physicians to provide specialty services to patients in a larger area as well as follow-up visits.
  3. The mergers and new entrants will also shake up the use of technology for pharmacy benefit managers (PBMs). A widespread rumor is that Amazon will soon enter the pharmaceutical business through contracts with pharmacy benefit managers and may be entering the PBM market on its own as well. Other activities such as processing claims and remote monitoring are other possibilities. The company has already established an internal team to look at various uses of digital technology to help them enter the healthcare space. But it is uncertain whether it will be a competitor or a partner with such companies as Express Scripts.
  4. The result of all of the consolidations, mergers and networks is the potential creation of huge databases of patients providing opportunities to use of population health - using the data to prediction, diagnosis and elements of artificial intelligence. Such moves will require a significant investment in applications and, while the potential for improving outcomes are hyped, the financial impact on increased revenues lowered costs and market changes are uncertain making this a more distant possibility.
  5. Last but not least, the fundamental change in the structure of the healthcare industry enables acceleration of emerging technology including automation, machine learning and artificial intelligence. As locally owned and operated hospitals and physician offices become networked and part of a larger health system, coupled with the entry of high-tech companies, incentives are starting to fall in place to modernize medicine and finally catch up with the times.

EMRs are great…but have they sucked up all the oxygen for care innovation?

For twenty years, the Holy Chalice of medicine’s future was thought to be Electronic Medical Records. The air was filled with the potential wonders of electronic data sets that would track a patient’s health over time and improve the quality of care. In 2004, President Bush set as a goal that every American would have an electronic health record by 2014.  President Obama signed the HITECH Act in 2009 providing a huge federal stimulus to the adoption of electronic medical records.

After spending over $35 billion in federal funds and much more than that in state and private funds, we have pretty much achieved Bush’s goal of having an electronic record for every American. In fact, there are many, many electronic records. Practically every hospital, health clinic and physician’s office has an electronic record. Personally, I assume I have around fifteen EMRs strewn throughout three or four states. Of course, none of them communicate with the other. Despite having never been hospitalized and in fairly good health, I have records with primary care, urgent care and specialists as well as pharmacies, health insurers, etc. Even within a health system the problem continues. Over the past couple of years my wife and I have seen a couple of specialists connected with Inova Health, the same system we have used for our health needs for years. Even though the system is interconnected, and we are assured that they have our payment and insurance records, we still have to fill out, by hand, the same multiple sheets of paper asking the same list of questions.

The common belief is that health records should reside with the primary care provider (PCP). This is a noble goal. The problems with this are many:

  • At least 20 percent of the population has no PCP.
  • Patients with a PCP see them far less often. Instead, they use emergency rooms, urgent care and online care for primary care services without any knowledge of their physician and no record of their visits transferred.
  • Almost half of the population change PCPs within 5 years (due to change in location, insurance, and preference)
  • The amount of patients maintained by PCPs has grown significantly and the amount of time spent with patients has shrunk. Several studies have recommended that a PCP maintain a patient load (panel) of about 1,000 patients but most have around 2,500
  • Unless pressed by the patient, providers rarely share the patient’s medical records, regardless if they are paper or electronic
  • Nor, do they share the information with each other. A study from the Archives of Internal Medicine (via the WSJ’s Health Blog), found that “that while more than 69% of primary-care physicians said they always or mostly passed on a patient’s history and reason for a consultation to the consulting specialist, fewer than 35% of specialists reported always or mostly receiving that information.”
  • Individual institutions may have their own proprietary medical record but it is hard at best for a patient to transfer them out of the institution and impossible to collect all the disparate information from the multitude of medical services and products that one encounters in life. I’ve known a lot of sick people but I have yet to find one that has successfully pulled their information from multiple EMRs and put it in one place. 

Meanwhile, telemedicine, digital health and related innovations that focused on patient care have been met with a policy I call Enforced Disregard.  “Not enough evidence;” “a danger to patient safety;” “a cause of higher utilization and higher costs” were a few of the retorts to appeals for coverage. Harrumph!

Instead, pilots and research projects were funded to explore the potential of telemedicine, which effectively delayed actual deployment and reimbursement until another day – what I called hitting the snooze button. If you don’t want to do it - fund a pilot.

Two conclusions:

  1. Let’s face reality. The only way we can make effective use of medical records is to have them centrally and independently located and owned by the patient, not a physician, health system, payer or pharmacy
  2. The sad fact is that with the billions spent on duplicative medical record systems there has been very little spent on improving the way care is delivered. Medicare has spent almost nothing to support technological innovations in providing medical services while spending billions on EMRs. Isn't it time we try something different?


Healthcare Competition Creates Opportunities for Advanced Tech

It seems strange to me that health care institutions consistently avoid any reference to competition. Yet health care has become aggressively competitive. Competition for patients is coming from all angles. Primary and urgent care is already starting to feel the bite and labs are next. Patients now have a choice: if someone feels ill they can choose between their primary care physician, an emergency room, urgent care center, retail clinic or online visit. The new alternatives provide two of the most important features that change consumer behavior: convenience and cost. They give cheaper faster medical care. As they evolve they also are using digital technology inside the place of care, advanced telecommunications to connect directly to the patient and intelligent algorithms (artificial intelligence) to improve the value of care, regardless of location. Here is a summary of current and emerging alternatives and what they portend for the use of technology.

Urgent care centers - Depending on the definition, there are somewhere between 7,400 and 9,300 urgent care centers in the U.S., with a yearly growth of about 300 centers per year.[1] At present, most of them are independent operations. Only 22% of urgent care centers are hospital-owned. Visits to urgent-care centers increased 19% from 2010 to 2015.[2] Trends include: further expansion as demand rises; health systems acquiring, building, or partnering with urgent care; increased use of healthcare apps to check on wait times and forward information. On the horizon: use of automated lab testing and a push toward consolidation or competition from large entrants that dominate the market.

Retail clinics - There are about 3,000 retail clinics operating in the U.S., which has almost doubled over the past five years. A big loser with the growth of retail clinics is primary care as consumers see this as a reputable alternative for many health services. Also they represent a growing challenge to traditional labs, retail clinics (more than urgent care centers) are becoming relatively large users of point-of-care tests, and immunoassay laboratory tests and vaccines.[3] On the horizon are ventures linking retail clinics with remote monitoring apps for chronic care patients, partnerships with online service providers. If Walmart seriously takes the plunge into providing primary care services in their stores and online that could be a major game changer as well.

Online – Online primary and urgent care has been growing for years reaching close to 2 million patients this year. The growth of these services has accelerated through the adoption of solutions to early barriers including technical, legal, regulatory, infrastructure and business models. Online services are an interesting market segment occupying a space somewhere between a primary care office and a nurse call center. The horizon includes widespread integration by health systems and physician practices as online services replace after-hours care. Also, several groups in this space are expanding into specialties and remote monitoring for chronic care patients. The greatest movement of independent online service providers is toward licensing platforms and sourcing physician staff to existing health care systems. 

Automation – This is the new frontier.  Not on the radar of many healthcare soothsayers is the pending growth in automation to deliver direct patient care. The use of patient check-ins using computer terminals and iPads and other office automation chores has already taken hold throughout healthcare but on the horizon are direct patient-care applications using intelligent software and robotics to diagnose and monitor conditions and deliver a variety of services. Computers have been reading EKGs and analyzing pap-smears and ICU patients for many years. Even ophthalmological and mental health applications are using technology to provide services normally delivered by a licensed professional, turning smartphones into medical devices with promising applications for chronic care. Investors are looking at serious money in this arena and Apple COO Jeff Williams recently said “We think there is tremendous potential to do on-device computing, to do cloud computing as well, and to take that learning through machine learning, deep learning and ultimately artificial intelligence, change the way health is delivered.”

So what about traditional health care institutions? The stand-alone, independent hospital, serving an array of medical services to the community, is vanishing. While academic journals from 1980 to 2010 included many studies concluding that the U.S. was in danger of a looming hospital bed shortage[4] such discussion has disappeared except for a few specialty areas such as mental health beds. Today, there are about 5,500 hospitals in the U.S., a decline from almost 7,000 in 1980. The total number of hospital beds in the U.S. declined from 1.5 million in the early 1970s to less than 900,000 today.[5] What is the outlook?

  • Many independent hospitals have joined larger health systems from less than 2,700 to over 3,200 in 2014.
  • Hospitals have become more of a critical care center as both inpatient admissions and average length of stay have declined while emergency room and outpatient visits have increased.
  • Health systems are growing by acquiring or networking with smaller hospitals aided by the use of advanced technology. For example, Mayo established the Mayo Clinic Care Network, a hub and spoke system linking almost 50 hospitals providing e-consults. As a result about 80 percent of the patients remain in the host facility while 20% have to be transferred away, many times to a Mayo facility, thus the revenue model for the network.

Next Up

  • Fake Concerns Protect Turf
  • Carving a Niche for Telemedicine in Pay for Performance

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[1] Urgent Care Association and American Academy of Urgent Care Medicine

[2] Accenture

[3] The Advance of the Retail Health Clinic Market: The Liability Risk physicians May potentially face when supervising or Collaborating with Other professionals Mayo Clin Proc. 2011 Nov; 86(11): 1086–1091.

[4] More beds for boomers. A top 10 list of reasons why hospitals will continue to expand capacity. Mod Healthc. 2004 Mar 8;34(10):32. No vacancy: hospital bed needs in the year 2000 and beyond. Health Care Strategic Manage. 1984 Dec;2(12):18-20.

[5] Data from CDC/NCHS and American Hospital Association


So, What to Do? Part 2: Transformation Takes More Than a Gadget

I am enthusiastic about digital advances in healthcare but innovative technology is only part of the answer.  Years ago I was invited to meet with an executive at a very well-known technology company where I had an insider’s briefing on their latest “disruptive innovation,” which was going to transform healthcare.  Coming out of the meeting with one of the world’s top players in technology I was feeling dumb because I did not understand how this was going to transform healthcare, or even make money.

It didn’t.  The company spent millions of dollars developing, promoting and selling it but it ended up scrapped.  The company withdrew entirely from healthcare …until a few years later when it had yet another technology innovation that was going to transform healthcare.

This story has been repeated many times over the past twenty years by those having similar epiphanies, from major corporations to individual inventors.  The press is an accomplice in this by touting such wonders on a regular basis.  Major technology disruptions from the dot-com bubble to the m-health revolution that was going to turn healthcare on its head have climbed to the peak of Gartner’s hype cycle only to fade away years later.

They all share a common mistake – it is not about the technology alone. Telemedicine won’t help devastated areas like Puerto Rico if they don’t have electricity or telecommunications.  Digital health won’t help put out forest fires in California.

The healthcare industry has been changing dramatically: how healthcare is financed, revolutionary medical and pharma discoveries, evolving roles of different types of providers and the evolving structure of the industry are a few of the changes underway.  Technology has enabled and facilitated this change but it has not caused the change.  It is a classic cause-and-effect conundrum.  Does the invention of telemedicine, such as online doctor visits cause a change in healthcare or did it just accelerate an evolutionary trend from hospitals to urgent care to retail health to online visits?  Sometimes it’s not quite as revolutionary as first thought - after all, the use of telecommunications technology to directly consult with a patient has been around since the invention of the telephone.

Can telemedicine, digital health and related innovations improve healthcare services?  Undoubtedly.  But the issue is not what the innovation does but what problem will it solve?  How it will be used?  Who will use it?  How it will be paid for?  And, most important, how does this fit into the larger revolution underway in the healthcare industry?

I end with an historical example.  In the 1980s for economic and organizational reasons, radiologists started to open-up independent practices, providing patients with an alternative to going to the hospital for imaging services.  Radiologists made more money and became their own bosses.  Independent imaging centers began to crop up across the country. Many of these centers decimated hospital-owned outpatient volumes and drew better-paying contracts away from hospitals.  Soon after, radiological devices became digital.  This allowed images to be read at a distant location so radiologists didn’t have to get up in the middle of the night and traipse down to the hospital to read an image.  Night-hawk services soon started up.  At the same time Medicare and Medicaid changed the payment formulas reducing the fee for imaging while hospital payer mixes began reflecting a much larger proportion of Medicare, Medicaid, and indigent patients, further reducing their per-patient revenue.  Meanwhile developing technology brought “affordable” imaging to other specialists’ practices such as orthopedics, cardiology, and pain management expanding the radiologists’ potential competitors and giving hospitals more options than just the local groups.  Finally, the emerging use of artificial intelligence to interpret medical images has generated fear and excitement.  The increased competition from teleradiologists, lowered revenues, management organizations, other specialists doing their own imaging and AI all threatens to commoditize radiologist services.  Thus, digital innovation has played a role throughout this “transformation” but only because of other factors in the surrounding environment.

My advice to the next crop of start-ups is to first understand the industry you are about to transform and make sure you are not the one getting disrupted

So, What to Do? Part 1: opening the market to consumer demand

When I was involved with establishing the American Telemedicine Association in 1993 it was often stated that telemedicine was “just around the corner.” That was 24 years ago. While much has been accomplished, we are still far, far away from the disruptive transformation that was assumed at the time. Why has it taken so long for healthcare to adopt and be transformed by the promise of digital healthcare? 

Like others, I have compared the growth of external digital health applications to several examples: finance, retail, and entertainment. Despite early opposition, all three resulted in a rapid, vast transformation of their industries. All three were driven by private investment and outside disruptors and adoption was accelerated by competition and consumer demand. Like others, the healthcare industry has its share of both Luddites and early adopters. However, there are a couple of critical differences. One of them is the role of the consumer. 

Although there is a lot of talk about consumer engagement or consumer empowerment. The fact is, while consumers receive more healthcare, they have far less power over making healthcare choices than ever before. A large part of this is tracking the source of the expenditures.  In 1960, almost half of all healthcare spending came from  consumers. Consumers paid for 60% of physician and clinical services. Dental services and prescription drugs were all out of pocket. Consumers’ chose what healthcare to receive and paid for it themselves.[1]  Today, while it is commonly held that consumers pay for 28% of all healthcare costs, the majority of this goes to pay insurers: private, employer, Medicare, Medicaid and for copays.[2] The payers (and state medical Boards) largely make the decisions about what can be goods and services can be purchased and how services are rendered. Insurance now covers dental and eye examinations and has a list of approved providers and their own rules on how services are provided. Only about 10% of household expenditures is for true out-of-pocket items where the consumer is the one deciding what to buy, from whom and how.

It’s hard to be transformative when the consumer has little power over consumption. It doesn’t matter how much data a consumer can generate about their own health and how well the data is computer-analyzed, if a consumer doesn’t have some say in what services they receive or how they are delivered. The effect of disruption in the healthcare marketplace is effectively limited to what the payers will tolerate and how it benefits them.

But its not just the money flow. How would you react if your bank told you that they would invest your money where they thought best and you would not be allowed the information to make your own decisions?  What if your car had a malfunction but the mechanics would not give you an opportunity to decide what was the best choice for repairing the car? (OK, maybe they do too much of that still)  Anyway, that is how all the components of healthcare works. Labs and radiology clinics generally do n t provide  he patient with the information about their tests until it is first sent to a physician who often just summarizes the results and tells you what to do.  In many cases, the assumption is that you will be told only if there is something wrong. Prescriptions are mostly written without giving the consumer information about other alternatives. Electronic medical records are kept for the consumer at each stop - hospital, clinic, urgent care center, specialist, etc. without providing the consumer access to the information or sending the information to a central file where the consumer can access, investigate and control their own information. Or have an automated software to analyze the information and provide a second-opinion.

Learn from other industries - Once the bank and the brokerage were the central places for almost all financial services. Consumers entrusted their money to others and relied on bankers and brokers for their investments. Today, its e-banking, online brokerages and over 3 million ATMs worldwide[3]. Consumers can access all their financial information in one place and take money out, make deposits and change investments regardless of location. Banks have morphed into financial institutions and networks and consumers can access online information, advice and histories 24 hours a day.

Few people want to become their own doctor, nor should they. But they can and should be given access to their own information as well as information about alternatives to products and services that they will use, even if they are not a direct payer themselves.

A small first step - trust patients and start calling them consumers (or even clients).

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[1]National Health Expenditure historical data, 1960-2015, Centers for Medicare & Medicaid Services

[2] US Health Care Spending: Who Pays? Josh Cothran California Healthcare Foundation

[3] International Monetary Fund, Financial Access Survey

EMRs Alone Will Not Transform Healthcare

It has now been eight years since the HITECH Act.   The Act distributed $35 billion for the adoption of EMRs by hospitals and physicians and established the Office of National Coordinator to adopt standards and incentives for the implementation and use of EMRs.  Yes, many now call them "EHRs" to make them seem more universal in coverage - but they aren't.

What has that achieved?  Certainly, the sales of EHRs have increased dramatically as the health provider industry took advantage of federal funds and avoided penalties by buying and installing EHR systems.  Almost every hospital in the country and most of the provider practices have purchased and installed electronic records.  There have been many stories of where EHR’s have resulted in improved clinical decision support, care coordination and improved performance.

But, according to several of critics, the benefits of this investment on patient care have been limited:

  • A 2015 article by five US Senators stated: “There is inconclusive evidence that the program has achieved its goals of increasing efficiency, reducing costs, and improving the quality of care.” Primarily because “…the lack of progress toward interoperability.”Anchor
  • The same year a report to Congress by a federal HIT Policy Committee concluded that despite large-scale adoption, significant barriers remain, including lack of cooperation among stakeholders, physician burnout tied to the technology and heavy regulation.Anchor
  • A recent commentary by several physicians concluded that “EMRs have become the bane of doctors and nurses everywhere. They are the medical equivalent of texting while driving, sucking the soul out of the practice of medicine while failing to improve care.”Anchor

Some of these criticisms are simply the pain of progress as traditionalists are forced into the information age.  However, they also include valid indictments of how the nation has failed to implement a national strategy to allow patients and their providers easy access to their own medical histories, regardless of where and when they received care or allowed them to control their own information. Compared to the relatively fast and widespread implementation of financial systems that allow consumers to access and control their own money as they want, when they want and wherever they are (and at almost no cost to the taxpayer), EMRs have been an elephant in the hospital room, moving at a snail’s pace.

Advocates and regulators have turned their attention from how to compel adoption to how to take advantage of the technology now that it is available.  The twisted thinking is that compelling use will solve the problem.  Compared to other innovations, this is a bit of a backwards approach toward adoption.  The “build it and then they will come” method worked in the “Field of Dreams” and perhaps for Apple’s iPhone, but not in healthcare.  Especially if the product does not allow user innovation, such as not giving the consumer ownership or making the system ubiquitous.

It's not the fault of the HIT industry.  Frankly, trying to make EMRs achieve improved quality, reduced cost or increased access alone is not the answer.  Nor are vilified meaningful use regulations.  When I was at the Appalachian Regional Commission we built hundreds of miles of roads into the isolated part of Appalachia but we knew that such infrastructure alone was not the answer – just like the Internet alone is not the answer.  We couldn’t force companies to build plants in the region just by building a road.  Similarly, making full use of technology and the information age to really improve patient care goes beyond installing hundreds of electronic record systems.

What to do?  I’ll save my thoughts for next time. ;-)

Anchor Where is HITECH’’S $35 Billion Investment Going? Sen. John Thune, Sen. Lamar Alexander, Sen. Pat Roberts, Sen. Richard Burr, and Sen. Mike Enzi. HealthAffairs Blog. March 4, 2015

Anchor REPORT TO CONGRESS, Challenges and Barriers to Interoperability. The Health Information Technology Policy Committee within the Office of the National Coordinator for Health IT. December 2015

Anchor Death By A Thousand Clicks: Leading Boston Doctors Decry Electronic Medical Records. Drs. John Levinson, Bruce H. Price and Vikas Saini. CommonWealth. May 12, 2017,

Six Misperceptions

Healthcare is a $2 trillion market in the United States and growing at a fast pace. For entrepreneurs, that figure is so alluring it is impossible to ignore. Companies, institutions and individuals from everywhere are looking to see how to get a piece of the healthcare market. It’s the gold rush of the 21st century and health technology is where a lot of companies are staking a claim. And now the attention is turning to telemedicine. The variety of new entrants is vast: vendors selling devices or software; sellers of remote health services; consultants and individuals simply wanting to get into the telemedicine job market. Every week there is a new conference, a newsletter or journal and even a new association targeting some aspect of telemedicine. 

Based on the feedback from new entrepreneurs coming through the ATA offices it is apparent that there are a number of misperceptions about the telemedicine market. Here are six of them, learned over the past 18 years.

  1. It’s not the technology, it’s the service. Dial up phones were a great invention. So was the VCR. They are both gone but telecommunications services and watching movies are bigger than ever. New and amazing devices and applications are coming on the market every day. But devices are tools that allow services to be provided at a distance. The focus, the purpose and the finances are on the service.

  2. Despite what you hear, Medicare reimbursement is not the Holy Grail for telemedicine. It’s important, but… Medicare fee-for-service covers about 36 million Americans, 12 percent of the total U.S. population. 88 percent of Americans are covered elsewhere and 81 percent of healthcare spending comes from other sources. There are no federal restrictions on using telemedicine for billions of health dollars spent on managed care, bundled services and on alternative plans by private payers.

  3. Healthcare institutions and physicians are partners, not the enemy.Transforming does not require replacing. So many new entrepreneurs in telemedicine start out with a negative, competitive attitude to traditional healthcare. We have not reached the point when someone with heart disease is going to trust their care to a computer alone. The role of doctors and hospitals is changing but they will continue to be the backbone of medicine.

  4. Device regulation is not bad – it’s good; in fact it could rapidly accelerate adoption. FDA rules for wired and wireless telemedicine devices and their certification by an official government agency is a stamp of approval, providing reassurance for cautious buyers.

  5. A great idea is born every minute but few of them are successful. I have heard of hundreds of stories about how a new technology, application or remote health service results in lower rates of hospitalization, improves compliance, etc. only to see it disappear a year later. Marketing, partnerships, revenue pathways and knowledge of healthcare business practices are essential, for starters.

  6. Consumers don’t buy healthcare themselves. For fifty years the percent of spending on healthcare by consumers has dropped (not including insurance or co-pays). It is now about ten percent. Consumers are getting much more knowledgeable and engaged in selecting among available procedures and treatments but they don’t pay directly for healthcare products and services. The only exceptions are one-time beauty treatments and fitness fads.

Regulation or Roadblock?

First published November 28, 2012

Telemedicine is a tool that has been used to improve and extend healthcare for well over two decades.  In 2012, ten million Americans will have benefitted from such remote health services as teleradiology, teleICU and remote vital sign monitoring (note: 20 million by 2017!).  Technologies such as video conferencing, the Internet, mobile phones and machine-to-machine applications are all being used to deliver health services.

Rules and laws governing the practice of medicine are needed in order to protect patients and ensure the quality of care. In fact, such regulations can serve as product endorsements for consumers and providers.  Telemedicine should not be exempt from such rules.  But neither should it be singled out as a separate practice.

Regulating agencies including state medical boards, the Food and Drug Administration and accrediting bodies need to constantly review and update the standards of care that are placed on medicine.  Our knowledge, the practice, and the tools used in healthcare constantly evolve and new lessons are being learned.  This changes the baseline of best practices.  For example, the history of medicine, from the use of stethoscopes to the deployment of video services has proven that we can no longer equate mere physical proximity to the patient with higher quality health care.

Interestingly, telemedicine often employs clinically superior tools than those normally used by physicians for in-person care such as electronic stethoscopes or digital otoscopes.  Clinical decision support systems, once considered electronic voodoo, are commonly used in every hospital and even mandated by the federal government as part of meaningful use.
Certainly there are some basic issues that need to be reassessed in light of rapidly changing medical evidence, new technologies and delivery innovations.  However, placing radically tougher requirements and significantly higher standards of care solely for the use of telemedicine will not necessarily ensure the quality of healthcare or protect patient’s lives.  In fact, such new regulations, often developed out of ignorance and fear, create serious roadblocks in the pathway to health reform.

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Commentaries On The Metamorphosis of Healthcare



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