Stanley Feld M.D., FACP, MACE

Our most precious asset is our health. We should be responsible for our own health and welfare. The ability to maintain our health is dependent on access to the healthcare system for diagnosis, treatment and health maintenance. The dysfunctional healthcare system is decreasing our ability to maintain our health by limiting access to the healthcare system.

In the past thirty seven years as a Clinical Endocrinologist, I have seen many advances in the medical care system as distinct from the healthcare system. We are becoming proficient in preventing the complications of chronic disease. The complications of chronic disease consume 90% of the healthcare dollar. I have observed economic and political distortions of a healthcare system. These distortions have impeded the physicians’ ability to prevent the complications of chronic disease.

Many have declared that the healthcare system is broken. We have also heard that while all goods and services industries have embraced the electronic era (not totally true), physicians have resisted the electronic revolution. It has been stated if medical care is to step into the 21 century, medical practices simply have to adopt an Electronic Medical Record (EMR). The EMR will solve many of the healthcare system’s problems.

In my opinion, the notion that the widespread adoption of an EMR is the solution to the problems with the healthcare system is simplistic and incorrect. It is true that physicians have resisted instituting EMRs, for many good and not so good reasons.

Why have physicians resisted the EMR? It is hard to find a coherent answer in the literature. Here are some reasons.

The EMR’s are too expensive to purchase and too expensive to service. They will not help patient care in their present form. There have not been standard EMRs developed. The EMR should help the patient and physician. If past behavior is a predictor of future behavior the data accumulated by the medical care system will be misused to the disadvantage of the patients and the physicians by the insurance industry and government.

These are some of the reasons for physician resistance. The Ideal Electronic Medical Record outlines my propose solutions to the EMR dilemma. Since we do not have universal adoption of EMRs, society is led to believe that the problems with the health care system are the physicians’ fault for not adopting the EMR.

However, a sober look at the problem reveals all of the stakeholders are at fault. The stakeholders are the government, the insurance industry, the pharmaceutical industry, the hospitals, the physicians and the patients. All have played an important role in the distortions and dysfunction of the healthcare system.

In my view, the patient and the physician are the key stakeholders. Without the patient and the physician, we would not need a healthcare system. The patient is the player and the physician’s role should be the coach, making the diagnosis and teaching the player what he has to do to get well and stay well.

However, in 2007, the patient and the physician are generally listed last among “important” stakeholders by government, insurance companies, hospitals and policy makers.

Since the patient is most important stakeholder, patients should be in the forefront of policy making. Physicians should be second. Unfortunately, as physicians have adjusted to the changes in the business aspects of healthcare their ability to practice efficient, effective and friendly medical care has deteriorated.

All other stakeholders are in reality facilitator stakeholders for patients and physicians. Everything done in the healthcare system should be done for the benefit of the patient first, and not for the economic bottom line of the all the stakeholders. After all it is the patients’ healthcare system! Is it not?

The demand for repairing the healthcare system and action to fix it has to be made by the patients.

Stanley Feld M.D.,FACP,MACE

After the last post I received the following comment.

“But here’s the problem. How can you keep government agencies, malpractice lawyers, and so on from accessing an EHR? They can subpoena written records or EHR’s, but the ability of sophisticated computer users to hack into an EHR system is what gives a lot of us ordinary folks the willies.”

This is a comment that always comes up. I believe the software companies with electronic medical records can answer the question better than I can. I have asked the question of security to many software companies who create EHRs and EMRs. Their answer has always seemed satisfactory to me.

Other industries seem satisfied with the security they have. The banking industry is elated with the savings and efficiency of online banking. I should think security in banking is as much of a privacy concern of people as medical records. Paper records all over the place in laboratories, physicians’ offices and hospitals never seemed very secure to me. One of my son’s (Brad Feld) portfolio companies “Still Secure” has created a software package that creates a fence around the computer server which makes the server is totally invisible to incoming and outgoing data. The thirty four year old CEO of Still Secure, Rajat Bhargava, is one of the brightest people I have ever met.

I spoke about the EHR cueing the Primary Care Physician to evidence based medicine tests, procedures and treatments. It is practically impossible to remember all the screening procedures that need to be done while treat care of an illness that brought the patient into the office. If done automatically, this would increase the quality of medicine practiced.

The malpractice attorneys’ opportunities would disappear if the governments, both state and federal, had the courage to pass realistic malpractice reform. Unfortunately the reform is occurring too slowly and sometimes incorrectly. The practice of defensive medicine has wastefully increased the cost of medical care.

If a patient has not seen a physician in a year, then visits with a common cold, there might be several screening tests due for the patient. If the patients chart is thick, it might be difficult to find the PSA (Prostatic Specific Antigen), rectal for blood, or chest x-ray in the paper chart as there is pressure to see the next patient. In an electronic chart all of this data can be presented at point of service to the physician. The physician can then recommend the evidence based screening test to the patient. There is simply too much information to keep in one’s head. The patients can decide, with the doctors help,which screening test they want done.

If the patient went to several physicians and had a Personal Health Record, the doctor would know instantly if the patient had the test at another physician’s office. The test and treatment could be available to the present examining physician. Having this information available could serve to discover disease early, avoid costly complications and save lives.

Physicians are always checking the literature to see the latest treatments, complications or drug interactions. Most physicians have computers in their office. In recent years rather than going to their textbooks which are outdated as soon as they are published they go to Pub Med, various journals or organized medicine sites to get the latest information. To get the latest information on a drug they do not turn pages in the PDR anymore. They go to the online PDR or pharmaceutical web site. Internet access in a typical practice day can be invaluable.

In an Ideal EHR all of this information would be at the physician’s fingertips at the point of service. The physician would have to learn to use the computer as a physician extender. He must learn to treat the patient and not the computer. He must remember that a positive patient physician relationship has great therapeutic value. Personal contact and communication is vital to the therapeutic effect. My good friend, Dr. Richard Reece, a noted healthcare policy expert pointed out graphically this potential hazard in his excellent and funny blog post The Chart Before The Horse.

I believe with the ideal EHR both the patient’s and physician’s privacy can be protected. Actually, there should be a reward. The companies manufacturing the EHR should be able to provide the data to prove the increase in quality care automatically. I spoke about eliminating the barriers to improving medical care. The EHR can provide information to both the physician and the patient to increase the quality of care patients receive. Instruction to the patient can be printed in detail or sent to the patient online to their PHR.

There should be nothing about this transaction that gives patients the “willies”. It can only improve the delivery of care.

Stanley Feld M.D.,FACP,MACE

I thank my son Brad for writing about my post “Electronic Health Record Part 2”
in “Feld Thoughts.” I was pleased with the many comments that we both received. There are many smart people out there.

I think the difficulty in developing an EHR has been overstated. Most of the software pieces of the ideal electronic health record are currently available.

Few developers have asked the physicians what they need. Fewer developers understand why they encounter such massive physician resistance. Those who have tried to understand the resistance can not get a straight answer.

The reason is many physicians do not know what they need. They have little experience thinking about relational databases. They have difficulty understanding the potential to the increased efficiency of their daily workflow (effective relational databases) in the practice of clinical medicine. Most of the effective information technology in clinical practice has been in financial medical management. Financial outcomes have not been linked to medical practice outcomes in an understandable way.

EMR developers also have had difficulty getting the physician to sit down and listen to them. Physicians are very suspicious of data collection devices. Most of their experience has been with data collection that has been used against them by the facilitator stakeholders (the government, the insurance industry, and the hospitals) to penalize them or reduce fees.

I believe all the pieces of an ideal EHR are now. However, most of the pieces are stand alone silos and are not interconnected. The physician is offered an expensive and unaffordable product that seems to offer little added value to his practice except to eliminate paper. The value to the practice is not translated properly nor could they afford it if it was.

Brad Feld (my son) and my brother Charlie Feld have taught me a lot about information technology and relational databases. We have had many discussions about relational databases. I have studied its potential value to physician practices. In my opinion, few companies understand how the physician thinks and what his needs are. They do not know how to teach the physician to understand the value of an EHR to his practice.

I think the reason is that software developers are oriented toward the hospital as their customer and not the physician. Hospitals have money to spend on capital improvements. Physicians do not want to spend large amounts of money on anything, especially something that they perceive will add little value to their practice. In fact, the EMR might hurt their practice. They hear many horror stories from peers about worthless EMRs. Most effective EHRs are out of the price reach for the average physician or small physician groups. Physicians have heard and seen big organizations like Kaiser Foundation get fooled out of hundreds of millions of dollars. Many have had the same experience in their own hospital.

An Ideal Electronic Health Record can, I believe, be easily synthesized from the current technology in use by other businesses.

The EHR should be leased to the physician and the practice to make it affordable. The EHR should be sold at a penny a the click just as Mastercard’s system is sold to small businesses. The data can be stored on site or off site or both with stout privacy firewalls around each practice.

Many businesses rely on relational databases. Two simple examples are Amazon.com
and Netflix. Amazon tells me what books I would enjoy and Netflix tells me which movies I should order from my order history.

The airlines let me schedule a flight online. Southwest has my online ticket buying reduced to three clicks.

Wal-Mart buys store inventory based on sales. It automatically sets up delivery routes and schedules of thousands of products delivered to thousands of stores based on velocity of individual product sales.

Frito Lay builds potato chips and buys potato futures on the basis of historical experience and timely conditions such as social unrest or sporting events on television. If volume of sales drops in a city, Frito Lay automatically puts the potato chips on sale in that city.

E-trade, Schwab and others make trades online and adjudicate sales at the point of trade. I remember the days when stock prices were caulked up on a blackboard.

Almost every merchant uses Mastercard, Visa or American Express. They settle the price of purchases immediately. Mastercard even questions a charge that is too frequent. I was at a gas station and the pump was acting funny. I stopped pumping gas from that pump and reentered my credit card in another gas station. I was denied access. I also got an instant call from Mastercard asking me if I lost my card. The software picked up an unusual event in the use of the card.

Stores, restaurants and gasoline stations do not have a universal software system. They interface their different software systems with First Data’s system. First Data has been able to flatten out many interfaces so that there is universal processing at First Data’s end.

The banking industry has adopted online banking. I thought the personal banking would the last to adopt. The software company selling to the banking industry has made the interface easy for the personal banking customer. The pain of reconciling the bank statements is gone forever. Customer service encounters are down. Everyone seems happy. The banks net profits have increased and expenses have decreased because labor intensive tasks have decreased. The individual banking institutions do not own the software. They lease the software. They also pay by the click. The software people upgrade and maintain the software with all the appropriate backups and firewalls.

The same can be done with appropriate data based driven legacy medical information systems. However, many of the legacy medical clinics EMRs are not worth much. They are word processing systems and not data processing systems. Those systems will manage to get the paper out of charts and off the shelves. However, you can not learn anything from them to improve a clinical practice.

Most practice management systems have relational data base capability. You can figure out a percentage of Medicare population in the practice. You can also get the names of all the males over 55 years old with diabetes mellitus, impotence, and hypertension.
The EHR I am talking about is the next step. What have we, as physician, done to improve patient care? What has the medical outcome been? What is the price in medical services for the medical outcome? Are there any suggestions available using evidence based medicine for the physician to improve his outcome?

Remember, 80% of the cost of medical care is spent on the complications of chronic disease. How can we learn from the patients record how to reduce these complications without the threat of penalty to the physician.

What have I taught the patient? How much of what I taught him did he learn?
What is his adherence to prescribed medication?

How could a physician measure adherence to prescription with an EHR? The entire informational technology infrastructure is available. It can be automated. It is waiting for an entrepreneur to put it all together. When I give six months prescription, the patient only gets a thirty day supply from the pharmacy. This is a little scam the CVS’s of the world in conjunction with the insurance company exercise. Why? If your co-pay is $10 for a generic drug, CVS might charge a total price of $14. You paid $10 and your insurance company pays $4. For a six month supply your insurance company would pay $24 and you would pay $60. If they gave you the six month supply of medication I ordered you would pay a co-pay of $10 and the insurance company would pay $74. I would say that is a pretty neat drug benefit for the insurance company.

If I, as the prescribing physician, demanded that the CVSs of the world notify me by email each time the prescription is refilled, each notification could go directly into the patients EMR. On the patient’s next visit, I would know whether the patient refilled his medications appropriately. Patients have told me they refilled the medication when in fact the pharmacy had not seen the patient in the previous 4 months.

As an example such a patient would not be able to properly control his blood pressure. Uncontrolled blood pressure can lead to stroke or heart attack. Both are a complication of the underlying vascular disease that causes hypertension. Appropriate control of the blood pressure can reduce the possibility of stroke or heart attack by 50%.

Simply understanding and controlling compliance can save lives and reduce the cost of medical care. Can this process be automated with present day technology? Of course it can. It could help us be better physicians and give better service to our patients without it affecting our daily workflow.

I do not think it should take forever to have a universal web based EHR. It can be as rapid as CD’s replaced vinyl records. It takes an understanding of the physicians mentality, the physicians needs and the physician workflow. I will present many concrete examples of quality care improvement across all five parts of the EHR in the future.

Stanley Feld MD, FACP, MACE

In my last post a comment referred to the difficulty with Kaiser HMO’s EMR. The following was reported in the San Francisco Chronicle November 7, 2006.

“Kaiser: Critical Need To Cut Rising Costs”

“$7 billion in losses if no action taken, HMO report says”. Kaiser has invested $3 billion in data system created by Epic Systems Corp. Kaiser’s project supervisor e-mailed 180,000 employees detailing his frustration with Kaiser’s Electronic Health Record System which he considers inefficient and unreliable. The project supervisor brought his concerns to the Kaiser HMO’s board. He said the information was not taken seriously “because of conflicts among top executives.” Doesn’t this sound typical of the hierarchical bureaucratic systems we live in? One simply has to recall the problems in the CIA and 9/11. Kaiser is supposed to be the best of the best.

The creation of an effective electronic medical record is extremely complicated. Physician practices and hospitals have different needs and therefore different EMRs. In fact the EMR is just one health record. The system that is needed is an Electronic Health Record (EHR) with multiple components. There is much confusion between these two terms. The confusion leads to the hesitation by physician to adopt an EMR.

The goal is to convert medical records from paper charts to digital electronic charts. The goal is to enhance the flow of information about patients and their care to all who might be involved in the patients care. The physician’s office practice work flow is very different that the work flow in a hospital. Therefore one size EMR does not fit all in our present environment. The issue of trust in handling records between primary stakeholders and facilitator stakeholders also represents a barrier to adoption.

The theory is that a paperless chart will decrease the waste and inefficiency in the system. The handling of each chart per physician patient encounter cost the physician $7 in labor and material. One click can save $7 per chart, if there was an efficient, reliable, and affordable EMR.

However, a paperless chart is in reality worth little unless the information entered is usable in data base format rather than word processing format. Only then, can patient care be enhanced. I will explain this in detail as we proceed. Many EMRs sold are simply word processing of records. Only in a data base format can one piece of data be related to other pieces of data to truly decide on best practices for enhancing quality and decreasing the cost of the complications of chronic disease.

There are many needs in health care information systems (Health Informatics). An electronic health record (EHR) is a personal medical record (EMR) that can typically be accessed on a computer or over a network. An EHR almost always includes information relating to the current and historical health, medical conditions and laboratory tests of the patient. In addition, EHRs may contain data about medical referrals, medical treatments, medications and their application, demographic information and other non-clinical administrative information.

The non clinical administrative information includes the financial charges and collections. All of these data points must be able to be integrated via relational databases in order to determine the relationship between the disease or diseases, medical steps taken, charges, costs and payment in relation to clinical (medical) outcomes. To my knowledge, the ideal EHR system has not been implemented by any software company to this date.

As of early 2007, adoption of EHRs and the multiple components of EHR have been extremely slow. I believe the reason for this is because the stakeholders are unsure of what they are buying. The software companies are unsure of what they are selling or are unsure of the primary stakeholders needs. The cost of the product is also beyond many primary stakeholders’ means in a medical economy of falling prices.

Less than 10% of American hospitals have implemented semi robust Health Informatics Systems. Only 16% of primary care physician have put an EMR in place. Most of those EMR are word processors. These EMRs get paper off the table eventually and cost large amounts of money to buy and maintain. Physician find these EMRs do not do what they need and are forced to buy add-ons.
The government wants paperless records so there is portability for the patient and ease of chart inspection by the government. This represents another reason for suspicion and caution on the part of the physician.

There Are Many Types Of Electronic Records In Use Presently.

Electronic Medical Records
Personal health records (PHR)
Continuity of Care Record (CCR)
Electronic health record (EHR)

Somehow all of these electronic records have to be combined.

Interoperability Is The Key To Any Successful EHR

However, interoperability can only be exercised at the request and permission of the patient and the physician. This becomes another barrier to adoption. I made a negative comment about Regional Health Information Organizations (RHIO) a while ago. I said I did not think they would work. There are many reasons for this view. First, how is this information going to be collected? What are its potential uses? Some uses are good, but many uses are bad for the patient and physician. Remember, they are the primary stakeholders.

In the United States, the development of standards for EHR interoperability is at the forefront of the national health care agenda. I believe without interoperable EHRs, practicing physicians, pharmacies and hospitals cannot share patient information, which is necessary for timely, patient-centered and portable care. Interoperability is essential if the EHR is going to help reduce the cost of care.

I believe that Medical Saving Accounts can help this process along. I plan to develop this belief. This portability should be for the benefit of the patient and the physician. It is not for the benefit of secondary stakeholders, especially those secondary stakeholders that see a widening of net profit with these new complicated systems that someone else pays for.

Aside from administrative waste of $150 billion dollars a year, 90% of the Medicare dollar is spent on the complications of chronic disease and 80% of the overall healthcare dollars is spent on the complications of chronic disease. The elimination of administrative waste could be reduced by present state of the art healthcare informatics systems if the proper motivation was created.

However, if we are going to repair the healthcare system electronically, the healthcare informatics systems must function with fully integrated interoperability. There must be systems of continuous quality improvement built into the EHR that are not punitive to the physician or the patient.

Presently, we have a healthcare system where the electronic information (incorrect information for the most part) is punitive to the patient and the physician, and lacks interoperability or continuous quality improvement. Several software companies have the infrastructure to achieve this goal. However, they do not seem to understand the physicians’ mentality in order to reach the goal. They key question again is who is your customer? The answer is the patients (consumer) and the physicians.

The concept of interoperability systems is embedded only in the Electronic Health Record. Interoperability cannot be attained with the Electronic Medical Records software companies have available. Remember, only sixteen percent (16%) of us have bought an EMR. Most of these records are potentially out of date. The EMR has gained some efficiency, but so far short it has been far short of its monies worth to the physician, the patients, or the cost of care to the healthcare system.

I will next discuss my vision of the idea Electronic Health Record.

Stanley Feld M.D.,FACP,MACE

Physicians have been slow to adopt Electronic Medical Records (EMR) even though most physicians are computer savvy. There are reasons for physicians to be slow adoptors.

They are told that the EMR will increase their quality of care. However, quality of care has not been adequately defined by those who proclaim EMRs’ virtue. Physicians have negative experiences with information technology. The insurance industry and government have used IT against physicians to decrease the fees. Physicians know much of the data collected by the insurance industry and government has been formatted to answer the wrong questions. The potential of the EMR simply stimulates more mistrust and suspicion on the part of the physician against these entities.

Those knowledgeable about EMRs would say “Dr. Feld you have it completely backward.” Perhaps I do. I do not think so. I have expressed the perception of many physicians. Perception translates to the reality of resistance by physicians.

I understand the advantages of a functioning and effective EMR. If done correctly the physicians would flock to adopt the system. However, most demonstrations of EMRs are a disaster. The implementation of EMRs by most EMR companies has been worse. The purchase of an EMR to many physicians has simply been money down the drain. A few practices have been lucky and very successful.

The investment the physician must make is at minimum $50,000 per physician. In an environment of decreasing insurance and Medicare payments, $50,000 is a huge investment. In addition there is usually an annual maintenance fee as well as yearly service fee. Many software companies produce EMRs. Choosing the correct EMR seems impossible to most. Many physicians have been stung by the software company going out of business within two years, making their investment worthless.

In the January 2007 issue of Health Data Management there appeared a Newsline article “Hawaii Blues to Docs: We’ll Help with EMRs.

“A $50 million program from the Hawaii Medical Service Association, under which the Blues plan, would give providers substantial financial help to purchase electronic medical records systems, could wire up most physicians in the state.”

Why would the physicians want to be wired up? What does wired up mean?

“Honolulu-based HSMA also thinks the program will foster the longer-term goal of establishing regional health information organizations.”We’re making this investment to move the community along to wider adoption of I.T. so we can be ready for RHIO activity,” says Cliff Cisco, senior vice president. “There’s a lot of RHIO talk, but we’re a ways off from implementing a network. We want to prepare for that and give motivation.”

One should note that a RHIO is a network of information of all the patients’ charts in a regional and anyone can get patient information and physician care activity instantaneously with proper authorization. This would be great if we lived in an environment of total trust. It could work if everyone would keep this information private and would not use the data gathered against the patient or physician. Remember the social contract in medical care is between the patient and the physician.

“Under the three-year HMSA Initiative for Innovation and Quality the plan has committed $20 million toward the purchase of EMRs for physician practices. It will contribute up to half the cost of an EMR, capped at $20,000 per physician, for about 1,000 physicians.’

The physician would still have to pay $30,000 for something he does not want and he does not perceive will increase the quality of his care. It is viewed as a tool that will be used to punish him.

Cisco believes a “significant” amount of funds under the hospital program will go toward I.T., but the overall goal is to reduce practice variances and improve safety. Details of the program remain under development. “We’ve made the commitment and now are talking to hospitals,” he adds.”

Please notice the implication is the system is going to tell the physician what he should do to practice “good” medicine as defined by the insurance companies and hospital administrators. This seems like a way to generate more mistrust between physicians and the insurance industry.

“The program to help pay for EMRs is open to any physician who doesn’t have EMR software. But the focus will be on small and rural practices where adoption rates are low. HMSA hopes it will get most of these practices to take up its offer, Cisco says. “This is an effort to bring on slower adopters of the technology.”

My response is good luck!

The EMRs also will have to be certified by the Certification Commission for Healthcare Information Technology. HMSA is expected to have a list of acceptable EMRs available by the end of 2006.

If this program was perceived by the physicians as a good idea it would have to be a single uniform software program with measurable data points available to the physician for his proving an improvement in his quality of care to the patient. Multiple software vendors will increase the costs and decrease the mobility of the data collected. I will devote more time to describing the ideal EMR in the ideal MSA system. The system would greatly benefit the patient and the physician. The benefit to the facilitator stakeholders would be secondary and not punitive to the patient or the physician.

“Heavy penetration of EMRs in Hawaii could support more comprehensive pay-for-performance programs. HMSA for five years has had a pay-for-performance program that gives physicians and hospitals “modest” payments for meeting certain quality standards, Cisco says. The new initiative is much larger than existing P4P programs, he notes. “Our board thought we’d ramp this up a bit, put out this $50 million commitment and see what it achieved.”

Does anyone out there know the potential punishing effects to the healthcare system that pay for performance will inflict. In my view pay for performance is not well thought through presently. Many physicians are totally opposed to the notion because the decisions of performance are going to be made by the same insurance company administrators that used incorrect data to produce the failed punitive report card system.

This ambitious program is going in the opposite direction of the concept of the ideal Medical Saving Account. It is not empowering to the patient or physician. P4P in the present form does not provide incentive to the patients or the physicians to improve their performance. It is an administrative mechanism devised to dictate physician behavior, undo patient privacy and reduce payment.
It is sure to fail at best and generate more distrust and waste at worst. The healthcare system does not have three years to waste on this folly. The endeavor is bizarre to me. It is a waste of $50 million. I predict the $50 million loss will be passed on to the patients in the form of increased premiums
The $50 million could go a long way to create the ideal EMR in an ideal insurance system (MSA). Some smart entrepreneurial company will figure it out some day. I hope sooner rather than later.

Stanley Feld M.D.,FACP,MACE

On August 22, the NY Times had an article called “Health Care the Engine that Drives the Economy.” I believe the experts The Times chose to quote were not serious, uninformed or quoted out of context.

“The United States already spends nearly 16 percent of its gross domestic product on health care, and it is almost impossible to know where all that money goes.”

But Dr. Fogel says he is not alarmed.” Americans can afford it, he says, because the nation is so rich.”

Most of us are aware that corporations spend 16-18% of their gross revenue on healthcare. General Motors spends $1.500 per automobile built on healthcare premiums. Thirty percent (30%) of the premium is spent for administrative costs at the insurance company. Medicare stated that its overhead is only 3%. However, Medicare outsources all the administration duties to an insurance carrier. Therefore it should have little administrative overhead.

Administrative costs could be greatly reduced by effective use of information technology. Claims adjudicated at point of service should be as simple as it is during commercial transactions. If one ever experienced the inefficiency in adjudicating a hospital bill one could appreciate the administrative waste. The savings to the system would be approximately $40 billion per year. Electronic Medical Records documenting care as well as medical and financial outcomes would save the healthcare system another $40 billion dollars per year.

If we added successful Chronic Disease management systems into our healthcare system, we could save another $60 billion per year simply decreasing the complications of Diabetes Mellitus by 50% and save $10 billion decreasing the complications of Osteoporosis

Instituting proven techniques, adjudication of claims, communication and documentation using EMRs could result in a total savings of $150 billion. Instituting these techniques would eliminate waste and inefficiencies in the system. It could reduce the cost of care and make insurance more affordable to corporations and individuals.

The big question is,” Who should benefit from this savings?” The answer should be: patients and society. A portion of this savings should be used to reduce the cost of care. A portion of the savings should be used as incentive to stimulate adoption of the new systems so the new systems are successful. We could also figure out how to make insurance available at an affordable price to the 47.6 million uninsured people with a portion of the savings.

However, I bet the facilitator stakeholders are lining up to grab the extra money generated by the elimination of the inefficiencies.

Waste is not good for any economy. The waste in the healthcare system should not be the engine driving the economy. Adding value and better medical care should be the engine for a healthier America.

Stanley Feld M.D.,FACP,MACE

1. Physicians and hospitals bill their retail prices with every claim form. They receive and accept Medicare prices as published. They have also negotiated deeply discounted prices with the insurance companies which they accept. An uninsured person, like Denise, has only seen the providers’ retail price. She could negotiate that fee before the service was rendered if she had a choice of provider. She could negotiate the price after service was performed if she knew the discount fees that the providers accepted. This is the best that she could do at the moment. Once everyone can buy insurance on a level playing field she will do much better. I will explain how, in my view, the medical savings account should be set up to be affordable to everyone, profitable to everyone, and driven by free market forces with freedom of choice for everyone. The model will lead to less people uninsured. It will also lead to a decrease in healthcare costs, because of a reduction in chronic disease complication rate.

2. In my blog, a Simple Solution to the Problem of Price Transparency some readers had the impression that I was advocating Price Control. I am a firm believer than Price Controls do not work. Price Controls in my view only create bigger problems.

The solution is competitive pricing. If a physician or hospital has a better product at a higher price, they will not lose their market share. One needs only to look at Neiman Marcus. If the product is similar the higher price product has a problem. The impartial web site will give that practice or hospital the opportunity to defend his price and in fact, prove its value to the consumer. They could publish their qualifications as well as medical and financial outcomes on the site and differentiate their value from the average.

In order to get that information, the providers will have to have a functioning electronic medical record (EMR). They could then have the opportunity to link medical and financial outcomes to cost and prove their value to those who want the superior product. Presently, there is little motivation for physicians or hospitals to have an electronic medical record. There is little incentive to buy one because presently there is no reward for having an EMR. The only incentive is a government mandate. However, mandates never seem to work. In addition, with the reimbursement declining it is difficult for a physicians or hospitals to understand the value of EMRs to be motivated to make the capital outlay necessary to purchase an electronic medical record. Many times these EMRs take years to install and function properly. Another barrier is the pain of converting to an EMR. The providers are tied also to a never ending costly service contract. The service from the EMR provider sometimes does not solve the problems that arise. In the past, many of us have spent large sums on the false promise of a significant payback. The false hope inhibits us from making an additional large investment that might not work well.

I will go into these problems and my proposed solution in the near future. Presently, one can start to see the depth and breadth of the problems the healthcare system has faced and the dysfunctional responses of stakeholders to the immediate problems. Their responses simply served to create greater problems for the healthcare system. The new problems generate further problems.