Healthcare: Not just another business

A reader comment on a posting about electronic medical records (EMR) suggests that medicine needs to follow other industries into the digital age. This is likely inevitable: Medical record keeping is bound to become more digitized over time. The primary reasons are monetary: It facilitates the generation of bills to send to patients and payers, the jury is still out on whether it increases quality and efficiency. Individual providers may like the added convenience, but it is still unlikely that EMR will provide the level of care coordination that is hoped for.

President Obama and others have proclaimed that EMR will also bring massive cost savings, but a new study released today sheds doubt on these projections. Harvard researchers analyzed over 4,000 hospitals and found no differences in administrative or overall costs between the most- and least-wired hospitals. More techie establishments did have a faster rate of cost increase, however. As for quality, more wired institutions had slightly higher quality scores for heart attack care, but not for pneumonia or heart failure, and not for all three combined. (These were process-measures, not outcomes measures.)

Another point worth making is that the business of healthcare doesn't operate like other industries, forexample:

1. Those providing services (doctors, hospitals) are generally not paid by those receiving the service (patient), but instead by a third party (insurers). So patients don't care how much things cost, and payers trying to be fiscally prudent are easily viewed as valuing profits over human health.

2. It may be a good thing that patients don't know how much services cost, because no one does. There are no fixed prices in healthcare, and those with least ability to pay are charged the most. Insurers negotiate lower rates, but the uninsured are charged full price. And that full price may vary by 100% or more among different providers at different institutions. Have you ever asked a doctor how much something costs? They probably don't know.

3. We don't comparison shop. In fact we will wander into just about any hospital and have a surgeon saw open our chest and yank out an important organ with no knowledge of how good he or she is. Before you buy a pair of shoes you'll take a test stroll down the aisle. Need open heart surgery? There's generally no way to take a stroll with the surgeon first.

4. Generally we let our primary care doctor refer us to a surgeon. But it's unlikely that your primary care doc has any reliable way of knowing how good a specialist is, and referral patterns are generally established around financial arrangements or among colleagues.

5. We take treatment advice from the people that profit the most from providing that treatment. Would you blindly buy a car simply because a salesman recommends it? Never. But you may have your gallbladder removed without a second opinion based solely on the recommendation of a surgeon who will receive thousands for a few minutes work.