Global Study Finds Majority Believe Traditional Hospitals Will Be Obsolete In The Near Future

A global study was released at the new year by the Intel Corporation indicating that around the world people’s health care wants and needs are principally focused on technology and personalization. The “Intel Health Innovation Barometer” found a consistent theme: customized care. At the intersection of health, care and technology, communities around the world consistently said they wanted to see their biological makeup and individual behaviors used to make receiving care more effective and efficient. This unsurprisingly was described by people through means such as telehealth, mobile health and the sharing of health information in real time. However, surprising methods of care were also common themes throughout the world such as ingestible monitoring systems and care that involves no utilization of hospitals.

Eric Dishman, Intel Fellow and Global General Manager of Health & Life Sciences at the company says the findings indicate that, “workflow, policy and culturally focused care are the most important ways we can improve health care.” Making care convenient, universally available and efficient through technological innovation is seen as more promising around the world than increasing the number of physicians or funding more academic research.

According to Senator Ron Wyden (D-Oregon), “People always talk about disruptors in terms of various kinds of practices in the American economy,” but “there’s nobody who’s done more disruption for the right reason than Eric Dishman.” With that kind of support to understand and advance the health care system, the Intel Health Innovation Barometer was conducted online by Penn Schoen Berland in Brazil, China, France, India, Indonesia, Italy, Japan and the United States. It was conducted among a representative sample of 12,000 adults aged 18 and older with a margin of error of +/- 0.89 percentage points.

Surprising Findings:

–       Traditional hospitals, according to 57% of people, will be obsolete in the future

–       Majority of people (84%) would be willing to share their personal health information to advance and lower costs in the health care system

–       More than 70% of people are receptive to using toilet sensors, prescription bottle sensors and swallowed health monitors

–       72% of those surveyed would be willing to see a doctor via video conference for non-urgent appointments

–       66% of people say they would prefer a care regimen that is designed specifically for them based on their genetic profile or biology

–       More than half of people (53%) would trust a test they personally administered as much or more than if that same test was performed by a doctor

–       About 30% of people would trust themselves to perform their own ultrasound

While wearable monitoring devices are commonly accepted in the US, global readiness for ingestible and sensory systems far exceeds that of Americans.  Acceptance of non-hospital care is also more appealing to those living outside the US. In remote areas of India, for example, extremely high percentages of people said that there is no need for traditional hospitalization.

Although in the US, a growing desire to care for the elderly at home gives hope to Eric Dishman that there could soon come a day that hospitals are obsolete. He cites changes in care seeking behaviors, policy and payment reform as incentives to move away from traditional hospitalization care. “The moment you signal pay for performance, people start thinking about how we misuse hospitals every single day,” says Dishman. That misuse of hospitalizations, and lack of formal hospitals in other countries, contributes greatly to the number of individuals worldwide who think the archaic system is not sustainable in the future.

Emerging Technologies For Innovation

Intel has been doing qualitative and quantitative research around the health care industry for many years. To date, the Intel Barometer is the most extensive survey it has conducted, and did reveal shifts in people’s increased desire to have access to emerging personal technology tools to become more active members of their care team.

Specifically, the Intel R&D teams are using ideology like Dishman’s to seek clarity and recognition of health advancements that unburden people from having to travel to a health care provider. “Care must occur at the home as the default model,” says Dishman. “It was also interesting,” he says of the survey, “to see people in emerging markets such as Brazil, China and India trusted themselves to use health monitoring technologies more than those in more technologically advanced economies like Japan and the United States.

Intel’s team of ethnographers used research in more than 1,000 homes and more than 250 hospitals across 20 countries to better understand the everyday lives of people, including those receiving and giving care.

The technologies that Intel’s survey received novel feedback on include items such as wearable and ingestible monitoring systems. While these hi-tech possibilities are new to all markets, the potential benefits could be felt across the entire health care arena as more thorough and patient-centered data is collected, driven by patient approval and demand.

Eric Dishman’s Personal Mission

In his pursuit of better health care technologies and home health care, Eric Dishman has been driven primarily from his in depth involvement with the health care system. As a student at the University of North Carolina, Dishman was told that he had months to live due to a rare kidney disease. Over twenty years later he has received a new kidney from a colleague at Intel thanks to sequencing his genes and finding that his diagnosis had been wrong his entire life.

Further, his grandmother’s progression of Alzheimer’s Disease drove his pursuit of innovation to keep her safe in her own home.  He found that keeping her health and dignity was a group effort. According to him, “Improving health care is a team effort, including patients and their families. Intel’s research shows that when people see benefits for them and their wider community, they are open to sharing sensitive information in an anonymous way.”

His approach seems to be gaining support based on the Health Innovation Barometer, which found that a higher percentage of people (47%) were willing to share their personal health records than their phone records (38%) or banking records (30%) to aid innovation.

If Dishman and Intel have their way, the new survey will move them to the head of the class by proving to health care leaders around the globe that massive disruption to the health care system is possible and supported by the large community. Smart devices that can connect patients and care givers in their home can lead to all kinds of health and policy change. Payment reform, independence and equal access might all be possible in the near future if individuals around the world are willing to use their own bodies and surroundings to educate and innovate the larger system.

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Penalizing Hospitals for Readmissions: Will It Work?

With notably few exceptions, the American health care system has been financed on the basis of volume rather than value. That means that we’ve been paying providers for everything that they do, rather than paying them for the outcomes they produce. This is not common in other fields. For example, if you are in an accident and have to take your car to a body shop, you (or your insurance company) typically pay them for the work once. If they haven’t repaired the vehicle properly, you can typically return the car to them and they will “make it right” for no additional charge. If you go out to eat, and the meal is not to your liking, the restaurant’s manager will typically offer to make you something else at no additional charge, or will discount the price of your unsatisfactory meal.

In health care, you pay the doctor to treat you, and if the treatment fails, you pay them to treat you again, and again, and again. Now, I’m not suggesting that this alone prompts physicians to do their job poorly or to provide more care than is necessary. Rather, I’m suggesting that the financial incentives are such that they do not reinforce physicians’ efforts to provide high quality care. Efforts to work around this include managed care and capitated payments, with the thinking that this shifts risk onto the providers and encourages them to doggedly pursue better outcomes. In some cases, this has worked. In other cases, it has backfired, as physicians simply reduce the amount of care they provide, much of it arguably needed care.

The latest development in this area is the implementation of financial penalties for hospitals with excessively high readmission rates among Medicare patients. As of October 2012, if a hospital’s readmission rate exceeds their expected readmission rate, they are fined by the Centers for Medicare & Medicaid Services (CMS). Right now, the maximum penalty is a 1% reduction in total Medicare payments over the coming year. By 2015, the penalty will increase to a maximum of 3%. This is a lot more money than it might seem from the percentage figures. In fact, it’s estimated to save Medicare roughly $300 million this year. That means, if hospitals don’t improve, CMS might keep nearly $1 billion a year starting in 2015.

Of course, the goal is to save even more money by using the penalty to encourage hospitals to prevent as many readmissions as possible. Medicare currently spends about $17 billion a year on readmissions, so there is considerable room for improvement and savings. However, I’m doubtful that the new penalties will achieve their desired effect. The reason is that hospitals have ways of artificially reducing their readmission rates. One prominent example is through the use of observation care, where patients are held in the hospital–sometimes for days–as outpatients. This is more costly for patients, who are responsible for a greater portion of their outpatient bills, it raises questions about the quality of care provided while a patient is under observation, and it seems like an ideal way for hospitals not to lose up to 3% of their Medicare reimbursement going forward. So, will penalizing hospitals for readmissions work? I doubt it. Not unless we find a way to prevent hospitals from working around the penalty.

 

Community Benefit: Holding Non-Profit Hospitals Accountable

With all of the recent scrutiny of Mitt Romney’s tax returns, here’s something you might not know: non-profit hospitals are exempt from paying any federal income taxes. The rationale behind this is that these hospitals deserve a break because they provide significant benefits to their communities. This community benefit can be thought of as consisting of the sum total of a number of things like the amount of uncompensated care the hospital provides, the number of lives it saves, the number of jobs it provides, and the impact it has on residents’ quality of life. If a hospital is creating jobs, restoring people’s health, saving people’s lives, and providing a health care safety net for the community, then perhaps it shouldn’t have to pay federal taxes. Similar to the case for making employer-based health insurance tax-free, this is a way for the federal government to effectively subsidize something that it considers to be beneficial to the public.

Hospitals certainly enjoy their tax exemption, but the bigger question is: Do they deserve it? For more than 40 years, the rhetoric of community benefit has been bandied about without actually defining what it includes, establishing criteria for the amount of community benefit that must be provided to merit non-profit status, or evaluating the extent to which non-profit hospitals are doing so. What has been done is research showing that more often than not, non-profit hospitals behave a lot like for-profit hospitals. And who can blame them? After all, why not take the tax break with one hand and attempt to maximize profits with the other hand? In fact, the former bolsters efforts at the latter.

Since 2009, however, the IRS has required non-profit hospitals to document the dollar amount of the community benefits they provide. In the February issue of the American Journal of Public Health, Karen Principe and colleagues consider what effect health reform may have on the provision of community benefit. For example, as more Americans are covered by insurance, the amount of uncompensated care a hospital provides can be expected to decrease. The authors report that some have called for an end to non-profit status for hospitals. One way to think about this is that the federal government would be shifting its subsidy from the hospitals to the individuals as it helped them to purchase insurance. The authors disagree, however. They argue that hospitals will still need to provide uncompensated care for individuals who move in and out of coverage, and that coverage expansions under the Affordable Care Act will strengthen the financial position of hospitals, leading hospitals to allocate community benefits differently. That is, they will provide less uncompensated care, but more of the “other” stuff that constitutes community benefit.

I like their optimism, but without strong enforcement to hold non-profit hospitals accountable, I think hospitals are about to win big: They’ll keep their tax-exempt status, provide even less uncompensated care, see their revenues increase, and laugh all the way to the bank. And who can blame them? After all, they’ve no incentive to do otherwise.