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The Bad and the Ugly of Prior Authorization and How Technology Will Fix It

Posted on May 16, 2018 I Written By

The following is a guest blog post by Karen Tirozzi, VP of Solutions, ZappRx.

Specialty drugs, which are usually defined by their complex instructions, special handling requirements or delivery mechanisms, are typically priced much higher than traditional drugs and cost more than the average American family’s salary. These medications are priced higher for a variety of reasons such as manufacturing costs, smaller patient populations and patient services like IV administration or at-home care required to support patients who will take these medicines.

Due to the costly nature of these treatments, payers insist on a comprehensive prior authorization (PA) process to ensure qualified patients are receiving the medications they need. The PA process involves cumbersome paperwork and fax machines and are a huge burden to physician’s and their staff. Physicians have even resorted to hiring extra, dedicated staff just to process these prescriptions as nurses, NP’s, PA’s and medical assistants tend to fall victim to the prior authorization nightmare. According to a recent study, it is estimated that $85,276 was spent on personnel costs to address billing and insurance issues associated with prior authorization, which is approximately 10 percent of practice revenue.

To put just how inefficient the PA process into perspective, a recent AMA survey of 1,000 physicians providing 20 or more hours of care a week, showed that doctors receive an average of 37 PA requests a week, which took an average of 16.4 hours to process. Extrapolate 16.4 hours a week over a year and clinicians are spending around 41% of their time annually doing paperwork, making calls and or sending faxes just to navigate PA and get medications to their patients. It includes enrollment forms and signatures from the patient, which can be done while the patient is in the office, however, it’s often done through mail, which slows down the process even more. Providers also have trouble ensuring they have the right forms for the insurer’s preferred specialty pharmacy, as sending to the wrong pharmacy also causes delays. Providers are tangled in faxes and phone calls for weeks on end so that all parties have all the information they need to approve just one prescription. In 2018, how is it that the medical community still heavily relies on fax machines to process information and deliver life-saving drugs to patients.

A Brighter Future

Digitizing the entire prior authorization process will significantly reduce the administrative burden on clinicians and get patients their medications in a much more streamlined manner. Healthcare providers should be able to, in one place, order a specialty prescription, see the paperwork and signatures needed and follow its progress until it reaches the patient’s hands. The healthcare industry needs to start utilizing the technology available today to streamline workflows and decrease operational expenses, which in turn, can help save patients’ lives.

By embracing technology, clinicians can also leverage the rich data sets generated to better understand their patients’ needs, trends within the space they’re treating and ultimately, improve patient care. Data can also be used by pharmacies to understand how their medications are trending within the market and catch any snags that may cause delays. The potential for pharma companies to use this level of information to provide insights and improve products in real-time is invaluable.

Let’s take the next step

Inherently risk adverse and with siloed stakeholders, healthcare must begin taking steps toward change. With what the space has at its disposal from a next-generation technology standpoint, there is no excuse to remain chained to the fax machine.

The good news? Providers, pharmacists and biopharma have options to improve this cumbersome process today. Forward thinking innovators are beginning to break down silos and uncover new methods with technology to streamline the prior authorization process and get patients their specialty medications in days, not weeks.

About Karen Tirozzi
ZappRx Vice President, Solutions, Karen Tirozzi, leads a fast growing team that is focused on transforming the specialty pharmaceutical prescribing process. With a focus on client success, Karen and her team are innovating technologies to automate traditionally manual and cumbersome processes in an effort to save clinicians time and resources, and deliver lifesaving drugs to patients in a timely manner.  Having spent more than 15 years in the industry, Karen’s unique background in HIT and clinical social work serve as the basis for her ability to deliver successful programs in highly disruptive healthcare services and IT companies.

Doc Vader on Integrative Medicine – Fun Friday

Posted on May 11, 2018 I Written By

John Lynn is the Founder of the blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of and John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Time again for another Fun Friday entry as we head into the weekend. This week we tapped into the most comedic doctor out there, ZDoggMD. Well, I guess it’s actually his alter ego Doc Vader, but you get the idea (and if you don’t get the idea, you should find ZDoggMD’s parody videos and watch them).

For this week’s Fun Friday video check out this video with Doc Vader talking about Integrative Medicine (not to be confused with integrated medicine or collaborative medicine with your doctor):

How to Improve Communication So You Can Improve Satisfaction

Posted on May 9, 2018 I Written By

The following is a guest blog post by Jim Higgins, Founder & CEO at Solutionreach. You can follow him on twitter: @higgs77

In attempts to boost revenue, practices often find themselves mired in the complex tasks of generating marketing, improving scheduling, reducing inefficiencies, and more. And while these practice management pieces are important, sometimes we make things more complicated than they really need to be. When it comes down to it, the foundation of a financially-healthy practice is simple—keeping your patients happy.

Happy patients are the patients that show up—and come back. They’re the patients that refer you to their friends. They are the ones who leave those all-important online reviews. They truly are the bread and butter of your practice’s bottom line. Research backs this up—multiple studies have found a direct correlation between revenue and patient satisfaction. In fact, one study found that those healthcare practices delivering a “superior” customer experience achieve 50 percent higher net margins than those providing just an “average” customer experience.

Use Surveys to Uncover Problems

Obviously, creating a happy patient base is key to a successful practice. But how do you know if your patients are happy? Well, you ask them—in person, in focus groups, and online. The most effective way to gather this data, however, is through surveys. Surveys are an easy and efficient way to find out where you may be falling short.

And since a study in the Journal of Medical Practice Management found that 96 percent of all patient complaints are related to customer service rather than care or expertise, every person in your practice can be involved in making improvements.

Some of the most common complaints of patients include:

  • Excessive waiting times
  • Inadequate communication
  • Disorganized operations

Last month, I discussed the importance of reducing excessive wait times. You can read that article here. In this post, we will be exploring how to avoid those communication problems that lead to low patient satisfaction.

There are two main areas where communication tends to break down within a practice—between staff members and between the practice and the patient. How can you improve?

Communication within the Office

From the front desk to nurses to doctors and even to the billing department, it is critical that everyone within the practice works as a team to support your patients. Failure to do so leads to errors, confusion, and unhappy patients. Unfortunately, experts estimate that problems take place in 30 percent of all intra-team healthcare communication. There are some ways you can combat poor intra-office communication.

  1. Daily team huddles. A daily huddle meeting is not a full staff meeting. It is a quick (10-15 minute maximum) meeting where each member of your team gives a status report. It’s a great way to align your team and know what to expect that day. Do you know an incoming patient is celebrating a birthday? Just graduated? Do you have holes in your schedule? All of these types of issues can be addressed during a quick huddle.
  2. Escalation processes. While critical care specialties have an acute need for escalation processes, every practice can improve their communication by implementing a designated process for difficult or complex situations. Decide which situations in your individual practice may warrant extra care. Lay out a plan for handling and monitoring these situations. Include the way you refer patients to other offices and communication between practices as part of this process.
  3. Use of a standardized communication tool. While your daily huddle is a great way to get everyone together each day, it is also important to have ways to communicate in real time as new issues arise. Healthcare is definitely a dynamic environment—constantly changing throughout the day. The best way to make sure everyone stays on the same page during the busy day is through the use of an instant messaging app to make communication accessible at all times.

Communication Between Provider and Patient

The vast majority of providers work hard to communicate with patients. But the sad truth remains—patients struggle to remember your instructions. One study showed that patients only recalled 40 percent of the information they were given. Even worse, around half of what they did remember was actually remembered wrong. This means that the way information is conveyed to patients is just as important as the actual information communicated. There are a few tips to improving your communication with patients.

  1. Use open-ended questions. When speaking with a patient, make sure to ask questions that leave room for patients to expound on their thoughts. Yes or no questions often leave many things undiscussed.
  2. Read non-verbal cues. Much of the communication that takes place between a patient and their provider occurs through nonverbal communication. So pay close attention to the patient’s face and their body language. After explaining something to your patient, do they look confused? Are they worried? If so, there is a good chance they will not follow your instructions. Follow up based on the body language of each patient.
  3. Use the teach-back method. One of the best ways to ensure your patients have a good grasp of the things you’ve taught them is to ask them to teach you. This may take an extra few minutes, but can have a lasting impact on patient outcomes (and satisfaction!).
  4. Continue communication between visits. Communication does not end when a patient leaves the office. Continue sending educational tips and encouragement through regular newsletters, social media, and email.

Communication is one of (if not THE) most important component of the patient-provider relationship. It is also the cornerstone of the financial success of every practice. Effective communication helps practices and patients better understand each other and develop a closer bond. It makes for not just healthy—but happy—patients.

Solutionreach is a proud sponsor of Healthcare Scene. As the leading provider of patient relationship management solutions, Solutionreach is dedicated to helping practices improve the patient experience while saving time for providers and staff.

Meaningful Use Becomes Advancing Care Information Becomes Promoting Interoperability – MACRA Monday

Posted on May 7, 2018 I Written By

John Lynn is the Founder of the blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of and John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

This post is part of the MACRA Monday series of blog posts where we dive into the details of the MACRA Quality Payment Program (QPP) and related topics.

I’m quite sure you’ve all seen the news coming out from CMS about the name change for the various Medicare EHR Incentive and MACRA programs. I decided to not dive into it in depth here since so many organizations are already doing it. Plus, this is just the proposed rule. However, if you want some light reading, here’s all 1883 pages of the Promoting Interoperability proposed rule.

The name change of Meaningful Use/Advancing Care Information to Promoting Interoperability is an interesting way for CMS to signal what they want these programs to accomplish. It’s always been clear that ONC has wanted to find a way to promote interoperability. Now they literally have a program that will work to drive that goal.

I’ll admit that I’ve been a fan of this idea since May 15, 2014 when I suggested that ONC and CMS blow up meaningful use and just focus it on interoperability. It only took 4 years for them to figure this out.

While I still think this is directionally an interesting way to go, I’m afraid that the current programs aren’t a big enough incentive for CMS to really move the needle on interoperability. Plus, can CMS really create a rule that would push effect interoperability? I’m skeptical on both counts.

What’s interesting is that CMS could really push interoperability if it wanted. It could just say, if you want to get paid for Medicare, then you have to start sharing data. No doubt there are some complexities to this idea, but if CMS is really serious about promoting interoperability, that’s what they’d really do. That would move the needle much better than thousands of pages of rule making that won’t cause doctors and healthcare organizations to change.

What are your thoughts on the proposed rule? Were there big pieces of it that you saw and you think others should be watching? Are these changes going to relieve doctors of the massive reporting burden they should today? Please share your thoughts in the comments or on Twitter with @HealthcareScene

Giving Patients Test Results: Is It A Good Idea?

Posted on May 2, 2018 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

These days, the conventional wisdom is that sharing health data with patients increases their engagement, which then improves their health.  And certainly, that may well be the case. I can tell you that when one of my doctors refused to share lab data until he reviewed it, I chewed his practice manager out. (Not very nice, I realized later.)

Still, I was intrigued by a story in the Washington Post challenging the idea that sharing test results is always a good idea. The story argues that in some cases, sharing data with patients lead to confusion and fear, largely because the patient usually gets no guidance on what the results mean. They may not be prepared to receive this information, and if they can’t reach their doctor, they might panic.

According to a source quoted in the Post, virtually no one knows what the actual benefits and risks are associated with releasing test results. “There is just not enough information about how it should be done right,” said Hardeep Singh, an associate professor at Baylor College of Medicine who studies patients’ experiences in receiving test results from portals. “There are unintended consequences for not thinking it through.”

Despite these concerns, some healthcare providers have decided to release most test results, gambling that this will pay off over the long-term. One such provider is Geisinger Health System. Geisinger releases test results twice a day, four hours after the data is published through a portal. ‘The majority [of patients] want early access to the results, and they don’t want to be impeded,” said Ben Hohmuth, Geisinger’s associate chief medical informatics officer at Geisinger.

Geisinger’s bet may help it avoid needless patient harm. According to a study appearing in JAMA, between 8% and 26% of abnormal test results – including potential malignancies – aren’t followed up on in a timely matter. Giving them this data allows them to react quickly to abnormal test results and advocate for themselves.

It also seems that the Washington Post didn’t take the time to get to know CT Lin, CMIO at University of Colorado Health. He’s done extensive research into providing electronic access to results and other health data. His results are clear and cover the idea that releasing some results is harmful. There are a few results that are good to keep until the provider has talked to the patient. However, he found across a wide range of examples that releasing the results doesn’t cause any of the damages that many imagine in their minds.

Maybe its time for providers to begin studying patient responses to test result access even more. We’re not talking rocket science here. You could start with an informal survey of patients visiting one of your primary care clinics, asking them whether they use your portal and which features they consider most valuable.

If patients don’t rate access to test results highly, it doesn’t mean that you shouldn’t bother making them available.  It could be that at the moment, your test results aren’t displayed in a useful manner, or that the patients you talk with dislike the portal overall. We can work to learn this as well rather than imagining some scenario that could go bad. That’s easy in healthcare.

Regardless, the evidence suggests that at least some patients benefit from having this data, especially the ability to ask good questions about their health status. For the time being, that’s probably a good enough reason to keep the data flowing.

AI Tool Helps Physician Group Manage Prescription Refills

Posted on April 25, 2018 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

Most of the time, when we hear about AI projects people are talking about massive efforts spanning millions of records and many thousands of patients. A recent blog item, however, suggests that AI can be used to improve comparatively modest problems faced by physician groups as well.

The case profiled in the blog involves Western Massachusetts-based Valley Medical Group, which is using machine learning to manage medication refills. The group, which includes 115 providers across four centers, implemented a product known as Charlie, a cloud-based tool made by Healthfinch 18 months ago. (I should note, at this point, that the blog maintained is by athenaHealth, which probably has a partnership with Healthfinch. Moving on…)

Charlie is a cloud-based tool which automates the process of prescription refills by integrating with EHRs. Charlie processes refill requests much like a physician or pharmacist would, but more quickly and probably more thoroughly as well.

According to the blog item, Charlie pulls in refill requests from the practice’s EHR then adds relevant patient data to the requests. After doing so, Charlie then runs the requests through an evidence-based rules engine to detect whether the request is in protocol or out of protocol. It also detects duplicates. errors and other problems. Charlie can also absorb specific protocols which let it know what to look for in each refill request it processes.

After 18 months, Valley’s refill process is far more efficient. Of the 10,000 refill requests that Valley gets every month, 60% are handled by a clerical person and don’t involve a clinician. In addition, clerical staff workloads have been cut in half, according to the practice’s manager of healthcare informatics.

Another benefit Valley saw from rolling out Charlie with that they found out which certain problems lay. For example, practice leaders found out that 20% of monthly refill requests were duplicate requests. Prior to implementing the new tool, practice staff spent a lot of time investigating the requests or worse, filling them by accident.

This type of technology will probably do a lot for medium-sized to larger practices, but smaller ones probably can’t afford to invest in this kind of technology. I have no idea what Healthfinch charges for Charlie, but I doubt it’s cheap, and I’m guessing its competitors are charging a bundle for this stuff as well. What’s more, as I saw at #HIMSS18, vendors are still struggling to define the right AI posture and product roadmap, so even if you have a lot of cash buying AI is still a somewhat risky play.

Still, if you’re part of a small practice that’s rethinking its IT strategy, it’s good to know that technologies like Charlie exist. I have little doubt that over time — perhaps fairly soon — vendors will begin offering AI tools that your practice can afford. In the meantime, it wouldn’t hurt to identify processes which seem to be wasting a lot of time or failing to get good results. That way, when an affordable tool comes along to help you’ll be ready to go.

Making EHRs Easier to Use and Safer

Posted on April 23, 2018 I Written By

John Lynn is the Founder of the blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of and John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Most people know that I’m a sucker for a well done infographic. Of course, there are a lot of crappy infographics out there, but a well done one is easy to read, educates, and informs in a really nice way. That’s why I enjoyed this infographic from The PEW Charitable Trusts embedded below.

Some of the EHR usability it issues are well known things like alert fatigue and incomplete lab results. However, I was impressed that this list included things that are often hidden from many’s view like the unintended consequences of customization and autorefresh mix-ups. Of course, the infographic doesn’t talk about how to fix them, but in many of these cases awareness is what’s most needed to fix the problem.

What do you think of the infographic below? What stands out to you?

Cloud-Based EHRs With Analytics Options Popular With Larger Physician Groups

Posted on April 20, 2018 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

Ever wonder what large medical practices want from the EHRs these days? According to one study, the answer is “cloud-based systems with all the bells and whistles.”

Black Book Research just completed a six-month client satisfaction poll questioning members of large practices about their EHR preferences. The survey collected data from roughly 19,000 EHR users.

According to the survey, 30% of practices with more than 11 clinicians expect to replace their current EHR by 2021, primarily because they want a more customizable system. It’s not clear whether they are sure yet which vendors offer the best customization options, though it’s likely we’ll hear more about this soon enough.

Among groups planning an EHR replacement, what appealed to them most (with 93% ranking it as their preferred option) was cloud-based mobile solutions offering an array of analytical options. They’re looking for on-demand data and actionable insights into financial performance, compliance tracking and tools to manage contractual quality goals. Other popular features included telehealth/virtual support (87%) and speech recognition solutions for hands-free data entry (82%).

Among those practices that weren’t prepared for an EHR replacement, it seems that some are waiting to see how internal changes within Practice Fusion and eClinicalWorks play out. That’s not surprising given that both vendors boasted an over 93% customer loyalty level for Q1 2018.

The picture for practices with less than six or fewer physicians is considerably different, which shouldn’t surprise anybody given their lack of capital and staff time.  In many cases, these smaller practices haven’t optimized the EHRs they have in place, with many failing to use secure messaging, decision support and electronic data sharing or leverage tools that increase patient engagement.

Large practices and smaller ones do have a few things in common. Ninety-three percent of all sized medical and surgical practices using an installed, functional EHR system are using three basic EHR tools either frequently or always, specifically data repositories, order entry and results review.

On the other hand, few small to midsize groups use advanced features such as electronic messaging, clinical decision support, data sharing, patient engagement tools or interoperability support. Again, this is a world apart from the higher-end IT options the larger practices crave.

For the time being, the smaller practices may be able to hold their own. That being said, other surveys by Black Book suggest that the less-digitalized practices won’t be able to stay that way for long, at least if they want to keep the practice thriving.

A related 2018 Black Book survey of healthcare consumers concluded that 91% of patients under 50 prefer to work with digitally-based practices, especially practices that offer conductivity with other providers and modern portals giving them easy access to the health data via both phones and other devices.

Pace of Technological Innovation

Posted on April 18, 2018 I Written By

John Lynn is the Founder of the blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of and John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Sometimes you come across a chart that blows your mind and causes you to step back and reconsider your perspective. That’s what happened to me when I saw this chart shared by Sandeep Plum MD. The chart shows every major technological innovation in the last 150 years and how they have changed the way we work. More specifically, I think it shows how technology has improved the output we’re able to create.

This chart is pretty astonishing to consider. I’d like to dig into the data some more, but no doubt the concept of technology allowing us to produce more is something we’ve all experienced. The amount of leisure time we have compared to farmers even 150 years ago is astonishing to consider.

The problem in healthcare is that many people will wonder why healthcare hasn’t seen the same increase in output. The reality is that we have seen an improvement. The challenge in healthcare is the care we provide has become much more complex and the regulations around that care have become more complex as well. So, the increased output doesn’t feel the same because of these added complexities.

When thinking about healthcare complexity I always like to think about the country doctor back in the day that had the famous black bag and would visit you in your home. What diagnostic tools did he have? Not very much. What treatment options were available to him? Not very many (and a lot of them were very questionable). Compare that to today’s healthcare which has extremely sophisticated diagnostic tools and treatment options. Much of our increased output goes into navigating these tools and options.

The same is true for the increased regulation and reimbursement requirements. How did the country doc handle documentation and reimbursement? He might have written a few notes on a sheet of paper. Underscore the might. The country doc didn’t have to worry about insurance requirements, prior authorizations, CPT codes, or other complexities that make medical billing so time-consuming. He just asked the patient if they could pay. Sometimes that meant he was taking a pig home with him as payment, but he didn’t have to worry about insurance claims denials or sending out patient bills.

This is why I think so many doctors are frustrated by technology. The technology has improved their output, but in many ways that improved output has just been pushed to satisfy bureaucratic requirements as opposed to improving care and making the doctor more efficient.

The good news is that the pace of technological change will continue. It’s not too hard to see the day when a doctor goes into an exam room and the documentation that’s required for reimbursement and continuity of care just happens automatically. We’re not there yet, but the technology to make that a reality is. The only question is whether we can stem the increase in regulations that are eating away all that increased output that technology provides.

Value Based Care: We Need a Better Health IT System to Measure It

Posted on April 16, 2018 I Written By

Healthcare as a Human Right. Physician Suicide Loss Survivor. Janae writes about Artificial Intelligence, Virtual Reality, Data Analytics, Engagement and Investing in Healthcare. twitter: @coherencemed

At HIMSS this year in Las Vegas I looked at the nature of the EHR and if we have the current computing and data infrastructure to enable better value based care.  Our data capabilities are failing to allow providers to align reimbursement with great care delivery.

Under the premise of “what gets watched gets done”, we understand that improving care delivery will require us to align incentives with desired outcomes. The challenge is that, among the many ills plaguing our version of the truth mined from data found in electronic health records systems, reimbursement data presents the core issue for informatics departments across the country. To resolve this issue, we need documentation to reflect the care we are delivering, and we need care delivery to center around patient care. Health information management should be heavily involved in data capture. To truly improve care, we need better tools to measure it, and healthcare data is expanding to answer difficult questions about care delivery and cost.

Our first challenge is stemming the proliferation of extraneous documentation, and healthcare is still addressing this issue. What used to be written on a 3-by-5 index card (and sometimes via illegible doctor’s notes) is now a single point in a huge electronic record that is, surprisingly, not portable. Central to our issues around the cost of care, we have also seen that quantity is valued more than quality in care delivery.

Duplicated testing or unnecessary procedures are grimly accepted as standard practice within the business of medicine. Meaningless and siloed care delivery only helps this issue proliferate across the health of a population. To resolve these issues, our workflow and records need to capture the outcomes we are trying to obtain and must be customized for the incentives of every party.

Incentives for providers and hospital administrators should center around value: delivering the best outcomes, rather than doing more tests. Carefully mapping the processes of healthcare delivery and looking at the resource costs at the medical condition level, from the personnel costs of everyone involved to perform a medical procedure to the cost of the medical device itself, moves organizations closer to understanding total actual costs of care.  Maximizing value in healthcare–higher quality care at lower costs–involves a closer look and better understanding of costs at the medical condition level. Value and incentives alignment should provide the framework for health records infrastructure.

When you walk into Starbucks, your app will tell you what song is playing and offer options to get extra points based on what you usually order. Starbucks understands their value to the customer and the cost of their products to serve them. From the type of bean, to the seasonal paper cup, to the amount of time it takes to make the perfect pumpkin spice latte, Starbucks develops products with their audience in mind–and they know both how much this production costs and how much the user is willing to pay. The cost of each experience starts well before the purchase of the beverage. For Starbucks, they know their role is more than how many lattes they sell; it is to deliver a holistic experience; delight the customer each time.  

Healthcare has much to learn about careful cost analysis from the food and beverage retail industry, including how to use personalized medicine to deliver the best care. Value-Based Healthcare reporting will help the healthcare industry as a whole move beyond the catch-up game we currently play and be proactive in promoting health with a precise knowledge of individual needs and cost of care. The investment into quantifying healthcare delivery very precisely and defining personal treatment will have massive investments in the coming years and deliver better care at a lowered cost. Do current healthcare information systems and analytics have the capacity to record this type of cost analysis?

“Doctors want to deliver the best outcomes for their patients. They’re highly trained professionals. Value Based Healthcare allows you to implement a framework so every member of the care team operates at the top of his or her license.”

-Mahek Shah, MD of Harvard Business School.

These outcomes should be based on the population a given hospital serves, the group of people being treated, or at the medical condition level. Measures of good outcomes are dynamic and personalized to a population. One of the difficulties in healthcare is that while providers are working hard for the patient, healthcare systems are also working to make a profit.

It is possible to do well while doing good, but these two goals are seemingly in conflict within the billion dollar healthcare field. Providing as many services as possible in a fee-for-service-based system can obfuscate the goal of providing great healthcare. Many patients have seen multiple tests and unnecessary procedures that seem to be aligned with the incentive of getting more codes recorded for billing as opposed to better health outcomes for the patients.  

The work of Value Based Time Data Activity Based Costing can improve personalized delivery for delivery in underserved populations as well as for affluent populations. The World Health Organization (WHO) published the work of improving care delivery in Haiti. This picture of the care delivery team is population-specific. A young person after an accident will have different standards for what constitutes “right care right time right place” than a veteran with PTSD. Veterans might need different coverage than members of the general public, so value based care for a specific group of veterans might incorporate more mental health and behavioral health treatment than value based care serving the frail elderly, which could incorporate more palliative care and social (SDoH) care. Measuring costs with TDABC for that specific population would include not just the cost of specialists specific to each segment of the population, but of the entire team (social worker, nursing, nutritionist, psychologists) that is needed to deliver the right care, achieve the best outcomes, and meet the needs of the patient segment.

Healthcare systems are bombing providers and decision makers with information and trying to ferret out what that information really means. Where is it meaningful? Actionable? Process improvement teams for healthcare should look carefully at data with a solid strategy. This can start with cost analysis specific to given target populations. Frequently, the total cost of care delivery is not well understood, from the time spent at the clinic to prescribe a hip replacement to the time in the OR, to recovery time; capturing a better view includes accounting for every stage of care. Surgeons with better outcomes also have a lower total long-term cost of care, which impacts long-term expenses involved when viewing it through the lens of an entire care cycle. If you are a great surgeon–meaning your outcomes are better than others–you should get paid for it. The best care should be facilitated and compensated, rather than the greatest number of billing codes recorded. Capturing information about outcomes and care across multiple delivery areas means data must be more usable and more fluid than before.

Healthcare informatics systems should streamline the processes that are necessary to patient care and provider compensation. The beginning of this streamlined delivery involves capturing a picture of best care and mapping the cost of processes of care. The initial investment of TDABC in researching these care costs at the patient level can be a huge barrier for healthcare systems with small margins and limited resources. This alignment is an investment in your long-term viability and success.

Once you understand your underlying costs to deliver care, health systems will be better prepared to negotiate value-based payment contracts with payers and direct-to-employers. Pair your measurement of costs with your outcomes. Integrating care delivery with outcomes standards has improved in recent times through ICHOM. Medical systems need to incentivize health if healthy patients are a priority.  The analysis of specific costs to a system needs a better reporting system than a charge master or traditional EHR which is strongly designed toward recording fee for service work. We must align or incentives and our health IT with our desired outcomes in healthcare. The more billing codes I can create in an electronic health record, the more I am reimbursed. Reimbursement alignment should match desired outcomes and physicians operating at top of their license.

Under value-based care, health and well-being become a priority whereby often in the fee-for-service model, sickness can be the priority because you get paid by doing more interventions, which may not lead to the best outcomes. The careful measurement of care (i.e. TDABC) paired with standards of best care will improve care delivery and reduce the cost of that care delivery. Insights about improved models and standards of care for outcomes and healthcare delivery allow patients, providers, and administrators to align with the shared goal of healthier patient populations. I am looking forward to the data infrastructure to catch up with these goals of better care delivery and a great patient experience.