When will technology actually transform health care?

After decades of bravely keeping them at bay, health care is beginning to be overwhelmed by “fast, cheap, and out of control” new technologies, from BYOD (“bring your own device”) tablets in the operating room, to apps and dongles that turn your smart phone into a Star Trek tricorder, to 3-D printed skulls. (No, not a souvenir of the Grateful Dead, a Harley decoration or a pastry for the Mexican Dia de Los Muertos, but an actual skullcap to repair someone’s head. Take measurements from a scan, set to work in a CAD/CAM program, press a button and boom! There you have it: new ear-to-ear skull top, ready for implant.)

Each new category, we are told, will revolutionize health care, making it orders of magnitude better and far less expensive. Yet the experience of the last three decades is that each new technology only adds complexity and expense.

So what will it be? Will some of these new technologies actually transform health care? Which ones? How can we know?

There is an answer, but it does not lie in the technologies. It lies in the economics. It lies in the reason we have so much waste in health care. We have so much waste because we get paid for it.

Yes, it’s that simple. In an insurance-supported fee-for-service system, we don’t get paid to solve problems. We get paid to do stuff that might solve a problem. The more stuff we do, and the more complex the stuff we do, the more impressive the machines we use, the more we get paid.

A tale of a wasteful technology

A few presidencies back, I was at a medical conference at a resort on a hilltop near San Diego. I was invited into a trailer to see a demo of a marvelous new technology: computer-aided mammography. I had never even taken a close look at a mammogram, so I was immediately impressed with how difficult it is to pick possible tumors out of the cloudy images. The computer could show you the possibilities, easy as pie, drawing little circles around each suspicious nodule.

But, I asked, will people trust a computer to do such an important job?

Oh, the computer is just helping, I was told. All the scans will be seen by a human radiologist. The computer just makes sure the radiologist does not miss any possibilities.

I thought, if you have a radiologist looking at every scan anyway, why bother with the computer program? Are skilled radiologists in the habit of missing a lot of possible tumors? From the sound of it, I thought what we would get is a lot of false positives, unnecessary callbacks and biopsies, and a lot of unnecessarily worried women. After all, if the computer says something might be a tumor, now the radiologist is put in the position of proving that it isn’t.

I didn’t see any reason that this technology would catch on. I didn’t see it because the reason was not in the technology, it was in the economics.

Years later, as we are trending toward standardizing on this technology across the industry, the results of various studies have shown exactly what I suspected they would: lots of false positives, callbacks and biopsies, and not one tumor that would not have been found without the computer. Not one. At an added cost trending toward half a billion dollars per year.

It caught on because it sounds good, sounds real high-tech, gives you bragging rights and because you can charge for the extra expense and complexity. There are codes for it. The unnecessary callbacks and biopsies are unfortunate, but they are also a revenue stream — which the customer is not paying for anyway. It’s nothing personal, it’s just business. Of course, by the time the results are in saying that they do no good at all, you’ve got all this sunk cost you have to amortize over the increased payments you can get. No way you’re going to put all that fancy equipment in the dumpster just because it fails to do what you bought it for.

Is this normal? Or an aberration? Neither. It certainly does not stand for all technological advances in health care. Many advances are not only highly effective, they are highly cost effective. Laparoscopic surgery is a great example — smaller wounds, quicker surgeries, lower infection rates, what’s not to like? But a shockingly large number of technological advances follow this pattern: Unproven expensive technologies that seem like they might be helpful, or are helpful for special rare cases, adopted broadly across health care in a big-money trance dance with Death Star tech.

Cui bono?

But that is in health-care-as-it-has-been, not in health-care-as-it-will be. How we think about the impact of new technologies is bound up with the changing economics of health care.

Under a fee-for-service system the questions about a new technology are as follows: “Is it plausible that it might be helpful?”, “What are the startup costs in capital and in learning curve?” And, “Can we bill for it? Can we recoup the costs in added revenue?”

In any payment regime that varies at all from strict fee for service (bundled payments, any kind of risk situation), whether we can bill for it becomes irrelevant. The focus will be much more on efficiency and effectiveness: Does it really work? Does it solve a problem? Whose problem?

Many times, extra complexity and waste are added to the system for the convenience and profit of practitioners, not for the good of patients. For example, why do gastroenterologists like to have anaesthesiologists assisting at colonoscopies, when the drugs used (Versed and fentanyl) do not provoke general anaesthesia and can be administered by any doctor? The reason is simple: It turns a 30-minute procedure into a 20-minute procedure. The gastroenterologist can do three per hour instead of two per hour. In the volume-based health care economy, they make more money. The use of the anaesthesiologist adds an average of $400 per procedure to the cost without adding any benefit, lowering the value to the patient. Altogether this one practice adds an estimated $1.1 billion of waste to the health care economy every year.

So in thinking about whether these new technologies will propagate across health care, we can ask how exactly they will fit into the ecology of health care, who will benefit from their use, and how that benefit will tie in to the micro economy of health care in that system, with those practitioners and those patients.

Change is systemic

A cardiologist in an examining room whips out his iPhone and snaps it into what looks like a special cover. He hands it to the patient, shows the patient where to place his fingers on the back of the cover, and in seconds the patient’s EKG appears on the screen. Dr. Eric Topol, speaking at last summer’s Health Forum Summit, performs a sonogram on himself on stage using a cheap handheld device. These things are easy to imagine in isolation, as something a single doctor or nurse might do with an individual patient.

In reality, in most of health care, the things we need to do to incorporate such technologies are systemic. To be secure, reliable, HIPAA-compliant and connected to the EMR, they can’t be used randomly by the clinicians who happen to like them. They must be tied into and supported by the IT infrastructure.

Similarly, in moving from “volume” to “value” we are talking about changes that don’t happen at the level of a single doctor or single patient. In most cases we cannot treat the patients for whom we are at risk differently from those we are treating on a fee-for-service basis. When you are paid differently, you are producing a new product. When you are producing a new product, you are a beginner. The shift from “volume” to “value” demands and dictates broad systemic changes in revenue streams, which dictate changes in business models, compensation regimes and governance structures. Getting good at these new businesses means changing practice patterns, collaboration models and cultures.

Hospitals, integrated health systems and medical groups face a stark choice: They can either abandon the growing part of the market that demands a “value” business arrangement and stick to the shrinking island represented by old-fashioned “volume” arrangements. Or they can transform their entire business.

The use and propagation of these new low-cost technologies are entirely wrapped up in that decision. In old-fashioned fee-for-service systems, they will be used only where their use can be billed for, or where they lower the internal costs of something that can be billed for. They will not be used to replace existing services that can be billed at higher rates.

“That’s a lot of money”

Dr. Topol in his talks likes to make the point that there are over 20 million echocardiograms done in the United States every year at an average billing of $800. As he puts it, “Twenty million times $800 — that’s a lot of money. And probably 70 to 80 percent of them will not need to be done, because they can be done as a regular part of the patient encounter.”

Precisely: That is a lot of money. In fact, it’s a big revenue stream. It’s difficult to imagine that fee-for-service systems for which various types of imaging, scanning and tests represent large revenue streams are going to be early adopters of such technologies that diminish the revenue streams to revenue trickles. When you are paid for waste, being inefficient is a business strategy.

In the “value” ecology of the next health care, the questions are much more straightforward: Does it work? Does the technology make diagnosis and treatment faster, more effective, more efficient? Does it make it vastly cheaper?

Imagine replacement bones (and matrices for regrowing bones) 3-D printed to order. Imagine replacement knee joints, now sold at an average price of €7000 in Europe and $21,000 in the United States, 3-D printed to order. (Imagine how ferociously the legacy makers of implants will resist this change, and how disruptive it will be to that part of the industry.)

Imagine the relationship between the doctor, the nurse and the patient with multiple chronic conditions, now a matter of a visit every now and then, turned into a constant conversation through mobile monitoring.

Imagine a patient at risk for heart attack receiving a special message accompanied by a special ring tone on his cell phone — a message initiated by nano sensors in his bloodstream — warning him of an impending heart attack, giving him time to get to medical care.

Imagine all of this embedded in a system that is redesigned around multiple, distributed, inexpensive sensors, apps and communication devices all supporting strong, trusted relationships between clinicians and patients.

Imagine all this technological change supported with vigor and ferocity because the medical organizations are no longer paid for the volume they manage to push through the doors, but for the extraordinary value they bring to the populations they serve.

That’s the connect-the-dots picture of a radically changed, mobile, tech-enabled, seamless health care that is not only seriously better but far cheaper than what we have today.

Joe Flower is a healthcare speaker, writer, and consultant who blogs at Healthcare Futurist: Joe Flower

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  • SteveCaley

    The change will come when the tech entrepreneurs stop offering solutions and start asking questions. Every patient with their own EKG machine on their iPhone? Great. Who’s going to read them – what do they mean? They solve nothing, but sound wow.

    • DeceasedMD1

      you mean they don’t have the answer? eye roll.
      you make a great point.

  • http://onhealthtech.blogspot.com Margalit Gur-Arie

    You know, I’m starting to think that all this imagery and talk of nanotechnology coming soon in a couple hundred years if, and only if, we stop paying fair fees for honest services, are deliberate smoke screens and shiny things dangled in front of an increasingly gullible public to divert attention from the fact that we are being robbed by big “health care” corporations.

    I am not inclined to wait for nanorobots and imaginary “constant conversation” with doctors and nurses who don’t get paid for work.
    How about we use an invention from about 5000 years ago? Zero. How about we zero out profit taking from health care? We certainly have the technology to do that today. Right this minute.

    There are no nano-iPhones in Germany, Switzerland, France, etc. etc. etc.

  • Dr. Drake Ramoray

    In defense of the author the title does say transform (note it doesn’t say improve.)

    In the following example the printer will represent my EMR. As you can see, sometimes a low tech solution is the best solution.


  • BionAlexHoward

    I don’t know what you guys are doing, but I’m building a micron-resolution 3d printer to make microfluidics which produce targeted nanocapsules for gene therapy. If we open-source genome engineering technology, we can start curing many chronic diseases in one shot…it’s all about cheap bionanotech. That’s how we make healthcare affordable. We cure stuff for real with cell programming.

    • SteveCaley

      Yeah, I tried that, but it rotated 90° into hyperspace and disappeared. SO I can’t find it.
      Dude, where’s my microfluidics nanocapsules?

      • SteveCaley

        PS: I do get to peek ahead at the next comment by BAH, even if everyone else can’t. I’ll give a reference to the last chapter in Joseph Weisenbaum’s book Computer Power and Human Reason, and specifically the chapter on The Imperialism of Instrumental Reasoning.

        • DeceasedMD1

          BAH must be related to the medical student who believed in “creative destructionism”.

          Haven’t read the book yet but it does sound like an empire full of superiority and dominance all constructed through rational computer driven scientific reasoning. Does that chapter fit any trends you see in recent medical technology?

          • SteveCaley

            Weisenbaum was a deep-thinking moral philosopher who was bothered by the dangers of technology; a late-comer to the field, and he certainly followed an odd path to it, being a professor of Computer Science and Engineering at MIT.
            He offered deep ethical statements on the dangers of “thinking machines,” including the physical blending or insertion of artificial machines into humans, literally and figuratively. It degrades humanity.
            I am sure that we are only a few years out from American healthcare insisting upon the same RFID chip that we implant pets with, for every human. If this ever happens here, we should simply skip the “human” terms and realize we’re all working on principles in primate veterinary medicine.
            It’s not just that societies that destroy their own humanity shouldn’t. Societies which destroy their own humanity DIE.

          • DeceasedMD1

            Steve, check this out. RFID chip idea is closer than you think. Proteus Digital Health, a start up in Silicon Valley, is FDA approved for an ingestible sensor.

            “The chip works by being imbedded into a pill. Ingest it at the same time that you take your medication and it will go to work inside you, recording the time you took your dose. It transmits that information through your skin to a stick-on patch, which in turn sends the data to a mobile phone application and any other devices you authorize.”

            Think of all the implications of this. And no doubt Big Pharma would fund this to ensure adherence to meds such as in the elderly.

            Where is there a Weisenbaum type in today’s age? He sounded not only like a very bright guy but ethical which seems to be lacking at the moment.

            I think there were some strong indicators back then including novels like 1984 that predicted this sort of thing, just happening 30 years later. lucky us. And yes well put about societies that destroy their own humanity die. Why do they not understand that?

          • SteveCaley

            Better-organized and more sophisticated societies have died, lots of them. The Eastern Roman Empire/Byzantine Empire. The old Western Roman Empire. Civilizations are mortal, and die from senility and feebleness just the same way as individual humans do. Stupidity is just the arrogant failure to deal with Reality; and we have that in spades.

  • DeceasedMD1

    Several companies are now working on to create ‘smart pills’… medications that are synchronized with mobile devices after they are ingested. Proteus Digital Health of Redwood City, California, has developed a pill that can send a text when it enters a patient’s stomach. This will relieve caregivers by confirming that the patient has taken the medicines on time.

    How the smart pill works:

    Patient swallows the pill

    Each pill contains a sensor made of copper, magnesium and silicon. The sensor is a 1 square mm chip, roughly the size of a grain of sand, that is embedded into the pill. The information is relayed by this sensor.

    Stomach fluid activates the sensor

    Instead of a battery, the sensor is powered by the stomach fluid. It sends data to a disposable patch worn on a patient’s rib cage. The sensor deactivates after few minutes and later passes naturally through the digestive system.

    Patch collects the data

    The data includes vital information such as the time of ingestion, the patient’s heart rate, body temperature and other activities, giving physicians a more complete picture of how patients are faring overall.

    Patch sends the data to a smartphone

    The stick-on patch sends the data to a mobile phone application and any other devices you authorize.

    The pill also informs a patient when to take the next dose of the medication and warns if the regimen is not being followed. The system’s goal is to overcome the forgetful impulses of human mind.”

    And I thought 1984 was just a novel…

  • SteveCaley

    I have seen the anesthesiology argument before. Either gastroenterologists are competent to know what they need for a colonoscopy, or they are not and need to be told. That’s the summary. It appears that they, and physicians in general, need total scrutiny to keep them from stealing out of the cookie jar.
    Society has become very uncomfortable with the idea of the individual provider, and independent decisions being made. Decisions by committee, with an appropriate blame outflow channel if something goes wrong, and one size fits all.
    If you run it out to its logical premises, the future of medicine is only the past of medicine from time immemorial to the last few centuries. Watch carefully and no nothing, and the patient will either recover or die.

  • SteveCaley

    I believe that all those things that you mentioned are grotesquely immoral, offensive to humanity, and wrong to the point that we should forbid them.
    I mentioned Weisenbaum below. We create an irrecoverable error when we use our reason as a slave to what can be done. Instrumental reasoning prevails in fascist thought – when we are told to do something, we go about it in the most efficient way.
    Human lives should not be fodder for testing human ideas. They certainly are in North Korea.
    Technology does not tend to foster humanity. Look at the American communities of 75 years ago, and that of today. If we stop striving to be human, we will become “Machine men with machine minds,” as Charlie Chaplin so eloquently put it in The Great Dictator.
    As a doctor, it is my duty to fight such atrocities.

    • Karen Ronk

      So, not looking forward to the Rise of The Cybermen, I take it?

      • SteveCaley

        It’s not safe. I hate to see our civilization go under by doing such stupid things as the cult of technopathy.

  • SteveCaley

    Ah, then we fundamentally disagree. We do have humans who exceed the lifetime survival projections for human primates (i.e. the elderly.) If they are machines, that is very bad and lossy.
    The human survival curve is approximated by
    certain functions like the Weibull distribution or the Gompertz–Makeham distribution. In planning for machine lifetimes, there is a time at which cost/survival parameters become negative (unprofitable.)
    If humans are machines, then, would you not then recommend stopping unprofitable care for the elderly and chronically ill? The impaired, or societally unproductive? That is the line of reasoning which your axioms invoke.
    Given the fiscal and economic wrongs committed by the Baby Boomer generation, putting the next generation in debt, isn’t it reasonable to factor their unprofitability into their cost equations for healthcare needs?
    All this follows from the argument of instrumental reason.

  • DeceasedMD1

    I don’t think that technology is going to fix costs in medicine, as even if you find the fountain of youth, the current problem in our system is dealing with greed for one. Right now there is a ton of price gouging for lots of inexpensive tests or procedures, meds etc. Guaranteed if you find a cheap way, the price will likely be made unaffordable to most.
    Jonas Salk who is responsible for the polio vaccine wanted to eradicate the disease and when asked if he was going to patent his vaccine, he said ” You can’t patent the sun.”
    Times have changed and everyone wants to make huge profits on HC which end up rationing. And yes even if it is cheap to make.

  • SteveCaley

    I do commend your Postmodernist approach, but there is a sad aspect of history…well, referred to as History, actually… When power is concentrated by well-meaning people with radical vision to do good things, bad people usually take over.
    Good and wise people might start a population genetics study for the prevalence of
    hexosaminidase A deficiency.
    Instrumental reasoning would say that is a
    good thing. the triumph of information through technology would say that it’s a good thing to know the distribution of this awful disease.
    And once it’s recorded, the record cannot be erased.
    In one person’s hands, such as study quantitates population genetics for a previously untreatable disease, with the intent of curing it.
    And in another set of hands – a DNA fingerprint for Jewishness.
    I was appalled that a British video tabloid reported, snickering, that DNA testing proved that Eva Braun had Jewish blood. But until we give up the tendency to talk about such foolish and harmful things as “purity of blood,” we have no business advancing our science beyond the scope of capacity of our culture. Yes, the Nazi’s are gone – but the stupidity of the idea remains.
    Had we changed all that much since WWII, nobody would care about such nonsense. But now, technology has given us this gift. We must be wary of what we CAN do.

  • DeceasedMD1

    Not quite sure how does that apply to medicine? Open source in what regard? Personalized medicine is very individual. or are you referring to future medical technology for open source?