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Could Technology Be Driving The High Cost of Healthcare?

by Fred Pennic 05/29/2012 1 Comment

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Written by Ahmed Mori at Care Cloud:

You wouldn’t know it from the overwhelming amount of positive press it receives, but amplified use of technology in healthcare could be one of the driving factors behind the high cost of healthcare in the United States.

However, it’s not the technology that you’re thinking of. According to a new study from the Commonwealth Fund, the U.S. healthcare system is fraught with high obesity rates, higher prices and more extensive use of medical technology like MRIs and CT exams.

 

So, despite the fact that the U.S. system spends more on healthcare than 12 other industrialized countries included in the study, why doesn’t it provide notably superior care? Or better yet, why is it spending so much?

High obesity rates and their associated medical costs represent a significant spike in healthcare costs. However, the country’s young population and considerably smaller percentage of smokers relative to the other countries in the study could offset the obesity spending.

Higher prices are more difficult to tackle. If you compare the U.S. healthcare system to Japan’s model – which controls healthcare costs via a government budgeted fee-for-service system that doesn’t restrict access to patients to contain costs – you’ll notice a rather stark contrast between the ways both systems operate, suggesting that the U.S.’s problems may lie at the procedural level.

When suggesting a remedy for America’s backwards system, Commonwealth Fund president Karen Davis points to the Affordable Care Act.

“The United States must use all of the tools provided by [the ACA], including new methods of organizing, delivery and paying for healthcare that will help to slow the growth of healthcare costs, while improving quality,” said Davis.

Things get a little murkier with technology, however, because much of the exorbitant spending in the sector is tied in to the fluctuating price of healthcare services. So in other words, an MRI in one clinic may be very differently priced in another. Your insurance plan also plays a prominent role.

While some of the abovementioned holes in the system are to blame, there is also the way in which technology-reliant healthcare services are delivered. However daunting the regulation of medical technology may seem, it’s not a procedural impossibility.

After examining the results of the study, disorganization seems to be a major contributing factor.

Enter healthcare information technology. Sure, sometimes electronic health records and revenue cycle management systems are too readily touted as the panacea to healthcare’s most pressing issues. But it’s tough to deny that they’re a huge step in the right direction, and they’re built to keep doctors tidy.

These systems are improving the way healthcare is delivered, improving patient safety, ensuring higher precision in the medical billing cycle to ensure less money slips between the cracks at practices and hospitals, providing better access to imaging test results, and making medical offices virtually paperless – which could save the system over $150 billion yearly.

Tack on another $140 to $240 billion in healthcare savings and improved health outcomes over the next ten years directly as a result of ePrescriptions, and the outlook is vastly different.

A SureScripts study saw a 10% increase in first-fill medication adherence and higher prescription delivery rates, which translates to fewer doctor visits and reduced risks of hospitalization. Oh, and decreased healthcare costs, naturally.

Information technology in healthcare means the same work is performed with fewer resources, equating to efficiency savings. According to a RAND study, the potential savings for both inpatient and outpatient care could total in the hundreds of billions if most hospitals and doctors’ offices adopted health IT.

So why not fight tech with tech?

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Tagged With: Care Cloud, Cloud EMR, healthcare spending, High Cost of Healthcare, revenue cycle management systems

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