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Cisco Systems, Inc.

How Internet-enabled communication among consumers, providers, and payers will drivelower overall costs and better patient care.

A renewed collaboration among health care consumers, payers, and providers is emerging. This “triangle of health care transformation” has the potential to improve personal health status, balance the responsibility for health consumption, and dramatically reduce U.S. health care costs, which are projected to reach $3.1 trillion by 2012.

And the heartbeat of this triangle? Internet-enabled services (see Figure 1). They are driving breakthroughs ranging from the convenient – virtual house calls, patient self-health management – to the extraordinary – telerobotic surgeries performed from Sydney to Santa Fe. Although traditionally slower to adopt technology than other industries, health care is looking more and more like science fiction materialized – yet returning to the individualized, attentive care practiced by the “old school” family doctor.

For example, in Santa Barbara, Calif., studies have shown that one of seven hospital admissions resulted from missing information in ERs or primary care settings. Here’s how Internet-enabled services respond: Picture a nurse with a handheld device on one side of a rushing gurney instant messaging with the patient’s insurance plan case manager, while the physician on the other side is downloading and reviewing that patient’s complete medical record from a shared community health database. Duplicate procedures are avoided, reducing costs and improving quality of care.

Virtual collaboration between health care experts also defines a new level in attentive care, as patients no longer need to rely solely on local physicians, or travel hundreds of miles to receive quality care or consult with needed specialists. And insurance companies are paying closer attention to both customer needs and their bottom line by enabling participants to individualize their insurance plans, creating cost efficiencies not seen in decades.

With scenarios like these only slowly gaining footholds in the health care industry, will technological breakthroughs drive lasting change? What will lasting change look like? And what is the ultimate potential for Internet-based solutions to create collaborative, balanced relationships, better care, and lower costs? The industry success stories to date; the continued evolution of faster, more efficient technologies; the absolute necessity to drive down health costs; and our basic human instinct to heal and thrive mean technological breakthroughs will likely continue. Is the sky the limit? Let’s examine the impact in today’s environment.

The Triangle Forms

Consumers: The New Health Care Experts

Consumers are no longer relegated to the role of passive participants in the health system. For decades, physicians made medical decisions, determined treatment plans, and referred patients for service with little consideration for cost or outcomes. Most often, patients accepted their physician’s guidance without question. With the advent of managed care, power shifted to payers through closed provider panels and prior authorization. Today, the abundance of health information available on the Internet has informed and empowered the general public, and the public is taking charge.

The 2002 Harris Poll #21 for the Health Information and Management Systems Society showed that 60 percent of Americans surveyed use the Internet for health advice. According to a 2002 Forrester Research survey regarding an online physician consultation service offered by Blue Shield of California and RelayHealth (addressed later in this paper), 63 percent of North American online consumers supplement their doctors’ efforts by researching their own conditions. Twenty-five percent use the Web to seek advice from other patients with similar conditions. This consumerism movement is redefining the patient-physician relationship and how health services are delivered. In fact, 9 percent of survey participants would like to communicate with their physicians online and 77 percent would like e-answers to medical questions.

Consumers’ need for accessible health care information is further fueled as they evaluate new health insurance offerings, are required to self-insure, or are forced to pay out of pocket (44 million uninsured Americans do so today). To combat rising health care costs, employers are implementing higher copays and introducing new insurance choices such as consumer-driven health plans. These plans require, or reward, consumers willing to take personal responsibility for their health and use Webbased self-service offered by the plans. More and more of the market is shopping for services based on price, provider quality, and individual needs. So who is managing care? For the first time it is the patient, the physician, and the health plan.

Providers: New Ways of Reaching Higher Levels of Cost-effective, Convenient Care

A 1984 Health Affairs article, “Dealing with Medical Practice Variations: A Proposalfor Action” by J. E. Wennberg, challenged physicians to significantly reduce national health care costs by eliminating dramatic variations in medical practice. Wennberg suggested measuring the quality of care with resource investment to create a national standard practice based on evidence. In this scenario, electronic medical records and computerized physician order entry systems with clinical decision support would help reduce variations in care. The next step is national clinical guidelines for high-cost conditions embedded within online tools to raise the level of care to the best-practice level.

Technology-enabled physicians can also re-invent themselves as true service-oriented businesses. Health care consumers appear as ready for e-care from their providers as they are for e-services from Amazon. Consider the conventional physician office visit: The traditional visit is optimal for patients who need to be seen in person and are well served in a 20- to 30-minute timeframe. This model is overkill for those who simply want questions answered, and is insufficient for first-time patients with new diagnoses needing a longer examination.

Physicians have taken notice, and new ways to deliver care, such as email consultations and televisits using video cameras on personal computers, are emerging. This new care delivery allows physicians to make house calls without leaving their office, saving time and lowering costs for both patient and physician. Remote care allows physicians to be more involved with patients over time, as well as facilitating earlier detection of medical issues. Seventy-eight percent of patients cited in a 2003 RelayHealth Provider Survey rated electronic communication with their physician as excellent. Will an ever wider and deeper cross section of payers support this high-tech, low-touch trend? If so, will reimbursement for electronic care move to the mainstream?

Payers: The Extreme Makeover

Managed care controlled costs and defined payer relationships between providers and consumers for most of the 1990s – at a price. Today, payers are striving to rebuild damaged provider relationships and negative consumer perceptions at the same time they are battling for consumer loyalty and (still) fighting to control costs.

According to a 2002 article in Disease Management on chronic disease management in the home, conditions such as asthma, diabetes, and heart disease represent the bulk of payer medical costs, consuming almost one-third of every dollar. Prevention, education, and early intervention are accepted approaches to reduce short- and long-term costs. Innovative technologies, such as pacemakers that transmit data over the Internet, support proactive treatment for problems discovered before a crisis occurs. In addition, e-learning technology enables educational push, automating access to educational programs based upon a person’s lifestyle, diagnosis, or care history, potentially leading to lower health care consumption and costs.

Payers are also recognizing today’s retail health care consumer. New insurance plan options allow consumers to choose from a menu best suited to their lifestyle, culture, risk adversity, and ability to pay. A recent survey of employers (Watson Wyatt and the Washington Business Group on Health) notes that 43 percent of respondents expect increased levels of choice in their offered plans. Self-service enrollment, online personal health records, and online financial transactions are considered minimum services. Boutique offerings such as luxury hospital suites, catered meals, around-the-clock private nursing, etc., that cater to those willing and able to pay for higher levels of service will become the new standard.

The Technology Enabling Transformation

Technology is inciting systematic health care transformation, specifically addressing concerns on all sides of the triangle by leveraging the ubiquity and cost-effectiveness of the Internet. “If you get the infrastructure right, anything is possible.” Carly Fiorina, CEO of Hewlett-Packard, highlights the need for a dependable, resilient network to capitalize on technology’s infinite benefits – essential in an industry based on life or death outcomes. The heartbeat of health care transformation then begins with a network foundation and builds up to the applications specifically addressing key concerns common among consumers, providers, and payers:

• Responsive, individualized health care;
• Driving down costs while improving care quality;
• Real-time access to relevant information; and
• Anytime, anywhere care.

The Foundation: Connecting

The Internet (with broadband access to support the data and image-rich files typical in health care) and virtual private networks (or VPNs, enabling secure access to sensitive information from remote locations) make up the lifeline for sharing information when and where it is needed most. In health matters, realtime access to both comprehensive archived and late-breaking data translates to more informed decision making by consumers, providers, and payers, translating to higher levels of care at reduced costs (see Figure 2).

The Middle Layer: Communicating

With a solid network foundation in place, the triangle is strengthened through consumer, payer, and provider interaction. Implementation and integration of clinical and business applications facilitate this interaction, resulting in consumer empowerment and service enhancement. Networks of health plans and providers are hosting secure Web sites where consumers can check lab results, schedule appointments, and review their health record (see Figure 3).

The Top Layer: Collaborating

New health care coalitions are forming that represent the entire health care spectrum – public health, hospital systems, physicians, payers, consumers, and clinical researchers – and that are built on the foundation of Intranet connectivity and online applications. Collaboration has the greatest potential to reduce costs and improve the health status of entire populations (see Figure 4).

These findings beg the question: If such compelling evidence exists supporting technology’s ability to address key health care concerns, what could explain the reluctance by an entire industry to adopt the enabling technologies at a more rapid pace?

Waves of Transformation Migration

With regard to health care technology adoption, a slow migration path exists from isolated points of automation to interintegration. Referencing Figure 5, the first wave of health care transformation migration in claims processing is almost complete. Most all organizations have enabled departmental operations with some form of technology, albeit isolated services.

Best-practice industry leaders (with regard to IT) represent the second wave, that of connected services between organizations and consumers. This group is rarified; some estimate that adoption of technologies such as e-prescribing and consumer self-service portals is no more than 10 percent (Cisco, 2004). And very few industry leaders (fewer than 1 percent) are experimenting with integrated information technology that supports inter-enterprise information sharing.

This phenomenon can be attributed to the reality of the hospital environment itself, which shows diminishing revenues and extremely slim margins. Faced with reducing costs and improving care, risk-averse decision makers will more quickly fund solutions showing obvious and immediate gain; for example, new diagnostic equipment that physicians argue will reduce process time with more accurate results. On first blush, IT expenditures for infrastructure and integrated technology applications just don’t scream tangible improvement the way a faster, quieter MRI with greater diagnostic capabilities can. It is up to technology developers to continue partnering with less risk-averse health care organizations to demonstrate the quantifiable wins Internet-enabled services are currently achieving on all sides of the triangle.

In a 2003 report, Healthcare Information Exchange and Interoperability, the Center for Information Technology Leadership states that digitization of information flow between payers and providers, coupled with seamless integration of processes, could yield more than $87 billion in annual savings after full implementation. This is an example of the third wave, where the greatest potential exists for improving costs and enhancing care – and therefore where health care technology developers will be focusing their time and efforts in the next decade and beyond.

The Triangle: The Portal To Health Care’s Future

Where might Internet technology and industry drivers take consumers, payers, and providers in the future? Today’s health consumers are educating themselves to have control in health decisions and consider alternative choices. Tomorrow, health knowledge may be a mandatory consideration in health insurance costs. Imagine health knowledge as a variable in individual or population health risk profiles, in addition to past health expenses and demographic profiling.

Imagine a world where payers post health knowledge tests online. Consumers who successfully complete the test will receive lower premiums. Those with knowledge gaps may receive online courses, customized for their knowledge gaps, delivered directly from their health plan. And those who complete online courses about high-risk behaviors, chronic conditions, or how to compare provider quality may receive lower copays from their insurance plan.

In a new world of automated medicine, who will manage care? Not the paternalist physician of old. Not the insurance plan from a bygone age of controlled choice and clinical oversight. Not the consumer, who will never possess the complete required expertise or bear the entire financial burden. Responsibility for cost, quality, and consumption will truly be a trinity, with balanced responsibility and collaboration occurring within the triangle of health care communication and, therefore, transformation.