Can technology bend the health care cost curve?

Today’s healthcare tab in the U.S. exceeds some $2.5 trillion, and there are plenty of wasted greenbacks in that eye-popping figure. Information technology has the potential to reduce waste, and that’s why Raghu Santanam is researching healthcare uses of IT and their impacts. This professor of information systems at the W. P. Carey School of Business recently used his one-year sabbatical from teaching to conduct studies at the Mayo Clinic’s Center for the Science of Healthcare Delivery.

Between 1999 and 2009, the average U.S. salary rose 38 percent. During the same timeframe, healthcare costs jumped 131 percent, according to the nonprofit, research-focused Institute of Medicine (IOM) within the National Academy of Sciences. If other costs had grown as quickly as healthcare has since 1945, IOM researchers calculate that a carton of eggs would cost $55 and you’d fork over $134 for a dozen oranges.

Today’s healthcare tab in the U.S. exceeds some $2.5 trillion, and there are plenty of wasted greenbacks in that eye-popping figure. Among the misspent dollars, IOM scholars cite $130 billion worth of inefficiently delivered services, $55 billion missed prevention opportunities and $190 in excessive administrative costs.

Information technology has the potential to reduce waste in these areas, and that’s why Raghu Santanam is researching healthcare uses of IT and their impacts. This professor of information systems at the W. P. Carey School of Business recently used his one-year sabbatical from teaching to conduct studies at the Mayo Clinic’s Center for the Science of Healthcare Delivery (CSHD).

The mission of the CSHD is to develop patient-centric service models and directly engage patients to co-create value in the healthcare delivery process. How will healthcare providers achieve these goals? They’re still trying to figure that out, which is where Santanam’s research savvy comes into play. Studies he now has underway include different ways to share and gather health-related information using patient portals, new costing approaches, as well as a pilot project for dermatology consultations via smartphone.

The power of the portal

Transaction-oriented portals are tried-and-true venues for raising consumer convenience and reducing costs in many industries. It’s now routine to look for airline tickets over the Internet, purchase goods from e-commerce sites and check account balances via online banking portals. Some healthcare organizations use portals, too. Kaiser Permanente, for instance, lets members refill prescriptions, schedule appointments, view test results and email doctors via its patient portal.

Taking this a step further, the Mayo clinic is considering using the patient portal as an educational venue. One study in progress looks at how well diabetic patients respond to carbohydrate-counting instruction via the portal versus printed patient education materials. “The idea is to use the patient portal to engage with diabetics for a sustained duration so that you can give them the educational materials in a piecemeal fashion, which provides more time for assimilation,” explains Santanam. “The research aim is to measure if the portal works as well or better than delivery through the traditional means: by mail.”

The portal-delivered materials will certainly be more actively engaging. Instead of a pile of papers that arrive in the mailbox, Santanam says the portal materials offers up information in short, digestible chunks and includes videos recorded by physicians so that people have multiple ways to access the lessons. Soon, Santanam and Mayo personnel will measure patients’ ability to do carbohydrate counting to see if the portal delivery exceeds retention of mere reading materials.

Another Mayo study aims to see if information gathering can be made more efficient via the patient portal. Santanam currently is reviewing data on two ways of updating medication lists for medication reconciliation, or the process of figuring out just what exactly each patient is taking.

“Once you have an appointment with a care provider at the Mayo Clinic, a pharmacy technician will call you a few days before your visit and get the list of medications that you are already taking and update that in your medical record,” Santanam explains. This way, healthcare providers can see your current medications and avoid prescribing conflicting drugs.

This sounds simple enough, but it’s a cumbersome process. Pharmacist calls don’t always reach the patient as intended, and patients don’t always return messages promptly. Even if they do, patients often don’t have their medications nearby to read the labels off to the pharmacy tech. “It is very rare that you can get all of this done in one single phone call,” Santanam says. “There is a lot of inefficiency in doing this over the phone. On the other hand, if you wait until the day of the appointment, now you are wasting either the time of the nurse or physician on the floor, who winds up trying to enter this information into the medical record during the appointment.”

Mayo Clinic recently began gathering medication lists by phone as well as via secured email messages. “They’re able to reach more patients and have a higher response rate by using secure message,” Santanam says. Analysis is underway to see if data collection methods impact the accuracy of the lists and the cost-effectiveness of the process.

Good call

Also in the works is a study on telephone-based dermatology consultations. Arizona has a very high incidence of skin cancer, so Arizona State students frequently have questions about skin lesions for the primary care physicians at the student healthcare center. Now, the Mayo Clinic is piloting a program where campus doctors can photograph a lesion with iPhone app and send it on to a dermatologist for a real-time review. “The lead time for an appointment with a dermatologist can be two or three months,” Santanam notes. “In this project, we are looking at ways to improve students’ access to dermatologist expertise.”

In yet another study, Santanam and Mayo researchers are looking at how patients respond to different pricing models for things such as hip or knee replacements.

Under the traditional model, patients who undergo these procedures get a dizzying array of bills from several sources, Santanam explains. “You have a surgeon’s fee, the fee for the anesthesiologist, a fee for the implant, a hospital-related fee, then after the surgery you have fees for the physical therapy and the post-surgery follow-ups,” he says. “In a sense, the fees are unbundled.” But, what if patients had the choice to make a single payment for the knee replacement and hospital administrators decide how that bundled payment is shared among the people and components of the treatment?

A study is looking at how patients will respond to this different payment model, and Santanam sees plenty of upside to it. Not only is this model simpler, but given the single-payment approach, it gives “the whole team an incentive to insure that the surgery goes as planned,” he explains.

This and the other research projects noted above are among a number of projects Santanam is engaged in with Mayo Clinic staff.

“We are still in the early stages of using technology to improve patient engagement in healthcare,” he says, “but there are lots of innovations that are going to come. As information systems researchers, we come to this field with the essential skills you need from the technology perspective, and we know how to design business processes. In a lot of ways, the patient-centered technologies that are coming into healthcare are in a sweet spot for the IS researchers because they offer a context in which we can show our strength. This is the right time and the right place for us all to be engaged in this type of work. Being involved with a healthcare organization like the Mayo Clinic at this juncture: You can’t ask for better.”

Bottom Line:

  • Information Systems professor Raghu Santanam recently spent a year-long sabbatical working with the Mayo Clinic to study how technology can boost patient engagement and value.
  • Some studies focus on using technology for education, such as a pilot study that uses a patient portal to teach diabetics how to count carbohydrates.
  • Some pilots focus on technology for care delivery. In one, doctors are using an iPhone app to get on-demand dermatology consultations for skin lesions.
  • Some projects are examining how portals can aid care delivery by helping patents supply information before they see the doctor.
  • Santanam is continuing his sabbatical research with Mayo teams to complete these studies and more.