AG: The Center for Studying Health System Change released a study which talked about the difficulties in getting collaboration among competitors involved in regional health information exchanges. How do you think that dynamic will play out?
NG: This involves thinking about how we have historically viewed, for example, doctor conversations, which in some ways have come under antitrust restrictions. In the airline industry, we’ve been pretty successful with distinguishing non-competitive conversations from competitive conversations, so that airlines and aircraft manufacturers can all get in the same room for the purpose of discussing results of a crash or lessons to be learned or how to change the system, but they can’t get in the same room to talk about scheduling or pricing. And I think we ought to have the same thing in healthcare, and it may require a federal law change. There ought to be a safe harbor created that enables doctors and hospitals and technology companies to talk with each other openly in a non-antitrust environment if the purpose of the conversation is the flow of information as it relates to patient outcome and patient safety. I think that that requires some monitoring, but I think the current rules actually increase the number of people who die unnecessarily annually and increase the number of people who get sick unnecessarily annually, because it inhibits the flow of information and the flow of resources.
Second, one of our biggest concerns with these regional health initiatives is how do you find a stream of revenue to sustain it? It’s fairly easy to get a one-time federal grant and have three or four years of interesting discussions, but unless you have an ongoing stream of revenue, you can’t last. If you look at ATMs — there was one in my hotel last night, and it said it would cost me $2.60, and I can either use it or not use it, it was my choice. But the fact is the ATM is sitting there because they charge money for it. And so you have a worldwide banking system that gives you real-time access to cash in about 120 countries because there is some underlying transaction fee that sustains it. We have to find a similar pattern. The closest that I’ve seen to sustainable was the insight that Humana and Blue Cross/Blue Shield of Florida had when they created Availity. Because they figured out that if they could take out the paper transaction cost of clerically evaluating the individual patient’s eligibility and shift it to an Internet-based expert-system mediated structure, so that 99 percent of all eligibility decisions are routine and automatic and don’t require a person to intervene, they save, I think, 23 stories of an office building in clerical help. That’s a recurring annual savings every year. That amount of money enabled them to give technically 95 percent of the doctors and 100 percent of the hospitals in Florida computers. Availity now is probably the most widely wired capacity — it’s eligibility oriented.
I think one of the things that’s going to happen with the modification of Stark is that you're going to see sole practitioners all of a sudden with an opportunity to have a service provider sustained by the hospital. The hospital is going to have substantial savings in paperwork, in accuracy and speed in coordinating with the doctors, particularly on the discharge patient side. You're going to be able to have follow-up information and follow-up treatments stunningly more accurate and stunningly more efficient than the current system.
My hunch is that that’s going to lead to a very substantial increase in sole practitioner and small practice doctors being on electronic medical records, because what you can't do is you can't have small systems with their own internal IT. It’s so inefficient and the quality of person you can hire is not sufficient, because you need a really high accuracy system for healthcare. It’s one thing if my personal computer goes down, it’s another thing if the computer that has all my data for my health goes down while I’m sitting in the emergency room. So I think going to these service provider models, where somebody has orchestrated for a region or for an entire county, access to a high quality health record system and the technical maintenance system that sustains those, I think is probably the model that’s going to emerge.