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IBM: Redefining Value in Healthcare

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IBM Global Business Services               Healthcare
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Redefining Value in Healthcare:
Innovating to expand...

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2   Redefining Value in Healthcare: Innovating to expand access, improve quality and reduce costs of care




The growing ...

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In its most recent World Health Report, the World Health            Crucial to the su...

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IBM: Redefining Value in Healthcare

  1. 1. IBM Global Business Services Healthcare White Paper Redefining Value in Healthcare: Innovating to expand access, improve quality and reduce costs of care
  2. 2. 2 Redefining Value in Healthcare: Innovating to expand access, improve quality and reduce costs of care The growing prevalence of chronic diseases and aging populations around the globe are placing a heavy two-pronged burden on health systems. It’s no wonder that healthcare costs continue to rise rapidly and relentlessly worldwide. France spent 11 percent of its GDP on healthcare in 2008, up from 10 percent in 2000; the U.K. spent 8.7 percent, up from 7; Japan spent 8.3 percent, up from 7.7 percent. The United States spends far more on healthcare than any other nation. In 2009, healthcare costs reached US$2.5 trillion – more than US$8,000 per person and 17 percent of GDP, up from 13.4 percent in 2000. Yet as is widely cited in healthcare reform debates, the U.S. fails to achieve optimum outcomes, lagging some other industrialized countries in common measures of healthcare performance. Despite its increased spending, the U.S. healthcare industry emerging technologies with the potential to achieve the three struggles to deliver the right care, to the right patients, at the most critical objectives: right time. More than 46 million Americans have no health insurance, and the year-old Affordable Care Act will not be in • Increase consumer access and value full effect until 2014. And even with its mandates and • Collaborate to improve quality, outcomes, and incentives aimed at adding millions to the health insurance personalized care rolls, critics insist that there’s little in the sweeping overhaul to • Build sustainable, cost efficient healthcare systems truly rein in costs and improve patient care. And the U.S. is only one case in a global challenge; The Organization for Yet to the extent many healthcare systems remain fragmented, Economic Co-operation and Development (OECD) projects it may be the impetus of consumers – who experience the that Europe’s healthcare systems require spending increases comfort, cost advantages and improvements in care – that that outstrip economic growth.1 ultimately drives wider adoption of integrated healthcare technology. Increasingly, however, healthcare is turning to digital information and electronic resources to mimic other industries Increasing consumer access and value that routinely innovate to improve quality while Improving access to healthcare is critical in the U.S. but simultaneously reducing costs. Electronic medical records greater access is also a global necessity. Even countries like (EMRs), digital communication between patients and Canada and Norway, with healthcare systems generally physicians, web-based health information accessible to both considered among the world’s most comprehensive, are clinicians and patients, and even remote diagnosis, treatment, challenged to deliver care to citizens in geographically remote care and patient education are just examples of rapidly regions. China, India and other newly industrialized countries with large populations and vast geographies confront these challenges on a significant scale.
  3. 3. IBM Global Business Services 3 In its most recent World Health Report, the World Health Crucial to the success of these telehealth efforts will be: Organization (WHO) identified inefficient and inequitable use of resources as among the three key impediments to universal 1. Substantial improvements in the patient experience. access to healthcare.2 It conservatively estimated that Seamless and un-obtrusive connections between patients inefficiency wastes between 20 to 40 percent of all health and healthcare professionals (doctors, nurses, pharmacists, spending – wasted resources that could be redirected towards etc.) for more convenient and personalized care experiences achieving universal coverage. The situation in the U.S. is no – without sacrificing patient privacy. better, where an estimated US$700 billion a year in healthcare costs do not improve health outcomes.3 Administrative system 2. Buy-in from physicians and other healthcare professionals, inefficiencies waste an estimated US$100-150 billion annually, who must see the technology as facilitating their daily work provider inefficiency and errors waste another US$75-100 rather than establishing additional workload. Data input billion each year, and failure to coordinate care burns US$25- into such systems must be minimized and simplified, while 50 billion annually.4 transactional activities like billing and scheduling are handled efficiently in the background. Opportunities to expand access to healthcare with the same resources exist in all countries. Medicines account for three of 3. Quality and outcome improvements that provide real value the 10 most common causes of inefficiency, according to the which can be measured and shared with providers, payers WHO. Reducing unnecessary expenditure on medicines and and patients, alike. Prompt reimbursements and additional using them more appropriately, and improving quality control, incentives for offering new telehealth services should be could save countries up to 5 percent of their health established based on measured quality and cost expenditure.5 Among the other common sources of inefficiency improvements. are medical errors – getting care right the first time saves money – and failure to get the most out of technologies and health services, according to the WHO. Case Study: A University hospital in China Wringing process inefficiencies from the system can help A University hospital system in a major Chinese city worked finance broader access to healthcare, but technology is needed with IBM Research and IBM Global Business Services to implement a community-wide electronic healthcare record to overcome geography in making the most efficient use of system and diagnostic, treatment and monitoring tools to medical resources. Sophisticated communications and improve the access to patients with chronic conditions and biomedical telemonitoring technology are helping providers diseases. The system helps the hospital provide more deliver medical services across increasingly vast distances and responsive, proactive care to patients with chronic conditions such as diabetes and high blood pressure. Biomedical sensors leverage scarce medical specialties to patients who need them. collect data on a patient’s health conditions and other vital Such systems can also be used to deliver comprehensive signs, correlating it with the patient data and reporting it healthcare to patients and consumers at home rather than the automatically over a variety of networks to the appropriate clinical supporting systems at major hospitals for further traditional office or hospital visit, greatly expanding access to treatment. The solution is expected to bring about many healthcare. benefits to the hospital: cost reduction in chronic disease treatment, time savings in patient referral, the ability to serve more patients and help doctors work more efficiently. But above all, it will help them provide better care to patients.
  4. 4. 4 Redefining Value in Healthcare: Innovating to expand access, improve quality and reduce costs of care Collaborating to improve quality and outcomes to deliver The Diabetes Connect program, until recently, involved a more personalized care device that took glucometer readings and transmitted the data Eliminating waste and inefficiencies in healthcare delivery is over phone lines to a database. Yet a “disappointingly high one key to expanding access, yet it also promises to improve percentage” of patients were unwilling to take the step of the quality of care and patient outcomes. Specifically, use of plugging in a device to the glucometer and into the phone line, information and communication technologies – including then pushing a single button to upload glucose readings, access to timely, comprehensive digital health information and according to Joseph C. Kvedar, MD Director of the Center for medical records – enables a more collaborative approach to Connected Health.8 care that promises better results. Giving people specific, detailed information about their health Such is the case in Spain, where the regional health authority, can allow them to see a path toward healthier behavior, Ib-Salud, launched its Balearic Telestroke program in 2006. It according to Thomas Goetz, executive editor of Wired uses advanced video-imaging technologies, broadband magazine and author of “The Decision Tree: Taking Control networks and electronic health records (EHRs) to allow of Your Health in the New Era of Personalized Medicine” neurologists in the capital city, Palma, to provide time- (Rodale Books, 2010). The best way to give people specific sensitive, life-saving stroke care across the remote islands in information and get them on a healthier path, Goetz says, is to the Balearic archipelago. Patients who received telestroke make the information simple to understand, as the magazine treatment between July 2006 and November 2008 had three did in its December issue with a radical redesign of a blood test month post-stroke cure rates of 55 percent, comparable to the report for the article “The Blood Test Gets a Makeover.”9 59 percent cure rate for patients receiving face-to-face care.6 Boston’s Center for Connected Health operates programs for heart failure, hypertension, diabetes and other chronic Case Study: A medical device manufacturer conditions, as well as online second opinions and enhanced A major medical device manufacturer gains a competitive advantage and provides revolutionary improvements to cardiac medical education and training. Connected Cardiac Care, a patients through remote patient care. IBM Global Business home telemonitoring and education program for heart failure Services was their innovation partner engaged in the design, patients at risk for hospitalization, dropped re-admissions by development, and implementation of this solution. The secure, Internet-based system for patients with implanted medical nearly 50 percent.7 Similar results are evident in both its devices gathers and stores data from the implant procedure, Diabetes Connect and Blood Pressure Connect self- in-clinic follow-up visits and from remote transmissions sent management programs. from a patient’s home. The information from the device helps physicians enhance patient care while improving administrative efficiency. Patients no longer need to return to the physician’s Such self-management programs encourage patients to take a office unless there is a problem identified by the device. This more proactive role in their own care. They typically yield frees up valuable physician time that can now be better spent better maintenance of treatment plans and healthier lifestyle dealing with critical patient needs. Also, it allows data to be integrated from the remote care system into a patient’s choices. But such systems need to be unobtrusive, user-friendly electronic health record. and comfortable for patients.
  5. 5. IBM Global Business Services 5 Even more pronounced results are evident when empowering The goal is to use analytics to rapidly generate new clinical not just the patient, but the entire spectrum of practitioners knowledge – leveraging existing clinical experiences and involved in a patient’s care, a practice known as coordinated outcomes. Managing that knowledge and incorporating it into care. Rather than focusing on single episodes of treatment, clinical processes and workflows is key, whether it involves these coordinated “care teams” take a more comprehensive patients communicating with their care delivery teams, approach, moving healthcare beyond the doctor’s office or collaboration among healthcare providers or medical hospital and into the daily lives of patients. Such integrated researchers working across organizational, industry or country care offers patients higher-quality, more efficient care that boundaries. better meets their needs, often at a lower cost. And new telehealth services can prove to be key enablers of such a Expanding access to healthcare and improving quality of care collaborative approach to healthcare. would be impossible without simultaneously reining in costs. Even before the economic downturn in 2008, total spending Reducing costs through analytics on healthcare in all OECD countries was rising faster than The vast volumes of integrated patient information generated economic growth. The average ratio of health spending to by increasingly instrumented and coordinated care teams could GDP went from 7.8 percent in 2000 to 9.0 percent in 2008.10 hold the key to more complete clinical knowledge. Yet the efficiencies gained from coordinated care, telehealth, medical analytics and other technology-enabled advances are Increasingly – but not yet on a wide scale – standards-based the keys to getting spiraling costs under control. medical networks are capable of capturing, storing, analyzing, appropriately sharing and presenting information about individual patients and patient populations. For example, Case Study: A healthcare provider in Spain applying advanced analytics innovation from IBM Research to In Spain, the largest healthcare provider in the state of help identify and compare individual patients with cohorts of Catalonia has saved €45 million over three years through a similar cases could assist physicians in predicting future modernization program that uses advanced video-imaging technologies, broadband networks and electronic health outcomes and deciding on a course of treatment. records to allow professionals all around the region share patient data, provide time-sensitive care and improve patient Watson, named after IBM founder Thomas J. Watson, was experience in the delivery of care. The ability to connect built by a team of IBM scientists who set out to accomplish a primary care physicians to hospital professionals has significantly reduced waiting time for patients to see certain grand challenge – build a computing system with the ability to specialists. Letting all hospitals in the network share the same understand the meaning and context of human language, patient data has put the patient in the center of the healthcare rapidly process information to find precise answers to complex process, eliminated duplicated tests, reduced unnecessary hospital displacements and allows for faster response in questions, and create confidence in the response it uncovers. emergency situations. With its combination of sheer data processing power, natural language recognition and machine learning, the system holds enormous potential to transform how computers help organizations, and particularly healthcare, accomplish once unobtainable outcomes in real time.
  6. 6. 6 Redefining Value in Healthcare: Innovating to expand access, improve quality and reduce costs of care An experimental program, called The Camden Coalition, Yet progress continues and must accelerate in the face of rising applied aggressive collaborative and preventative care to the healthcare costs and the global debt crisis. We must leverage most costly patients in one of the poorest cities in the U.S., technology to focus on substantially improving the health Camden, NJ, to show remarkable preliminary results. An consumers’ experience in receiving healthcare services without analysis of hospital claims data from all three Camden health putting additional burden on healthcare professionals. It is the systems (Cooper University Hospital, Our Lady of Lourdes resulting push from the health consumers asking for these Medical Center, and Virtua Health), discovered that 80 percent technology-enabled services which will build the momentum of the costs were spent on 13 percent of the patients, and 90 for change. Building more open, interoperable and robust percent of the costs were spent on 20 percent of the patients. health information technology environments is the key to The first 36 “super-utilizers” – patients with various expanding access, improving care and reducing healthcare combinations of asthma, cancer, diabetes, drug addiction, costs. emphysema, heart disease, mental illness, obesity, and other health problems – averaged 62 hospital and E.R. visits per For more information month before joining the program that provided For more information, please visit ibm.com/healthcare comprehensive collaborative care. The treatment program reduced their hospital visits by 40 percent, cutting their hospital bills, previously averaging US$1.2 million per month, to just over US$500,000 monthly – a 56 percent drop.11 Building sustainable healthcare systems While the potential gains from greater use of these information technologies have been evident for years and are demonstrable in isolated examples, most countries still face major adoption challenges. Information technology deployment in the healthcare industries lags many other parts of the economy. Obstacles include the cultural barriers to sharing patient records and integrating workflows across specialties and in-patient and out-patient settings. Healthcare professionals are sometimes reticent to adopt new technologies because of complicated user experiences and additional workload with no clear and measurable value, lack of transparency about cost and quality impacts of working collaboratively in adherence to accepted guidelines and ongoing privacy concerns. Privacy and societal issues arising from the increasing use of genomic data in designing and directing treatment strategies will be another future challenge.
  7. 7. 7 Redefining Value in Healthcare: Innovating to expand access, improve quality and reduce costs of care About the author References Mohammad Naraghi (MD, PhD) is the Global Leader for both 1 Organisation for Economic Co-operation and Development (OECD), “Growing health spending puts pressure on government budgets, according to OECD the Healthcare and Life Sciences Industries for IBM Global Health Data 2010,” June 29, 2010. http://www.oecd.org/document/11/0,3343, Business Services. In this capacity, he is in charge of developing en_2649_34631_45549771_1_1_1_37407,00.html the vision, strategy and global business in Healthcare and Life Sciences by building and expanding IBM’s offerings and 2 “The world health report - Health systems financing: the path to universal coverage.” The World Health Organization, November 2010. http://www.who. relationships with the clients. int/whr/2010/en/index.html He has rich experience in the Healthcare and Life Sciences 3 “Budget Chief: For Healthcare, More Is Not Better.” Peter Orszag, director of industries for 20 years, ranging from clinical practice in the White House Office of Management and Budget, during an interview on National Public Radio. April 16, 2009. http://www.npr.org/templates/story/story. cardiology and biomedical R&D work at leading edge php?storyId=103153156 institutions in Europe and USA to executive leadership positions in world-renowned international corporations, such 4 Kelley, Robert. “Where can $700 billion in waste be cut annually from the U.S. as Siemens AG and McKinsey & Company. healthcare system?” Thomson Reuters. October 2009. http://www.ncrponline. org/PDFs/Thomson_Reuters_White_Paper_on_Healthcare_Waste.pdf He studied Medicine and Mathematics in Germany and 5 “The world health report - Health systems financing: the path to universal Austria. After clinical work in cardiology, he moved to coverage.” The World Health Organization, November 2010. California Institute of Technology for graduate studies in http://www.who.int/whr/2010/en/index.html Computation and Neural Systems. Returning back to Germany, he finished his PhD in Physiology and Biophysics 6 “Improving Health Sector Efficiency: The Role of Information and Communication Technologies,” OECD Health Policy Studies, OECD, Paris. June from the Max-Planck-Institute. He then joined McKinsey & 2010. www.oecd.org/health/ict Company to consult global Healthcare and Life Sciences clients and moved on to Siemens Healthcare. At Siemens 7 The Center for Connected Health, Boston, MA. http://connected-health.org/ Healthcare, he was a member of the Global Executive Committee in charge of Global Business Development and 8 Joseph C. Kvedar, MD, “From Couch Potato to Quantified Self: This Journey Must be Defined and Encouraged,” The cHealth Blog, June 13, 2011. http:// CEO of Siemens Diagnostics. Dr. Naraghi can be reached at chealthblog.connected-health.org/2011/06/13/from-couch-potato-to-quantified- naraghi@us.ibm.com. self-this-journey-must-be-defined-and-encouraged/ 9 Steven Leckart, “The Blood Test Gets a Makeover,” Wired magazine, December 2010. 10 Organisation for Economic Co-operation and Development (OECD), “Growing health spending puts pressure on government budgets, according to OECD Health Data 2010,” June 29, 2010. http://www.oecd.org/document/11/0,3343, en_2649_34631_45549771_1_1_1_37407,00.html 11 Atul Gawande, “The Hot Spotters – Can we lower medical costs by giving the neediest patients better care?” The New Yorker, January 24, 2011. http://www. newyorker.com/reporting/2011/01/24/110124fa_fact_gawande#ixzz1NsvfWj6g
  8. 8. © Copyright IBM Corporation 2011 IBM Global Services Route 100 Somers, NY 10589 U.S.A. Produced in the United States of America September 2011 All Rights Reserved IBM, the IBM logo and ibm.com are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Webat “Copyright and trademark information” at ibm.com/legal/copytrade.shtml Other company, product and service names may be trademarks or service marks of others. References in this publication to IBM products and services do not imply that IBM intends to make them available in all countries in which IBM operates. Please Recycle GBW03155-USEN-01

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