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Regulations, Lack of Capital Hinder Technology Adoption

Robert Trinka, for HealthLeaders Media, January 8, 2008
What many Americans (both inside and outside the system) don't recognize is how the healthcare industry is completely unique. Only in healthcare do capable, well-intentioned individuals, groups, government entities and corporate organizations attempt to introduce major change without actively involving the industry participants, particularly practicing physicians, who are the pivotal players in the system.

John Smale was an auto industry outsider, but he actually went to work for GM rather than starting his own not-for-profit, foundation or private corporation dedicated to "implementing automobile industry change and improving the driving experience." By working within the system, Smale's unrelated consumer products experience could be tempered with the realities of the auto industry resulting in workable solutions. Steve Case, et al, all of whom I admire, to my knowledge are not employed or seeking employment in the healthcare system, but instead are trying to lead the introduction of major technological change from the outside into an industry that is not well-positioned to implement the technology nor equipped to pay for it.

The federal government is guilty of the same behavior, and in addition, they have the big hammer. I met with Bill Frist's healthcare staff when he was the Senate majority leader, and it was clear to me that the government's agenda was to introduce its brand of technology into healthcare, to dictate its own standards and schedules, all with a "like-it-or-not" approach to physicians and healthcare providers, and even insurers. Do it our way or feel the impact of the hammer!

Imagine the federal government dictating to the auto industry not only what standards the companies had to meet, but the methods and technologies they had to use to meet them. Then telling the banks and finance companies how the cars were to be financed and the standards they had to meet and how they were to meet them. And finally, that all participants had to be linked together with a real-time information system operating under federal government standards and regulation in order to share information freely, but protecting the privacy of that information with severe penalties.

There is no question that the healthcare system can be improved, particularly with the application of information technology. But there are very good reasons for the industry not having done so. At the head of the list is the cacophony of government regulation imposed on healthcare, followed closely by the simple lack of available capital. Both can be solved by dramatically reducing government regulation and making capital for system innovation more readily available to physicians, hospitals, and other system providers.

Healthcare is really calling out for an opportunity to solve its problems using the same basic solution afforded other American industries--free market economics. The leaders of the technology, auto, banking and other industries are readily identifiable and take responsibility to introduce innovation and change. They are economically rewarded when they are right and penalized when they are wrong. Where the healthcare industry has lagged, particularly in the case of physicians, is in providing the leadership to take responsibility for evolving the industry.

Again, there are very good reasons why physician leaders have not emerged. Physicians are largely economically rewarded and penalized the same whether or not they innovate, introduce technology or drive major change. They get paid to provide services to patients, and the rewards for investing in innovation, including costly technology, are meager (for example, a 2 percent discount on a malpractice premium). And the penalties for not providing exactly the right patient services in the right way at the right time? Loss of career, reputation and financial security. How would we all handle that dilemma?

It is easy to find fault in the healthcare system, but the responsibility must be shared by all participants inside and outside the system. The right solutions will come from within the healthcare system with active physician participation and leadership, and I would encourage Case, Schmidt, Leavitt and any senator to join the healthcare system; get a feel for it; take a management job in a major hospital, clinic or integrated healthcare delivery system; understand the industry's regulation and economics; see the every-day challenges physicians face, first-hand; and then work with the physicians to bring about positive, constructive change, including but not limited to technology, that is appropriate and manageable and fully supports better patient health and disorder management.

The healthcare industry can well use the additional management and capital resources, and it will respond with market-driven solutions that will benefit us all. Guaranteed.


Robert Trinka is CEO of the Miami-based Physicians Healthcare Management Group, Inc.
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