The University of Alabama Health System has hired William Ferniany as its new chief executive officer. Although he was an outside candidate, Ferniany is an Alabama native and UAB alumnus. Ferniany is currently associate vice chancellor and chief executive officer of University of Mississippi Hospitals and Health System, and will start his new job in September at the University of Alabama at Birmingham.
Mark W. Niedfeldt, MD, an associate professor at the Medical College of Wisconsin who is on the staff at several Milwaukee-area hospitals, is planning to open a concierge medical office in Mequon, WI. Niedfeldt is opening the concierge medical office—a practice in which doctors agree to see a limited number of patients—with help from Arizona-based start-up ModernMed Inc. Representatives from ModernMed Inc. said they believed Niedfeldt's practice would be the first primary care concierge medicine practice in the state of Wisconsin. ModernMed requires its doctors to commit to having no more than 500 patients a year, far fewer than the average of 2,300 a typical family doctor sees in a year, said the company's CEO.
Diagnostic imaging can catch disease at its earliest stages, and carries the potential for saving lives. But health plans sometimes view the procedure as an unnecessary expense. +
Retail clinics could soon overshadow primary care physician offices, as convenience for patients and rising healthcare costs are pushing the traditional venue out of the picture. +
Kaveh Safavi, MD, JD, chief medical officer at Thomson Reuters' Center for Healthcare Improvement, discusses how technology might impact global healthcare and the looming physician shortage. +
Diagnostic imaging can catch disease at its earliest stages, and carries the potential for saving lives. But health plans sometimes view the procedure as an unnecessary expense. +
Kaveh Safavi, MD, JD, chief medical officer at Thomson Reuters' Center for Healthcare Improvement, discusses how technology might impact global healthcare and the looming physician shortage. +
Health plans and the healthcare industry as a whole are relying more on technology to help lower costs and improve the quality of care. But technology poses the risk of security breaches and HIPAA violations. +
Kaiser Permanente has donated $300,000 toward the $1.3 million construction of a new faith-based clinic in New Orleans. The recent donation adds to the more than $800,000 the New Orleans Faith Health Alliance has raised for the project so far. The clinic will offer various medical services, as well as preventative care and spiritual counseling, for those who generally cannot afford health insurance.
The newest report on medical tourism predicts "explosive growth" for U.S. outbound medical travel, with Americans paying more than $2 billion to global providers this year and doubling their spending next year. By 2010, the report estimates that spending will reach as much as $10 billion, but after that the speculation is much less precise.
In a decade from now, U.S. outbound medical travel could be as much as $79.5 billion or as little as $30.3 billion, according to the Deloitte Center for Health Solutions' report, Medical Tourism: Consumers in Search for Value.
Threats
When reports like this get circulated, the knee-jerk reaction is to rattle off a headline that the U.S. healthcare industry is going to lose big. Indeed, the Deloitte study warns that with Americans spending more on medical travel, lost domestic spending in the U.S. could reach as much as $76.1 billion by 2010.
C'mon now. Not only does that figure bank on Americans fleeing the U.S. healthcare system in droves, it also assumes these consumers would pay U.S. prices for their cosmetic and elective procedures if they didn't have alternatives beyond the borders. While Deloitte says that 750,000 Americans left the U.S. for medical care last year, it projects 6 million outbound medical travelers by 2010. That is one big leap.
Paul Keckley, Ph.D., executive director of the Deloitte Center for Health Solutions, acknowledges this would be a huge spike in medical travelers, but stands firm with the prediction, largely because he sees health plans and employers joining forces to promote incentives to patients. "Looking at the data from the Medical Tourism Association, what becomes a striking difference is the role that employers play in promoting medical tourism," he says. "The health plans are tiptoeing through this, but the cost differential is substantial."
By comparison, the McKinsey & Company study that came out earlier this year attached a very strict definition for medical travel and concluded that there are only 60,000 to 85,000 inpatient medical travelers a year.
Overstatements
The real number of medical travelers is likely somewhere in the middle of Deloitte's and McKinsey's estimates. But more importantly, where is the explosive growth going to come from? For sure, the U.S. healthcare systems can't keep increasing costs at a rate of 8% per year and expect no fallout, and as that expense gets passed along to patients, they will become more selective consumers. But the Deloitte study has some telling findings on consumer preferences.
It's important to note that Deloitte's report derives from a national online survey of more than 3,000 Americans. Of these respondents, 39% say they would go abroad for an elective procedure if they could save half the cost and be assured that quality was comparable to that in the U.S.
So this must be where the growth will come from. The report points out, "As patients are exposed to greater financial burdens resulting from higher co-payments and price transparency efforts, they are likely to seek low-cost treatment alternatives such as medical tourism."
Is this reality, or are the study's participants overstating their acceptance? I think there's at least some truth to the later. Consider that the report also found that only 12% of respondents have traveled outside of their own communities for medical treatment. If you've never had the inclination to leave your hometown healthcare provider, it would be a dramatic shift to endure a trip to Thailand, India, or even Mexico for care.
Keckley agrees that there's a difference between what participants say in a survey and what they will actually do when the time comes to make a healthcare decision, but he points out that it bodes well for the medical travel industry that more than one-third of the survey participants are expressing an interest in services abroad.
Uncertainty
As I've reported recently, an increased awareness of medical travel is a good sign for global destination hospitals. But don't think the floodgates are open just yet. It's going to take significant time and effort to turn these prospects into true believers in medical travel.
Since American consumers still only pick up about 19% of the tab for their healthcare, they aren't the only stakeholders that need convincing. As much as I might like to think the media has sway, insurers, employers, and primary care providers have much more pull with patients than any research report, news story, or online column.
And they haven't bought in—yet.
Sources from destination hospitals and insurance companies tell me, however, that U.S. corporations are inquiring more and more about medical travel as one option to limit healthcare costs. In the coming years, success stories from these early adopters could spur the kind of growth that Deloitte and others project.
In sum, this is yet another report predicting that tremendous medical travel growth from the U.S. market is just a few years away. If you make the mistake of looking only at the tables and charts, medical travel organizations might get giddy over the projections, so take the time to not only read the fine print, but also between the lines. Deloitte notes well that the kind of growth it predicts will happen only if consumer acceptance continues, employers push insurers for medical travel options, and U.S. healthcare organizations continue to watch from the sidelines.
The study offers worthwhile analysis and supports the theory that the medical travel trend will continue, but global destination hospitals should hedge their bets. U.S. outbound medical travel could explode, blow up, or have a less volatile future. While the potential is there, keep supporting regional and local consumers in emerging markets. There is long-term growth in other regions too, in spite of the continual and obsessive focus on the West.
Note: You can sign up to receive HealthLeaders Media Global, a free weekly e-newsletter that provides strategic information on the business of healthcare management from around the globe.
eHealth Global Technologies has released its eHealthConnect online request service for institutions to retrieve outside patient medical records for referred inpatients. The online request service provides customized forms for each healthcare institution customer of eHealth, and generates the appropriate release of information forms to allow access to the records under HIPAA guidelines, according to eHealth representatives.
GE Healthcare has announced the commercial release of a new pre-clinical computed tomography scanner specifically designed to accelerate research in the areas of cardiac disease and drug development. Using x-ray source technology derived from clinical systems, the GE eXplore CT 120 scanner features 100 times the output of previous GE laboratory research imaging systems. This power enables x-ray exposures fast enough and detailed enough to capture the motion of a beating mouse heart, according to a GE release. The power of the new x-ray source also allows for more effective filtering of the x-ray beam, reducing the x-ray dose to the research subject compared to previous scanners, according to the release.
The Arkansas Department of Human Services has been working with Electronic Data Systems Corp. for the past 18 months to develop a computer network that will make e-prescribing available to doctors statewide before the end of the year. If all goes as planned, the network will become available just in time for doctors in Arkansas to reap the benefits of Medicare's new incentive-based e-prescribing program. The federal effort is designed to save time and reduce costly and dangerous medication errors caused by illegible handwriting and bad drug combinations.
For years, just about everybody involved in healthcare has been touting the benefits of electronic prescribing. From the government to health plans to medical associations, we've heard again and again how the technology will improve patient safety and prevent medication errors, all while saving money by increasing the use of generic drugs and avoiding duplicated prescriptions.
Despite that, doctors have been glacially slow in making the switch (the United States Department of Health and Human Services estimates only about 10% of U.S. doctors use e-prescribing; other estimates put the adoption rate even lower).
Now some of the proponents of e-prescribing are putting money where their mouths are by offering financial incentives to physicians who switch from pad and paper to keyboard and monitor. Beginning Jan. 1, 2009 and continuing throughout 2010, Medicare will give doctors an additional 2% bonus on top of their fee for e-prescribing. In 2011 and 2012, the bonus will drop to 1%, and in 2013, the bonus will drop again to 0.5%. And, for those who need even more motivation, Congress put in place financial penalties for physicians who decline to use e-prescribing, dropping their Medicare reimbursements by 1% in 2012, 1.5% in 2013, and 2% in 2014. Some exceptions will be allowed for hardship cases. Medicare expects to save up to $156 million over the life of the e-prescribing program in fewer adverse drug events, Health and Human Services Secretary Michael Leavitt said during a press conference to introduce the plan.
Just after federal officials made their announcement, Blue Cross Blue Shield of North Carolina said they too would offer an incentive to doctors who use the technology. The one-time, $1,000 incentive will go to network providers who access the medication history for 20 individual patients through a certified vendor between Oct. 1 and Dec. 31 of this year. The insurer also launched an e-prescribing Web site to "improve patient safety, control costs, and reduce medication errors." The Web site offers physicians hardware and software information, as well as discounts for implementing an electronic prescription practice.
Blue Cross Blue Shield estimates that e-prescribing can produce savings of about $250 per doctor per month, again through the increased use of generics and avoidance of unnecessary prescriptions.
So, will all of these efforts have a "profound effect on the adoption and use of e-prescribing," as Leavitt said he expects? Senator John Kerry and former Speaker of the House Newt Gingrich certainly think so. Last Friday in an opinion piece they co-wrote for the Mercury News, Kerry and Gingrich said that by helping pay for the technology, the new legislation addresses the biggest impediment to adoption of e-prescribing technology: cost. "So with the right balance of financial incentives, physicians can and will adopt this life- and money-saving technology. We expect this law to start a wave of adoption, leading to the use of more sophisticated technology," they wrote.
I, for one, love the idea of not having to drop off and then wait around for my prescription at the pharmacy. And, while I agree that money is generally a terrific motivator, what if the cost—an estimated $3,000 per prescribing doctor—of buying and installing this technology is not truly the main barrier that is keeping doctors from switching over? Old habits die hard after all, and it takes considerable time and effort to learn new computer programs. Meanwhile, those prescription pads seem pretty easy to use and it only takes seconds to illegibly scrawl out a patient's name and medication.
Note: You can sign up to receive HealthLeaders Media IT, a free weekly e-newsletter that features news, commentary and trends about healthcare technology.
