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How the Health-Care System Slows Mobile Medical Technology

Under a fee-for-service structure, doctors aren’t motivated to embrace innovation.
October 4, 2011

The advent of cheaper sensors and wireless transmitters, along with ubiquitous computing power in the form of smart phones, is making it easier and easier for patients with chronic diseases to track their conditions at home. But many health-care providers seem reluctant to adopt these technologies.

Experts say this is, in large part, because of the reimbursement system in U.S. health care, where physicians are paid for each test or office visit they provide. Outside a few specialties, doctors won’t get paid for monitoring data that’s been gathered remotely.

“It doesn’t matter how good these technologies are; if doctors can’t get reimbursed for looking at blood-pressure data that the patient records at home, they are not going to do it,” says Richard Grant, a physician at Massachusetts General Hospital and the Center for Connected Health.

This sentiment was echoed again and again at the Health 2.0 conference in San Francisco last week, where health-care innovators gathered to talk about how advances in mobile and Internet technologies can be applied to medicine. While earlier iterations of the conference focused largely on the technologies themselves, the latest gathering reflected how the field has matured. It included major players from the insurance industry, and often focused on the hurdles of incorporating these advances into health care.

“The worst problem when you buy health care piece by piece is that you can’t easily reengineer it,” said George Halverson, chief executive officer at Kaiser Permanente, a nonprofit insurer and health-care provider, at the conference. He gave the example of a program at Kaiser, which is paid an annual fee per patient, rather than per service, to reduce broken bones in older people. The program incorporated a number of steps that aren’t billable under Medicare. “We reduced the incidence of broken bones by 50 percent and saved $200 million in hospital stays,” says Halverson. “For anyone else, that would be lost revenue.”

Mark Smith, president of the nonprofit California Healthcare Foundation, agreed that the payment system discourages doctors from embracing new technologies. “My experience is that providers, when confronted with an innovation that will save money, say it will save money for insurers, not us, and essentially go on strike against it,” Smith said at the conference.

Indeed, many Health 2.0 entrepreneurs are targeting their products either directly at consumers or at insurance companies, who want to save on health-care costs. But to have a major impact on patient health, these innovations need to be embraced by physicians themselves. “It’s a lot more effective for a doctor to say, ‘I need you to upload your glucose numbers every week,’ than for a health plan to ask for that,” says Jim Hansen, executive director of the Dossia Consortium, a nonprofit organization that develops personal health records for employers.

A number of pilot studies suggest that remote monitoring can improve patient health and reduce costs. A study published in the Lancet earlier this year found that heart-failure patients with a wireless implant designed to measure pressure had fewer hospital visits. In a second Lancet study, published by researchers in the United Kingdom, patients with hypertension who measured blood pressure at home, in combination with remote monitoring from physicians, were better able to control their hypertension. That’s likely to reduce a patient’s long-term health costs.

With the current system, “there are no incentives for preventive care; no one gets paid for keeping you from needing these services,” says Hansen. “That’s especially true for behavior-related issues, such as obesity, diabetes, congestive heart failure.”

Hansen and others hope that the Affordable Care Act will help to alleviate this problem. Part of the legislation funded the Center for Medicare and Medicaid Innovation, which is testing new payment models. One option is that providers are paid a monthly amount to take care of patients and are able to share in the financial savings that may result. (This approach, often called “bundled payments,” is similar to that of Kaiser Permanente’s.)

Of course, new technologies don’t always save costs. But with a bundled payment system, health-care providers will have more incentive to find the ones that do.

Leslie Saxon, a cardiologist and director of the Center for Body Computing at the University of Southern California, says that the reimbursement structure isn’t the only problem. In cardiology, recent additions to the Medicare billing codes do pay physicians to track heart patients remotely. But she says only about half of them do.

“I think the issue is largely cultural,” she says. “We’re not used to practicing medicine this way. That is why I think patients will need to be the drivers of this change also.”

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