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The Healthcare Cure: How Sharing Information Can Make the System Work Better

The Healthcare Cure: How Sharing Information Can Make the System Work Better

by Jeff Margolis

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In this lucidly presented and forward-looking book, the author proposes a needed and workable solution to the challenge of providing affordable health care for all Americans. Margolis takes a fresh look at the healthcare system from the perspective of various industry participants, to reveal how the system can be adjusted to produce better results by combining


In this lucidly presented and forward-looking book, the author proposes a needed and workable solution to the challenge of providing affordable health care for all Americans. Margolis takes a fresh look at the healthcare system from the perspective of various industry participants, to reveal how the system can be adjusted to produce better results by combining information technology with the right incentives. Drawing on real-world examples from other industries such as retail and automotive that consumers can understand, Margolis describes how a better system can be designed and is in fact within our grasp.

As both a healthcare executive and a healthcare consumer living with a severe chronic illness, Margolis offers a unique perspective that combines both management and consumer viewpoints. He understands health care and is able to evaluate it from the outside and inside as an overall system. His vision for health care is called Integrated Healthcare Management (IHM) and it employs a systems science approach to optimize the coordination of benefits and care to ultimately provide more value for every healthcare dollar spent. IHM is practical because it builds upon our healthcare model today and describes specific steps to create the system of tomorrow—affordably and sustainably.

Both professionals working in health care and members of the public interested in a healthcare solution will find the insights in this book informative and useful.

Editorial Reviews

From the Publisher
"Although healthcare reform is one of the most complex and difficult challenges we face as a country, Jeff Margolis’s book The Healthcare Cure offers a new perspective on how to address this critical issue. Margolis understands the problem, and his Integrated Healthcare Management model could improve the administration of our system to allow better access, cost, and quality for every American."
-Tom Daschle, former US senator from South Dakota and former Senate majority leader

"This easily digestible call to action combines information technology and value-based solutions to solve the seemingly insurmountable health system challenges that we as individuals, and as a nation,
face every day."
-William Frist, former US senator from Tennessee

"Balanced, insightful, and well written, The Healthcare Cure highlights systemic flaws in our unnec­­­essarily complicated healthcare system and proposes straightforward, understandable solutions."
-Michael V. Drake, MD, chancellor at the University of California at Irvine

"I highly recommend this book to everyone who is impacted by the healthcare industry—which means every one of us."
-David A. Shore, PhD, associate dean and director of the Forces of Change Program at the Harvard School of Public Health

"Margolis takes our complex healthcare system and lays it out in real and no-nonsense terms. Every reader will walk away knowing how the system works, where and why it is broken, and what to do to fix our US healthcare system for the long term. . . . This refreshing perspective is a must-read for all who seek a powerful spark for the much-needed process of change."
-Thomas Main, US healthcare leader and partner at Oliver Wyman Group

Library Journal
Margolis makes an efficient, effective U.S. health-care system seem not only possible, but also a logical, reasonable, and attainable goal. Founder, chairman, and former CEO of the TriZetto Group, Inc. (a major supplier of information solutions to U.S. health-care providers), he has used his extensive professional background in systems science and information technology, along with his personal experience as a patient dealing with a chronic disease for many years, to inform his work. Margolis offers a solution to the inefficiencies and miscommunications in the system—the Integrated Health Management (IHM) system (which TriZetto sells). The book outlines the current health-care system and explains where pieces are working satisfactorily separately but failing together. He uses other industry examples to illustrate how the IHM system would streamline communication throughout the medical industry—e.g., among doctors, hospitals, pharmacies, consumers, and employers. VERDICT Although readers should be aware that this book can be seen as a promotional piece for the company's IHM products and services, it remains a thorough and accessible exploration of the proposed system and offers useful information and ideas.—Elizabeth J. Eastwood, Los Alamos P.L., NM

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Prometheus Books
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Read an Excerpt


How Sharing Information Can Make the System Work Better

Prometheus Books

Copyright © 2011 The TriZetto Group, Inc.
All right reserved.

ISBN: 978-1-61614-487-6

Chapter One

Taking a Systems Approach

The whole is more than the sum of its parts. —Aristotle

Do not resuscitate. That is what some people think should be the fate of the US healthcare system. But is it truly beyond repair? When you read the newspapers, watch television, go to the Internet, or ask your neighbor, doctor, or pharmacist, you might think our healthcare system is among the worst in the world. Uncle Sam is often painted as an underperformer because the United States famously posts poorer longevity and higher infant mortality scores than other developed countries.

However, statistics don't tell the whole story. I, for one, do not believe these statistics are tabulated with equivalent levels of precision around the world. To begin with, the statistical playing field is not level. Because we operate with third-party payers (health insurance plans) that require highly accurate data for payment, we capture and report much more information than is captured in countries where doctors and other healthcare providers are paid a fixed salary. What is actually reported in those countries tends to make their healthcare systems look better than they would if more comprehensive data were reported.

Second, our most disenfranchised patients, whether citizens or not, tend to receive much of their healthcare in emergency rooms because they either cannot afford or do not have a primary care doctor. In addition, they forgo routine screenings and generally are not able to take care of healthcare needs as they arise. Instead, these individuals often seek care in the emergency room when their healthcare needs have become too serious to ignore. It so happens that US emergency rooms are one of the places where we capture statistical information with great precision and where both media attention and public interest often focus. When you combine patients who have received poor prior care with the high-cost setting of an ER, you get a skewed perspective on the US healthcare system.

Third, and more important than statistical precision or where statistics are gathered, is the substance of what we're measuring and reporting. Measuring and publicizing our country's healthcare system primarily by birth and death endpoints leaves out all the healthcare people get in between, which includes some of the best care in the world.

The reality is that many of the individual elements of the US healthcare system are in excellent shape—a fact that receives comparatively little press. We have highly trained physicians, nurses, and other medical professionals who are sought after by people in other countries as well as our own; we also have an abundance of first-rate medical facilities, state-of-the-art medical equipment technology, and effective and innovative drugs and other biotechnologies. But my point—and one of the main points of this book—is that the way in which the parts of the US healthcare system interact or fail to interact is the heart of the problem—not the medical care providers, not the insurance companies, not the relative amount of money spent on healthcare, not the pharmaceutical companies, or even the changes contained in healthcare reform legislation. Improving how the parts of the healthcare system work together makes sense regardless of healthcare reform legislation and whether or not it changes. We will see later in this book how an approach called Integrated Healthcare Management (IHM) can make all the parts of our healthcare system work together to reduce costs and improve quality through better sharing of information and better alignment of incentives. But first, let's examine what a system is and how our healthcare system in particular works.

Understanding the Systems Approach

What is a system? A system is a combination of elements and behaviors that interact to achieve an objective.

In order to improve our healthcare system, we first need to understand the components of that system and how they work together. So what is the US healthcare system anyway? Indeed, what is a system? It seems that systems are popping up everywhere—and not just in healthcare. We have transportation systems, food distribution systems, and even home entertainment systems. There is actually a discipline called systems science, although few people study it. The late C. W. Churchman, an esteemed professor at the University of California, Berkeley, from 1957 to 1996, was one of the first to define a "systems approach" to solving problems. While systematic thinking can and should include social policy, my experience is that when people throw up their hands and rely primarily upon policy intervention to solve a tough problem, it is usually due to a lack of systematic discipline. This is clear in the US financial system as well as in the healthcare system. And when crises occur, playing the blame game may make entertaining headlines, but it is not a path to systematically solving tough problems.

When you study systems, as I did in college, home heating is often the first concept you learn about. Understanding a simple closed system like this one is a good way to begin to understand systems science and—as we will see later—how systems science can be applied to fix the US healthcare system. The basic elements of a typical home heating system are the air in your home, the thermostat, and the furnace. The thermostat sets the target, measures the air temperature, and, if required, sends a signal to the furnace to heat and circulate the air. When the air reaches the desired temperature, the furnace shuts off. It's a simple and perfect closed system as long as you know what you want the temperature to be. Well, almost perfect.

However, suppose it's hotter outside than you want the temperature inside to be, and now you need to reduce the temperature inside your house. To do so, you need to add another element—the element of cooling—to the system. Now the thermostat has to be intelligent enough to tell the furnace when to go on or off, when to tell the air conditioner to go on or off, and when to tell both to do nothing. This is where many college students decide to study philosophy because they are smart enough to know that systems science only gets more complicated. For example, what about the air itself ? How efficiently does it move around? What about humidity? Are the windows open? Should we cool the part of the house facing the sun and heat the part facing away from the sun to achieve the greatest efficiency? As you can see, designing a comprehensive heating and cooling system can become overwhelming if you consider every possible variable. So, whether you are designing a heating and cooling system or a system as massive as healthcare, it is important to focus your energy on the variables that matter most.

Systems Thinking Meets the Healthcare System

Many people think of the healthcare system as only the elements they can see and touch: the doctor's office, the hospital, and the local pharmacy. But as you will see, there is much more to the healthcare system than that. Even many doctors and other healthcare professionals do not understand all the elements of the healthcare system and how they affect one another. That is why assuming that your highly skilled physician is an expert concerning the entire healthcare system is similar to believing that your first-rate auto mechanic is an expert in the automotive and transportation industries. Most people intuitively know that even though their superstar mechanic has in-depth knowledge of particular makes and models of automobiles, and perhaps even specializes in transmissions, he or she is probably not qualified to run General Motors.

A similar analogy exists for doctors who become specialists. Specialists are systems experts on a subset of closed human systems, such as the digestive system, the circulatory system, or the nervous system. As advanced medical research yields deeper understanding of smaller and more discrete anatomical systems, specialists become even more specialized. And as these physicians expand their knowledge about treating patients within particular medical specialties, and even subspecialties within their specialties, they understandably have less time to focus on how the whole healthcare system ties together. Herein lies a paradox of systems thinking—and a problem in today's healthcare delivery system. If you have a medical problem involving the microscopic workings of your inner ear, then you probably are thankful there are specialists who pursue their understanding of the ear, nose, and throat system to the nth degree. But the fact that these specialists are able to solve your complex ear problem does not necessarily mean they understand the framework of the entire healthcare system. And from a systematic perspective, even if a well-researched and innovative treatment for your ear malady exists somewhere in the healthcare system, if your doctor does not know about it, or you cannot get access to this treatment because of your location, or if your health benefits plan doesn't cover it, that specialized knowledge is practically useless.

The Systematic Role of Primary Care Doctors

Fortunately, there are some physicians, typically called primary care doctors, who concentrate their careers on understanding how all the anatomical and certain psychological and social systems interact with and affect one another. These days, however, fewer and fewer medical students are choosing to become primary care doctors. Ironically, despite being trained to understand the whole human being both psychologically and physiologically, primary care doctors are not usually as well compensated as their specialized peers. From a systems science perspective, just as you cannot efficiently deploy the relatively advanced components of home heating and cooling systems without a thermostat, it is difficult to effectively deploy sophisticated components of the healthcare system (such as specialty care) without primary care doctors.

If the trend of more medical students choosing careers in specialty care continues, the United States could end up with the healthcare equivalent of too few "thermostats" to signal when the heating and cooling elements should go on and off. Primary care doctors are an essential control mechanism for the health of the patient, much the same way that thermostats are the control mechanism for the temperature of the house. Their understanding of the many variables that can affect the health of their patients qualifies primary care doctors to make smart decisions in consultation with their patients about when to "turn on" visits to specialists and other care settings beyond the primary care doctor's office.

For the house with no thermostat, the result might be either too high a temperature, wasting lots of expensive energy, or too low a temperature, which could cause the pipes to freeze and avoidable leaks to spring up. For the patient with no primary care doctor or accurate alternative information source, the result might be either too many unnecessary tests and visits to specialists and consequently an increase in healthcare costs, or not enough diagnostic tests or visits to specialists when these services are needed. In addition, the patient could spend more time in pain and run a greater risk that the illness or injury could become serious or, perhaps, deadly.

Addressing the shortage of primary care doctors is a difficult challenge. From a systems science perspective, we need to focus on the root causes of the problem. As we try to design a better healthcare system, how can we reverse the troubling trend of too few primary care doctors? Should we pay more to doctors who choose careers in primary care than to their specialist peers? Should we pay medical school tuition for those who commit to careers in primary care? Should we make the criteria for being accepted into such a tuition payment program very competitive so that we attract the best and brightest candidates to be our medical "thermostats" instead of becoming specialists? Some efforts are being made through healthcare reform legislation to create incentives to address the primary care shortage, such as student loan repayment programs and funding for training and education for primary care physicians and other professionals who practice in primary care. (We'll talk more about incentives and other solutions to our healthcare problems in chapter 8.) The good news here is that there is nearly universal agreement among all parties involved in the healthcare debate that access to primary care doctors is a crucial component of any improved system.

Clearly, primary care doctors (as well as specialists) play a central role in American healthcare. But it is important to realize that they represent only one element of the healthcare system—albeit a sacred one. Doctors and other providers have their hands full with the system elements they need to know in order to provide care to human beings. They cannot possibly know the whole healthcare system, and we should not assume they do.

Managing through Measuring: The Basics of Information Technology

So how do goal-seeking human beings today think about taming complex systems such as healthcare so they can better understand and manage them? The use of information technology can play an important role. Nearly anything that can be observed or measured that in turn would lead to a specified action (e.g., if the temperature is too low, then turn on the furnace) can be expressed as a mathematical or rules-based algorithm. The ability to capture measurements or values in digital form, process those data against a set of instructions or algorithms, and do something with the results is the backbone of modern information technology.

The world seems full of jargon about information technology, so let's make it easier to understand. "Software" is simply rules for operation, "hardware" simply determines how much data can be stored and how fast they can be processed, and "networks" simply determine both how quickly and where or to whom data can be transported. The challenge in information technology is assessing how best to use software, hardware, and networks to make specific objectives easier to achieve. In healthcare information technology, examples can range from deriving a clinical diagnosis that requires dozens of inputs with hundreds of permutations (for which even when assisted by a computerized diagnostic tool, the human brain of an experienced primary care physician is still the reigning supercomputer champion) to simple algorithms, such as a health plan checking whether a physician has entered a diagnosis code for an office visit or whether a prescription has been written and filled.

The press is full of stories about doctors being unfairly buried in administrative duties. However, before you express outrage that a physician should have to waste valuable time filling in a diagnosis code properly to get paid, keep in mind that failure to properly record a medication, test, or diagnosis could result in an allergic or adverse drug interaction, the unnecessary duplication of a particular test, or a delayed or incorrect diagnosis for that doctor's patient. And so, if you begin to think about it systematically—a habit I hope you will pick up from this book—administrative data used in the context of receiving accurate payment can also be used as important data for determining treatment of a patient in a clinical setting, such as a doctor's office or hospital. If you need medical care and the doctor treating you does not know about your past tests, diagnoses, and medications, you might wish the doctor had access to your health history in a digital (i.e., computer-accessible) form so she could see all the care you have received.

Information Underload

A wealth of data are being captured every day about who gets what healthcare and how much it costs. However, because these data are fragmented and much of the more insightful information is captured manually (instead of digitally) on those long paper forms you fill out every time you go to the doctor or in doctors' handwritten notes, it is not being used in the most timely or effective way, nor is it shared among the different parts of the healthcare system in order to help it run effectively. Stories abound about people ill on vacation receiving a drug to which they are allergic, simply because the information about the drug allergy was locked up in a paper-based file at their physician's office instead of being available where patients and providers need it.

Similarly, if you move to a new city or simply switch doctors, your medical record is not automatically transferred, and when it is, it's often in the form of manila folders stuffed with nonstandard forms in messy handwriting. As a result, your new provider has no practical way of knowing anything about your medical history, medications, allergies, past diagnostic tests, or risk factors unless you remember to include every detail on the new provider's paper form. This lack of information can lead doctors to order tests that have already been done, prescribe medication that can interact negatively with others you are taking, and cause countless other problems ranging from mere inconvenience or unnecessary expense to a dangerous drug interaction or misdiagnosis. However, this type of information deficiency is neither the doctor's fault, nor is it yours. The system was never engineered to assemble and distribute information to the greatest benefit of providers and patients.

Much is being made of the electronic health record as an answer to some of the information issues in our healthcare system. In fact, many doctors are converting to electronic or digitized medical records, and some are already using them. The American Recovery and Reinvestment Act of 2009 made funds available to providers who create electronic health records and use them in a meaningful way in their practices, and that is a step in the right direction. (In chapter 9, we'll examine the differences among several types of computerized health records.) However, while having clear, legible, and accessible health records is important, you and your doctor should be wary of claims that the implementation of electronic health records alone will dramatically improve care or save money. Merely computerizing a flawed process speeds it up but does not fix it. In the information technology world, there is even a name for digitizing a system that is not well engineered to begin with: it is proverbially known as "paving cow paths." In order to make a tool such as the electronic health record more useful in improving care and saving money, technology and processes must be engineered together. For example, what if your handwritten health record were not only converted into an electronic health record, but in addition, it could enable your doctor to connect electronically to the prescription drug information that your health plan (insurer) stores in its own system? Now suppose that when you entered the exam room, instead of your doctor asking you to list the prescriptions you were taking, she were able to tell you the names of those prescriptions on record and simply ask you to verify the information? Here, technology would save your doctor time and give her more information than was contained in your original handwritten health record. A "cow path" would not be simply paved over in its original crooked form; rather, it would be straightened out and widened to make everyone's life easier. There are many immediate and practical ways in which information technology can be integrated with changes in processes throughout the healthcare system. In chapter 8, we will explore this powerful combination in more detail.


Excerpted from THE HEALTHCARE CURE by JEFF MARGOLIS Copyright © 2011 by The TriZetto Group, Inc.. Excerpted by permission of Prometheus Books. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Meet the Author

Jeff Margolis is the founding CEO and chairman emeritus of the TriZetto Group, Inc., the largest supplier of information technology to the US healthcare insurance industry. He is the executive chairman of WellTok, Inc., a pioneer in the application of social media technology to healthcare. Over a twenty-five-year career dedicated to improving the US healthcare system, Margolis has earned broad recognition as a futurist and an advocate for the innovative application of information technology to solve complex challenges in all areas of the healthcare industry. A frequent guest lecturer for healthcare programs at major universities in the United States as well as at healthcare conferences, he also serves on the national board for the Crohn’s and Colitis Foundation of America, the Board of Directors of Hoag Memorial Hospital Presbyterian, and the Advisory Board of the University of California at Irvine’s Center for Healthcare Management and Policy.

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