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Editor's note: We've heard about the merits of electronic medical records and other healthcare information technology from health providers and vendors, but what do insurer's make of the industry's electronic push? Marty Preizler, president and CEO of Physicians Plus Insurance Corp., views the benefits in much the same way and he explains why in Part I of a recent interview with WTN. Excerpts of the interview are as follows:WTN:
From the perspective of the health insurer, what do you make of the move to electronic medical records and patient data exchange?
: We're very much in favor of having data exchange. I would say the only caveat, and it's not a Preizler caveat, but a caveat in the industry, and that's that we want to be protective of patient privacy and make sure that we're complying with the law and living up to our ethical standards. But having said that, in terms of efficiency, improving continuity of care, improving our ability to address member healthcare needs and quality, I think we would support the electronic medical record. It really, overall, will contribute to lowering costs and improving quality and safety.WTN:
The federal government is trying to speed the pace of EMR deployment, mainly by setting goals. What has been the role, if any, of health insurers in giving it a push?
We're certainly in favor of it for some of the reasons we've already talked about. Primarily, it's the patient quality improvements, the safety improvements, and then having access to accurate and more timely information that helps us with the programs that we sponsor here to improve health, in particular those chronic conditions - diabetes, congestive heart failure, hyper lipidemia, behavioral health.
Those are the four or five that are the biggest drivers of our healthcare costs, so that's where we concentrate, and probably most of the health plans in our marketplace are very similar to us in that way.WTN
: Do you have any particular concerns about the forthcoming Madison patient data exchange
: It would probably be in the protection of patient confidentiality. I don't have big concerns about it because of the ethics and the integrity of our systems here. I also think that we have to help educate the public so that they know that we have very high standards about the improper use of information.
I noticed that there were comments at the Digital Healthcare Conference
, where one person made a statement, something negative that insurance companies might improperly use information, and I wanted to sort of blurt out, "Well, maybe insurance companies, but Physicians Plus doesn't." I'm not making an advertisement for P-Plus, but we take our responsibility seriously because it's also our own information. I'm a patient, too.
Even if we were not ethically minded, there are steep fines and jail sentences. I don't look particularly good in orange jump suits.
Other than that, I think the benefits outweigh those risks. Actually, Madison could be kind of a model for that because I think we just have a lot of the right ingredients coming together. It needs some leadership and some focus. The fact that every organization - actually, we're the odd one out - is on or going on the Epic
system creates a beautiful technology foundation for that.
And then you have got really great leaders in Jeff Grossman
(University of Wisconsin Medical Foundation), and Donna Sollenberger
(University of Wisconsin Hospitals and Clinics), Frank Byrne
(St. Mary's Hospital) and Jim Woodward
(Meriter) and the insurance people like me. I think that you could have a real strong, collaborative effort that could be a model for the country.WTN:
If there are cost savings to be had from healthcare IT, will that necessarily trickle down to health consumers in terms of their monthly premiums?Preizler
: I would say that the answer is definitely yes. At Physicians Plus, where we have invested in all kinds of improvements in our information technology, it actually has contributed to significantly lowering our administrative overhead from 12 percent just a few years ago to less than eight percent right now. At the same time, we know that we've improved our customer service and value to our partners and stakeholders, and I can give you some examples.
A real easy example that we actually innovated here in this marketplace and now is pretty widespread is the distribution of Palm Pilots to all of our primary care providers about four years ago, with basically our drug formulary on embedded information on that Palm Pilot
that they can sync everyday to get the most up-to-date information. That really helped when making good decisions - good prescribing decisions - for their patients, and that has taken off like wildfire. All of the health insurers use the same system.
We've extended beyond our primary doctors to a lot of our specialists now, so they literally carry their physician desk reference on their belt, and it's real-time data. So we invested in that and [initially] put about 200 of these devices out to our physicians.WTN
: Right now, how many of them are using the Palms?Preizler
: About 2,800 physicians, or almost our entire physicians network, regularly use ePocrates
. In the last quarter of 2006, about 50 percent used ePocrates to find lower generic alternatives, which certainly reduced the rate of [price] increases for drugs.WTN
: Did you do anything in particular in terms of change management, or anything else to get them to embrace it?Preizler
: There's a whole roll-out process where we started with our primary-care physicians that had the highest concentration of our patients. We went out there and went through the training process with them, and I think it was one of those things where people had them and their colleagues saw them and said, "What's that?" Then they would get it and use it, and it's one of those things that spread that way. And then our competitors used them. GHC
(Group Health Cooperative) and Dean
(Health System) started to adopt them as well.
So now most physicians are in these closed plans, but if you happen to be a physician who is treating patients from more than one plan, you could have all those formularies embedded inside. What we put in ours is really not in the Palm Pilot, itself, but it's embedded in the PC through the Web, and we make access to Meriter's formulary in the Physicians Plus formulary. So they'll take their device and when they get back to their office, they put it in their little sync device, and it will pick up the most current fresh information off of our website. And they can do that every night or once a week or once a month or whatever it is, and that loads it into their Palm Pilot.WTN
: What happens to the formulary when there is new information about a prescription drug?Preizler
: It's entered here and then picked up by the vendor, which is ePocrates, and then the doctor is really going out to that vendor's website to get that information. But every time they sync, they have the most current [information]. And it has comparative pricing, so they know that Brand A versus Brand B or C, they know the generics, and they know the contra-indications. There is other clinical information they will download through, and that's a really good example of how that's helped, also, to bring our drug costs down. WTN
: Were physicians involved in the design of the formulary?Priezler
: We have a Formulary Committee here that's 95 percent made up of physicians who practice in our network, and they are the ones who basically designed our formulary. And they meet on a quarterly basis and review our whole drug formulary, and they add drugs and take drugs off, etcetera. They are the drivers of that, not a "bureaucrat" in an insurance company. The physicians are driving that whole process.
I think your initial question was, besides all that nice stuff, does it lower your costs? Number one, the answer is yes. And number two, does it have an impact on premium, and the answer is yes it does. And while the trend of premiums go up, it always goes up as an industry, it's going up at a slower trend than it would have otherwise.Blue Cross
established, through some studies a few years ago, that there is a 20-year cycle of premium going up and then coming down and then coming up and coming down. We're right now probably getting near the low end of a trough, and I suspect in the next two years, probably, we'll start to see the trend kicking back up. That's an industry phenomenon and Physicians Plus pretty much is a microcosm of that trend. So if we see in the national news that United
are doing something, within about a year lag of that, we'll see Madison following that same trend.
We're in the single digits [in terms of annual increases]. We have been for probably our second or third year.WTN
: Where are the increases compared to the rate of inflation right now?Preizler
: On average, probably about double. WTN:
How will greater healthcare information technology adoption change the relationship between the various healthcare players?Preizler
: I think there are three dimensions to the relationship. I'm talking primarily in Madison, with the three hospitals, the four insurance companies, the big physician groups. And I think those dimensions are competition, collaboration, and quality.
In my mind, to a certain extent, there is competition in the application of healthcare technology, or information technology, in healthcare because in many instances, it becomes a competitive differentiation. If you just take the insurance world as opposed to the clinical world, if I invest in and introduce technology that my competitors don't have, and I think that's adding value to our customer, and it will help me keep my costs down, it will improve the quality of care, and it will improve the premium trend, that's an investment I'll make and create differentiation from Dean or Group Health.
So on the one hand, the investment is competitive. More typical of the Madison culture is the collaborative nature of what we do. We compete on marketing and benefit design and so forth, but in many ways, where we're actually trying to improve the care and the quality of life, I think that's where you'll see a lot of collaboration happening.
For example, I think there are some common goals and objectives across the community in improving care for diabetic patients, or the whole obesity topic is a societal issue. It isn't just a Physicians Plus issue or a Dean issue or a Unity issue. And I think physician leaders in all of these different groups, including ours, set collaborative goals to try to improve. We work with our own populations and we work with key provider groups at Meriter and the UW Physicians Group
on these types of conditions.
And then I think, similarly, where we can see the improving overall quality and safety is where there is more collaboration in investing in technology across the different systems.