11 Jun Visions, Part II: Preizler sees IT leading incremental health system change
Editor’s note: This is the second of a two-part interview with Marty Preizler, president and CEO of Physicians Plus Insurance Corp. In Part I, he provided an insurer’s view of healthcare IT and patient data exchange.
WTN: We hear a lot about interoperability of information technology systems between health facilities, but what about interoperability between insurers and facilities? Is that a challenge of similar dimension?
Preizler: I think they are probably similar challenges. We’re very much in favor of the interoperability. Understanding that there are very strict laws about protecting patient information, which we take very seriously, we’ve found that where we are able to leverage exchange of patient information across our systems with our major stakeholders and provider partners, we do that. I can give you two examples.
One is in the administrative processing of claims. We’re virtually at 100 percent transfer of data electronically between the UW’s systems and Physicians Plus and Meriter. Everything comes over electronically, it’s reviewed and adjudicated electronically, and that contains all kinds of confidential patient information, and it’s embedded in those sorts of records. So we already do that on an administrative basis.
A more clinical example would be the exchange of patient medical information so that we can measure our clinical quality. We used to have a very manual process of sampling patient records when going out and determining whether the medical system has provided the quality HEDIS requires, and how do we measure that? We would literally hire people to go out and pull those records and comb through the records manually, so there were a lot of errors and missed information and missing records and so forth.
In the last five years, we’ve put a significant amount of investment with Physicians Plus and the university’s system, in particular having it all automated and having ways for the clinic to mine that information electronically. The quality of the process, itself, has just been enormous. In terms of the efficiency, we can do it much faster, we can do it cheaper, and the results are much better.
WTN: What are the other data sets that you would like to glean from that?
Preizler: We have something called a Chronic Illness Registry and we’re able to get information on our patients with chronic illness from a variety of sources. That [information] feeds into a central data bank that then allows us to look through the information and identify patients who are at high risk, contact those patients and their primary providers, and get them into programs that can improve their health. So we’re actually doing that right now. I would say it’s in its early stages. We have the software, we have the programs, we’ve done the training, and we’re building up those capacities.
WTN: What kind of healthcare system, in terms of who pays for health insurance coverage, will we have in 10 years?
Preizler: If the Iraq War wasn’t there, I think healthcare would be the number one topic with 50 million uninsured and the whole litany of issues. So I think it will be a big agenda item. I don’t think we’ll see radical change because that’s not really the nature of politics in this country. It never has been when it comes to those social changes. We’ve haven’t seen many big social changes in healthcare like 1935 with Social Security and then in the mid 1960s with Medicare and Medicaid. There has been tinkering with it. They added the pharmacy part 40 years later, so everything else has been incremental change.
So I think we’ll see incremental change toward more of a single-payer approach, and it will be incremental in the sense of the central information exchange that we’ve been talking about, Medicare being expanded, and those sorts of things. I would guess probably in my lifetime, which might be another 30 years or so, we’ll probably see the diminishment of the big for-profit, equity-traded health insurers and have more regional payers with a more single type of system to eliminate the excess overhead.
Now, in this community you always hear about 30 percent of the dollars going for administration. I can tell you that in this industry and in this marketplace, the pure administrative costs for the market – Dean, P-Plus, Group Health, and Unity – is at 10 percent or under. Now you could say, “Okay, but that’s duplicated four times,” and that’s true. So you could take a lot of those costs out by going to some form of a single-payer system. Will that happen? I don’t know.
WTN: Would the single payer necessarily be the government?
Preizler: The government would probably define the single payer and they would contract with someone else to administer it. For economies of scale, it would probably make more sense to have it done on a regional basis. WPS (Wisconsin Physicians Service Insurance Corp.) is a good example. They are one of the largest administrators of Medicare in the country. They pay the claims, and they do it very effectively.
WTN: So it wouldn’t necessarily have to add to the government bureaucracy.
Preizler: I don’t think that would be the best way. I think the Medicare program covers 50 million people, something like that. They claim they do it very efficiently, three percent. I can tell you that as an insurer dealing with the federal government, there is all kinds of unnecessary bureaucracy and process that they could eliminate and save a lot of money. So I’d hate to see it become so bureaucratized. I think you’d probably lose a lot of innovation in that process.
I think there are trade-offs. I think the physicians, and you can’t speak for everyone, but I think there are probably some people who believe that a single-payer system is good because it rids the system of payments to insurance companies] that are siphoned off for profit, or that are not going into the healthcare system, and that if you had a single-payer system, you would have a reduction of overhead and an increase of dollars going into care.
I don’t think that’s necessarily the case. I think there will be a reduction in administrative costs, which would be a good thing, but the money won’t necessarily be allocated back into the system.
WTN: Would a single-payer approach necessarily be tied to universal coverage?
Preizler: If you have universal coverage, what’s the scope of that coverage? Who’s going to pay for it? Where’s the money going to come from? As long as we have competing international interests – Iraq is the best example I can give right now, and it’s a classic guns and butter issue – you can’t pay for schools and healthcare and other societal goods if you’re spending it on wars.
So with universal healthcare, how do you cover those other 50 million people who aren’t covered by insurance? The issue is how it’s going to get paid for. You have to figure out either within the overall 14 percent of the Gross Domestic Product that goes to healthcare, can that be reallocated?
That would mean less administration and more to cover these people. Do you go for less of something to pay for something else, or do you go outside of that 14 percent and see where else in the economy you can find it? It will be interesting to see because in the early [presidential] campaigning, the candidates, especially the Republicans, are saying healthcare is important and we need to do something about it, but we’re not going to raise taxes. So how they are going to get the money?
It will be an incremental process. We will see change. It will be incremental, but the incremental process will accelerate after the next election. If we can figure out how we can extricate ourselves from Iraq, it will free up dollars.
We’re two years away from an election, and probably the next 10-year period is when we’ll see the most rapid change in terms of going more toward a single system that has more universal coverage along the lines that I described.