Ken Terry

It’s well known that new medical technology drives up costs, but how it does that is often more complex than appears on the surface. While the financial benefits of a technology to physicians and hospitals may accelerate its spread, some innovations become widely accepted because physicians and patients are convinced that they provide superior healthcare benefits.

A paper by Gabriel Barbash and Sherry Glied in 

offers a good case in point: robotic surgery. Robotic surgery systems, which cost between $1 million and $2.5 million each, have spread across the U.S. and Europe in the past four years. Between 2007 and 2009, the number of da Vinci systems (the leading robotic surgery product) installed in U.S. hospitals jumped 75 percent to about 1,400, and the number purchased in other countries doubled to 400. Since 2007, the number of robot-assisted procedures has soared from 80,000 to 205,000 per year.

Before robots came along, manually performed laparoscopic procedures had already reduced hospital lengths of stay and recovery times for a number of common procedures. Robot-assisted procedures do the same, and they have also been substituted for some open procedures that previously had no minimally invasive alternative. There is no solid evidence that robot-assisted surgery produces outcomes superior to those of conventional procedures. Yet the use of robots adds about 6 percent to the cost of procedures, and twice that when one includes the cost of paying off the equipment.

One might think that robot-assisted surgery would pay for itself by reducing length of stay. But, as was the case with the earlier laparoscopic procedures, robotic surgery is associated with an increase in volume. Despite a decrease in the underlying incidence of prostate cancer, for example, there was a 60 percent rise in the number of hospital discharges for radical prostatectomy between 2005 and 2008. That just happens to be the period when robotic surgery for that condition was becoming widespread. Patients who received a diagnosis of prostate cancer were 14 percent more likely to have the procedure in 2007 than three years earlier.

Surgeons who do robot-assisted surgery undoubtedly believe it’s better than manual surgery; and after spending hundreds of hours learning the technique, they’re likely to tell patients who may need a procedure that they’re going to be safer, have less side effects, and recover more quickly if they have robot-assisted surgery. Meanwhile, hospitals are engaged in a medical arms race: If they see their competitors acquiring robotic surgery systems, they may feel compelled to do the same. So, in a short period of time, despite the lack of rigorous evidence that it leads to better patient outcomes, robot-assisted surgery has become the 

Biomedical innovations have accounted for much of the gains in life expectancy over the past half century, notes Victor Fuchs, a Stanford University economist, in 

. But because new technology is a major driver of health cost growth, he says, we should require the advocates of new technologies to prove their value. To pass the test, he says, these innovations must be shown to significantly increase the quality of care (in terms of longer life or greater quality of life), and their cost must be reasonable in relation to the increase in quality.

Of course, both tests are somewhat subjective: For example, longer life might mean only a few extra months for someone with terminal cancer. That might be valuable to a particular patient; but if the treatment substantially decreased his or her quality of life, would it still be worthwhile? And how much is the patient with an average income willing or able to pay for it?

The argument is complicated, of course, by the fact that the patient might have good insurance. But as costs continue to skyrocket, we as a society also have to consider what the new technology is costing the patient’s employer. If that company reduces wages or benefits or doesn’t hire new employees because of the cost of healthcare, where do we draw the ethical line?

The challenge of new technology - as in the example of robot-assisted surgery - is that costly innovations often become the standard of care before there’s sufficient evidence to tell whether they add real value that justifies their expense. The comparative effectiveness research that the government is planning to conduct should help reduce uncertainties about value; but unfortunately, most of those studies will probably be done after it’s too late to act on the information.

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The challenge of new technology - as in the example of robot-assisted surgery - is that costly innovations often become the standard of care before there’s sufficient evidence to tell whether they add real value that justifies their expense.

Trendspotter: Technology Must Prove Its Value

Small physician practices are less likely than big groups to have electronic medical records-and there’s a reason that goes beyond cost. They lack the resources and the technical knowledge to implement these complex systems. The support and training that vendors offer is frequently inadequate, especially for physicians who aren’t especially computer-savvy. And the vendors freely admit that they don’t have sufficient staff to cope with the expected influx of new EHR buyers who want to show meaningful use by 2011, when the government incentives start flowing.

Under the HITECH provisions of the American Recovery and Reinvestment Act (ARRA), the government is required to create health IT regional extension centers (HITRECs) across the country to help up to 100,000 primary-care physicians install EHRs in their practices. The Office of the National Coordinator for Health IT 

 for this purpose, and 60 HITREC grants will be handed out by the end of March.

Some healthcare systems are 

to subsidize EHR purchases by non-employed staff physicians, and far more are trying to get their employed practices online. But in either case, the demands of working with a multitude of small practices to implement EHRs exceeds the capacities of most hospital IT staffs. Moreover, the hospital IT people have expertise in inpatient systems but know little about ambulatory-care EHRs.

The AMA is trying to help fill the gap by creating a new web portal that will “provide physicians access to information, products, services, and resources to help facilitate medical practice and ease adoption of health information technology.” While the AMA will give doctors access to e-prescribing and lab ordering applications via the portal, now in beta test mode, AMA’s partner, Dell Perot Health Care Systems, will help physicians implement their EHRs. According to Dell Perot, the AMA will initially offer its member an Allscripts EHR, and it appears that other products will be made available later.

No pricing was available at press time. But, since Dell Perot will host the EHRs on a remote server, upfront and maintenance costs will be lower than they would be if the program and the patient data were hosted on an in-office server.

The big question is how effective Dell Perot can be in working with small physician practices. Both companies have extensive experience in helping hospitals set up and integrate their systems, and Perot-

-has also done a lot of outsourcing work for hospitals. The company has also been helping some big healthcare systems, such as Memorial Hermann in Dallas and Tufts Medical Center in Boston, ramp up EHRs in the offices of affiliated physicians. But small independent practices outside the orbit of a healthcare system present a different set of challenges.

In an interview with 

, Jamie Coffin, vice president of Dell Healthcare and Life Sciences, pointed out that Dell has helped computerize lots of small businesses in non-medical fields. Of course, that doesn’t mean too much, because EHRs and healthcare are much more complex than, say, a bookkeeping system in a restaurant chain.

Part of the small-practice solution, Coffin indicates, is to use remote training and support tools. Dell Perot will install the hardware, do a “brief touch” in the practice to get the software running, and then follow up online. This does not leave much room for change management or handholding, and practices that cannot figure out how to use the software quickly might drop it, as many have before. But based on Dell Perot’s success to date in working with healthcare systems, they’re hopeful that this approach will also click in private practices.

In any case, Coffin points out, the AMA-Dell venture will fill a need as physicians scramble to show meaningful use. “The real question is whether EHR vendors can scale to the number of installations they have to do over the next 36 months,” he says. “It’s not a cost question for them, it’s an issue of whether they can scale to the demand. They’re going from 1,000 implementations a year to 10,000-20,000 or more. That’s one reason why they’re looking at companies like Dell and Perot.”

Small physician practices are less likely than big groups to have electronic medical records-and there’s a reason that goes beyond cost. They lack the resources and the technical knowledge to implement these complex systems. The support and training that vendors offer is frequently inadequate, especially for physicians who aren’t especially computer-savvy. And the vendors freely admit that they don’t have sufficient staff to cope with the expected influx of new EHR buyers who want to show meaningful use by 2011, when the government incentives start flowing.

Author | Ken Terry

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Trendspotter: Technology Must Prove Its Value

Trendspotter: AMA To Give Small Practices a Helping Hand in Launching EHRs