Noted MD and author says Obama health plan only one step in the right direction..much more needs to be done

Dr. Potarazu's new book "Get Off the Dime: The Secret of Changing Who Pays for Your Health Care"


Sreedhar Potarazu, M.D. M.B.A.

Who is really qualified to be working in the medical profession these days? Healthcare reform is on everyone's mind and, according to the President, someone in the United States is declaring bankruptcy every 30-seconds because of healthcare costs. We have a lot of people making suggestions, but how many of them are really qualified to speak? How many of them have been in the trenches providing for care or paying for it? What do we really need to know to finally make an impact that will last?

I would never have guessed 20 years ago that the practice of medicine would become what it is today, nor that there would be a distinction between health and healthcare. When I interviewed for medical school, what was important for me, and maybe even to those across the table, was that I cared about people, and that I was passionate about making the kind of commitment leaders in the profession have made. While a lot of this notion still holds true today, there is so much more that I have learned about health and healthcare than I would have anticipated.

I had the privilege of practicing ophthalmology for almost 10 years, part of it at Johns Hopkins and, in the past 10 years, working with some of the largest employers helping them understand how to better provide cost-effective, quality healthcare for their employees. I have seen the point where the dollar begins in our healthcare system, as well as where it ends. These are two very different places.

What I have learned are a few facts everyone in the system should know, but perhaps never really stopped to think about:

First, cost and quality is driven by empowering the purchaser. Give the buyer - in this case the employer and its employees - the information to drive accountability, competition and ultimately value.

Information is driven by infrastructure; that is technology. In this case, technology means the plumbing that is required in the healthcare system to collect and transport information from all the reservoirs and tributaries where data resides. This data includes every element of the healthcare experience, starting with the employer and flowing through the insurance companies, pharmacies, hospitals, doctors and the entire system. This data brought together in its TOTALITY, which has never occurred previously, will give everyone the transparency (true cost and measures of quality) of health and healthcare. Ultimately, the buyer can then make more informed decisions about - not the total cost of illness - but rather the total cost of people with illness (which factors in the cost of not just illness but lost productivity).

With this infrastructure and information the right incentives can be put in place for everyone: insurance carriers, hospitals, doctors, and consumers for cost-effective quality care. How de we know this can work? Because that is how we have driven efficiency in every sector of our economy. Ask companies such as McDonalds , Kodak or Microsoft - they have done it.

The administration has prioritized the need for transparency and technology to reform the system. The reality is that in order for us to be successful, health information technology must be aligned to the economic flow of dollars instead of working against the tide.

No matter who the party is in the healthcare system, we can only make decisions on three fundamental variables: COST, UTILIZATION and RISK; nothing more, nothing less. Cost implies the price of services being delivered. Utilization is the volume of services being consumed and Risk is the likelihood one will need to use a service in the future based on their health status. Why we have yet to crack the code of reform?

Second, we have never started at the top of the mountain with the employer to align the right incentives from where the dollar flows. The expertise required to make decisions at the corporate human resource level has been challenged by the depth of medical expertise required to put in place the right programs for employees. Many health-related decisions within corporations are being made by people who have no healthcare background. We need more doctors to be involved at this level on the mountain. We also need more people in the industry who understand the value of technology in healthcare and how it can be best used to drive efficiencies.

Another important challenge to reform is the level of transparency employers have to-date which has been weak, and most of the information has been provided by the fox (the insurance carrier) in the hen house (the employer). While the risk of financing has been borne by the employers, the insurance carriers continue to benefit from the float of dollars. Virtually no financial control has been placed in the hands of the employers or, for that matter, physicians.

The President's push to accelerate the adoption of electronic medical records by physicians is a step in the right direction, but it is only a small piece of a much broader adoption of technology that must occur throughout the industry. Connecting all of the key players in the market with a standardization of data and security measures is a key priority. Without a stable foundation, creating individual applications or building blocks that cannot communicate with each other, is like stacking random Legos. What we need is a model similar to the Tinker Toy. While there has been a push to create regional health information exchanges, it is critical that we don't simply create new complex islands with no connecting bridges or tunnels.

With the economy on the verge of collapse, healthcare could be the tipping point to submerge us beyond recourse. It is essential that, as part of any reform, we carefully evaluate the necessary elements that will provide the insight to determine the full extent of the economic burden to be borne for providing healthcare to the society as a whole. We can no longer rely on our best guess or actuarial tables to determine this number. If we are wrong we may have to look to China to bail us out again. The right math can only be solved through the use of information technology that exposes the metrics of healthcare utilization throughout the system. Once this information is available, individuals with the knowledge and expertise of health and healthcare must help create the right incentives to drive greater efficiencies in the system for cost-effective quality care for consumers. Consumers must ultimately be empowered with the right information to engage them as an active participant- again through technology.

The challenges for the nation today are enormous. We must recognize that in order to rise to the occasion we must be armed with skills that far supersede our previous attempts. The system needs, immediately, individuals who are skilled in not only health delivery but also have an in-depth knowledge of technology and healthcare financing. This is a unique combination of skills that need to be further developed. It will soon be the responsibility of medical schools and business schools to meet this new demand.

We can meet the challenge, but it will require a new spirit of innovation and entrepreneurship that can truly cure the ills of our existing system.


Sreedhar Potarazu M.D., M.B.A.
CEO, VitalSpring

Author of Get Off The Dime - The Secret of Changing Who Pays For Your Health Care