TMCnet Feature
June 20, 2019

Is IT the Answer to America's Skyrocketing Healthcare Costs?

How Evolving Technology and New IT Trends Could Disrupt Healthcare

As costs continue to rise, healthcare becomes a bigger and bigger black eye on the American political system. It’s a face off between big business and private America, with the latter group losing ground on an annual basis.

The Rising Cost of Healthcare

According to a recent report from Axios, Americans spent $3.65 trillion on healthcare in 2018 – a figure that is larger than the entire GDP of countries like Mexico, Brazil, Canada, Spain, and the U.K. That makes it, by far, the highest in the entire developed world.

In total, American spending on healthcare increased by 4.4 percent over 2017, and estimates suggest things will only worsen in the near future. A report published in Health Affairs suggests an average annual growth rate of 5.5 percent from 2018 to 2027 (at a time when the current inflation rate is just 1.6 percent).

According to a report from Credit Loan, healthcare expenses for individual Americans has increased by 67 percent since 2006, which is by far the single biggest increase across any personal finance expense category.

On a per capita basis, health spending has increased more than 30-fold over the last four decades. In 1970, the average person spent $355 per year. By 2017, that figure had risen to $10,739. Even taking inflation into account, it’s a six-fold increase over that time period.

You can make a good argument for a number of factors influencing the rise of American healthcare costs, but according to one recent study, there are five key factors: population growth, aging population, disease prevalence or incidence, medical service utilization, and service price and intensity.

As Investopedia surmises, “Increasing costs for medical services, caused by both a growing and aging population play a large role but so do other factors like the growing number of people with chronic disease, increased costs for outpatient and emergency room care, higher premiums and out-of-pocket costs. These factors are exacerbated by inefficiency and lack of transparency in the world of medicine.”

How IT Can Make Healthcare Affordable Again

There’s no one-size-fits-all solution to fixing the healthcare system – financial or otherwise. There are, however, opportunities to improve the current state of affairs and technology – IT in particular – appears to be best suited to tackle pressing issues.

Here are some of the most promising opportunities:

1. Telemedicine

The growth of telemedicine – or healthcare that can be administered remotely via phone/video – has been fascinating to follow. According to data curated by MobiDev, the number of telehealth patients worldwide has grown from just 350,000 in 2013 to 7 million in 2018 – a 20-fold increase. These numbers are expected to grow even more in the coming five years.

The beauty of telemedicine is that it reduces wait times, eliminates many of the unnecessary costs of on-site appointments, and allows doctors to serve more patients on a limited schedule. It also gives patients better access to specialists, regardless of where they’re located. This can produce better early prognoses and reduce the likelihood of costly chronic conditions. And then there are data exchange platforms that are transforming the potential of telemedicine.

“While the current video chat platforms that dominate the sector serve immense purposes, telehealth services can do a lot more,” MobiDev mentions. “For example, hospitals have been able to reduce readmission rates by providing real-time monitoring of patients outside the office. Thanks to the advent of wearable devices, it's normal for remote monitoring systems to now be included in post-discharge plans for patients.”

2. Interoperability

If there’s one single force that has the potential to singlehandedly lower the cost of healthcare in America, it’s data. Better access to data – and the right data, for that matter – is the key to unlocking affordable care. And at the heart of this matter is interoperability.

The push for better interoperability in the healthcare industry is actually going pretty well at the moment, but there’s still a lot of room for growth. We desperately need a universal system that provides seamless, real-time sharing of digital patient information across all systems and platforms. Doing so would allow for a more complete patient picture, faster treatment, and more efficient care.

Interestingly enough, interoperability would lower costs for patients, while still giving doctors and healthcare companies the opportunity to maintain and grow revenues. As patients have better experiences, they’ll be more willing to develop healthy relationships with their doctors and return for follow-up service and advice. Interoperability has the potential to transform the industry by giving patients choice and healthcare providers the motivation to provide higher quality services. Everyone wins.

3. Artificial Intelligence

Most have heard about some of the trends in robotic surgery. (Perhaps you’ve even had a surgical procedure performed by one of these amazing technologies.) But artificial intelligence (AI) has even greater potential in the healthcare space.

As AI capabilities grow, look for things like predictive analytics, data liquidity, and improvements to existing EHR systems to give doctors and healthcare providers more information to make smart decisions that reduce the need for unnecessary procedures and allow for more efficient and accurate treatments/solutions. That’s the hope and expectation.

Technology Isn’t Enough

Leveraging powerful technologies and applications like telemedicine, interoperability, and AI will prove helpful in developing a more efficient and cost-effective healthcare environment for individual citizens, but it’s not the only answer. In order to truly put a cap on spending and reduce the cost for average Americans, technology must be complemented by the right policies.

This isn’t a political piece, so we won’t go into any specific suggestions regarding what specific actions should be taken. (There also doesn’t appear to be a clear path forward.) However, in order for real change to occur, there will have to be a common ground, common sense solution. The polarizing options in today’s political climate are doing little to mitigate costs. As cliché as it sounds, everyone must be willing to make concessions and meet in the middle. Generally speaking, the optimal solution is found at the intersection of understanding and change.

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