Wednesday, October 7, 2009

Will Googling Bring Down Clinical Costs?

The American Recovery and Reinvestment Act allocated $31 billionn for Health Information Technology (HIT) with the goal of wiring the entire U.S. medical industry within the next decade.

David Cutler, Ph.D., Obama health care advisor, “Will the Cost Curve Bend, Even without Reform?” New England Journal of Medicine, October 8, 2009

Three of President Obama’s chief medical advisors – David Cutler, PhD, and David Blumenthal,MD, of Harvard, and Peter Orzag, his Budget Director – envision EMRs as a powerful tool for bringing down health costs.

Here is the strategy, as described in my book, Obama, Doctors, and Health Reform.

“In health care, the big fix will focus on four Medicare strategies.

One, initially investing heavily ($44,000 to $64,000 per doctor) in Electronic Medical Records (EMRs) for doctors and hospitals.

Two, within five years, restricting or reducing Medicare payments to those doctors and hospitals that have EMRs.

Three, using Medicare-acquired data to pay doctors and hospitals, at the prevailing rates in the least expensive part of the U.S., e.g., the same in urban New Jersey as in rural Mississippi.

Four, stopping or reducing Medicare payments for expensive treatments that don’t work, as determined by a federal Comparative Effectiveness Research Institute using EMR-generated Medicare data and governed by a Federal Health Board.”

Will this strategy work? Doctor Cutler, a health economist at Harvard, thinks so. He believes modern information technology, as embodied in Google, will reduce the number of patients receiving expensive technology, lower administrative costs, and improve the management of chronic diseases.

I’m not so sure. Spending up to $64,000 per EMR per doctor and $2 million per hospital per year sounds stiff to me, considering the failure of EMRs in Britain to bring down costs and improve quality.

But in the H.I. T. community, unbridled optimism reigns, if this week’s Health 2.0 conference in San Francisco is any indication. The big H.I.T. companies are now deep in the game. The game is to empower consumers to improve their health and to pick the right I.T. doctor user.

This optimism is understandable considering San Francisco and Silicon Valley are cheek-to-jowl an considering the I.T. community is wildly enthusiastic about Obama, having voted for him by nearly 70%. Obama is the first Internet President.

Besides, Google in now the dominant media company. According to an article in the October 12 New Yorker, Google may be first media company to reach $100 billion in revenues. It is clear, as set forth in “Searching for Trouble: Is Google Invulnerable?”). that “Google, with the democratization of information and impact on other companies, has changed the business landscape.”

Will it fundamentally change the health care landscape as well? Google is, after all," the most visible service company concocted by mankind.”

Dr. Richard Reece is author, blogger, speaker, and innovation and health reform commentator. Dr. Reece’s latest book, Obama, Doctors, and Health Reform ( is available at,, and for $31.95 (hardcover), $21.95 (softcover), and $6.95 (electronic). For information on speaking fees and arrangements, call 860-395-1501.

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