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Kaiser Health News and Fortune Investigation into EHRs Finds Medical Errors and Millions of Dollars in Federal Subsidies Inappropriately Released

Lawsuits filed by whistleblowers, doctors, and hospitals allege EHR software used by hospitals, clinical laboratories, and medical offices may ‘pose danger to patients’

Where have all the federal incentives for meaningful use of health information technology (HIT) gone? Pathologists and clinical laboratory leaders caught up in medical error investigations are not the only healthcare providers asking this question.

Since the start of the 2009 Health Information Technology for Economic and Clinical Health (HITECH) Act—which provided billions of dollars in federal incentives to stimulate use of electronic health record (EHR) systems to improve quality of care—about $38 billion in subsidies and incentives have been paid out by the Centers for Medicare and Medicaid Services, Becker’s Hospital Review reported.

Now, an ongoing investigation by Fortune and Kaiser Health News (KHN) indicates some EHR software vendors and healthcare providers were paid hundreds of millions of dollars in federal subsidies that they should not have received. Furthermore, EHRs are apparently associated with thousands of mistakes and medical errors, the Fortune and KHN investigation revealed.

In “Electronic Health Records Creating a ‘New Era’ of Health Care Fraud,” KHN wrote that “The federal government funneled billions in subsidies to software vendors who overstated or deceived the government about what their products could do, according to whistleblowers.”

Was Software Really Certified to Begin With?

As part of the new Merit-Based Incentive Payment System (MIPS), which itself is part the Medicare Access and CHIP Reauthorization Act (MACRA), meaningful use (formerly the Medicare EHR Incentive Program) refers in part to using certified EHR and HIT technology in a “meaningful” manner as defined by the Office of the National Coordinator for Health Information Technology (ONC).

However, MIPS and MACRA are only recent updates to the original federal legislation that launched the drive to incentivize hospitals, physicians and other providers to adopt and use EHR systems that met defined criteria. It was the $787-billion stimulus bill—the American Recovery and Reinvestment Act of 2009 (ARRA)—that actually defined the incentive program and allotted an initial $17 billion specifically to encourage adoption of EHR systems.

Now, more than a decade later, there is growing evidence that many EHR vendors and providers took advantage of the EHR incentives without meeting both the intent and requirements of this federal program. For example, government reviewers found that some providers and vendors collected their federal EHR subsidy payments and then “gamed” the system by programming the software to appear to meet incentive criteria, even though it had not, Becker’s Hospital Review reported.

“The only problem (with software certification) is that it presupposed that the [EHR] product [certified by a] vendor would be the same product it sold. It presupposes that people will go into the certification process and participate in good faith,” John Halamka, MD, a Professor of Medicine at Harvard Medical School, Chief Information Officer at Beth Israel Deaconess Medical Center, and Co-Chairman of the national HIT Standards Committee, told KHN.

According to FortuneKHN study findings:

  • Lawsuits filed by “dozens” of whistleblowers, doctors, and hospitals allege EHR software used by hospitals and medical offices may “pose danger to patients;”
  • Some of the $38 billion in federal EHR subsidies went to companies that “deceived the government about the quality of their products;”
  • Three EHR vendors were part of settlement deals totaling $357 million with the US Department of Justice (DOJ); 
  • 28% of doctors and 5% of hospitals who said they met government standards for EHR adoption and use were later found to have not done so, audits showed;
  • $941 million in inappropriately released EHR subsidies were recovered by federal officials.

Investigation Suggests EHRs Linked to Medical Errors

Fortune-KHN also investigated medical errors and omissions related to software failure and user errors. Fortune published these finds and others in a series of investigative articles beginning with: “Death by a Thousand Clicks: Where Electronic Health Records Went Wrong.”

In one case, a patient had gone to the emergency room with severe headaches and a high fever. During the diagnostic process, a doctor performed a spinal tap to rule out meningitis, an inflammation of the tissue covering the brain and spinal cord. Later, through the hospital’s new EHR system, an infectious disease specialist ordered a clinical laboratory test to check the spinal fluid for viruses, including herpes simplex. Unfortunately, the lab test order did not make it to the lab.  

A lawsuit later filed by the patient stated that the hospital’s EHR didn’t “interface” with the hospital medical laboratory, delaying results of the lab test, resulting in brain damage due to herpes encephalitis, Fortune reported. In the lawsuit, the patient alleges the missed order meant he did not receive an antiviral medication (aciclovir) that could have minimized the brain damage.

The graphic above is based on data from the Kaiser Family Foundation (KFF) study. In the first article of its investigative series, Fortune wrote, “KHN and Fortune examined more than two dozen medical negligence cases that have alleged that EHRs either contributed to injuries, had been improperly altered, or were withheld from patients to conceal substandard care.” Some of these errors involved delayed clinical laboratory test results, resulting in severe patient injury. (Graphic copyright: Kaiser Family Foundation.)

After interviewing 100 doctors, patients, IT experts, health policy leaders, attorneys and government officials, FortuneKHN found:

  • “Thousands of deaths, serious injuries, and near misses tied to software glitches, user errors, or other flaws;”
  • EHRs enabled “upcoding” or inflating a bill instead of improving billing;
  • A “disconnected patchwork” instead of an electronic superhighway.
“How is it in the public interest for medical records software to have flaws that lead to deaths? These incidents should be fully understood and investigated and not be able to be buried,” said Joshua Sharfstein, MD (above), Former Principal Deputy Commissions of the Food and Drug Administration (FDA) and Vice Dean Public Health Practice at John Hopkins Bloomberg School of Public Health, in, “No Safety Switch: How Lax Oversight of Electronic Health Records Puts Patients at Risk,” the second article in the Fortune-KHN investigative series. (Photo copyright: Baltimore Sun.)

Doctors Give EHRs an ‘F’

Frustrated physicians gave EHRs a grade of “F” for usability, according to an American Medical Association (AMA) study published in Mayo Clinic Proceedings, titled, “The Association Between Perceived Electronic Health Record Usability and Professional Burnout Among US Physicians.”

The researchers found that “The usability of current EHR systems received a grade of F by physician users when evaluated using a standardized metric of technology usability. A strong dose-response relationship between EHR usability and the odds of burnout was observed.”

In their survey of 870 doctors, the researchers asked for a ranking of EHR system usability on a scale of 0 to 100. The mean score of 45.9 was deemed an “F,” Becker’s Hospital Review explained.

The researchers suggested that “Given the association between EHR usability and physician burnout, improving EHR usability may be an important approach to help reduce health care professional burnout.”

That could be the understatement of the decade.

“It is a national imperative to overhaul the design and use of EHRs and reframe the technology to focus primarily on its most critical function—helping physicians care for their patients. Significantly enhancing EHR usability is key,” said Patrice Harris, MD, President of the American Medical Association, in a statement.

All is not well with the EHR segment of healthcare information technology, as attested to by the number of lawsuits, complaints, and news accounts of patient harm due to misperforming EHR systems and user error. Because of the growing number of lawsuits involving the function and use of different EHR products, clinical laboratory leaders would be wise to ensure their EHR interfaces to healthcare providers function correctly and check them often.

—Donna Marie Pocius

Related Information:

Defective EHRs Suffer Little in Fraud Probes: “They’re Almost Too Big to Fail”  

Electronic Health Records Creating a New Era of Healthcare Fraud, Officials Say

Death by a Thousand Clicks: Where Electronic Health Records Went Wrong

No Safety Switch: How Lax Oversight of Electronic Health Records Puts Patients at Risk

The Association Between Perceived Health Record Usability and Professional Burnout Among U.S. Physicians

AMA Study: Physicians Give EHR Usability an ‘F’ Rating

New Research Intensifies AMA’s Call for Improved EHR Usability

Innovative Programs by Geisinger Health and Kaiser Permanente Are Moving Providers in Unexplored Directions in Support of Proactive Clinical Care

These initiatives are a call-to-action for clinical laboratories to contribute their expertise in support of wellness programs

Two of the largest healthcare systems in America are moving in non-traditional directions to proactively address certain healthcare populations. Most recently, Kaiser Permanente announced it will be investing millions of dollars to tackle homelessness and the disease outbreaks associated with it. The health system is even investing in a housing complex in Oakland, Calif., which it hopes will help patients in that area who face housing insecurity.

Kaiser’s new direction mirrors a similar project by Geisinger Health designed to address the health of certain populations. In 2017, Geisinger launched what it calls the “Fresh Food Farmacy” for its adult diabetic and obese patients to give them access to healthy foods. Geisinger finds this service saves substantial money in downstream medical expenses because the patients are healthier.

If these programs are harbingers of things to come, clinical laboratories open to supporting such wellness programs will find opportunities heading their way.

Healthcare and Homelessness

Kaiser Permanente’s announced $200 million investment in the new program begins with a $5.2 million purchase of affordable housing in Oakland, Calif. Kaiser is working with Enterprise Community Partners and the East Bay Asian Local Development Corporation (EBALDC).

The housing complex consists of 41-units and is in an area where existing residents are at risk of displacement due to gentrification. Kaiser Permanente’s purchase means the complex will be blocked from redevelopment and will remain affordable for the residents who live there.

“Housing security is a crucial health issue for vulnerable populations,” Bernard Tyson, Chairman and CEO at Kaiser Permanente, stated in a news release. “Access to affordable housing is a key component to Kaiser Permanente’s mission to improve the health of our members and the communities we serve.”

This unusual move is part of a larger strategy to invest in the economic, social, and environmental conditions that impact the health of Kaiser’s patients. It’s also part of a greater trend toward value-based, proactive healthcare.

“We know that differences in health are striking in communities with poor social determinants of health such as unstable housing, low income, and unsafe neighborhoods,” said Richard Isaacs, MD, CEO and Executive Director of The Permanente Medical Group, in the news release. “These innovative strategies are critically important steps toward the maintenance of health improvement, consistent health outcomes, and California health equity.” (Photo copyright: Kaiser Permanente.)

Proactive versus Reactive Care

Healthcare delivery in the US is transitioning from volume-based to value-based care. The Kaiser and Geisinger projects are championing another equally critical change—proactive care instead of reactive care. This shift in priorities promises to change how health systems and healthcare providers think about healthcare delivery. And clinical pathology laboratories play a critical role in these changes.

“Specifically, in the transition from volume-based to value-based healthcare, clinical laboratories are called upon to provide programmatic leadership in reducing total cost of care through optimization of time-to-diagnosis and time-to-effective therapeutics, optimization of care coordination, and programmatic support of wellness care, screening, and monitoring. This call to action is more than working with industry stakeholders on the basis of our expertise; it is providing leadership in creating the programs that accomplish these objectives,” James M. Crawford, MD, PhD, and co-authors, noted in their paper, “Improving American Healthcare Through Clinical Lab 2.0: Santa Fe Report,” published in the journal Academic Pathology.  

Food as a Prescription

Patients encounter all sorts of challenges in addition to housing. Geisinger Health’s Fresh Food Farmacy program promises to help obese and diabetic patients who face food insecurity maintain healthy diets. Coupled with exercise, the program acts like medication in helping regulate blood sugar and improving long-term outcomes for people with diabetes.

Patients in the program are given a referral, called a prescription, by their primary care physician. Once enrolled, they receive a welcome kit that includes food measurement instruments, recipes, and nutritional information. Each week, they also receive enough food to prepare healthy, nutritious meals twice a day for five days for their families.

Enrolled patients attend weekly support groups to learn about self-management. And they complete an online wellness class to help them learn about nutrition. The program also offers free cooking and nutrition classes taught by dieticians and health coaches.

Proactive, Value-Based Care and Population Health

“With what’s happening in this nation right now, there’s never been a more important time for us to focus in on this population and to do that through a united front,” Lloyd Dean, CEO at CommonSpirit Health (formerly known as Dignity Health), told Forbes.

The housing program at Kaiser Permanente and the Fresh Food Farmacy at Geisinger are just two of the latest examples that healthcare providers are increasingly focusing on population health. The fee-for-service model of healthcare pays health systems, hospitals, and other providers, based on the number of sick they treat. These new programs, however, move the entire healthcare system toward keeping people from getting sick in the first place.

“I think there’s no doubt that we need to emphasize both health needs and social service needs, and we should be thinking about these collectively and not in silos,” Signe Peterson Flieger, PhD, Assistant Professor of Public Health and Community Medicine at Tufts University, told Forbes.

As progressive health networks such as Kaiser Permanente and Geisinger move the traditional sites and types of medical care into new settings and new directions, medical laboratory managers and personnel need to stay alert for opportunities to support innovative, new health and wellness programs in their communities.

—Dava Stewart

Related Information:

Kaiser Permanent Just Invested in a Housing Complex. Here’s What It’s Doing with It

3 Initiatives to Tackle Housing Insecurity

Improving American Healthcare Through “Clinical Lab 2.0”: A Project Santa Fe Report

Fresh Food Farmacy

The Man Who Used to Run Medicaid Has a New Idea to Make It Better 

Kaiser Family Foundation Survey Finds Hospitals in West Coast States Incur Highest Daily Expenses when Providing Inpatient Care

US hospitals typically spend $2,424/day to provide inpatient care, according to the KFF report 

How much does the average hospital spend/day to provide inpatient care? The numbers vary widely, but the latest statistics from Kaiser Family Foundation (KFF) State Health Facts show West Coast states incur the highest daily operating and non-operating inpatient costs.

This disparity in spending is unlikely to surprise medical laboratory executives working in hospital settings. They know firsthand that operating costs can vary from state-to-state and by hospital ownership type.

Oregon, California, and Washington are the most expensive three states overall for inpatient hospital care. However, the leaderboard changes when looking specifically at inpatient care at for-profit hospitals.

In the for-profit hospital category:

  • North Dakota, South Dakota, and Alaska rack up the highest expenses/day.
  • Idaho, California, and Oregon top the non-profit hospital segment.

Overall in the US, the average hospital incurs expenses of $2,424/inpatient day, the KFF reports.


While the average US hospital spends $2,424/day to deliver inpatient care, West Coast states have the highest hospital adjusted operating and non-operating expenses/inpatient day, according to a recent report from the Kaiser Family Foundation. Oregon hospitals top the spending list at $3,599/day. (Graphic copyright: Kaiser Family Foundation.)

AMA Annual Survey Rankings

Rankings are based on information from the 1999-2017 American Hospital Association Annual Survey, which includes all operating and non-operating expenses for registered US community hospitals. The figures are an estimate of the expenses incurred by a hospital to provide a day of inpatient care. They have been adjusted higher to reflect an estimate of the volume of outpatient services, according to the KFF. The numbers do not reflect actual charges or reimbursement for the care provided.

Most expensive average expenses/inpatient day:

  • Oregon, $3,599
  • California, $3,441
  • Washington, $3,429
  • Idaho, $3,119
  • District of Columbia, $3,053

Least expensive average expenses/inpatient day:

  • Montana, $1,070
  • Mississippi, $1,349
  • South Dakota, $1,505
  • Wyoming, $1,520
  • Alabama, $1,554

Most expensive non-profit hospitals/inpatient day:

  • Idaho, $4,208
  • California, $3,800
  • Oregon, $3,546
  • Washington, $3,500
  • Colorado, $3,319

Least expensive non-profit hospitals/inpatient day:

  • Mississippi, $1,365
  • South Dakota, $1,519
  • Iowa, $1,564
  • Montana, $1,627
  • Alabama, $1,723

Most expensive for-profit hospitals/inpatient day:

  • North Dakota, $4,701
  • South Dakota, $3,956
  • Alaska, $3,280
  • Nebraska, $3,031
  • Wisconsin, $2,830

Least expensive for-profit hospitals/inpatient day:

  • Maine, $1,055
  • Maryland, $1,207
  • West Virginia, $1,362
  • Iowa, $1,558
  • Arkansas, $1,619

Most expensive state/local government hospitals/inpatient day:

  • Oregon, $4,062
  • Connecticut, $3,979
  • Washington, $3,312
  • California, $3,217
  • Utah, $3,038

Least expensive state/local government hospitals/inpatient day:

  • Montana, $52
  • South Dakota, $442
  • Pennsylvania, $787
  • Nebraska, $906
  • Georgia, $917

Some Regions Pay Much More for Healthcare

The KFF report did not look at whether patients in states where hospitals incur the highest daily operating and non-operating expenses also pay the most for hospital services. Hospital charges vary widely, with many treatments costing far more in some regions than others.

In addition, health bills can vary at different hospitals in the same city or region. According to Healthcare.gov, the average total cost of a three-day hospital stay is about $30,000.

Adding to the confusion is the fact that hospital costs, billed charges, and the amounts paid by patients for services can be distinctly different amounts. Health insurance companies, for example, negotiate lower rates with hospitals and health systems for their plan enrollees. While patients without insurance are billed full price for services based on the hospital’s chargemaster.


Zack Cooper, PhD, Associate Professor of Health Policy and Economics at Yale University, told National Public Radio (NPR) that hospital consolidation is partly to blame for the wide variation in the price of hospital services within states and across the country. He says consolidation has eliminated competition in many markets. “Where one large hospital dominates the markets, that hospital is able to get higher prices,” Cooper maintains. “Hospitals have gotten increasingly powerful over time.” (Photo copyright: Yale University.)

CMS Final Rule Requires Pricing Transparency

As of Jan. 1, 2019, a new Centers for Medicare and Medicaid Services (CMS) rule went into effect aimed at making hospital pricing more transparent. The CMS is now requiring hospitals to publish chargemaster price lists online, rather than release those numbers to patients upon request.

However, healthcare advocates have questioned the rule’s impact on transparency. Posted hospital pricing information is often hard to access and difficult to comprehend. In addition, chargemaster prices typically do not represent the actual costs passed on to consumers.

“[The chargemaster] is the list price. When you go to buy a car, you have a manufacturer’s suggested retail price. This is basically what [the chargemaster] is,” Medical Contributor Natalie Azar, MD, told NBC News.

Meghan Nechrebecki, Founder and CEO of Health Care Transformation, told Debt.org that prevention is the best medicine for lower inpatient hospital bills.

“Prevention comes first,” Nechrebecki suggests. “Utilize the ambulatory care clinics. Go see your doctors and do what they recommend to keep yourself healthy. Eat well and exercise often. You will prevent many surgeries and hospitalizations.”

Sound advice. Nevertheless, clinical laboratories and anatomic pathology groups should take note of the federal government’s ongoing push for price transparency and prepare accordingly.

—Andrea Downing Peck

Related Information:

Hospital Adjusted Expenses/Inpatient Day

Hospital Adjusted Expenses/Inpatient Day by Ownership

HHS Takes New Steps in Secretary Azar’s Value-Based Agenda

Hospital and Surgery Costs

That Surgery Might Cost You a Lot Less in Another Town

Protection from High Medical Costs

Hospitals to List Procedure Prices Under New Law: What You Need to Know

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Kaiser Health News Labels Routine Clinical Laboratory Testing and Other Screening of Elderly Patients an ‘Epidemic’ in US

Some experts in medical community question value of health screenings of older patients with shortened life expectancies, though many aging adults are skeptical of calls to skip tests

What does it mean when a credible health organization makes the assertion that there is an “epidemic” of clinical laboratory testing being ordered on the nation’s elderly? Clinical laboratory leaders and anatomic pathologists know that lab tests are a critical part of screening patients.

Health screenings, particularly those for chronic diseases, such as cancer, can save lives by detecting diseases in their early stages. However, as consumers become more engaged with the quality of their care, one trend is for healthcare policymakers to point out that many medical procedures and care protocols may not bring benefit—and may, instead, bring harm.

No less an authority than Kaiser Health News (KHN) also is questioning what it calls an “epidemic” of testing in geriatric patients. Since medical laboratory tests are part of many screening programs, a rethinking of what tests are necessary in older patients would likely impact clinical laboratories and pathology groups going forward.

Treatment Overkill or Necessary Clinical Laboratory Tests?

“In patients well into their 80s, with other chronic conditions, it’s highly unlikely that they will receive any benefit from screening, and [it is] more likely that the harms will outweigh the benefits,” Cary Gross, MD, Professor of Medicine and Director of the National Clinician Scholars Program at the Yale School of Medicine, told KHN as part of an investigative series called “Treatment Overkill.”

That opinion is supported by a 2014 study published in the Journal of the American Medical Association (JAMA) Internal Medicine. The researchers concluded, “A substantial proportion of the US population with limited life expectancy received prostate, breast, cervical, and colorectal cancer screening that is unlikely to provide net benefit. These results raise concerns about over screening in these individuals, which not only increases healthcare expenditure but can lead to patient harm.”

Yet, seniors and their family members often request health screenings for themselves or their elderly parents, even those with dementia, if they perceive doing so will improve their quality of life, KHN noted.

Cary Gross, MD

Cary Gross, MD, Professor of Medicine and Director of the National Clinician Scholars Program at Yale University, told Kaiser Health News patients “well into their 80s, with other health conditions” are unlikely candidates for the many routine health screening tests administered to elderly patients. Were this to become a trend, medical laboratories could see a drop in physician-ordered screening tests. (Photo copyright: Yale University.)

Meanwhile, an earlier study in JAMA Internal Medicine found older adults perceived screening tests as “morally obligatory” and were skeptical of stopping routine screenings.

In its series, KHN noted two studies that outlined the frequency of screening tests in seniors with limited life expectancies due to dementia or other diseases:

  1. According to the American Journal of Public Health, nearly one in five women with severe cognitive impairment are still getting regular mammograms;
  2. Likewise, 55% of older men with a high risk of death over the next decade still receive PSA tests for prostate cancer, the 2014 JAMA Internal Medicine study found.

“Screening tests are often done in elderly patients as a knee-jerk reaction,” Damon Raskin, MD, a board-certified internist in Pacific Palisades, Calif., who also serves as Medical Director for two skilled nursing facilities, told AgingCare.com.

Correct Age or Correct Test?

While a movement may be afoot to reduce screening tests in older patients, a one-size-fits-all answer to who should continue to be tested may not be possible.

“You can have an 80-year-old who’s really like a 60-year-old in terms of [his or her] health,” Raskin noted. “In these instances, screening tests such as mammograms and colonoscopies, can be extremely valuable. However, I’ve seen 55-year-olds who have end-stage Parkinson’s or Alzheimer’s disease. For those individuals, I probably wouldn’t recommend screenings, for quality of life reasons.”

However, for the general population, researchers have emphasized that the focus should not be on whether physicians are ordering “unnecessary” lab tests, but whether they are ordering the “correct” tests.

A 2013 study published in the online journal PLOS ONE analyzed 1.6 million results from 46 of medicine’s 50 most commonly ordered lab tests. Researchers found, on average, the number of unnecessary tests ordered (30%) was offset by an equal number of necessary tests that went unordered.

“It’s not ordering more tests or fewer tests that we should be aiming for. It’s ordering the right tests, however few or many that is,” senior author Ramy Arnaout, MD, Harvard Medical School, Assistant Professor of Pathology and Associate Director of the Clinical Microbiology Laboratories at Beth Israel Deaconess Medical Center in Boston, stated in a news release. “Remember, lab tests are inexpensive. Ordering one more test or one less test isn’t going to ‘bend the curve,’ even if we do it across the board. It’s everything that happens next—the downstream visits, the surgeries, the hospital stays—that matters to patients and to the economy and should matter to us.”

Since the elderly are the fastest growing population in America, and since diagnosing and treating chronic diseases is a multi-billion-dollar industry, it seems unlikely that such a trend to move away from medical laboratory health screenings for the very old will gain much traction. Still, with increasing focus on healthcare costs, the federal government may pressure doctors to do just that.

—Andrea Downing Peck

Related Information:

Cancer Screening Rates in Individuals with Different Life Expectancies

Doing More Harm Than Good? Epidemic of Screening Burdens Nation’s Older Patients

Large-Scale Analysis Describes Inappropriate Lab Testing Throughout Medicine

Preventive Screening for Seniors: Is that Test Really Necessary?

Impact of Cognitive Impairment on Screening Mammography Use in Older US Women

Cancer Screening Rates in Individuals with Different Life Expectancies

The Landscape of Inappropriate Laboratory Testing

Older Adults and Forgoing Cancer Screening: ‘Think it would be Strange’

Kaiser Permanente Announces that Virtual Visits with Providers Have Surpassed Face-to-Face Appointments at Meeting of Nashville Health Care Council Members

Should this milestone be an indicator that more patients are willing to use telehealth to interact with providers, then clinical laboratories and pathology groups will need to respond with new ways to collect specimens and report results

Telehealth is gaining momentum at Kaiser Permanente (KP). Public statements by Kaiser administrators indicate that the number of virtual visits (AKA, telemedicine) with providers now is about equal to face-to-face visits with providers. This trend has many implications for clinical laboratories, both in how patient samples are collected from patients using virtual provider visits and how the medical laboratory test results are reported.

That this is happening at KP is not a surprise. The health system is well-known as a successful healthcare innovator. So, when its Chairman and Chief Executive Officer Bernard Tyson publically announced that the organization’s annual number of virtual visits with healthcare providers had surpassed the number of conventional in-person appointments, he got the members’ attention, as well as, the focus of former US Senator Bill Frist, MD, who moderated the event.

Tyson made this statement during a gathering of the Nashville Health Care Council. He informed the attendees that KP members have more than 100 million encounters each year with physicians, and that 52% of those are virtual visits, according to an article in Modern Healthcare.

However, when asked to comment about Tyson’s announcement during a video interview with MedCity News following the 13th Annual World Health Care Congress in Washington, DC, Robert Pearl, MD, Executive Director/CEO of the Permanente Medical Group and President/CEO of the Mid-Atlantic Permanente Medical Group (MAPMG), stated, “Currently we’re doing 13-million virtual visits—that’s a combination of secure e-mail, digital, telephone, and video—and we did 16-million personal visits. But, by 2018, we expect those lines will cross because the virtual visits [are] going up double digits, whereas the in-person visits are relatively flat.”

So, there’s a bit of disagreement on the current numbers. Nevertheless, the announcement that consumer demand for virtual visits was increasing sparked excitement among the meeting attendees and telemedicine evangelists.

“It’s astounding,” declared Senator Frist, “because it represents what we all want to do, which is innovate and push ahead,” noted an article in The Tennessean.

Is this a wake-up call for the healthcare industry? Should clinical laboratories start making plans for virtual patients?

Of virtual office visits, Pearl noted in the interview with MedCity News, “Why wouldn’t you want, if the medical conditions are appropriate, to have your care delivered from the convenience of your home, or wherever you might be, at no cost to you, and to have it done immediately without any delays in care?”

Pearl added that one-third of patients in primary care provider virtual visits are able to connect with specialists during those sessions.

“It’s better quality, greater convenience, and certainly better outcomes as care begins immediately,” he noted.

Kaiser Permanente ‘Reimagines’ Medical Care

The virtual visit milestone is an impactful one at Kaiser Permanente, an Oakland, Calif.-based nonprofit healthcare organization that includes Kaiser Foundation hospitals, Permanente Medical Groups, and the Kaiser Foundation Health Plan. It suggests that the KP has successfully integrated health information technology (HIT) with clinical workflows. And that the growing trend in virtual encounters indicates patients are becoming comfortable accessing physicians and clinicians in this manner.

As Tyson stated during the Nashville meeting, it is about “reimagining medical care.”

Bernard Tyson (right), Chairman and CEO of Kaiser Permanente, speaking with former Senator Bill Frist, MD (left), at the Nashville Health Care Council meeting where he announced that the non-profit provider’s number of virtual visits with patients had surpassed its face-to-face appointments. (Photo Credit: Nashville Health Care Council.)

What does “reimagining” mean to the bottom line? He shared these numbers with the audience, according to the Modern Healthcare report:

  • 25% of the system’s $3.8 billion in capital spending goes to IT;
  • 7-million people are Kaiser Permanente members;
  • 95% of members have a capitated plan, which means they pay Kaiser Permanente a monthly fee for healthcare services, including the virtual visits.

The American Telemedicine Association, which itself interchanges the words “telemedicine” and “telehealth,” noted that large healthcare systems are “reinventing healthcare” by using telemedicine. The worldwide telemedicine market is about $19 billion and expected to grow to more than $48 billion by 2021, noted a report published by Research and Markets.

Consumers Want Virtual Health, but Providers Lag Behind Demand

Most Americans are intrigued with telehealth services. However, not everyone is participating in them. That’s according to an Advisory Board Company Survey that found 77% of 5,000 respondents were interested in seeing a doctor virtually and 19% have already done so.

Healthcare systems such as Kaiser Permanente and Cleveland Clinic are embracing telehealth, which Dark Daily covered in a previous e-briefing. However, the healthcare industry overall has a long way to go “to meet consumer interest in virtual care,” noted an Advisory Board news release about the survey.

“Direct-to-consumer virtual specialty and chronic care are largely untapped frontiers,” noted Emily Zuehlke, a consultant with The Advisory Board Company (NASDAQ:ABCO). “As consumers increasingly shop for convenient affordable healthcare—and as payers’ interest in low-cost access continues to grow—this survey suggests that consumers are likely to reward those who offer virtual visits for specialty and chronic care,” she stated.

Telehealth Could Increase Healthcare Costs

Does telehealth reduce healthcare spending? A study published in Health Affairs suggests that might not be the case. The researchers found that telemedicine could actually increase costs, since it drives more people to use healthcare.

“A key attraction of this type of telehealth for health plans and employers is the potential savings involved in replacing physician office and emergency department visits with less expensive virtual visits. However, increased convenience may tap into unmet demand for healthcare, and new utilization may increase overall healthcare spending,” the study authors wrote in the Health Affairs article.

Clinical Laboratories Can Support Virtual Healthcare  

Clinical laboratories must juggle supporting consumer demand for convenience, while also ensuring health quality expectations and requirements. How can pathologists and medical laboratory leaders integrate their labs with the patient’s virtual healthcare experience, while also aiming for better and more efficient care? One way would be to explore innovative ways to contact patients about the need to collect specimens subsequent to virtual visits. Of course, the procedures themselves must be done in-person. Nevertheless, medical laboratories could find ways to digitally complement—through communications, test results sharing, and education—patients’ use of virtual visits.

—Donna Marie Pocius

 

Related Information:

Kaiser Permanente Chief Says Members are Flocking to Virtual Visits

Kaiser’s Tyson to Nashville: Health Care’s Future Isn’t in a Hospital

More Virtual Care Than Office Visits at Kaiser Permanente by 2018

Telemedicine Market Forecasts: 2016 to 2021

What do Consumers Want from Virtual Visits?

Virtual Visits with Medical Specialists Draw Strong Consumer Demand, Survey Shows

Direct-to-Consumer Telehealth May Increase Access to Care but Does Not Decrease Spending

Cleveland Clinic Gives Patients Statewide 24/7 Access to Physicians Through Smartphones, iPads, Tablets, and Online; Will Telemedicine Also Involve Pathologists?

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