Philadelphia Reflections is a history of the area around Philadelphia, PA ... William Penn's Quaker Colonies
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Correcting the Computerized Medical Record Muddle

Who Should Dominate Medical Computing Design? The computerized medical record was to have been the smash hit of Obamacare. It promised dozens of efficiencies, vast reductions in cost, and a glittering example of how young minds always see the future clearly while old traditionalists fail to recognize the obvious. However, after the expenditure of millions of dollars of development money, the reaction of doctors to the electronic record now is, "It's a good idea, but it's too much work." The reaction of patients is, "It's a wonderful idea, but I can't understand it." A brief analysis of such user complaints is that most efficiencies involved a shift of data entry from clerks to physicians, with resulting higher input costs. Most user-friendliness for patients dissolved before the public's awakening they had expected to be helped, not regimented. Evidently, the designers of the software architecture did not adequately value the points of view of either patient or physician, which mostly do not match those of the third parties. The design of the computerized medical record evokes memories of the collision between the department store and the housewife in 1978, when only one of the two possessed the terrifying power of an expensive computer, and got arrogant about it. In the end, the housewives won that war by fleeing to discount stores in the suburbs.

The design of these products should begin, and eventually must finish with the premise that medical care contains highly variable degrees of labor intensiveness, following each other in quick succession. In addition, there is the Sherlock Holmes fallacy that a diagnosis is frequently based on a mathematical formula, when in fact most diagnoses are instantaneously recognized by an experienced physician based on what the patient tells him in the first five minutes of an interview. To modify slightly the words of Oliver Wendell Holmes, the life of medicine has not been logic, it has been experience. The painstaking recording of the features which led to a diagnosis may well assist a beginning medical student, but they seem like a preposterous waste of time to a busy practitioner. Another clinical maxim for computer design to grapple with is that "More diagnoses are missed because the doctor didn't look, than because the doctor didn't know." Most of the time the doctor does look, and inking a check-block is merely an irritant. In those cases where he doesn't look, the cause is usually that he was either distracted or overworked.

The designers should have begun with what is easily automated, like laboratory results, billing, and prescriptions, and constructed a less comprehensive system around them. A modest system which delights the medical personnel could then have enlarged its sphere when technology caught up to more difficult things like physicians' notes. With patients of necessarily differing levels of personality and experience, little should have been expected until the system offered more in return. It may seem to others that patients will do anything a doctor tells them, but even in that traditional relationship salesmanship is fine, rigidity is resented. There are many areas where relevant data entry is already automated, and a greatly enhanced but partial, medical record is therefore possible. Step by step, the totally digitized medical record could have advanced amidst applause. This system should begun by offering unchallengeable veto power to a large community of actively practicing physicians, the early adopters, limited additionally to those who have earned the confidence of their colleagues by making a living as practitioners. They must repeatedly expose themselves to colleagues who are not early-adopters, in order to defend the accusation they are hobbyists, or secretly nurse conflicts of interest.

That's on the data input side. On the output side, greater respect must be paid to the ability of electronic printers to produce overwhelming masses of reports. They are neat and uniform, but few doctors have time to read them. We must continually devise concise summarizations, paying respect to the rapid obsolescence of relevant information as the case unfolds, rapidly discarding information which only recently was vital to know. At the same time, the system must tolerate greater redundancy for strikingly out-of-bounds reports. Reconciling summarization with redundancy is not an easy task. The ideas for flagging outliers and deleting noise must come from physicians in active practice, who will otherwise resort to adhesive tape, felt pens and alarm clocks. No doubt the requirements of accrediting agencies and the tort industry are in conflict with these notions. If necessary, separate records may be produced for their use, and stored in stand-by locations. No attempt should be made to conceal their perceived irrelevance.

The Electronic Medical Record is a fine idea, so long as it limits data entry to material which is already digital. As soon as medical professionals are commanded to touch a keyboard, costs will soar. We have plenty of useful things to do with digital medical data to keep us occupied until medical professional data entry does become feasible, as it must. It might be five years, or it might be ten. But to hurry it up is to cost billions more dollars, producing very little to show for it. Therefore, the following billion-dollar solution is offered for this multi-billion dollar muddle. It's a Hail, Mary football pass, they would say in college football.

The Big Data Approach". For most of the readers of this article, "Big data" is an unfamiliar term. It is slang for some pretty advanced mathematics, using matrix inversion and other similarly difficult concepts. For present purposes, the nut of it is the science of lashing dozens or hundreds of computers together to solve a single mathematical problem, too big to be solved on a single computer, no matter how big and fast it may be. It promises to make sense of the overwhelming data volume produced by new mountain-top telescopes. It is the general approach of certain Wall Street hedge funds who have made astonishing amounts of money, much envied and imitated by other Wall Street firms who have only lost huge amounts of money. It is at the heart of the Google search engine, and rumor has it that Amazon is far advanced in the business of assembling and renting out gigantic computer farms to people who think they have a Big Idea and can assemble cash to use the computer farm for ten minutes or so.

The appeal of the Big Data approach to medical care is that it inverts the old-fashioned statistical approach, completely. Instead of sampling the data, big data uses all of the data to shake out what conclusions it contains. The traditional sampling approach of statisticians involves a huge expenditure of time and effort in making certain that the sample is absolutely representative, manageably small but big enough to be meaningful. Reduced to its essence, the big data approach takes all of the data, shakes and bakes it appropriately, and then derives the conclusions which fall out of it, whatever they may be. The problem remaining for scientists is to take the conclusions which emerge, and try to make sense of them. Some of them are like the product of a thousand monkeys at typewriter keyboards; eventually they will write the Bible. However, this time-honored slogan of statistics is generally swamped by sufficiently huge volumes of data. Sometimes the important conclusions among the rubbish can be identified by shaking and baking the meatloaf a second time, but mainly it involves confronting acknowledged experts with surprising conclusions to test in more conventional ways. Suppose the data show that eliminating co-pay would save money, or that fewer patients with appendicitis would die if you operated on none of them, or that patients with certain forms of thyroid cancer would live longer without surgery. As a rule, the most likely outcome would be a flood of instances which some pioneers have suggested but have been reluctant to test. Unpopular ideas, now raised to a level sufficiently respectable to justify a clinical trial. Big data is an approach that can identify unpopular ideas in huge volume, prompting a more judicious examination which would otherwise be long in coming.

Elective Hospital Admissions: One Approach Could Be Flexible Deductibles

Flexible Deductibles. Front-end deductibles are a long-standing tradition in casualty insurance, mainly popularized to accommodate automobile accident insurance. There is no good reason why features suitable for fender-benders should be suitable for appendicitis, however. For one thing, appendicitis ordinarily only happens once to a victim, while some unfortunates have many auto accidents. Most acute illnesses are nobody's fault, while the legal system tends to assign blame for most auto accidents. Since hospitals seldom collect cash at the time of admission and the bill containing a deductible feature often arrives many weeks after the patient has gone home. Therefore, there is no pressing reason why all health insurance containing a deductible needs to make it a "front-end" deductible. Indeed, there might be considerable utility in applying front-end deductibles to elective admissions, but no deductible at all for emergencies. Although it is inevitable for administrative personel to protest that "you can only collect bills while the tears are hot", almost every movie or television show about hospital accident rooms takes a cheap laugh shot at the frustrated clerk running to collect demographic data from some victim whose intestines are hanging out of a sword wound. A font-end deductible is not only routinely swept aside at the hospital's front desk, it is so routinely covered by secondary insurance it would be foolish to pay it in cash. Using a second administrative layer to pay it is itself foolish expense, particularly when it is collected with the pretense that it would be impossible for two insurance companies to communicate, when in fact they are usually administered by a single insurance company. or an "adminisrative services only" payment agency.

Earlier it was stated, deductibles should apply to outpatient services, but are essentially useless to restrain inpatient costs, over which the patient has no control. That is true, but misleading. Great savings from the use of deductibles are possible in reducing elective inpatient admissions when outpatient patient procedures are appropriately substituted. If the same procedure is sometimes possible for an outpatient, but occasionally requires hospitalization, that distinction is seldom made by the diagnosis alone. This point is both more subtle and more complicated than it sounds. Traditionally, insurance rules concerning elective admissions are based on diagnosis codes, so insurance utilization clerks can approve them; much friction results when such decisions prove inappropriate. This process then becomes a major cost in time and money for everyone concerned, even though deductibles purport to generate cost savings. On the other hand, the cost consequences of unnecessary admission also varies greatly. Although it would require some work to compile the data, it might help this situation for deductibles to vary by diagnosis-related reimbursement, adjusted for the particular consequences. A system of varying levels of front-end deductibles based on provider perceptions, could then be presented to the patient applying for elective admission, and the patient could then make a patient-based decision on whether to go ahead with it. As experience accumulates, delayed elective admissions occasionally result in much increased later consequences, so the deductible may also be decreased for that reason. Finally, a flood of elective admissions may well suggest a need for the deductible amount to be increased. It is of course possible to go too far with such a process, which needs to be perfected on a diagnosis level before it is extended any further, triggering political uproar. Best of all, the size and applicability of deductibles might be left to the various competing insurance firms as a competitive tool; some would do it, some wouldn't, and the customers could choose.

Perhaps a further useful example lies in the evolving use of gastric surgery to treat obesity. The procedure is presently characterized as more effective than any other available approach to morbid obesity of the six-hundred pound variety. And yet patients with advanced degrees of disability from obesity often confront the surgeon with considerable extra difficulty and risk. Under those circumstances, it can be both hazardous and expensive. At the opposite end of the spectrum are neurotic patients with only minor degrees of obesity, sometimes trivial degrees, who demand what amounts to cosmetic major surgery masquerading as treatment for gastric reflux. There are also innumerable variations among intermediate degrees of obesity, where there is considerably more latitude for judgment, hence more usefulness for deductibles. A fairly high deductible, particularly one buffered by a Health Savings Account, could usefully have two or three deductible plateaus matching specified features of advancement. The proposal is roughly this: the more obese the patient, the lower the deductible. Since no-nonsense proposals like this would provoke oceans of crocodile tears, it is not suitable for politicians to advocate it.

At this point, What Are the Alternatives to Obamacare?

Cost of the Program. The fact must be squarely faced that insurance almost always increases costs. That is true of all casualty insurance, whether auto, homeowners, or maritime. Correctly applied, it can indeed redistribute costs, but insurance imposes extra administrative expenses, and it produces "moral hazard", so total costs are increased by insurance. Moral hazard is a term of art, signifying that nobody spends someone else's money as carefully as his own. Actuaries calculate the extra cost imposed by present American forms of health insurance to be at least 30% of the total service, and arguments can be made it will be so much that more that level costs cannot justify the higher level. Universal coverage now introduces its own new issue, that eliminating all market benchmarks for medical costs also eliminates any cost guidance for constraining them or relieving shortages. Crippled though it may have been, the cash market did set benchmarks, if not prices, which insurers then had to match -- and those benchmarks will soon be gone. As to any reduced marketing costs, employer-basing had already reduced them to a small opportunity for streamlining. In the past, the resort to price controls has invariably led to shortages and thus to failure. To put it mildly, rationed healthcare is certain to be politically disadvantageous for those who attempt to enforce it. The most conservative projections available, now suggest that Obamacare will increase healthcare costs by 22%. Since the following proposals would by contrast almost surely reduce costs by a conservative 30%, it is not impertinent to suggest that no matter can remain closed while a 50% overall cost swing remains credible, particularly when it concerns 17% of gross domestic product (GDP) during a recession.

Patient Participation in Costs, Generally Speaking. For the insurance industry, this is an old story. Industry survival has depended on success in answering it effectively. In health insurance the traditional approaches have mainly been 20% co-pay, and about $500 annual deductible. The first means 20% of all benefit cost, the second means the first $500 of expenses in a year. These figures evolved out of countless negotiations between labor and management, or within legislatures. In those arenas the contending forces are how much each side thinks it can afford, since they see themselves as ultimately paying the bill. Until recently however, requiring patient participation at such small levels has not reached the point where it significantly influences patient behavior, which is set by entirely different forces, and is now the main long-term cause of healthcare cost inflation. Business negotiators seldom pay much heed to costs, so long as major competitors must pay the same costs. In this case, governments as third-party payers enjoy no such luxury, and most of the complaining about healthcare cost inflation has originated with governments. Consequently, businesses not infrequently drag governments to higher cost levels, and this must be recognized as a reality of entitlement programs. Furthermore, attempts at raising patient cash contributions have always had political rather than economic origins, usually characterizing any cost constraints at all as crippling the intent of insurance, making false promises, and depriving the poor of humane treatment. If patient contribution ever reaches 50% of costs, the program will likely be called a failure. But it would appear it cannot much affect overall patient behavior until patient payments do reach that point. (As it is argued here, this dilemma need not be completely dispositive.) More recently, steadily rising healthcare costs have actually led to employer increases in co-pays and deductibles, and the Obama administration has been giving signs of cautiously yielding to the behavior modification argument. However, these approaches cannot be called a success until they seriously reduce long-term healthcare cost inflation, and that remains a doubtful outcome. In fact, no desperately sick patient should ever be expected to pay much attention to costs. The restraint of partial cash payment should be reserved for lesser conditions, and provider discipline should be reserved for what are provably individual provider decisions, whether at the institutional level or the professional one. There are certainly broad areas where no patient cost restraint whatever can be justified, and program design should recognize that premise. Nevertheless, much more could be done with patient participation in costs than is done at present.

Two Targets for Cost Restraint, Requiring Distinctive Approaches. There are two factors in medical costs: item cost, and item volume. Above a certain level of sickness severity, only item prices can be legitimately pressured, not volume of service. Before any of that happens, of course all published prices should be audited and forced to conform to standard cost-to-price ratios. For minor conditions and illnesses, volume control on the patient remains entirely legitimate, particularly for conditions where patients are usually responsible for inciting them. Patient cost-sharing is therefore a legitimate out-patient approach. The healthcare market segments itself into two approaches, and successful administration consists of accurately distinguishing the two. As soon as the patient enters a hospital, his control of cost creation is taken away along with his clothes. Therefore, payment by diagnosis is a sensible approach for inpatients, and could be even more effective if the diagnosis codes were revised to include greater imagination in verification with laboratory and other billing sources. Since Obamacare has apparently not fully recognized these distinctions, there remains hope it can be persuaded to modify the program. However, this is merely tinkering around the edges of indirect volume control. Much greater savings are possible from applying sophistication to inpatient pricing, the main locus of cost-shifting. Going all the way to Health Savings Accounts would be ideal, and is discussed below. It comes already segmented, between outpatient and inpatient hospital care. The main issue is whether to retain a dollar amount as a threshold for the deductible, or to make a frank distinction between inpatient and outpatient costs. Beyond segmenting price and utilization controls, however, consideration should additionally be given to segmenting health insurance configuration to match implicit age segmentations. That last matter is next addressed.

Terminal Care Escrow, Creating Opportunity for Investment Funding. Increasing longevity paradoxically exaggerates reimbursement discontent, effectively concentrating medical costs into the first and last years of life. Unfortunately it leaves long stretches in the middle where the people actually paying most of the bills feel threats of disease are remote for them. Employer-basing concentrates this blithe perception, and anything which lessens it is desirable. Despite the growing realities, health insurance remains one-size fits all, so it requires re-examination. Why not consider three targets of insurance, for the first year of life, for the last year of life, and a residual insurance for the majority of people, covering the majority of their lifetimes? The burden of proof, of course, is fairly put on those who would change things. Why should we impose an age segmentation on the program?

The answer lies in compound interest. So much of the cost is concentrated in the last year of life, it becomes attractive to adopt a whole-life insurance model for it, and pay terminal care costs from the interest income earned over a lifetime. The age and investment income calculations, including allowances for steadily improving longevity, have already been compiled for life insurance, which terminates in the same year. In addition, last year of life costs and their rate of inflation, have already been calculated for Medicare. What remains to do, is create a fund and actually fund it, transferring the cost of individual terminal care from an escrowed investment fund to Medicare at the end of the year of death. The overall effect would be to reduce the cost of Medicare by the investment proceeds of the fund. There may well be misjudged projections of future terminal care costs, but the goal of this proposal is not to pay precisely for terminal care, but to introduce the principles of compound interest into a previously "pay as you go" system. Any cost saving from doing so, is a bonus.

National Debt and Presidential Hat Tricks, Shale Gas and Argentina

Alexander Hamilton

This speaker at the Right Angle Club began a discussion of the "Fiscal Cliff" razzle-dazzle of 2012, by changing his mind about the causes of the fiscal crash of 2007. Originally, it seemed as though globalizing 500 million Chinese out of poverty had destabilized the exuberant American mortgage market by flooding it with cheap credit. Supplanting that idea, or perhaps only supplementing it, must now be added the overextending of national debt to a point of halting national borrowing. Early in the Eighteenth century the Dutch and English had developed national borrowing into a system formalized by Necker in Europe, and Robert Morris and Alexander Hamilton in America. It amounted to guaranteeing private credit in the banking system with national debt monetizing the assets of the whole nation. Carried to an extreme, it might imply that America would turn Guam and Hawaii over to China if we defaulted on our debt. However, the nebulous issue of "National Sovereignty" interfered with territorial transfers by any means other than war. If one nation defaults against a second nation which was afraid to go to war, it was just the weaker nation's hard luck about the debt. That's a simplified view of our international financial system, which admittedly skirted uncertainty about how much national debt was too much. A more modern description places the blame on Alan Greenspan, who for eighteen years produced growing world prosperity by steadily increasing American national debt, faster than the economy was growing. With silver and gold removed from the equation, one could see that default would loom whenever the size of the debt became so large it could never be serviced by the Gross Domestic Product (GDP), both of which were measurable. This reality might be obscured temporarily by reducing interest rates, modifying international trade balances, and inflation. When the stars were in alignment however, the system just had to collapse and start over. Essentially, our two political parties made opposite assessments: the Republicans announced this system was doomed, and the Democrats announced they could stave off disaster by making the Republicans pay for it. Both parties were partly right but essentially wrong, and the Democrats hired a better magician.

Henry Clay

It will take several weeks or months to be certain just what strategy was pursued. It would appear that the Democrats chose to repeat the performance of the Obamacare legislation, eliminating national debate by eliminating the Congressional committee system of examining the details in advance of a vote. Given one day to digest two thousand pages prepared by the Executive branch, no time was allowed for public opinion to form about Obamacare. In the case of the fiscal cliff episode, Congress was given less than one day to consider 150 pages allegedly prepared the day prior to the vote. Some will admire the skill of the executive branch in orchestrating this secret maneuver, but eventually it will become apparent that detailed policy decisions have been transferred from the legislative to the executive branch of government. Perhaps the Congressional Republicans are as stupid as the Democrats portray them to be, but it is also possible that a decision has been made to tempt the Democratic leaders into repeating this performance several times, until eventually the public is ready to consider impeachment for it. No matter what the strategy, we are now encouraged to contemplate some moment when gun barrels come level, and live rounds slide home. We may pass up the opportunity to criticize Henry Clay for concentrating undue power in the Speaker of the House, or to uncover the way Harry Reid was persuaded to surrender it in the Senate; both are fast becoming irrelevant in the flurry of events. We have borrowed too much, exceeding our means to pay it back, that's all.

Seemingly, there are only two ways to cope with overborrowing. A nation may cheat its citizens with inflation, or it may cheat foreign nations by defaulting on its currency. We are indebted to Rogoff and Reinhart for pointing out there is no difference between inflation and default except the identity of the cheated creditor, so most politicians prefer to cheat foreigners. Either way, cheating makes enemies. Two centuries ago, Alexander Hamilton suggested a third way out of the problem, which we would today call "growth". If the limit is the ratio of debt to GDP, find a way to increase GDP.

Shale Gas and Argentina

The most astonishing current example of the power of growth, is shale gas. It may not be totally clean, but it is much cleaner than oil or gas, and far cheaper. We suddenly have so much of it the price is artificially lowered, and we talk, not merely of energy independence, but of restoring the balance of international payments by exporting it. Germany is constructing steel mills to utilize iron ingots made in America with gas instead of coal. Pittsburgh was once the center of steel production because that's where the coal was, the most expensive ingredient to transport. Suddenly it is now cheaper to transport the energy source to wherever you find limestone and iron ore. Russia now finds it has lost its leverage over Eastern Europe's energy supply, and the Arabs (?Iranians?) will no longer have a monopoly to provide the wealth supporting Middle-Eastern mischief. China may suddenly lose interest in Africa. And in America we may suddenly develop the courage to rid ourselves of the corn subsidies for gasoline; the wind and sunlight fumbles emerge as obvious ways to cut the deficit. That's what we mean by growth. It's so powerful it makes any action by any American President seem trivial by comparison.

Presumably, President Obama does not welcome being upstaged by an economic force he resisted. No doubt he will seek ways to imply it was his idea all along. When that happens, we can rest assured that everyone is then a fracker. But there is another alternative Presidential path, which in extreme form is emerging in Argentina without much media attention. In short, Argentina discovered signs of oil deposits but was unable to exploit them. A European oil company was enticed to develop the oil reserves at its own expense, and effectively did so in expectation of reward from the resulting oil sales. Suddenly, the Kirchner government expropriated the oil company, paying for it with Argentine bonds. The ink was scarcely dry before the Argentine government offered to buy back the bonds for 24 cents on the dollar. And unless someone is willing to send gunboats, the previous owners of the oil company are just out of luck. Appeals to the UN are futile, because on the one-nation, one-vote principle, there are more expropriator votes in the UN than potential victims. The only thing which can save capitalism in Argentina, is shale gas competition. Presumably, Argentina has lots of shale gas, too, but who will lend them the money to frack it?

Revenue Stream for Historical Documents

The Economist

1.-2. Save the cost of publishing long bibliographies in every copy of a book whose readers mostly make no use of the bibliography, while still making the bibliography available to those who will use it. The Economist magazine now does this in the form of notifying the reader that the source documents for their articles are available on the Economist web site. This is a suitable methodology for publications with only limited bibliographies, but very large circulation and a short shelf life. Essentially, it is a free service to readers which reduces the clutter and intimidation of citations to essentially unavailable sources.

Kindle

On the other hand, a recent book about Thomas Jefferson had 120 pages of bibliography citations. Unless that book has an unusually scholarly readership, most of the cost of printing and distributing 120 pages was wasted. Printing that book without the citations, but also publishing a diskette, Kindle, or website -- containing nothing but citations --would produce considerable savings for the publisher and reader, and they ought to be willing to pay for it. Unfortunately, there is resistance to anything new, and you may have to do it both ways until the idea catches on. The cost should include the right to some recognizable copy mark on the book, signifying this feature is available. Bowker and advertisers should be encouraged to use something smaller but similar. In that way, the concept can be advertised in advance of actual market penetration.

Some thought should be given to making some use of the searchability of such a bibliography. At negligible cost, it can be resorted and listed in a wide variety of options(author, date, publication source), since the incremental cost of such additional material is minimal. For example, identifying all the citations available at one location should assist the scholar in deciding where to pursue his work. Perhaps there are ways to produce it which would help the librarian locate the material within the library, or to pick out material in the same location before moving on.

ABE Books

3. Widen the availability of the text of primary sources. Much of this would be of interest to the non-professional reader if he could get to it more easily, and it would enlarge his sense of participating in the interpretation or "buy in". Unfortunately, most photocopying is still of poor quality, and the most useful version of the original is to use a keyboard. Therefore, I recommend searching for ways to induce the scholar to do it for you; if he really thinks it is an important document, would he please keyboard it for everyone else. If a way is provided for counting the number of "hits" on a document's citations, it will lead you to the popular documents to begin with. Please don't try to start with "A" and end with "Z". After you have produced digitized copy, then photocopy it if you wish. The local Athenaeum makes quite a lot of revenue from selling reprints of architectural drawings, so there are exceptions.

4. Do not limit yourself to primary sources. There are copyright issues here, but a link to Amazon will get you revenue from Google, and a used copy of a book from ABEbooks will be delivered to your home by United Parcel Service. It's often cheaper than parking near a library.

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