Rewards for better management needed for U.S. healthcare

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Insuring everyone is an easy economic problem but very difficult political problem, said David Cutler, Otto Eckstein Professor of Applied Economics and Dean for the Social Sciences, Harvard University, during his keynote address at the Building the Connected Health Economy: Innovation, Implementation and Investment conference in Boston yesterday.

On the other hand, providing healthcare service of a high value is politically easy but extremely difficult economically.

Cutler said that lots of people overuse drugs and services. For example, research has found that up to 10-15 percent of coronary bypass patients didn’t really need to undergo the procedure. “Overuse is a big issue,” Cutler said. However, health information systems can pinpoint these kinds of overuses. “Overuse is incredibly sensitive to health information systems.” That could save $400-$500 billion a year in the United States.

Meanwhile, care is underused. For example, about one-quarter of those with depression are successfully treated. Although this is up from about 5 percent 20 years ago, there is room for improvement. About one-third of those with high blood pressure are successfully treated. These rates indicate that “there needs to be more reward for doing the right thing rather than the more intensive thing.”

But, “financially it’s very difficult to show return on investment on IT,” Cutler said. The cost of wiring the medical system is about $150-$200 billion plus upgrade costs. “The medical system is bifurcating to the haves and the have nots. We need major investment and incentives to use technology.”

Studies have found that 20 percent of United States citizens think the healthcare system needs minor improvements. But, in Canada and the United Kingdom where there is universal healthcare, 20 percent also think the healthcare system needs minor improvements. “The problems are not just particular to the United States,” Cutler said. When it comes to healthcare, “I can’t think of a more pressing problem.”