eWeek has an article that just came out entitled Digital Health Coming to Grandma's House. It paints a potentially rosy picture of a future in which health IT reaches into people's homes to propagate preventive care and facilitate remote intervention when necessary. There is, however, an 800-pound fly in the ointment: America's fragmented, bloated, overpriced and underserving healthcare system. Providers and payers face a Prisoner's Dilemma problem that isn't going to go away anytime soon.
Here's a taste of the rosy picture:
Elderly patients living at home will receive fewer nursing visits, and make fewer visits to the hospital. That's according to a white paper released this month by Parks Associates, which concludes that "technological advances are making over the home health industry." According to the report, the digital home health market in 2005 was $450 million. By 2010, it could be $2.1 billion, fueled mainly by wellness monitoring services and online doctor consultations.
Many insurers aren't sophisticated enough to implement such strategies effectively, and want manufacturers to provide evidence of savings. But many home technology companies are undercapitalized. That creates a Catch-22, writes report author, Harry Wang. "Many small companies have the expertise but not the financial resources to sponsor large-scale studies." In other words, they can't sell more technology because they haven't done studies, and they can't do studies because they can't sell enough technology.
The report does not mention Intel, which has been aggressively promoting its health IT efforts and has teamed up with Kaiser Permanente. However, even Intel has said that the fragmented health care system does not necessarily provide a market for good products.
This last assertion refers to another eWeek article from back in February which featured commentary from Intel's head of Health IT and the CEO of Kaiser Permanente: Intel: Funding Shortages Stifle Health IT. Some tidbits from that article:
...even if better standards lower the costs and increase the utility of health IT, promised savings can't come without up-front investments, said [Louis] Burns, [manager of Intel's Digital Health Group,] praising the United Kingdom's decision to pour billions of pounds into health IT. "You've got to build in the infrastructure before you see the benefit," he said.
Securing that up-front cash is more difficult in a market like the United States, where a motley collection of government programs, private insurers, and individual patients pay health care providers, he said. It's not surprising that rare "closed systems," like the Veterans' Administration or California HMO Kaiser Permanente have led technological innovation.
"In a system like Kaiser, which is both a payer and a provider, the returns are clear," said Burns. That's not the case when health care providers and payers are different entities. "The question is who is going to pony up the cash," he said. "I don't know how that's going to get done when it's separated."
Richard Pearl, head of Kaiser Permanente, was more acerbic. "There are no incentives to keep people healthy," he said, "You're not going to get people to make investments in preventing disease, when they are going to make money treating it."
There's another way of saying what Pearl said: Free markets do work, there's no doubt about it. But they work for the stockholders, not necessarily the consumers, especially when the consumers who need the goods the most are those least able to pay for them. In the case of the elderly in particular this is tragicomic, because many of the elderly who are now poor contributed a lot to the healthcare of others, directly or indirectly, in their earlier years when they were better off.
The Prisoner's Dilemma problem is an allegorical situation in which there is substantial benefit for both if two prisoners cooperate with each other against the jailers, substantial harm if they defect and betray each other mutually, and disproportionate benefit to one and disproportionate harm to the other if one defects the other prisoner remains cooperative.
Defect or cooperate? In the US healthcare system, it's a no-brainer. Providers and payers both benefit in the short term by defecting ("let someone else pay for the infrastructure"), while the patient population has little choice but to cooperate. The long-term picture is bleak for all, but for corporations, there is no long-term picture, or rather the rules of the game forbid managers from taking it into account.
The 1983 movie Wargames ends with the quote: "A strange game. The only winning move is not to play." If only that were a choice. It would almost be funny if it wasn't our well-being at stake.