Tuesday, July 20, 2004

West Virginia Native John Chambers, CEO of Cisco Systems, Talks about the Costs of Paper on the Health Care System

A recent USA Today article talks about the impact a paper based health care record system has on the costs to the health care system. Below are excerpts from the article.

John Chambers, CEO of Internet titan Cisco Systems (CSCO) and a native of West Virginia, says that based on tech's impact on other industries, technology could cut health care costs by at least 25% - and improve care. In May, President Bush set the goal for every American to have an electronic medical record, instead of the traditional stuffed manila folder, within 10 years. At the same time, he named David Brailer to the new position of national coordinator of health information technology.

On Wednesday, Brailer is expected to announce government plans to nudge the industry forward. In the past 18 months, lawmakers introduced at least five bills pushing health care tech ideas.

It won't be an easy fix, though. Billions in investments have been lost on health care tech. The reasons are many. Health care is a huge, fragmented industry: 700,000 doctors; 5,700 hospitals. Each piece collects data its own way. Existing systems don't talk to each other. More common standards are needed. Privacy has been a concern.

The biggest reason, though, is economic. Doctors and hospitals bear the cost of new hardware and software. Their productivity suffers when they change decades-old work processes. But those who pay for care, insurers and employers, get the first financial benefit because of increased efficiency and fewer costly errors.

More than 90% of the 30 billion health care transactions done annually occur via phone, fax or paper, says the eHealth Initiative, a non-profit formed to spur tech adoption. While 90% of physicians in Sweden and the Netherlands use electronic patient medical records, fewer than 20% of U.S. primary-care physicians do, the same percentage as Greece, says market researcher Harris Interactive.

Health and Human Services Secretary Tommy Thompson estimates the USA could save $140 billion a year using more tech. That's a lower estimate than Chambers', but about equal to Mexico's '04 federal budget.

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