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By: | Tags: | Comments: 0 | January 14th, 2015


How Electronic Records Must Lead the Way

In 2005 the RAND Corporation projected that widespread use of EHR by the medical service industry could save $81 billion (USD) per year.  Not a single person with experience in healthcare can say today that these projections have proven accurate.  In fact most, if not all, would say that this was a fairytale, and little or none of those benefits have been realized. Some can argue that EHRs have actually cost more because better documentation has actually increased billing by documenting more intensity in office visits.

Before we blame the RAND Corporation, I think their analysis, if academic, was based on normal business principles.   Our U.S. healthcare industry is not a “normal” industry, even with its noble intent.

This is not in any way bashing a great industry, and a business that I love. Who cannot love helping, in any way possible, make people well?  I think the problem is that the industry, apart from pharmacology and technology in diagnostic and treatment, has not measured up to its potential because there has been a lack of true innovation over the last 50 years.  Going from tube TVs to flat screen TV in the waiting room does not constitute innovation, any more than going from paper records to using computers, yet not changing the actual process of recordkeeping, constitute innovation. About the only process innovation in the delivery of healthcare has been the emergence of urgent care centers and para-medical facilities.

I quote the 2012 Annual Report from the Board of Trustees of the Medicare Trust that “current Medicare cost assumptions assume an unprecedented improvement in provider productivity.”  Healthcare is desperate for innovation, yet largely lacking

Most large providers of healthcare IT, and by association EHRs, are large enterprises that have either moved from other IT industries into healthcare or adopted legacy models, all of which have failed to bring any new innovation to the healthcare community.

Some of the major players have emerged from the medical billing sector, or as the term has been recently coined “Revenue Cycle Management (RCM),” with little, if any, experience in the provider-patient process interface.  Policymakers in both major U.S .political parties appear to believe that the new Medicare and Medicaid payment scheme is going farther away from episodic payments to providers, to what is a combination of managed care, global payments, pay-for-performance and or flat-out capitation.  The RCM model will likely go the way of the telegraph and the gaslight and will effectively become extinct in the next 10 to 20 years if current trends continue, at least for government programs, and for certain, if the nation moves towards a single-payer system.

So, back to innovation – or lack thereof, taking up paper records and converting them to electronic format is not innovation today. It is fundamental and is not unlike the starting point for the word processors (Wang) when it replaced the IBM “Selectric” typewriters in the 1970’s. The word processor was not an end product; rather it was historically a short-term transition to modern computers.  The healthcare industry is at a similar crossroads undergoing a transition from a reliable QWERTY keyboard (1873-1878) to a mouse, to visual user interface, and maybe the end play, to a high-quality voice recognition and speak-to-text commands.  How long will the QWERTY keyboard be the principle method for input/output in the advanced systems of tomorrow?   Many would argue dominance of the manual input input/output has been quickly deteriorating by the invention of the mouse that was patented in 1970.

As I prepared these observations, I first wrote them on paper (old-fashioned way) and then dictated them directly to my computer voice recognition program – not even to my computer really, instead it went directly to my iPad.

There is a challenge AND high-risk to any innovation which may be why we have seen little to no innovation in the EHR industry.  In the EHR business there are two issues to deal with: the rate of change of a user and the end-user’s (physicians) ability to assimilate new technology.  Today, the typical general practitioner may use diagnostic technology and amazing 21st-century drugs; however, the pattern of care, assessment, both subjective and objective, as well as treatment protocols have not changed significantly in nearly 100 years.  Further, true innovation presented to the medical community cannot go too quickly or it will likely be rejected, and too slow is not what the industry needs today.

The challenge for innovators is also the vulnerability to time and energy to create the innovation, access to long-term capital (sometimes called patient capital) versus the use of reasonable, existing and reliable (non- innovating) models and platforms.  It is actually easier to replicate existing models than to truly innovate a new model or find a new use of existing technology.

The other natural obstacle has been the inability of current EHRs to transition the process and improving productivity – true process evolution.  I have been a witness to hundreds, if not thousands, of interactions between patients and providers.  Many days I have shadowed providers to determine potential improvements in their physical workflow, need and use of technology, removal of barriers or bottlenecks; nearly always using non-traditional industrial engineering concepts to improve the productivity that in most cases has been around for decades.  I have many times gutted a building and rebuilt an office to provide for more useful space and workflow.  As with other industries, the modern medical office is not modern at all by today’s standard, instead it is usually a 75 year old physical model.   My goal was to always improve outcomes, or speed that outcome, and provide economic value.  That said, a new innovative EHR has to do far more than just transition from paper to electronic format.  As I have noted before, any physician can write a prescription on paper faster than it can be typed, even by using a mouse with elaborate templates to create the Rx.  A transformative EHR has to provide far more; it must also be faster and better.  A truly innovative EHR has to go beyond just replacing an old paper system with a look-alike/work-alike digitized system.

The major challenges faced by today’s EHR:

• Make a doctor more efficient in daily workflows and improve productive use of assets.

• Provide actionable data.

• Provide the ability for patients to enter data relevant for the office visit as they enter the medical facility or office, or from home. Create a way for patients to describe their problems and what they’re hoping the outcome to be while sitting in waiting room.

• Access patient information at every point in the patient process.

• Create a continuous flow of information replacing the black hole of old manila folders medical records. Connect patients to records so that each provider knows the patients’ status.  Today it can be done even via a smartphone.

• Have actual notes doctors can share that are created immediately and are available to patients using a patient portal with a smartphone or desktop.

• Allow patients to access to their EOB’s (explanation of benefits) so that they become advocates for providers when there’s a problem with the insurance company.  Currently,  patients get the EOBs anyway via regular postal mail; it should be done online for efficiency in timing and a connection to the actual visit or occurrence of issues.

• Allow peer-to-peer sharing of patient charts.  This is the equivalent of the fabled unicorn. Yes, large enterprises and large integrated healthcare systems today have this opportunity (Mayo Clinic, Cleveland Clinic, Kaiser Healthcare).  Unfortunately, even in one five-story medical office building (MOB) with 50 offices, there is no intercommunication of information, even if most of the “unofficial” care team is in the same MOB.  And the EHR’s must be patient centric not facility centric.

The best way we can create value within the healthcare technology arena is with an interconnected EHR; with that interconnectivity based around patient wellness, everything will change.  The old model has been effective in using information to create value to the creator of the medical record, and yet not wellness for the patient.  When this transformation happens, it will be the equivalent of the transformation that happened during the dark ages when we went from hand writing books to the invention of the Gutenberg press that fueled the Renaissance.  We can use the example of handmade clothes versus machine made; handmade cars versus those made by robots in assembly lines.  True technology and innovation in healthcare WILL increase productivity and improve quality outcomes and as a result will reduce the costs within the industry.  These simple key changes of increasing productivity and improving quality outcomes have occurred in every industry that has embraced technology innovation and are the signs of true innovation.  Healthcare is about to experience it as well.

Today, as the U.S. government moves as fast as it can and fiscal realities dictate toward an outcome based payments system, the sharing of real-time information is paramount.  Let’s be frank, until now, the only real value EHR’s have brought to medicine, for the nearly $100 billion USD spent by the industry over the last 3 to 4 years, has been “maximizing medical collection.”  Even EHR’s that should provide more documentation, sometimes as doctors have told me are just words or other times  less actionable information.  I am told that now it can take more time to see what is wrong with a patient in medical reports, because there are more words and a doctor has to read all of it to see what is real and what just “chart noise.”  At times, and to the untrained eye, it gives the perception of more care, and potential higher complexity, which translates to higher reimbursements as it would still be a fee-for-service environment.  This does not always mean better care.

Recall that in the fee-for-service environment of today, the more times the physician sees a patient, the more they will and should get paid.  That is the economic model that we have inherited, and yet is likely to materially change over the next 5 to 10 years.  The new model will include more managed care and a capitation of payments (lump-sum monthly payments to provider), both of which is effectively paying providers to keep us healthily.

In the USA, we have witnessed healthcare costs grow from 4% of GDP in 1965 to a staggering 17% of GDP in 2012.  Every economist will tell you that this is an unsustainable, and approaching critical state as this country continues to face fiscal challenges.  And we’re not yet sure how the baby-boom generation as it begins entering retirement age will impact healthcare expenditures over the next 25 years; no one believes this will not be a material impact.

We have recently seen the emergence of experiments with new payment models (or maybe a new name of an existing healthcare model) focusing on Accountable Care Organizations (ACOs). Medicare has hoped that these new ACOs will provide a shallower up-trend (reduced rate of growth) in healthcare expenditures.  ACOs are a group of medical providers in a defined community that provides all of the services to Medicare patients, from podiatry to hospitalization.  Medicare uses claims data against historical benchmarks determines if the care teams have provided better healthcare at lower cost.  Medicare shares the savings with the ACO in the form of annual bonus payments.  They have been in operation for about three years and most of the ACO’s have not proven economically justifiable, even though some have been in areas that already experience with managed-care physicians.  The ACOs single biggest challenge is EHR interoperability, and sharing of valuable and actionable information on their shared Medicare patient.

Regardless of what could be inconclusive results for ACOs, I still believe that over the next 20 years the trend towards managed-care will continue to replace fee-for-service, in one or many ways.  I believe that the potential opportunity for the innovative EHR will be highlighted by managed-care operators that are looking for better more accountable Medicare care and cost trend reductions.  This trend will go way past Medicare and will impact Medicaid, now growing exceptionally fast after the implementation of the Affordable Care Act of 2009 (ACA) in the USA. Many states are transitioning to 100% managed care for Medicaid recipients (Florida effective July, 1, 2014).

No single action that we do in healthcare today will have the benefit of having a one patient record all across the healthcare delivery system.

Noel J. Guillama

President & CEO


The future of healthcare belongs to a “patient centric platform” versus the provider centric installation of today.  Our trademarked concept of One Patient…Total Connectivity™ platform design will be a stronghold in a whirlwind of political healthcare controversies.


About PWeR®, Inc.

PWeR® is an innovation-driven healthcare services organization purposefully designed and structured to bring effective change to the U.S. healthcare industry.   The foundation of the Company is in the design, development and deployment of innovative solutions, technology, products, and services to the healthcare industry.  Our technology solutions are intended to assist physicians, hospitals, and health systems, as well as government and private sector payers, to manage treatment outcomes through a patient-centered wellness concept, our trademarked concept of One Patient…Total Connectivity™.  Our premier platform, PWeR®, (Personal Wellness electronic Record™) is a 21st Century electronic health records (EHR) solution that will host medical records and permits interactive use.

There are certain statements contained in this PWeR® Perspective or Opinion Paper that are not based on historical facts and are forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act of 1995, and are subject to substantial risks and uncertainties.  This Paper is for educational and informational purposes only and is based on our opinion of a highly volatile political subject. The Company does not undertake any obligation to release any revisions to these forward-looking statements publicly or to provide any update to this Paper to reflect events occurring after the date of this Paper or to reflect the occurrence of unanticipated events.

PWeR® is a Registered Trademark of The Quantum Group, Inc. and it assigns or licensed users, in the U.S., China, EU and other nationalities.

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