Finding new ways to look at the same old things.

Is outsourcing medical services using digital technology the way to slash health care costs?

via Associated Press

Let’s not forget that the ongoing discussion debate firestorm about health care is not only about ideology – however real or falsified – but also about fundamental economic costs. Wheether you’re for or against health care reform, most will agree that increasing health care costs by almost 10 percent yearly and having employees shoulder more of the costs is an unsustainable trend under any system.

So the question remains: just how are we going to reduce costs? Sure, there’s been lots of talk about increasing competition between plans, making generic drugs more available and eliminating many of the bureaucratic redundancies that siphon off more money than necessary.

For example, one of Obama’s main strategies to reduce costs is by creating a digital medical record system, which by some estimates could save $200 to $300 billion a year – though implementation won’t be easy. Having a digital database is long overdue and a no-brainer – it’s simply prodding the health industry towards the 21st century and in line with how the world works.

But what about more radical approaches that infuse technology into the actual care itself? There are a few different approaches being developed right now that are all aiming towards the same goal of using technology to allow doctors to help patients remotely and thereby increasing the number of people they can see in any given day – compacting time and space.

On the basic level, there is Jay Parkinson’s Hello Health online platform, which attempts to merge Web 2.0 tools with real-life medical practice. By using features commonplace on social networking sites such as Facebook but customizing them specifically for the medical practioner, Parkinson is developing a fully integrated online application that streamlines the process for things such as making appointments and examining a patient’s health history. Hello Health is aiming to be much more than just an offshoot of a digital health record system in trying to extend their reach to help track a patient’s health status, refill prescriptions and give advice all using online tools tailored for the task.

Parkinson estimates that doctors can reduce their overhead from 65 percent of costs to as low as 25 percent by using Hello Health, with hopefully much of the savings being passed onto customers. This would in turn reduce the overall cost of care – though one would expect that mass adoption will be necessary to make a significant difference.

Eliminating the challenges of time and space is also the goal of a project being tested by Cisco and UnitedHealth Group. Dubbed “Connected Care,” it allows patients to see doctors through HD video chat with the help of an on-location human assistant and a digital stethoscope sending information about your pulse rate to anywhere in the world.

Connected Care is also aspiring to be a lot more than just a fancy video chat application, but rather an integrated platform with information about your health records, referral options and even vital signs all accessible at your fingertips. Just as with Hello Health, the idea is simply that by cutting overhead and increasing efficiency while using less resources, one creates more accessibility at a lower cost.

It is in this way that health care is now following the model of economic globalization that took shape in the latter half of the 20th century through cost-cutting and efficiency measures achievable only by compacting time and space.

If Web chats are the factory robots, then who will be the outsourced labor? Most likely, it will be the same countries that we have outsourced our service jobs to – namely China, India and even Brazil. While it’s true that checking for strep throat is a completely different matter than changing an airline reservation, the fact is that outsourcing medical services has already been going mainstream in the form of “medical tourism.”

While Americans have been going abroad to seek cheaper medical treatments for years, what’s changed in recent years is that some insurers have actually been willing to pay for them – and why not? The patient receives the treatment he or she needs, and the insurer spends less – a lot less – than they would if the procedure had been performed in the U.S. The savings are immediate and obvious – for example, a $130,000 heart-bypass surgery in this country costs only $34,000 in South Korea or just $6,650 in India, and sometimes may be performed by surgeons who were trained in the U.S.

After piecing all of this together, it’s not hard to imagine these same doctors seeing patients remotely using a communications platform such as Connect Care and achieving much the same results as American doctors, but at a much lower cost. It’s these types of cost-saving measures that American companies claim to be necessary in order to compete in a global marketplace. As Americans become more accustomed to services being provided remotely by foreigners with impeccable Midwest accents, this perhaps becomes inevitable future of health care as insurance companies scramble to compete by reducing operations costs – much in the same way that major corporations have outsourced much of their work overseas in recent years.

Coincidentally, Britain’s much derided/celebrated National Health Service took very much a similar path nearly 50 years ago during its early beginnings. Needing to fill unpopular posts in deprived rural and inner city areas that most would rather avoid, the NHS lured more than 18,000 doctors from the Indian subcontinent to fill these roles – and essentially ensuring the survival of the NHS in the process. Today, as America tries to expand health care coverage to many more of its citizens, it seems that we may be on the verge of calling upon a new generation of Indian doctors to save our health care system, even if we haven’t completely calculated all the future costs that outsourcing may bring.