Jeff Bauer, PhD, on Transforming Health Care
Health care futurist and consultant Jeff Bauer, PhD, coauthor of the book Paradox and Imperatives in Health Care: How Efficiency, Effectiveness, and E-Transformation Can Conquer Waste and Optimize Quality (Productivity Press, 2007), has raised eyebrows by suggesting that meaningful health care reform faces tough odds on Capitol Hill. He spoke with ImagingBiz.com about his belief that reform has to happen from the grassroots up, highlighting strategies for transforming health care from the provider’s perspective. 
Jeff Bauer, PhD ImagingBiz: Recent research indicates that the United States lags behind many Western countries in terms of widespread, interconnected health IT. What should be done to overcome this lack of interoperability? Bauer: There are lots of systems in this country that do a wonderful job of interoperability. Mayo has done it, Kaiser has done it. It’s not that interoperability can’t be done; it can be done very well. The problem isn’t interoperability and technology. I’ve got consultants that can go out and do it for you next week. The problem is that we’ve got too many people waiting around for the government to solve it, or believing in the idea that there will be this regional cooperation. I don’t find that interoperability is a really serious problem unless you approach it on a really large scale. If you’re trying to do it at a partnership level, with a couple of major carriers, a couple of major employers, a health system or two, and the large medical groups, it’s a piece of cake. It’s doable. There’s no interoperability problem; it’s just too many people trying to do it at the inappropriate level—waiting for government to take the lead (or government telling us it’s going to take the lead) and we sort of blindly fall into place. ImagingBiz: You’ve stated that the United States is long overdue to modernize its health care delivery system. What needs modernizing, and how might that alter payment structure and physician–hospital relationships in the United States? Bauer: I really think that we have hit the limits of the paper trail. I cannot imagine any solution in health care delivery that is still based on paper records. In other words, quit talking about improvements in health care delivery: cost, quality, and access. For anything you want to talk about reforming, overhauling, or making better, if you don’t premise that on digital data networks, forget it. I think we’re absolutely there. Nobody wants to invite me to Washington, because until they want to get serious about really doing something, such as providing a digital backbone for health care, it’s not going to happen. If we are going to talk about health care at the national level, everything must be digital. Physicians and health systems must also be on the same wavelength. The fact that the physicians are on a different balance sheet than the place where they do their work makes no sense. It’s 19th century, not even 20th century; the system is more than a century behind. That’s one of the reasons that so many other countries (in fact, virtually all other countries in the developed world) are ahead of us. They get far more bang for 50% fewer dollars. Physicians aren’t able to compete with hospitals on the balance sheet. You get admitted to a hospital in virtually any other country, and the physician who treats you is an employee of that hospital. We’ve really got to get the physicians on board, and I think that’s the answer to your question. It’s perfectly rational for physicians to have any economic interests within the medical community and the hospitals. This, by the way, was an issue. I asked people, “Do you think that you need to start taking seriously the fact that your radiology group is going to work for the hospital?” Half of the people said yes. We have always resisted, but we are beginning to realize that this is not going to work out as long as we can have our OICs force us to do different things. I don’t ever say that the physicians have to work for the hospitals, but I think the physicians and the hospitals need to be under the same balance sheet. ImagingBiz: You are among those who spoke at the recent RBMA conference on the importance of performance-improvement programs that can help optimize human resources and save costs. What is the low-hanging fruit in radiology services? Bauer: I can count on two hands the number of radiology groups that have addressed the discrepancies between the treatment of the partners who own them and the new physicians who are coming into them, who have different life goals. It’s very costly not to address that issue. You have to make both happy or you lose your young people, and they are the future of the group. ImagingBiz: Why is developing fair relationships with hospitals so critical to radiology? Bauer: It’s because the physicians and the health systems and hospitals need each other. Somewhere in the next two to five years, I think we are going to see a tipping point away from fee-for-service payment toward some old words—managed care and capitation. I expect that somebody smarter than me is going to come up with a new word, but we’re going to see the tipping point away from fee-for-service models and toward some sort of bundled payment. I feel very strongly that in the future (even though I look at my crystal ball and it’s a little fuzzy), we’re not going to see any more than 17% of the gross domestic product going into health care anymore. We do need something other than fee-for-service medicine. Fee-for-service payment is a large part of why we’ve had all this growth in health care spending. I think what we need to do is to develop the relationship—the fair relationship or the employment relationship—where you are paid for your knowledge and your performance, and you are not paid for what you own. That’s one of the lessons of the older radiologists: They became so wealthy. They own shares that they are firmly convinced are worth a million dollars. That’s unfair to the younger physicians who have something to contribute. We need to bring everybody under the same balance sheet. In the name of fairness, I think the health systems have to compensate their physicians fairly, and that includes compensation for the work that they do that is not billable patient activity. Radiologists deserve to be compensated fairly. If they have to overdo procedures so that they can afford to get paid nothing for the wonderful contributions that they make to the health systems, that’s not fair. The health systems have to expect that they are going to be hiring a couple of radiologists who will never read a study—but who will be the geniuses who will tie together the diagnostics for the health systems. Then, you have a decent system for preventing unnecessary studies. Steve Smith is vice president, client services, imagingBiz, Tustin, California.
Jeff Bauer, PhD ImagingBiz: Recent research indicates that the United States lags behind many Western countries in terms of widespread, interconnected health IT. What should be done to overcome this lack of interoperability? Bauer: There are lots of systems in this country that do a wonderful job of interoperability. Mayo has done it, Kaiser has done it. It’s not that interoperability can’t be done; it can be done very well. The problem isn’t interoperability and technology. I’ve got consultants that can go out and do it for you next week. The problem is that we’ve got too many people waiting around for the government to solve it, or believing in the idea that there will be this regional cooperation. I don’t find that interoperability is a really serious problem unless you approach it on a really large scale. If you’re trying to do it at a partnership level, with a couple of major carriers, a couple of major employers, a health system or two, and the large medical groups, it’s a piece of cake. It’s doable. There’s no interoperability problem; it’s just too many people trying to do it at the inappropriate level—waiting for government to take the lead (or government telling us it’s going to take the lead) and we sort of blindly fall into place. ImagingBiz: You’ve stated that the United States is long overdue to modernize its health care delivery system. What needs modernizing, and how might that alter payment structure and physician–hospital relationships in the United States? Bauer: I really think that we have hit the limits of the paper trail. I cannot imagine any solution in health care delivery that is still based on paper records. In other words, quit talking about improvements in health care delivery: cost, quality, and access. For anything you want to talk about reforming, overhauling, or making better, if you don’t premise that on digital data networks, forget it. I think we’re absolutely there. Nobody wants to invite me to Washington, because until they want to get serious about really doing something, such as providing a digital backbone for health care, it’s not going to happen. If we are going to talk about health care at the national level, everything must be digital. Physicians and health systems must also be on the same wavelength. The fact that the physicians are on a different balance sheet than the place where they do their work makes no sense. It’s 19th century, not even 20th century; the system is more than a century behind. That’s one of the reasons that so many other countries (in fact, virtually all other countries in the developed world) are ahead of us. They get far more bang for 50% fewer dollars. Physicians aren’t able to compete with hospitals on the balance sheet. You get admitted to a hospital in virtually any other country, and the physician who treats you is an employee of that hospital. We’ve really got to get the physicians on board, and I think that’s the answer to your question. It’s perfectly rational for physicians to have any economic interests within the medical community and the hospitals. This, by the way, was an issue. I asked people, “Do you think that you need to start taking seriously the fact that your radiology group is going to work for the hospital?” Half of the people said yes. We have always resisted, but we are beginning to realize that this is not going to work out as long as we can have our OICs force us to do different things. I don’t ever say that the physicians have to work for the hospitals, but I think the physicians and the hospitals need to be under the same balance sheet. ImagingBiz: You are among those who spoke at the recent RBMA conference on the importance of performance-improvement programs that can help optimize human resources and save costs. What is the low-hanging fruit in radiology services? Bauer: I can count on two hands the number of radiology groups that have addressed the discrepancies between the treatment of the partners who own them and the new physicians who are coming into them, who have different life goals. It’s very costly not to address that issue. You have to make both happy or you lose your young people, and they are the future of the group. ImagingBiz: Why is developing fair relationships with hospitals so critical to radiology? Bauer: It’s because the physicians and the health systems and hospitals need each other. Somewhere in the next two to five years, I think we are going to see a tipping point away from fee-for-service payment toward some old words—managed care and capitation. I expect that somebody smarter than me is going to come up with a new word, but we’re going to see the tipping point away from fee-for-service models and toward some sort of bundled payment. I feel very strongly that in the future (even though I look at my crystal ball and it’s a little fuzzy), we’re not going to see any more than 17% of the gross domestic product going into health care anymore. We do need something other than fee-for-service medicine. Fee-for-service payment is a large part of why we’ve had all this growth in health care spending. I think what we need to do is to develop the relationship—the fair relationship or the employment relationship—where you are paid for your knowledge and your performance, and you are not paid for what you own. That’s one of the lessons of the older radiologists: They became so wealthy. They own shares that they are firmly convinced are worth a million dollars. That’s unfair to the younger physicians who have something to contribute. We need to bring everybody under the same balance sheet. In the name of fairness, I think the health systems have to compensate their physicians fairly, and that includes compensation for the work that they do that is not billable patient activity. Radiologists deserve to be compensated fairly. If they have to overdo procedures so that they can afford to get paid nothing for the wonderful contributions that they make to the health systems, that’s not fair. The health systems have to expect that they are going to be hiring a couple of radiologists who will never read a study—but who will be the geniuses who will tie together the diagnostics for the health systems. Then, you have a decent system for preventing unnecessary studies. Steve Smith is vice president, client services, imagingBiz, Tustin, California.