Feb. 2, 2017

Dr. Michael Williams Discusses Cost-Saving Opportunities in Health Care

The University of Virginia Health System will need to dramatically cut costs to adapt to a changing health care market, said Dr. Richard P. Shannon, UVa’s executive vice president for health affairs.

Shannon, who oversees the Health System, briefed members of the Medical Center Operating Board on the situation at a meeting of the board Monday.

Telehealth, machine learning and data collection will help cut back on the cost of providing care to patients, Shannon said, which will be important as Republicans in Congress roll out a new health insurance system that likely will force hospitals to cut back on spending.

Republican plans, written to replace the Affordable Care Act, likely would favor a market-based approach that forces insurers into a price war. Though it may lower insurance costs for consumers, it would mean lower reimbursements to hospitals that could add up to hundreds of millions of dollars over several years, Shannon said.

“Take it all together and I think you can predict there will be enormous pressure on cost in the health care enterprise over the course of the next iteration of the Affordable Care Act,” he said. “The honest answer is we have to get more efficient and we have to get more productive.”

It’s not clear what changes might be in store for patients. New technology provides many cost-cutting opportunities, Shannon said, and UVa will need to take advantage of it.

Researchers at Stanford University recently found, for example, that artificial intelligence can diagnose skin cancer as well as human doctors can. Machines could conceivably do some of the diagnostic work typically done by dermatologists, Shannon said, and this could someday apply to other specialty areas.

 “Machines can’t treat [patients] yet,” he said. “But I think you could see pretty quickly how liquid nitrogen could be applied by a robot.”

The use of “big data” — or mass data collection and analysis — could allow health care providers to predict problems before they arise and thus take preventive measures.

Telehealth — or the practice of examining patients remotely — already is used by UVa to reach patients in outlying rural areas. Last year, Shannon said, the university made 11,000 telehealth visits. Shannon said he wants to increase that number to 60,000.

“That’s a better method of triaging care that needs to come to UVa,” he said.

Dr. Karen Rheuban, director of UVa’s Center for Telehealth, said 60 specialties use teleconferencing technology to see patients.

Many specialists are able to diagnose patients via teleconference and give recommendations to local care providers. This is especially useful for community hospitals that may not have the wealth of specialists UVa does — a stroke patient in Bath County, for example, could be seen by a UVa neurologist, who can determine whether the patient would benefit from anti-clotting medication.

Rheuban said she believes the program could be expanded even further to reduce travel time for both doctors and patients.

“Many people drive five, six hours for a medical appointment that could be managed via telehealth,” she said. “Many [doctors] drive to community settings. That is an inefficient use of time.”

One of the most important cost-saving measures is simply sharing information, said Dr. Michael D. Williams, who directs the university’s Center for Health Policy. Many times, doctors treating the same patients do duplicative work, such as ordering the same test or MRI on a single patient because they “either don’t or can’t share information about you, and may not even know they’re both treating you,” he said.

Reforms to patient privacy laws and more effective data sharing could change that, Williams said.

Big data already is used to monitor population health and watch for outbreaks, which could allow officials to contain problems before they spread. As chief medical officer with the Washington, D.C. Fire Department, Williams said he collected data on certain high-risk areas of the city; at the time, officials were hoping to prevent and contain outbreaks of SARS.

“The challenge in health care is to take the fire hose of big data and take the sips we need to digest,” he said.

But hospitals may not immediately reap all the cost-saving benefits of implementing new technology, Williams added. It will take significant investments from both the medical providers and the government, which could mean it’ll be a few years before the long-term cost savings become apparent.

“To deploy enough iPads and to have enough bandwidth across the state to leverage this to its maximum capability will require investment,” he said. “The return on the investment will not be an overnight proposition.”

But the UVa Health System does not have any other choice, Shannon told the board, as market pressures wipe out hospitals that fail to adapt.

“You’re going to see hospitals disappear,” he said. The question is, who are the 50 percent who are going to survive?”


About the author: Derek Quizon is a reporter for The Daily Progress. Contact him at (434) 978-7265, dquizon@dailyprogress.com or @DPHigherEd on Twitter

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Associate Professor of Surgery and Director of the UVA Center for Health Policy
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