Aging Populations Mean Big Opportunities in Health Care IT
This is a guest commentary for CNBC.com.
According to the United Nations, the overall median age in developed countries rose from 29.0 in 1950 to 37.3 in 2000, and is forecast to rise to 45.5 by 2050.
The aging population comes with many challenges — across social, financial, economic, and political dimensions. Managing health care quality and costs for this demographic is one of the key focus areas in the U.S.
Health care spending has grown from 5 percent of U.S. GDP in 1960 to about 17 percent, or $2.4 trillion, in 2008. The Centers for Medicare and Medicaid Services (CMS) expect health care spending to nearly double to $4.4 trillion by 2018 (20 percent of GDP).
While the cost of health care continues to increase with age, there is significant evidence that a collaborative approach between consumers, providers and payers has a very meaningful impact on reducing long-term health care costs.
The effective use of health care information technology is one of the primary levers for achieving this objective. Health care IT offers a tremendous opportunity to support many high impact areas in health care delivery.
Here's some ways it can help.
Enhanced consumer awareness and tracking of health care conditions: patient portals allow easy access of health care information to patients, while consumer health technologies allow effective use of consumer health devices and self-management software for consumers.
Increased focus on chronic condition management: complete patient records would enable physicians to access patient information integrated across health care providers. Business intelligence and analytics could be used to identify high risk patients and proactively manage care.
Reduced cost of hospitalization and re-admissions: cost tracking tools would enable organizations to clearly track true input costs and efficiencies, optimize resource utilization and reduce costs.
New cost effective health care delivery models created: The use of home monitoring and tracking applications could reduce the need for hospitalization, while the use of new Internet video/audio capabilities could enable consumers and patients to increase access to physicians and nursing staff without need for visits or hospitalization.
The federal government is recognizing the positive impact of health care IT on managing and the reducing the cost of health care.
The American Recovery and Reinvestment Act of 2009 (ARRA) provides $19 billion to promote the adoption and use of technology in health care. The law provides financial incentives for hospitals and doctors to adopt and use electronic health records, and financial penalties for physicians and hospitals who do not use them meaningfully by 2015.
There are many new health care technology organizations emerging in the market — resulting in a high level of venture capital and private-equity funding.
In addition to technology focus, providers, payers, and government need to work closely to create the right financial incentives for all stakeholders to collaborate effectively in a win-win environment.
Traditional volume-based fee-for-service models need to transition towards outcome-driven models for patient care. Many new initiatives — pay for performance, bundled payments, accountable care organizations and patient-centric medical homes — are aligned in this direction.
Health care IT can be leveraged to integrate clinical information with financial and operational data, provide evidence-based insights and actionable intelligence, and reduce the risk involved with the new performance-based payment models.
In summary, the aging population is one of the most key issues facing the U.S. and most other Western countries. Given the high level of inefficiency in the health care ecosystem today, there is significant potential to reduce costs while still protecting the financial interest of all the stakeholders.
Our experience with health care technology over the years has consistently demonstrated that there is tremendous opportunity in using technology to enhance health care delivery for the aging population and reduce costs. From the health care IT perspective, the journey has just begun!
Rizwan Koita is the CEO and co-founder of CitiusTech, a global provider of health care technology solutions and services.
CNBC and YPO (Young Presidents' Organization) have formed an exclusive editorial partnership, consisting of regional "Chief Executive Networks" in the Americas, EMEA, and Asia-Pacific. These "Chief Executives Networks" are made up of a sample of YPO's unrivalled global network of 20,000 top executives from 120 countries who are on the frontlines of the economy. The opinions of "Chief Executive Network" members are solely their own and do not reflect the opinions of YPO as a whole or CNBC.