Modern Healthcare | December 31, 2016)

Dr. Robert Pearl leads the 9,000 physicians employed by the Permanente Medical Group, which serves over 4 million Kaiser Permanente members in California and around Washington, D.C. A plastic surgeon by training, Pearl has emerged as a leading champion of using electronic health records and new technologies to improve quality while lowering the cost of care. He was recently named chair of the Council of Accountable Physician Practices, or CAPP, which includes medical groups from the Mayo Clinic, Geisinger Health System, Intermountain Healthcare and other integrated delivery networks.

Modern Healthcare Managing Editor Gregg Blesch recently spoke with Pearl about the advantages and challenges facing physicians working in large integrated delivery systems. The following is an edited excerpt.

Modern Healthcare: What are some of the technologies with the most potential to improve the way we’re delivering healthcare?

Dr. Robert Pearl: The first technology is actually the electronic health record. It’s not just about billing. We use it to provide tremendous convenience to patients so that they can make appointments online; they can send secure email to their physician and get a response in under four hours for most routine problems.

We use it as a means of providing physicians information. It’s why we are able to have 90% control of hypertension compared to the 55% in the nation, and 90% screening for colon and breast cancer against 55% in the nation.

We use it as a tool to communicate amongst physicians. If a patient comes in with an incidental finding like a lung nodule, the radiologist can tag that to make sure the patient does not fall through the cracks. They send the information out to an expert thoracic surgeon, pulmonologist and oncologist. Within 24 hours the patient has a complete game plan. In a sequential referral process, that could take many, many weeks to accomplish.

MH: What other new tools are you using to enhance patient care?

Pearl: A second tool is video. It eliminates time. It eliminates distance. It can be used to serve as a consultative tool. It can be used as a post-treatment follow-up tool. It can allow the physician, rather than to see the patient intermittently, to increase the number of touch points so that they can see how the patient is doing on a more continuous basis.

And then there is the opportunity to use technology for data analytics, predictive analytics. We survey on a continuous basis every patient in one of our hospitals across Northern California. We use data from several million patients we’ve taken care of in the past to predict which patients have the highest probability to deteriorate tonight and being in the ICU tomorrow. That enables us to treat them today—basically do tomorrow’s intervention today. That reduces the mortality by 75% compared to what they otherwise would experience.

MH: What do you think is the most overhyped technology right now?

Pearl: The most overhyped technology right now is wearable devices. It’s not that they don’t have tremendous potential to have an impact. We have not yet figured out how to use them to be able to do what I call shift care left: move from the hospital to an outpatient site, the outpatient site to the office, the office to the home.

Doctors don’t want a thousand EKGs. It clogs the electronic health record. What they want is a smart technology that, using the best clinician thinking, using the recommendations of the patient’s own primary-care physician or cardiologist or other provider of care, is embedded into the device and allows the person to know how they’re doing.

That’s what they want to know. Am I OK or am I not OK? Should I call my physician? Should I change something about my care? And that kind of smart analytics, predictive analytics, doesn’t exist today inside wearables.

MH: What’s holding that back right now?

Pearl: The biggest challenge is the fear of malpractice by the developers of wearables. It’s a lot easier to develop a device that simply creates the data information and just sends it to the physician. If you look at another technology—the left ventricular assist device—we actually have technology embedded into the device that will notify the clinician when the device fires. But that’s the only technology that I’m aware of that does it today. Most of the wearables simply create data and aggregate it or send it to a physician, neither of which advances clinical care.

MH: You’ve written that all physicians should have business school training. Why?

Pearl: In the 20th century, you had a patient who came in with a new problem, a physician took care of it, and the patient either got better or didn’t get better. It was a very simple set of transactions.

Today it’s far more complex. Patients have multiple chronic diseases. Physicians have to work together as a team. Take a pulmonary nodule. This is an oncologist working with a pulmonologist working with a thoracic surgeon, linked back in with a primary-care physician and a radiologist. Complex systems of care are not what physicians have been trained to do.

The opportunity is to use business principles. Businesses are integrated. They work together as one. Marketing works with sales, works with manufacturing, works with the capital generation process. They have a defined leadership structure. Most of medicine has none of that. Creating those same systems to improve care is what’s necessary in the 21st century.

If we don’t do that, we’ll find ourselves either rationing care or doing something else that will undermine the excellent care of patients. It’s part of why I am the chairman of the CAPP groups, the 28 largest and best medical groups in this country. These organizations are integrated, capitated, physician-led and technologically enabled. They are trying to move healthcare into the 21st century using technology, system reorganization, collaboration and coordination. Those are all skills that we teach in the business school that we don’t teach in the medical schools.

MH: Is it possible for providers and insurance companies to achieve the same level of integration and accountability under a different model of looser affiliations with value-based contracts?

Pearl: If you look at the National Committee for Quality Assurance database, the organizations at the very, very top—given a rating of 5 both in commercial and in Medicare—are the CAPP-type groups. If you look inside Kaiser Permanente, we’ve lowered the chances of our patients dying from heart disease 30% below the communities around us, lowered the chances of patients dying from sepsis 40% below the communities around us.

My belief is that we provide care that’s 10% to 15% better in quality, 10% to 15% more convenient and probably 10% to 15% lower in cost. That combination requires movement from fee-for-service to pay-for-value. It’s going to be difficult, or at least it will take a while, for people who are completely in a fragmented practice, practicing alone without technology, paid simply on a fee-for-service basis without any ability to really coordinate with their colleagues except intermittently or through mail or fax, to be able to develop a 21st century integrated delivery system.

People in small groups can come together and work toward becoming an accountable care organization. People who are in accountable care organizations can actually become very much like a CAPP-type group focusing on the quality, the patient convenience, the technology, and doing it in a way that is so much more efficient that the costs become more affordable.

MH: How are rising drug costs playing out for your practices and your patients?

Pearl: The overall cost of healthcare—and specifically as it plays out in pharmaceuticals—shares a common point of reference, which is that the cost of healthcare is rising faster than we as a nation can afford it. And much of that cost is being transferred to individual patients. The out-of-pocket expenses in much of American medicine are rising. Seven years ago, something like 25% of people had a high-deductible program. Now it’s moved to 40%. We’ve seen American wages stagnate.

So figuring out how we can restructure American healthcare so that it’s integrated, that it’s prepaid, technologically enabled and physician-led at the point of care delivery would allow us to address rising healthcare expense.

Specifically with pharmaceuticals, we have a broken system. We’ve created a system basically of oligarchical and monopolistic pricing. We have to think about it very differently than other products. Most products you have a choice. If you don’t want to stay at a fancy hotel you don’t stay. When you have a disease, you have no choice but to buy that product.

If only one company has it and they have unlimited pricing ability, what you’re going to see is gouging of the public. And that’s what we’re seeing in American medicine today. The question is going to become whether action happens to make drug pricing be more rational. What’s happened in the past five years is that drugs that are well-established, that require no more R&D investment, are having their prices go up 100, 200, 500, a thousand times more. To me, it is simply not conscionable.

MH: What’s an appropriate policy response?

Pearl: First you need transparency. Drug companies should be required in return for having the patent protections they have to disclose the R&D cost of development and to have it audited, either by the government or by an agency. Some type of group needs to look at whether the value generated justifies that price. And then the drug industry needs to be held accountable for making sure that the pricing of the drug is consistent with that value that’s created and with the research and development dollars that have been invested.

MH: What is your greatest hope or your greatest fear for how repeal and replace plays out in the next administration?

Pearl: My greatest hope and fear is really more about American medicine. I think that the challenge in American medicine is one of economics and mathematics and less about politics. Politics will play a part across time. But in the longer time period, we have to find ways to raise quality; we have to find ways to help people change their lifestyle. We have to find ways to be able to provide preventive care in a way that’s going to be cost-effective.

My greatest fear is we’ll devolve into rationing. My greatest fear is we’re going to see the people getting insurance through the commercial realms finding they are unable to get the care that they require.

This article was originally published in Modern Healthcare