P2P Network

Our country is facing a serious crisis with the existing healthcare system which was designed about 60 years ago. Healthcare (HC) costs have steadily increased over the last decade while the quality & availability of HC services to patients have declined. In response to this crisis, the federal government has allocated up to $50 billion (source: www.hhs.gov/recovery) for Health Information Technology (HIT) spending under the American Recovery and Reinvestment Act of 2009 (ARRA). This funding includes creation of a nationwide HIT infrastructure comprised of regional Health Information Exchanges (HIE), and incentives to physicians ($44,000/ physician) to buy Electronic Medical Records (EMRs).

Recent articles published in Washington Post and other leading magazines give sufficient evidence that the physicians are not buying the traditional EMR software offered by 300+ vendors, primarily because these EMRs are too complex and in-efficient resulting in loss of productivity and higher costs.

Our field trial results indicate that P2P software is very simple and user-friendly, increases productivity of the physicians and reduces their overhead costs up to 10%. The P2P Network offers many services beyond EMR to physicians, other healthcare organizations (including government agencies) and the patients. It has the potential to save $20 – 40 billion per year for approx. one million physicians in the U.S. In addition, the P2P Network should save $196 billion to the governments during next decade when implemented nationwide*.

*A national health IT infrastructure could save additional $196 billion to the governments between 2010 and 1019 – research report by Melinda Buntin and David Cutler, professor of Applied Economics at Harvard University . www.americanprogress.org.

The root causes of HC industry’s cost-quality problems are diverse and complex. The P2P Network provides solutions to some of these problems.

Overhead Costs of Healthcare Service Providers

The methods of communication and transfer of information among independently practicing physicians, patients, HC product/service providers, and other healthcare user groups are slow and inefficient. Majority of the overhead tasks related to providing services to the patients are done manually using paper. These manually conducted operations, rising labor cost and shortage of skilled HC workers have resulted in ever-rising overhead costs of HC services, while the quality of services to patients is deteriorating. The average overhead costs of most HC organizations are 50%.

Marketing Costs of Healthcare Products

HC product suppliers such as drug manufacturers have to hire highly paid marketing representatives to reach out to the physicians, educate them about the new products, and finally convince them to prescribe the new drugs to their patients. But the physicians are very busy during the day. In-between examining the patients, they have to accommodate a number of drug representatives and listen to their brief marketing pitches. At the end of the day, it is likely that a physician may not remember which drug belongs to which representative/drug manufacturer. In many cases, the physician would even forget the name of the marketing representative.

These highly paid marketing employees have to continually struggle to get physicians’ attention, and stay in front of them. The labor cost of the marketing staff is a major factor adding to the costs of HC product suppliers.

Sales Costs of Healthcare Products

The HC products, especially prescription drugs, are sold to the patients through pharmacies. The pharmacies have to add a significant mark-up (up to 300%) to the original cost of the drugs due to their own cost of sales. With the result, the patients end up paying much higher prices for the HC products.

A number of online pharmacies have popped up during last few years. But, these pharmacies are not considered reliable (and some are illegal), since the drugs are sold to the patient without recommendation/approval of his own physician.

P2P Network... a Patented Solution for HC Cost-Quality Problem!

The patented P2P network has made it possible for MDEC International to offer IT and business solutions to physicians and other healthcare service providers that are cost effective, reduce the overhead costs and improve the availability & quality of services to patients.

P2P Network Salient Features

Replaces paper records with Electronic Medical Records (EMRs).
Allows patients to enter their Registration and Medical History information through P2P website.
Patient information (entered only once) is stored at P2P Central Facility.
The central patient database is shared by all authorized P2P HC organizations.
The patient data is automatically transferred from the central facility to the P2P HC service provider’s Computer when requested.
Authorized P2P members can access central patient database in real-time from anywhere in the world.
Patients can make appointments, send messages to their physicians, view and pay their bills online.

The P2P network provides the underlying infrastructure that connects the physicians, patients and other healthcare organizations, which currently are isolated from each other. This HIPAA compliant, private & secure network enables its members to communicate with each other, transfer, and share healthcare information electronically in a secure environment.

In the near future, when P2P Network becomes a large community of physicians and patients, we will be able to offer solutions to a number of other HC industry problems.

Third Party Payment Related Problems

The third party (insurance companies) payment system has its merits, but it also has a number of drawbacks with the present business model utilized in the U.S. The present system, designed about 60 years ago, has made the HC industry an insurance-employer driven industry rather than a market driven industry. The patient (customer) does not have the power to chose his own healthcare services, and the physician (service provider) also has no authority to determine the prices for his services.

The employer of the patient negotiates a deal with the insurance company to select health insurance policies for its employees. Obviously, the employer looks for its own interest first, and selects the policies that are most cost effective for the employer. Since the patient (employee) does not get involved directly in the selection process, his interest is generally overlooked. Unlike a customer who has the freedom to evaluate and select a product of his choice, the patient choices are restricted.

On other side of the fence, an insurance company solely makes the decision regarding how much to pay for each medical procedure to the physician for his services. The individual physician gets no opportunity to negotiate the price with the insurance company for his services. The physician is required to sign a blanket contract, which states that he will accept whatever amount insurance company will pay him. After the physician signs the contract, the insurance companies have the authority to change the payment amounts any time. During last decade, the payment amounts have decreased steadily. While all workers in other industries get a salary-raise every year, the physicians get a salary-cut every year. This trend is continuing with no end in sight.

Another major flaw in the system currently used in the U.S. is that all physicians receive the same amount of payment for performing a medical procedure irrespective of their level of experience. A fresh graduate from medical school starts his new practice, and gets paid exactly the same amount for performing a surgery as a physician with 40 years of experience. There is no provision in the payment system of insurance companies in the U.S. to compensate a physician for his years of experience.

The roots of these problems originate from the US federal government agency – Medicare, which provides medical insurance to elderly population. Every year, the federal budget gets cut, which results in payment reduction to the physicians and other HC service providers. To make the things worse, by law, the physician cannot ask the patient to pay and makeup for the reduced payment. Since Medicare dictates its terms to the physicians, other private insurance companies follow the footsteps of Medicare, and also cut the payments every year.

The reduction in payments to physicians (by Medicare, Medicaid and all other insurance companies), and lack of compensation for physician’s experience level translates into lower quality of services to the patients. Unfortunately, majority of patients are not even aware of these problems. Since the insurance companies increase their insurance premium every year, they expect higher quality service from the physicians. This environment results in a poor physician-patient relationship.

Legal System Related Problems

The biggest legal flaw in the US healthcare industry is lack of having a cap on mal-practice lawsuits, and a cap on the percentage (of pay-out) given to the attorney representing the patient. A patient can sue a physician/HC provider for almost unlimited amount even for minor issues. Since most litigation attorneys work on contingency basis, and they can keep almost the entire amount (paid by the insurance company) if the patient wins, they have strong incentive to file a lawsuit for extremely high amounts. This flaw alone has resulted in ever increasing malpractice insurance premiums of physicians.