The most common questions that we get about iClickCare are related to cost and ROI.  What is the return on investment of telemedicine? Can doing healthcare collaboration bring additional income into the organization? Will iClickCare help us cut costs? (To which we answer: the ROI is excellent; definitely; and for sure.)

It makes sense, given the cost pressures that providers, practices, and hospital systems face these days. So much of what we do boils down to cutting costs or increasing income for the institutions that we work for.

This focus on costs makes sense in a lot of ways. But it is also a shame, given the profound impacts of using telemedicine for healthcare collaboration that go far beyond cost savings. Ultimately, for us, iClickCare is about good medicine, not just good economics. We find that healthcare providers, who do telemedicine and do healthcare collaboration, experience less burnout, better outcomes, AND increased income and decreased costs. It simply goes back to providing the best care that we possibly can for our patients: a principle we all learned in medical school.

That said, we were intrigued by a recent study that gets deep into healthcare costs in the US — with some surprising conclusions. Fierce Healthcare elaborates on the study by Papanicolas et al., which was published in the Journal of the American Medical Association last week. It's an exploration that lends some good science to the conversation around costs.

There are fascinating findings, some of which debunk drivers of healthcare that we tend to take as “obvious” causes of high costs. Conventional wisdom says, "Sure, medicine in the US is more expensive than in other places, but outcomes are better, and the costs generally come from use of high-tech interventions and pro specialists." 

The reality is more complicated than that. In 2016, the US spent 17.8% of its GDP on healthcare. That's significantly higher than in the 10 other high income countries (United Kingdom, Canada, Germany, Australia, Japan, Sweden, France, the Netherlands, Switzerland, and Denmark) that the study looks at. Expenditures in those countries range from 9.6% (Australia) to 12.4% (Switzerland). And, sadly, life expectancy (perhaps a proxy for outcomes, or perhaps not) is lower in the US than it is in the rest of these high-income countries.

The first focus of the study was the source of these high costs. As the study authors report, “Administrative costs of care (activities relating to planning, regulating, and managing health systems and services) accounted for 8% in the US vs a range of 1% to 3% in the other countries.” It turns out that it is precisely these administrative costs, alongside pharmaceutical costs, that account for the total cost difference in the US relative to the other countries -- not costly specialists or expensive procedures. 

The study certainly raises important questions about value. And the conversation around evidence-based approaches to costs is hugely important. It's certainly detrimental to our field that we often don't tend to apply the same amount of rigor to analyses of costs and drivers as we do to the content of our medical practices. Ultimately, cost concerns drive the context in which healthcare providers work, so it's crucial that we understand these costs accurately.

But there are no easy answers. Why do we spend more on administrative costs of care? Is it because we're failing at care coordination and healthcare collaboration or is it for another reason? Why is our life expectancy lower? Is it because of poor outcomes relative to the other countries, or does our heterogenous country have different starting points than these other countries (as just one example of an additional explanatory factor.) 

While fascinating and helpful, the study certainly doesn't give us simple conclusions. It's an important conversation to be having, but it's also important not to jump to knee-jerk responses that don't really support us in moving forward.

As healthcare providers, most of what we can control is just in our patient-by-patient decisions, trying to improve care, bringing down the time that we spend playing phone tag or coordinating care, and improving outcomes. And ultimately, that may make the biggest difference of all.

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