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Craig Barrett on what employers can do

by David Williams

Intel Chairman Craig Barrett’s been pretty consistent in his views on health care so I wasn’t hopelessly lost when I arrived a few minutes late into his talk on “Employer Demands to Improve Value in Health Care Purchasing.” Basically, employers are in a position to encourage health care reform and technology can play a major role as it does in other parts of the economy.

He described his continued amazement at how health care entities make decisions. He gave the example of a hospital evaluating the ROI of interoperability and concluding it was negative. However the hospital didn’t include the value to consumers in the calculation, considering it irrelevant. According to Barrett:

Only in health care can the system be so concerned about its own operations and unconcerned about consumers.

He compared the situation with Fedex, which didn’t put package tracking in to benefit its drivers, and banks, which didn’t put ATM networks in to benefit tellers. Health care players need to think in the same way, he said.

I sat up front so had the chance to pose a question:

In health care, couldn’t you consider the physician rather than the patient to be the consumer? After all, physicians order tests, write prescriptions, and choose hospitals for patients. [They are different than Fedex drivers and bank tellers.] Recent moves by hospitals –like creating physician portals– are actually geared toward making it easier for the physician to do business with the hospital. How realistic is it for employers to shift power to consumers?

His answer: those with purchasing power (employers) need to refuse to employee providers that don’t provide value to consumers. He likened it to Walmart telling vendors to use barcodes. The vendors just do it.

I’m afraid Barrett’s prescription isn’t ready to be applied yet. Employers don’t speak with one voice, they don’t have a unified plan, and despite the fact that health care has become a top priority issue, employers still tend to rely on health plans and benefits consultants to tell them what to do. That’s not going to lead to anything radical.

Barrett contends that employers can move faster than the other big purchaser: the federal government. While that may be true of individual employers I don’t see how it’s true of employers collectively.

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