Volume 2, No. 3
May 2006

Julie Neese massage business
Julie Neese opens a new massage business

Miles of GolfMiles of Golf expands their space on Carpenter

Ann Arbor Area BUSINESS MONTHLY magazine brings the reader the latest business news and information important to the businesspeople in Washtenaw County. Each month articles cover real estate, legal, Internet, employee concerns and the climate of business in the greater Ann Arbor area. There is news about company employees and feature articles on local businesses. We cover business news from Ann Arbor, Chelsea, Dexter, Manchester, Milan, Saline, Whitmore Lake, and Ypsilanti.

Controlling Health Costs With Technology

VA Hospital's Cost-Saving Computer System Leading The Way

VA Hospital computerized medical costs
Computerized medical files allow VA Hosiptal physicians to discuss results with patients at any VA hospital.


By Dale R. Leslie

Information technology can enable the consistent provision of quality health care by keeping the organization's knowledge base updated and accessible to all who can benefit from it.

Paul D. Scheel, Associate Director of the Veterans Administration Medical Center on Fuller Road in Ann Arbor, covers a common health case scenario with the brush of the VA's cost-saving Computerized Patient Record System (CPRS).

"Let's say a 'snowbird' splits their time between here and Arizona. They're tested and evaluated for a heart condition in our facility. And a few months later, they report to a VA hospital in Arizona with chest pains. Formerly, the same diagnostic tests and analysis that had occurred in Michigan would probably be duplicated in Arizona. This is no longer the case in the VA health care system through the development and utilization our state-of-the art, integrated program," Scheel said.

Paul D. Scheel, Associate Director of the Veterans Administration Medical Center on Fuller Road in Ann Arbor, covers a common health case scenario with the brush of the VA's cost-saving Computerized Patient Record System (CPRS).

"Let's say a 'snowbird' splits their time between here and Arizona. They're tested and evaluated for a heart condition in our facility. And a few months later, they report to a VA hospital in Arizona with chest pains. Formerly, the same diagnostic tests and analysis that had occurred in Michigan would probably be duplicated in Arizona. This is no longer the case in the VA health care system through the development and utilization our state-of-the art, integrated program," Scheel said.

"Knowledge sharing" has become the new buzz-phrase in the movement to control health care costs; consumers currently spend more than $1.7 trillion each year on health care. The VA also invests heavily and systematically in preventive care, because unlike private health care providers it expects to realize financial benefits from measures that keep its clients out of the hospital.

The VA is the nation's largest integrated health system, which is among these facts about the VA Health System:

"Our CPRS is so second nature, I feel I've grown up with it," comments Dr. Jeffrey Curtis, Director of the Ann Arbor VA Medical Intensive Care Unit, who has served in the VA system for 20 years, 15 years in Ann Arbor."

Curtis attributes the smooth transition of physicians and staff to the integrated system to its careful step-by-step implementation. "I remember when we could first place our pharmacy orders with the system," he recalls as a landmark event. Also, he characterizes himself as "pro-computer" which made the transition easier.

"CPRS is not perfect but we're working on it," he adds.

The truly unique feature of the CPRS and enhancements is the ability to pool test results and analysis with x-rays and other support material from various departments in the hospital into one transferable package. The software is not proprietary and as public domain, it is available to all medical centers. Those centers could also benefit from the VA's experience with the system.

"The attending physician whether they're here or across the country has the patient's current medical history at their fingertips without duplicate testing and analysis required. They can even zoom in on a portion of an x-ray or a photo for closer scrutiny," Scheel said.

It's difficult to imagine a hospital, like the familiar VA facility in Ann Arbor, without a sliver of x-ray film. Since a majority of the VA medical records are digitized, the cost of paper and handling is also reduced; hardcopy charts and graphs are obsolete and there is virtually no need for expensive, consuming storage space and boxes.

"Under the old system, only one person at a time could checkout an x-ray or review a patient's folder," Curtis mentioned, "We spent an inordinate amount of time trying to track down a piece of film or a patient folder. Now, an x-ray or a patient's file can be reviewed by several people simultaneously. And they can jointly communicate about it."

"The resident doctors who come here to study are astounded. They are lost not having an actual piece of film or a chart or paper to hold," Curtis notes, "And they need to refresh their keyboarding skills. Because the new information must go into the system."

Other benefits with CPRS integration are:

What are the disadvantages to CPRS?

Start up costs and the period of time required for training may appear excessive. The VA has taken the lead in introducing electronic medical records, which it can do far more easily than a private hospital chain because its patients remain customers for decades. Most health experts agree it is helpful to have some type of technical knowledge and it is essential that the system is user-friendly.

"Physicians must be the users of the system, performing data entry (e.g., orders, progress notes) as well as information retrieval, if they are to realize the benefits of interactive on-line decision support," comments Richard Dick, Elaine Steen and Don Detmer in "The Computer-Based Patient Record: An Essential Technology for Health Care, Revised Edition."

Another obstacle facing the users of an integrated system is the lack of standardized terminology, system architecture and indexing within the health care industry. "Although there has been progress in developing individual coding standards for data elements, none has emerged as a comprehensive standard," Dick, Steen and Detmer comment.

When a standard language is developed, systems will become more flexible and provide additional relevant information in response to diverse demands. Health care consultant Peter Schloeffel notes, "By adding a standard platform, clinicians will be able to use a range of best-of-breed clinical applications which all share a common standard Electronic Health Record (EHR) architecture."

Dr. Curtis is quick to point out that the private sector hospitals would need to add a billing component to the CPRS and customize the features for a business setting.

Then there are the traditionalists in the medical field. In an article in the Stanford Report, Alain Enthoven, Emeritus Professor in the Stanford University Graduate School of Business, asserts many doctors prefer a system that lets each doctor or small group of doctors work independently in their own offices. The model works against "knowledge sharing," best practices or any systemized way to track the overall health care activities of a particular patient.

And it is precisely this model of inefficiency, Enthoven says, that is causing costs to escalate out of control. He views information sharing and role reassessment as a critical part of an integrated delivery system. He points to the growth of "Evidence-based Medicine" where new medical care that evolves from the over 10,000 randomized controlled clinical trials evolves each year.

"A doctor could not only call up integrated test results- which have much less likelihood of getting lost- but also obtain practice guidelines that explain what should be done for a patient with a certain diagnosis," said Enthoven in the Stanford article.

Dr. Curtis envisions a time when voice recognition will further streamline CPRS. "A significant amount of time and labor could be saved through dictation rather than keyboarding the information," he noted.

Confidentiality and security issues always surround patient records but supporters of a CPRS-like system point to firewalls, passwords and properly designed and monitored audit trails as preventive measures of unauthorized access. "Whereas stringent security measures should be applied to protect the confidentiality of patient information, it is also in the patient's best interest for the Electronic Medical Record to be accessible for appropriate, legitimate purposes by authorized users," Dick, Steen and Detmer comment.

In somewhat of a role reversal, Scottsdale Health Center (SHC) in Arizona has an integrated system that also allows customers to access their health and wellness center.

SHC has partnered with DC Ranch, a new master-planned community of 4,500 homes, as their preferred health care provider. In turn, SHC supplied HealthDesk Online personal health and care management software to each consumer in the community.

DC Ranch residents participate in disease management protocols from home, access online libraries of medical information and schedule doctor appointments.


John Hindle of Hylant Group
John Hindle of Hylant Group

Employers, Employees Struggle
With Rising Health Care Costs

By Duane Ramsey

In today's economy, every business is faced with the challenge of providing health insurance to employees due to the escalating costs of healthcare across the country. Local businesses have numerous options when it comes to finding a health insurance plan for their employees.

The cost of healthcare has risen beyond the control of most employers with the increasing inflation of medical institutions and treatment, consolidation of the medical delivery system resulting in less competition, new and more expensive technologies, spiraling costs of prescription drugs, and continued pressure on physicians to see more patients in shorter time periods.

The combination of those factors not only places a significant squeeze on employers but also on employees who are paying more of the cost for health care and insurance for it. Cost participation has led to a greater awareness of the cost of care on the part of the average person, according to sources in the employee benefits business.

"Our firm believes strongly that the most effective way of managing health care costs is managing health care risks," said John Hindle, senior vice president of the Hylant Group's office in Ann Arbor

The Hylant Group acquired the Dobson-McOmber Agency, a local independent insurance agent, in 2005 to form Hylant of Ann Arbor LLC.

"Our position espouses such management through integrated programming that addresses wellness, lifestyle of the well but risky population, and disease management assistance for those who have chronic disease conditions," said Hindle.

Most employers have achieved success with respect to risk management in the areas of commercial insurance and workers compensation. However, there has been little focus on risk management of employee and dependent health, according to Hindle.

"We're bringing the concept of loss control to healthcare claims for businesses," he said. Hylant takes an approach that requires "population management" and includes all participants in the employer's health plans. It has developed a program, Personal Self-Care Plan, which uses a "health risk appraisal" to identify individuals who are well and those who engage in risky behavior but do not have chronic illnesses.

The company uses an analytic system that downloads two years of health and pharmacy information, processes it through a series of risk identification factors and creates a risk profile for each person in the employer's plan. The information from those analytic programs is processed through its medical staffing program, which places people in a wellness, lifestyle or disease management program.

"We provide a total systems approach to improving the health of all participants and assistance in managing the costs of health benefits through the care and technology components of our program," said Hindle.

Modern healthcare's most effective innovation offers the most appropriate care for the best possible outcomes at the lowest possible cost. Hylant's health data systems track and monitor utilization at both the individual and group levels. The staff at Hylant will work with the management team of each client to create a multi-year, customized Preventative Self-Care Program designed to reduce healthcare costs and improve employee productivity with that approach.

Risk management of the health of employees and their dependents represents the next step in meaningful cost containment. Quality risk management may not only help reduce costs but also create a healthier and more productive workforce.

There are numerous choices for health insurance plans available to local businesses from single-person operations to Fortune 500 companies. Various plans are available through insurance companies, local employee benefits firms and insurance agencies, the Ann Arbor Area Chamber of Commerce and Small Business Association of Michigan.

"We're very fortunate to have several choices for HMO's in Washtenaw County such as Blue Care Network, Care Choices, HAP and M-Care," said Mike Dempsey of Dempsey, Inc. in Ann Arbor, a firm that specializes in employee benefits for businesses.

Those HMO's are not medically underwritten as most of the national carriers are. Due to recent rate reform in Michigan, rates for small groups are no longer based on community or industry demographics, but on the actual people in the group.

Dempsey's company is one of 19 local firms that market group health insurance programs from Blue Cross Blue Shield offered through the Ann Arbor Area Chamber of Commerce. Dempsey said they offer a plan to their employees and have several local clients that have purchased health plans through their firm.

McNaughton & Gunn, Inc., the book manufacturing company in Saline, purchases benefits for its 200-plus full-time employees through Dempsey, Inc.

The company offers employees a choice of two HMO's for health insurance, one from M-Care for the University of Michigan Health System and another from Care Choices for St. Joseph Mercy Health System, and two dental plans from Delta Dental.

It also provides life insurance, long and short-term disability insurance for its employees. Anderson Paint Company in Ann Arbor has worked with Dempsey to put together a health insurance plan for its 23 full-time employees with 17 of them participating. It currently offers medical insurance through Care Choices with a monthly co-pay by participants, a dental plan, long-term disability and life insurance.

The firm reviews its plan annually with Dempsey comparing it to other plans and then reviews the options with its employees before making any decision about changes to it, said Anthony Anderson who owns the business with his brother Robert. They are also participants in the health insurance program.

"We're thankful we can offer good health insurance for our small group," said Tony. "Being able to offer healthcare to our employees is critical to maintain those employees." Approximately 2,000 employees with more than 100 local companies are covered by the BCBS plans available to members of the Ann Arbor Area Chamber of Commerce.

A similar group program from Blue Cross Blue Shield is available through the Small Business Association of Michigan. About 4,000 of its 5,000 members participate in the group program marketed through the Independent Insurance Agents of Michigan.

The SBAM Plan is a group benefit plan designed specifically for small businesses. It offers many different combinations of options that include health, dental and vision coverage as well as life and disability insurance for firms as small as one person.

"In Michigan, members pay an average of $8,000 per employee for health insurance," said Scott Lyon, vice president of Small Business Insurance Services for SBAM.

Mercer Insurance & Financial Services in Ann Arbor markets the health insurance plan from BCBS offered by SBAM to its members, with other health plans, financial services including retirement plans, commercial property and casualty insurance for businesses. Charles Mercer has been involved in providing health insurance benefits to local companies for about 20 years.

As a member of SBAM, Ron Cowen, owner of Ron's Garage in Ann Arbor, subscribed to the BCBS health insurance plan in 2005 for the three full-time employees in his business. He was looking for better coverage when he joined the plan through Mercer's insurance agency where he gets his commercial liability insurance.