Financial Impact of Telemedicine Programs on Health Care Organizations

Excerpts from my managerial case study report.

Telemedicine provides specialty medicine consultations to hospitals and clinics in remote areas through the use of telecommunication technology. The use of telemedicine has greatly expanded in the recent years and health care organizations are using it to increase health care access and thus revenue. High up-front costs and subsequent cost-effectiveness of telemedicine programs are central concerns of decision makers in large healthcare organizations. This article presents results of various studies and academic research articles that focus on various financial impacts of a tele medicine program on a tertiary care health care organization and concludes with specific recommendations.

Background-

Telemedicine has a long history. The first reported telemedicine consult was done in 1922, in Sweden, for sailors in the Swedish merchant fleet. It has come a long way since then, with a medical consultations being in operation for 100 or more types of types of diseases. Although, health economists believe that the introduction of new technology often leads to increased cost and very few technologies are cost-reducing. Telemedicine is one of them. It has been shown to reduce health care costs in Some European countries(1). But, in order to utilize its full potential its full integration with the traditional health care has to be accomplished. Tele medicine requires financial and personnel resources. In addition to that it requires a strategic and technological partnership between the tertiary care center and remote health care center. Referring patients to hospitals results in an increased market share, an increased number of referrals and therefore an increased hospital revenue. Health care organizations are showing an increasing trend in utilizing telemedicine services. In spite the growth of telecommunication technology in the recent years health care organizations have been reluctant in adoption of telemedicine program. The general attitudes of physicians and decision makers to wards telemedicine has neither been encouraging nor discouraging. There is a lack of research on economic evaluation models for telemedicine in spite of good reimbursement rates by private insurers, Medicare and Medicaid.

Costs:

Calculation of total costs should be done upon considering all the costs incurred by all parties. The total costs should incorporate any waste or duplication of services. They should also factor in savings and increase in productivity. Capital costs should include cost of: new building or remodeling of existing structure; new equipment; communication software; electronic health record etc. For operational projects variable costs which are likely to change with the expansion of the projects should be considered.Such costs would be provider-payments, medical supplies, overhead and utility costs etc. (2) To make the system financially viable, maximum utilization of resources should be achieved, which means that a busy tele medicine program will generate higher revenue(3).

Costs for a particular technology, in general, decline with time. As new vendors emerge, better yet cheaper equipment alternatives become available. However, as technology advances and electronic medical equipment become outdated and need replacing, in that case the costs may not decline as predicted. To calculate the profitability of the project over time, one must calculate discounted value of future stream of costs. Summation of all the discounted values will provide the net present value or NPV of the project. (4) When calculating cost of services, health care organizations often use payments instead of service charges. This is based on the fact that charges are highly negotiable whereas payments are actual financial transactions that occurred. Another preferred approach is to calculate per unit cost of all combined resources to provide a particular service. (5)

Cost benefit analysis;

The concept of doing a cost benefit analysis is to match the costs incurred with the benefits of the intervention for e.g. reduction in morbidity, or as in our case, increase in hospital revenue. An important consideration when doing a cost benefit analysis is that all telemedicine programs are different and thus give different outcomes. A generalization of all telemedicine programs for different specialty applications should be avoided. Similarly, geography and demographics of the location covered under tele medicine program should be kept in mind.

When considering a return on investment analysis, break even analysis is not deemed appropriate for the tele medicine program as- Firstly, it is difficult to find out a break-even year due to the inherent complexity of the revenue stream. Secondly, the variable equipment useful life which ranges significantly and does not have much salvage value in the end. A detailed sensitivity analyses that incorporates proficiency related cost reductions may better predict future revenue. The risks and best possible outcomes considered in the sensitivity analyses can also be changed over time.(6)

Reimbursements-

Health care organizations can bill private insurers as well as Medicare/Medicaid for the services they provide through telemedicine. In a research study, it was found that private insurers do not follow the Medicare lead, but follow Blue Cross Blue Shield reimbursement rubric. Very few if any have devised their own reimbursement rubric if any. Many private payers do not use special CPT codes assigned to tele medicine and continue to bill according to traditional codes. (7)

With the Medicare shared savings program for accountable care organizations, emergence of new Health care Maintainance organizations (HMOs), the future reimbursemens for telemedicine services may increase.(8) Health care organizations will be able to save more by decreased emergency rate admissions, decreased readmissions, better quality of care for chronic diseases. In the Accountable Care Act of 2012, provisions have been made to provide better reimbursements for telemedicine services.

Various studies and academic papers point out the cost effectiveness of the tele medicine program in United States. In an tele intensivist program designed to cover Intensive care to remote locations in support to the already existing care, lower variable costs per case and higher hospital revenues (from increased case volumes) generated financial benefits in excess of program costs. (9) Various research studies on tele medicine programs on the effectiveness of tele medicine in the prison inmates. Three studies (out of four) about telemedicine in American prisons also found a positive economic result. The fourth reported preliminary data and concluded that telemedicine is likely to be cost – effective.(10)

In another study on inmates, cost effectiveness comparisons with traditional care demonstrated that tele medicine outperforms traditional care on financial grounds. The research showed $16,514/18.73 QALYs for tele ophthalmology and $17,590/18.58QALYs for non tele ophthalmology.(11) Experience of UC Davis health system also provides proof of tele medicines’ cost effectiveness. From new patients covered by the tele medicine program, the organization was able to increase its average hospital revenue from $2.4 million to $4.0 million per year and average professional billing revenue increased from $314,000 to $688,000 per year. (12) In another report from kalorama information (a medical decision support company) telemedicine market revenue has increased from $4.2 billion in 2007 to $10 billion in 2012, representing a 237 percent increase. (13)

Physician attitudes to tele medicine:

Contrary to popular belief that physicians are reluctant in adopting tele medicine, the research indicates otherwise. There is lack of research data on attitudes of health care providers towards tele medicine, and so the results on one study cannot be used to form a consensus.

1. Research has shown that Health care providers approach new technology initially with positive attitude focusing on the usefulness of the technology in providing patient care. (14)

2. Often drawing form their personal beliefs and experiences, health care providers are not easily persuaded by external influences.

3. They often assess the incorporation of the new technology in their routine patient care. The medical field has kept pace with the technological advances in various means and hospitals continually invest in latest medical technology. (15)

4. It is true that the traditional image of a physician at the bedside is being challenged with the advent of tele medicine and some health care providers and even patients cannot fully assimilate it.



All in all-

Telemedicine program can increase revenue, access and quality of care in a health care organization. Better utilization of human resources- Physician shortage is a barrier to access of health care in rural and underserved areas. Telemedicine program helps address that problem. It allows health care organizations to provide access to remote areas in the community. Continuum of care improved quality and lower costs. As seen in the case of advanced ICU care programs, telemedicine consulting has shown to decrease stress among house physicians and improve their work- life balance. It can prove as a powerful recruiting tool for health care organizations. Monitoring of patients of chronic diseases through tele medicine can help reduce morbidity. Timely evaluation and treatment of acute clinical conditions e.g. stoke, can reduce complications and improve outcomes. Health care organizations are also utilizing tele medicine services to secure the market and continue to serve their patients. In the face of constant mergers and acquisitions, tele medicine is a part of the strategy to keep the present patient pool. University of Iowa healthcare deployed robots in local hospitals in the local towns of Clinton and Grinnell to secure its patient pool in the rural communities of Iowa. (16)

Despite the obvious advantages of the tele medicine program cannot be supported at all health care organizations. Some barriers to tele medicine program exist such as indifferent attitude to new technology by patients, providers and decision makers. Upfront costs of equipment and software prevent smaller health care organizations to invest in tele medicine. Continuous technical support staff is also a requirement that requires hospital funds. Strategic and financial partnerships between two participating health care organizations also difficult to achieve at times.

Despite certain barriers that are specific to tele medicine programs, opportunities to establish them should be actively sought out by health care organizations. A detailed analysis of cost benefit and risk sensitivity can help reduce the risk of such an investment, with assurance of guaranteed positive financial outcomes.

Recommendations-

It is apparent that both telemedicine practitioners and Medicaid personnel at the least would benefit from:

• Standardized utilization figures from all states, with standard codes.

• Cost figures for amounts being reimbursed under Medicaid.

• Availability of reports on types of services and volume covered under Medicaid, as well as savings in patient travel.

• Standardized billing procedures

• NPV analysis

• Research of various funding resources for initial start-up costs.(17)

• Study of referral patterns for returning patients.

• Setting a fixed hospital facility and equipment cost

• Considerations for accommodating dissimilar return for various diseases and specialties.



References-

1. (1999) Holm-Sjögren L, Sandberg C, Törnqvist H. Telemedicine in Sweden: a diffusion study. Journal of Telemedicine and Telecare ;5 (suppl. 1):63–5

2. (1996) Institute of Medicine (US) Committee on Evaluating Clinical Applications of Telemedicine Telemedicine: A Guide to Assessing Telecommunications in Health Care. Chapter 7- Evaluating Costs and Cost-Effectiveness of Telemedicine. National Academy of Sciences. Bookshelf ID: NBK45438

3. (1996) Institute of Medicine (US) Committee on Evaluating Clinical Applications of Telemedicine Telemedicine: A Guide to Assessing Telecommunications in Health Care. Chapter 7- Evaluating Costs and Cost-Effectiveness of Telemedicine. National Academy of Sciences. Bookshelf ID: NBK45438

4. (1998) Andrew E Cameron et al. Simulation methodology for estimating financial effects of telemedicine in West Virginia. Telemedicine Journal, Volume 4, November 2 1998.

5. (1996) Williams, RM. The costs of visits to emergency departments. New England Journal of Medicine, 1996 Mar 7; 334(10):642-6.

6. (1996) Institute of Medicine (US) Committee on Evaluating Clinical Applications of Telemedicine Telemedicine: A Guide to Assessing Telecommunications in Health Care. Chapter 6- A Framework for Planning and Improving Evaluations of Telemedicine

National Academy of Sciences. Bookshelf ID: NBK45438

7. (2006) Sate Medicaid and private payer reimbursement of telemedicine : an overview Journal of Telemedicine and Telecare, 2006,12:32

8. (1996) Institute of Medicine (US) Committee on Evaluating Clinical Applications of Telemedicine Telemedicine: A Guide to Assessing Telecommunications in Health Care. Chapter 7- Evaluating Costs and Cost-Effectiveness of Telemedicine. National Academy of Sciences. Bookshelf ID: NBK45438

9. (2005) Jason R. Leong, Carl A. Sirio, and Armando J. Rotondi. eICU program favorably affects clinical and economic outcomes. BioMed Central, 2005 9E:22

10. (2000) Steven Hakansson, and Carlin Gavlin. What do we really know about cost effectiveness of telemedicine, Journal of Telemedicine and Telecare 200 6:133

11. (2004) Noriaki Aoki et al. Kim Dun, Heleln K Li, J Robert Beck, William Schull, and Tsugua Fukui. Cost effectiveness analysis of telemedicine to evaluate diabetic retinopathy in prison population. Diabetic care. Volume 27 Number 5 , May 2004

12. (2013) Scott Mace. How Telemedicine Drives Volume, Revenue. HealthLeaders Media , October 22, 2013

13. (2013)Kalorama Information. Advanced Remote Patient Monitoring Systems Mar 28, 2013, 380 Pages - Pub ID: KLI4997661 Retrieved fromhttp://www.kaloramainformation.com/Advanced-Remote-Patient-7450566/

14. (2002) Patrick Y.K. Chau, and Paul Jen-Hwa Hu. Investigating healthcare professionals’ decisions to accept telemedicine technology: an empirical test of competing theories. Information & Management Volume 39, Issue 4, January 2002, Pages 297–311

15. (2002) Patrick Y.K. Chau, and Paul Jen-Hwa Hu. Investigating healthcare professionals’ decisions to accept telemedicine technology: an empirical test of competing theories. Information & Management Volume 39, Issue 4, January 2002, Pages 297–311

16. (2013), Jennifer Brown. Stroke Robot Helps to Provide Immediate Care. University of Iowa Healthcare. Retrieved from http://www.uihealthcare.org/stroke-robot/

17. (2012) Hcureton. University of Iowa Telehealth Project. Great Plains Tele Health Recourse and Assistance center. September 22, 2012. Retrieved from http://www.gptrac.org/wpcontent/uploads/2011/10/Financial_Overview_0820111.pdf

Notes on T.R. Reids' "The Healing of America"

           T.R. Reid - The Healing of America:

A Global Quest for Better, Cheaper, and Fairer Health Care

The book is available on Amazon.

T.R. Reid is a well-known foreign correspondent for the Washington post. He has written highly acclaimed books like “The healing of America” and “United States of Europe”. T.R Reid’s book “The Healing of America” demystifies the health care systems around the world in a simple and didactic way. Circa 2009, Reid suffered from a chronic shoulder pain and was recommended to undergo a total shoulder arthroplasty in the the United States (U.S). In his quest to seek out other treatment options, he traveled to many countries and ended up studying about their ingenious health care systems. Healing of America is a product of a search for the perfect health care system.

The book is valuable in understanding US health care system through a comparative analysis with other healthcare systems around the world. The book incites us to ask valid questions regarding delivery, financing and access to health care in the United States. Reid does not propose any solutions and that in itself is an incisive aspect of the book, as we are trying to find solutions even before defining the problem. Although, the book tries to refrain from providing solutions and leaves the burden of doing so on the reader, if he or she chooses to. Asking the right questions is in itself a good start. There are a couple of recurring themes in the book, like universal health care coverage, cost containment, and healthcare as a right, rather than a privilege. Probably the biggest overarching theme is that better health care systems exist around the world and, without having to reinvent the wheel, we can learn good policy making from other countries.

  

In the United States, health care financing determines who has access and who doesn’t. People either pay from their pocket or they pay through their insurance. In our case, financing through insurance indirectly increases health expenditure by increasing costs by over utilization of resources. Other countries are able to tackle this problem by good policy making. Reid argues in the book that Americans believe the health care around the world is either rationed or socialized which leaves patients having no choice. This cannot be further from the truth as even the countries offering so called socialized medicine provide patients with free choice of choosing their providers.

The book highlights the fact that better health care systems exist in the world outside the US. It seems like we are awakened to the poor system here when compared to other developed countries. The book also analyses health coverage through health insurance in different countries.  It draws our attention to the fact that none of the developed countries depend on for-profit health insurance sector. It is widely accepted that the health care industry does not work like the other industries for example supplier induces demand and technology driven costs are unique to health care industry.  It also talks about the policies, other countries have in place, to control rising health care costs.

Providing health care expenditure as a percentage of Gross domestic product (GDP) makes for an easy comparison.  The book states that administrative costs in the United States are close to 20% of total health care expenditure. Other countries, like France, manage to keep it below 7%. One basic question which needs to be answered before considering any policy changes is whether we consider health care a right or a privilege of the resourceful? It is a right for the destitute and those above 65 years of age but a privilege for those not falling in these categories.  This type of fragmented and unreliable system allows for people to fall through the cracks and be devoid of health care coverage.

Bismarck Model

Out of the four different models discussed in the book, Reid lays emphasis on the Bismarck model.  The Bismarck model, named after the “iron chancellor”, Otto Von Bismarck of Germany has been adopted by  Germany, Japan, France, Belgium , Switzerland and some countries in Latin America. The Health insurance agencies, called Mutelles’ in France and Krankenkassen in Germany, are strictly nonprofit. Government regulates the prices for insurance plans which are often fixed. They collect funds from the employer and the employee in case of salaried individuals. For the unemployed and indigent population, the government pays their premium. There is a competitive insurance market as the insurance funds compete with each other to get more individuals enrolled. The funds make sure that there are no defaulters in the system and once a premium if forgotten services can only be sought after agreeing to pay the premium within one year. The Japanese version of the Bismarck model is slightly different from the rest. Although there are 3500 insurance funds in Japan as compared to 14 in France and about 200 in Germany, the Citizens in Japan are not given the privilege of choosing the insurance plan of their liking. Large companies have their own plan; some even have their own hospitals like Toyota and Honda.

These countries have universal health care coverage therefore insurance funds cover everybody. In fact, it is illegal to be without insurance. For covering co-pay and for the services not covered in the main insurance programs there are supplemental insurance plans which are funded privately. In France, they are known as Med-gaps which is extra insurance that pays for services like face lifts and life style medicines like Viagra. By allowing the Med-gaps, the government can keep private for profit insurance companies in business. Most Bismarck countries require patients to pay a percentage of treatment fees when seeking medical services. The co-pay is capped at a reasonable amount, so that it does not burden the patient financially. Rationale behind co-pay is to make citizens assume some responsibility and be reminded of the fact that medical services are expensive and should not be misused. In France, even the co-pay is reimbursed at a later date.

Most Bismarck Countries let citizens choose their health care provider. This means that there is no gate keeping or terms like; in network, out network or even a need for referral from general practitioner. Although due to rising health care costs around the world the system now encourages preliminary visits, to a general practitioner before seeing a specialist, by reimbursing an extra 10 percent of their co-pay. Doctors and hospitals are private entities and are paid according to the services rendered. The Bismarck model of Health care delivery is based on a shared value of solidarity which is a belief that everyone should be treated equally when they are sick. This is reflected in the fact that the insurance funds do not discriminate and never deny claims. Also, delay in reimbursement is illegal. Patients are reimbursed in a month and doctors in a week.

Even though it is entirely a different model from the Unites States with plenty differences three main differences clearly stand out. First, being the nonprofit nature of the Insurance agencies which allows for reduced health care delivery costs. Second, is the universal coverage where no one is left out. Government goes to the extent of covering the unemployed. This reduces the indirect costs of eventually treating the uninsured in the emergency rooms. Third, patients often have freedom to choose their preferred provider.  In Germany, the rich also have freedom to opt out of nonprofit insurance funds and buy their own private insurance.

The countries that have adopted the Bismarck model of health care delivery are facing problems that are ingenious to the system. With the rising health care costs due to improved technology and advances in science, it is becoming difficult for them to keep health care expenditure low. Even though France enjoys favorable health indices ranking in the World Health Organization reports, the physicians in France aren’t sharing the benefits.  Their salaries are often lower than the average physician salaries in the developed world. Doctors are part of the Labor Union which negotiates their salary with the government. They often demonstrate their distress by going on strikes. Japanese physicians and hospitals are severely underfunded.  Even though their medical school tuition is paid for by the local government, it is not enough to keep the discontent of the health care providers low which often surfaces as nationwide protest marches and demonstrations. As a result, in Japan, physicians are forced to make extra income from vending machines and parking lots in their clinics. As side effect of rigid cost control policy is that it saves money at the expense of doctors and hospitals. In Germany insurance funds negotiate reimbursements with doctors, and in Japan the government negotiates with doctors. Clearly, the doctors do not have much negotiating power in both circumstances.

As discussed, one of the most striking features of this model of healthcare delivery is its ability to reduce administrative and bureaucratic costs while keeping the freedom of choice.  They are able to achieve that partly by encouraging clinics to provide medical services without any “frills”. This minimalistic approach has also led to increased transparency as physicians and hospitals often display a detailed price list in clinics. This drastically reduces time and money wasted in negotiating for affordable prices. The system does not encourage false malpractice suits and even though doctors buy malpractice insurance, they are inexpensive especially when compared to the United States. In France, average malpractice insurance premium for a year is roughly equal to what the physicians in United States pay in a week. Germany and France spend approximately 11percent of GDP on healthcare. Japan spends close to eight percent of its GDP on healthcare and even that is dropping. In a drive to curtail costs, these countries adopted electronic health record systems and integrated software systems early. German citizens are required to carry a digital health records swipe card called Die elecktrinischen gesundheitskarte. The French system encourages the use of a similar card called Carde vitale.

A common myth about the Bismarck model is that there is rationing, but this cannot be further from the truth. The Japanese are avid users of health services, for example visits the doctor’s clinic average about 14.5 times a year as compared to five times a year in United States. Japanese physicians are twice more likely to order Computed Tomography (CT) Scans and three times more likely to order Magnetic Resonance Imaging (MRI) than United State. Clearly, they favor the use of modern technology.  In Germany the Benefits covered under insurance plans are generous- they often cover visits to spas and pay for health club memberships. In short United States spends a lot and gets too little whereas countries like Japan get a lot by spending too little.

Out of pocket

            160 out of 200 countries in the world do not have an effective healthcare system and people are required to pay for medical services out of their pocket. In this type of arrangement the resourceful can get health services, but the poor are left without receiving any medical attention. They often succumb to serious consequences of easily treatable diseases. In countries like Cambodia, the out of pocket expenses can run as high as 91 percent of the total healthcare expenditure. Most countries in Africa, for example Nigeria the health care expenditure is as low as one percent of their entire GDP. Of this one percent a major portion goes to treating major epidemics like HIV-AIDS.

In India, most of the healthcare budget is allocated to finance health care services provided to government employees who often live in cities. This leaves more than 750 million people, mainly villagers, without access to any healthcare services. To add to the plight, there is a lack of intelligent policy making. For example excise taxes on drugs and equipment are similar to excise taxes on other industrial goods. Without having made a distinct exception for them, the governments levy heavy import duty and taxes on drugs, even on pills that are donated for free. It is rather preposterous that Nigeria puts import duties on donated mosquito nets.

Some countries have taken a turn for the worse. China is a perfect example of what not to do when formulating health care policies.  Under the Mao regime, from year 1952 to 1983, China witnessed a radical increase in average life expectancy of 38 years to 60 years. The pandemic of bird flu depicted how the preventive medicine has crumbled in the 21^st century China.  It has been found that there is a positive co-relation between per capita income and average life expectancy. There exists one exception to this rule that is the country of Cuba. Cuba manages to spend nearly 6 percent of its GDP on health care, providing universal coverage to everyone. Third world countries have human resources aplenty and cheap medical education. With good policies and implementation it is not impossible for them to overcome the disparities in healthcare delivery and learn from countries like Cuba.

National Health Insurance Model

National health insurance is the healthcare delivery model in operation in countries like Canada, Taiwan, and South Korea. This system was brought to existence in 1944 by Thomas Clement Douglas who was the governor of Saskatchewan province in Canada. His own childhood experiences with knee surgery became his inspiration for a comprehensive healthcare system that provides universal coverage. He appointed an academician Henry Sigerist of John Hopkins University. Sigerist formulated policies required to bring about the new healthcare system in stages. Instead, Douglas introduced the new system in the entire province at once, covering all sections of the population. Luckily it worked. Later he named it Medicare. Following his experiences in the Saskatchewan district, the government at Ottawa signed it for the whole country. Years later, Taiwan took inspiration from it and so did South Korea.

Canada has a thirteen payer system which includes ten provinces and three territories. Some provinces pay 100 percent for the health care services rendered whereas others require small co-pay at the time of treatment. As compared to its neighbor, United States, Canada spends only eight percent of its GDP on health care but it has better health indices for its population. The federal government of Canada provides funding through general taxes and also sets rules and regulations that govern the health care delivery. All provinces have to follow the general rules in order to receive financial aid. Since there is public administration in health care, it is on a not for profit basis. Nobody can buy the services covered under Medicare. Use of private dollars to seek Medicare services is considered illegal. Doctors are bound by Medicare rules as those billing Medicare cannot engage in private practice.

The hallmark of the system is Comprehensiveness as the government pays for all medically necessary services. Another striking feature of Canadian Health care system is its Universality. The system makes sure that everyone is covered at all times and everywhere, which brings us to discuss another unique feature which is Portability.  The insurance travels with the insurance holder from one province to another, in some cases even during travel abroad.  The last ingenious feature of the National Health Insurance model is the Accessibility, as the physicians cannot deny treatment to anyone and must treat everyone according to their scope of practice. The health care costs are much cheaper as the National Health Insurance, being the only player in the system, is easily able to negotiate drug prices with pharmaceutical companies. The critics of the system point out the long wait times for patients, but Canadians don’t seem to mind it as they rate their system highly.

Beveridge model

Countries like United Kingdom, Italy, Spain, Cuba, and Scandinavian States have a system which is known as the Beveridge model around the world. It was introduced in Great Britain by William Beveridge, and was implemented by a statesman Nye Bevan. The hallmark feature of this system is that citizens do not receive any bill for health care services they received thorough the system. The government pays for all healthcare expenditure from the general taxes. As a result, the taxes in these countries are often higher than the rest of the world. To discourage waste and unnecessary use of healthcare services there is a strict cost control mechanism in place. The government can and often does deny expensive treatment or diagnostic tests if they do not offer an acceptable value on their costs.

In line with reducing expenditure, there is minimal paperwork and the administrative costs are kept low. The system allows for private insurance companies, but only a few (three percent) bother with them. Besides, with a million full time staffers National Health Services (NHS) is the biggest employer, and therefore highly popular. The government owns thousands of hospitals but the Physicians (also known as General practitioners or GPs) are independent business people and receive a fee from the NHS. The role of GP in UK is very important. They act as gate keepers to the specialty services.  In turn they are reimbursed generously by the government for the services rendered and they also receive a set fee for every patient enrolment. They have an incentive to practice preventive medicine and to keep the patient out of their clinic (better known as surgery). They often give a complete physical exam to patients on every visit. It’s not uncommon for GPs in UK to earn twice as more than the primary care physicians in United States.

The draw back for such a system is that there is some sort of rationing and although the citizens are free to choose their provider, they are not free to choose their preferred treatment options. Long waiting times has also been cited as a major drawback of the system, as 38 percent patients have to wait for more than four months for an elective surgical procedure.  National Institute for health and care excellence (NICE) is an organization devoted to research and analyze various Index of quality indicators. Clearly, the system encourages paying for the results.

Summary

The book gives the basics of health care systems in other countries with facts, brief history and figures. In my understanding from the book, to reduce health care delivery costs, guild like opposition to cheaper yet equally effective treatments should be battled. The book encourages us to borrow a good policy idea even if it has a foreign lineage. It disproves the arguments around alleged socialized medicine. It explains the different health care delivery models in an unbiased way, as it also throws some light on the problems with the healthcare systems around the world. For e.g. Britain's NHS would not pay for the arthroplasty unless he was in acute pain, but as his Indian experience proved, he didn't even need the operation. In the end, Reid learned that there is no such thing as a perfect health system and all the current health care systems around the world are constantly changing and improving. We must also embrace the opportunity for change.