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Virtual Patient Simulations Take Sting Out of Readmission Penalties


Misdiagnoses and readmissions are a major cost-driver in the US healthcare system. Now, experts are using technology in an effort to reduce those problems.


Do you want to hear some scary statistics? Data published in a recent issue of the British Medical Journal indicate that one out of every 20 adult outpatients in the US is misdiagnosed. That equates to approximately 12 million people.

In addition to the potential harm created, misdiagnoses contribute significantly to higher healthcare costs system wide, which becomes a problem where value-based reimbursements and readmissions are concerned.

“Medicare is making hospitals eat the costs of readmissions within 30 days,” says Norm Wu, CEO of I-Human Patients, a provider of virtual patient simulation technologies. “That can have a significant impact on the financials for hospitals as well as physicians.”

Provider Response

Indranil Bardhan, PhD, is a professor and area coordinator of information systems in the Naveen Jindal School of Management at the University of Texas at Dallas. He says Medicare estimates that in 2014, approximately 18% of Medicare patients were readmitted within one month. That can lead to fines totaling about $428 million.

In response, healthcare providers are developing new approaches to reduce their readmissions rate for chronic diseases including the formation of care coordination teams that coordinate patient care across visits, and target elderly, at-risk patients with a dedicated team of cardiologists, nurses, and rehab care. Some physicians are using post-discharge care management programs as a means to reduce readmission rates.

But much of that response may be reactive—and costly, according to Wu.

“If you’re treating the wrong disease you’re wasting money,” he explains. “The condition you should have been treating is going untreated, and escalating to the point where the treatment becomes more expensive, or the patient dies. And so we believe that accounts for a fairly significant part of the $700 billion a year that is being spent on unnecessary and avoidable healthcare costs. And it also turns out to be the largest source of malpractice claims: lawsuits.”

Forming Differential Diagnoses

Wu believes that by training medical students to reason and think critically, the rates of misdiagnosis and readmission will decline. He likens the I-Human Patients technology to a flight simulator for medical students and practicing clinicians.

“All you need is a web browser on any kind of device—desktop, laptop, iPad—and we provide a complete, simulated, highly interactive patient encounter soup to nuts,” he says.

Using the I-Human Patient technology, a patient—represented by a programmable, lifelike avatar—presents in the doctor’s office with a chief complaint, and the doctor begins by asking questions and taking a complete medical history. Through the web browser, in a very interactive hands-on way, medical students and physicians can conduct hundreds of different kinds of virtual, physical exams. Then, based on exams, the physician develops a hypothesis and possible different diagnoses.

“We’re giving feedback and coaching at every step along the way to really help them fine tune and master these competencies,” Wu says. “Did the physician ask the right questions given the presenting symptoms? Did they do the right physical exam given the case scenario? Did they come up with the right hypotheses, and did they rank them appropriately? If they missed something, or if they’re shot gunning tests, that’s going to drive costs way up. The primary thing is, how do you get to the right diagnosis the first time, but do so in a very cost efficient manner?”

Multiple Uses

Wu explains that medical educators can use the technology to see how individuals as well as groups of students are performing and developing. Hospital administrators can keep track of how staff is performing. Large provider organizations can use the technology to assess healthcare practitioners.

“In the old days if somebody went into an arrest and you did all sorts of things it added cost, but it was all fee for service and you got more money,” Wu says. “That’s changed, and so now you really do want to figure out how to reduce mortality rates. It affects your Medicare reimbursement rate, and in an ACO it’s going to be extra cost without any revenue for you.”

Wu also points to the boom in telemedicine. He says that if misdiagnosis rates are high when physicians are seeing patients face-to-face, imagine what they’re like over the phone when there is no long-standing patient-physician relationship. And the physician can’t touch or see them.

“Malpractice lawsuits tend to go hand in hand with close communications and strong patient-provider relationships,” Wu says. “But if you don’t have that situation, which is the case in the telemedicine world, and you misdiagnose someone, then you’re opening yourself up to more lawsuits.”

And that’s a financial hardship as well.

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