Dell Takes Health Care Online

The PC titan is poised to unveil an initiative aimed at containing employees' medical bills. One thing it probably won't cure: Some experts' skepticism

Dell will announce Apr. 10 that it is becoming the largest U.S. employer to offer workers electronic health records that track their insurance claims and drug prescriptions, which the computer giant says is a key step toward letting its 26,000 staffers coordinate their own care in a bid to improve medical safety and contain costs.

CEO Kevin Rollins will announce the plan today at a health care forum in Nashville, Tenn., where Health and Human Services Secretary Michael O. Leavitt will be the keynote speaker. Dell has offered limited electronic health records since 2004, but the upgrade coming Apr. 20 adds the ability for the system to automatically capture new information about treatments and test results, rather than waiting for the employee to enter the data manually.

"We feel strongly that the whole issue of e-health, that the practices where technology is used to make industries more efficient, needs to be done in health care," Rollins told BusinessWeek Online. "It would make health care more efficient, and spend money on the actual care of people rather than administration."


  Dell (DELL), the world's largest computer manufacturer, hopes the electronic records will help it improve preventive care in particular. Tre McCalister, a program manager in Dell's benefits group, says that as new information is added to a worker's personal health record, the system will send out automated alerts about the kind of care that patient should get next.

For example, a newly diagnosed diabetic might get information about how to monitor blood sugar and how to care for his or her feet, since diabetics suffer complications ranging from skin changes to circulatory problems that can sometimes lead to amputation.

The system will complement an existing Dell effort to have its benefits providers use data-mining software to look for patterns in an employee's medical care. Patients with identifiable health conditions or risk factors will then be invited into health coaching programs, says Kathleen Angel, Dell's director of global benefits. Dell is won't be told which employees are identified by the research. "It maintains their privacy but also gets them information that's relevant to them," McCalister says.


  Dell's move is the latest in a series of corporate efforts to use information technology to manage corporate health care. The effort meshes with the federal government's plans to build a national health-information network that would keep electronic data on all Americans' care.

That would let doctors coordinate care when a patient sees more than one physician or travels from town. It would also let researchers scour anonymous data to search for patterns in areas such as drug safety -- and even the potential effects of bioterrorism.

David Brailer, the national coordinator for health-information technology at the Dept. of Health & Human Services, has estimated that health IT can add $140 billion a year to the productivity of the $2 trillion health care industry by reducing medical errors and eliminating duplication that occurs when one doctor doesn't have access to results of tests another doctor previously ordered.


  "Virtually every major corporation in America is considering some kind of employee-directed online health-management tool," says Wayne Gattinella, CEO of WebMD Health, (WBMD) which is supplying the technology for Dell's health-record system. "Dell is one of the companies in the lead, but we believe [within] the next couple of years most employers will be in a similar position."

Rollins says Dell's health-record system will be voluntary, but the outfit expects about 50% of its staffers to sign up.

However, Dell has not yet taken a number of steps that are heavily promoted by e-health backers. In particular, Dell has yet to give employees access to online services that rate the quality of care provided at different hospitals and doctors' offices and compare the prices different providers charge for specific services.


  Rollins says those services, the largest of which are provided by Chicago-based startup Subimo and New York-based WebMD, don't yet have enough data on doctors or medical devices to make the rating services effective.

Also, Dell has not yet moved toward pay-for-performance medicine, a plan under which companies either steer business or give higher reimbursements to high-quality providers. Companies from Cisco Systems (CSCO) to General Electric (GE) are experimenting with different pay-for-performance plans. "We're not doing anything like pay-for-performance today, but that will be the next phase of where we're going," Rollins says.

Moves like Dell's are part of a broader movement to make workers pay for more of their own health care. As benefit costs have risen at several times the rate of inflation this decade, employers are turning to more limited benefits plans such as health-savings accounts that feature higher deductibles and other out-of-pocket expenses, in exchange for lower premiums.


  Backers of such plans believe this approach will let patients impose market discipline on health care by allowing them to refuse wasteful care. But they argue that employees need both electronic health records and access to market information about health-care costs and quality.

"We think all Americans need to take control and responsibility for their health care, and the way to do that is to have their information available," Rollins says.

However, this free-market approach to health care reform has many skeptics. Service Employees International Union president, Andrew Stern, has argued that poor workers will often choose to forego medical care rather than bear more expenses. And Harvard Medical School professor Steffi Woolhandler says health-IT plans will do little to rein in the exceptionally high administration costs of U.S. health care, which many liberals argue can only be slashed by providing national health insurance that cuts the overhead and reduces the profits of private health insurers.

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