Delivering universal health coverage – will smart phone apps replace bureaucrats? Nov 17, 2015

Delivering universal health coverage – will smart phone apps replace bureaucrats?

Somehow, everyone in the universal health coverage (UHC) universe seems to assume that the future of health financing will be built on centralized financing institutions fed by a mix of general tax revenue, payroll taxes and other contributions. This large pot of money, so the assumption goes, is administered by bureaucrats sitting in big buildings in national or provincial capitals. They contract with providers and pay them through capitation, diagnosis-related groups, fee for service, and reimbursement of retailers (pharmacists) for medicines that the patient takes home.

Maybe this assumption is correct, although there are a few rebels out there who think that decentralized primary care arrangements that cut out the bureaucracy could provide more value for money, at least at that level of care. In this model, the patient pays a subscription fee for access to a basic package of services directly to the facility he/she uses, and can stop paying if he/she thinks there is not enough value for money – which makes for a decent accountability arrangement. The jury is still out, and I hope we’ll soon get data on how this approach competes with the centralized purchasing of primary care services.

Now, let’s take a look at reimbursement for medicines, as practiced today as a standard feature of UHC arrangements: A doctor writes a prescription, the patient takes it to a pharmacy, the pharmacist hands out the drug package and gets paid by the financing institution. Sounds easy enough, so what’s the problem?

In almost all countries that I’ve visited as a World Bank pharmaceutical expert, the costs for medicines reimbursement keep growing year over year at a much higher pace than overall health expenditures (the latest numbers from Montenegro show a 60 percent increase over five years). Some cost drivers are desirable; for example, improved primary care that ensures patients with chronic diseases get diagnosed and treated. Others are inevitable, like population aging. But what happens everywhere is a creeping shift to over-prescribing and unnecessary use of higher-priced drugs. It seems that when experts make decisions drawing on someone else’s account, the profit motive gets the better of us human beings.

For-profit drug companies innovate, persuade, incentivize; pharmacists and doctors happily go along and grow their per-capita prescribing costs. How do the bureaucrats respond? By hiring more bureaucrats to develop guidelines, lists, price regulations, controls, pre-approval procedures, education programs, incentives to counter the industry’s incentives and so on. Of course, the commercial side adjusts and finds the loopholes, until the bureaucrats after a couple of years come up with additional controls and the circle goes around one more time.

But technology can disrupt this cycle. Imagine that country X wants to offer free antibiotics for childhood pneumonia, but wants to avoid a situation where every child with a mild cough and flu is getting a prescription for an antibiotic (see thisrecent publication if you are not convinced this is an issue). The responsible agency pushes out a smartphone app to the phones of all licensed and contracted providers. The provider opens this app when a young patient with suspected pneumonia shows up in the clinic. It allows enrollment of the patient by taking a picture, a fingerprint or scanning a government-issued ID. It presents a step-by-step diagnostic algorithm that the nurse or doctor has to go through with the patient. This can include some specific diagnostic procedures – maybe, in the near future, there could be a small mobile device or attachment that can identify bacterial DNA and recognize resistance patterns against common antibiotics.

Once both provider and patient have gone through the steps, the back-end of the app will validate the data input. If it meets defined criteria, the app will offer prescription options. Once the provider selects and confirms, the prescription is sent to the pharmacy, where the pharmacist works with another version of the app, and dispenses the drug after scanning its barcode into the app so that the transaction is complete. Both prescriber and pharmacist are paid immediately through mobile money.

All transactions are transparent and can be evaluated in real time through automatic tools running in the background and looking for patterns of error or abuse. No patient can pose for another one or double-dip by visiting two different clinics. Overprescribing becomes difficult as it requires systematically inputting wrong information when interacting with the app. Occasional audits and controls of providers that show suspicious patterns in their utilization would be enough to discourage fraud. Budget overruns are preventable as the benefit can be capped by prescriber, location or region: Once the cap is reached, enrollment is blocked until the next budget period starts.

In short, what today is done with limited success by a significant number of staff at financing agencies eating up a significant share of the health budget, could soon be done by networked devices that only need a few smart people to program, maintain the software algorithms and set the rules for the system to function automatically.

All the basic building blocks needed to do what is described above exist already, on your and my smartphone. If you ever wondered what the programmers in the secret labs of Google, Facebook and the like are working on these days, this might be one of their projects: If someone provides the tools for such an innovative approach and gets only a few cents per transaction in return, we are talking about a large new business.

Why should we at the World Bank care? We are giving loans to countries that their taxpayers will have to pay back far into the future. With our business model comes a responsibility to make our clients aware of potential disruptive technological change, so they don’t invest in something that could become obsolete before it is paid for. So let’s keep our eyes open for novel solutions and create some space for nurturing innovation within our core activities.

Editor’s note: This blog originally appeared on the World Bank’s website and is reprinted here with permission.

Andreas Seiter is a senior health specialist and expert for pharmaceutical policy and management in the World Bank’s Health, Nutrition and Population Global Practice.