The Hospital Finance Podcast®

Solving the Billion Dollar Misdiagnosis Problem [PODCAST]

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The Hospital Finance Podcast

In this episode, we are joined by Dr. Art Papier, Dermatologist, CEO and Co-founder of VisualDx to discuss why misdiagnosis costs the healthcare industry billions of dollars every year and what can be done about it.

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Highlights of this episode include:

  • Why misdiagnosis is so widespread and how it translates into lost revenue
  • Types of solutions and the cost benefit
  • Visual and knowledge-based tech tools
  • How can providers implement these types of tools

Mike Passanante: Hi, this is Mike Passanante and welcome back to the award-winning Hospital Finance podcast. Medical diagnostic errors are costly and sometimes a fatal issue, causing an estimated 40 to 80 thousand deaths every year and leading to billions of dollars in lost revenue. Joining me today is Dr. Art Papier, dermatologist and VisualDx CEO and co-founder to discuss why misdiagnosis costs the healthcare industry billions of dollars every year and what can be done about it. Dr. Papier, welcome to the show.

Dr. Art Papier: Mike, thanks so much for having me today.

Mike: We’re really looking forward to your perspectives here on this particular issue because it is so widespread. And as I just mentioned, misdiagnosis really does cost the healthcare system billions of dollars every year. Can you break that down for us by explaining why this is so widespread and how it translates into lost revenue?

Dr. Papier: Sure, Mike. Diagnosis is actually very difficult. Patients can come in to the emergency department or their primary care practice complaining of over 500 different complaints. They could say, “Doc, I have chest pain. Doc, I’m dizzy. I have a headache. I have a rash.” And it’s the job of that clinician, that professional to take a history, do a physical exam, assess the patient, and come up with a preliminary differential diagnosis. That actually is very difficult when you have different patients coming every 20 minutes, unscheduled visits in the ER. And so we rely on mental shortcuts that are called heuristics that allow us to make these snap judgments, and sometimes we get it wrong. And pretty much, it’s widespread and it’s not in the spotlight of quality and safety until the last 5 or 10 years. The National Academy of Sciences ran a report called Improving Diagnosis in Health Care in 2015. This was a multi-million dollar, 18-month study of the National Academy of Sciences, where as you noted in your introduction, 40 to 80 thousand people are dying each year from diagnostic errors. 10 to 20 percent of all visits are thought to have a diagnostic error. Now, some of those errors don’t result in harm, but many do. And literally, hundreds of billions of dollars are wasted every year in American healthcare on diagnostic-related mistakes.

Mike: It certainly is a widespread issue. One way that providers look to reduce misdiagnosis is through clinical decision support solutions. Can you walk us through the types of solutions that are available and what the cost benefit is of each of these types of tools?

Dr. Papier: Great question, Mike. Clinical decision support is the idea that we could augment decisions with information in the exam room. So when I was in medical school years ago, there were no computers, there were no smartphones, and you basically memorized and tried to hold it in your brain. But as you know, there’s really too much to memorize. So the idea is that we use computer-based information, whether it’s on the desktop, integrated into the electronic health record, or on the smartphone, to augment our decisions. And so in this category of clinical decision support, there’s a subcategory, diagnostic clinical decision support. And the idea of diagnostic clinical decision support is that rather than searching by the disease that you think the patient has, you could also alternatively search by their factors, meaning their symptoms, their labs, other clues that help you figure out the diagnosis. So this is a space I’ve dedicated my career to, and we’ve spent the last 30 years thinking about how do we improve diagnosis at the point of care, particularly for the generalists and the ER doctors.

And what we arrived at is that we not only have to support the analytical thinking that the brain does, but we also have to support pattern recognition, because not all problem-solving is just thinking with words. Sometimes you can see something with your patient, and if you knew what that pattern was, you could diagnose immediately. So clinical decision support has a subcategory of diagnostic clinical decision support. And these tools, these information tools can provide a lot of power in that exam room, particularly for primary care and the emergency physicians. Many healthcare systems are now relying on nurse practitioners and physician’s assistants who have had very little clinical exposure in their training. So we have to do a better job of augmenting decisions with those providers as well.

Mike: And visual and knowledge-based tech, they have some adherent advantages. Can you talk to us about these types of tools and how they bring a benefit to reducing misdiagnosis?

Dr. Papier: Yes. So I’m a dermatologist. So most people equate dermatology with skin cancer or acne or psoriasis, common diseases you’ve heard of, but really what we do in dermatology is we recognize patterns, and very serious infectious diseases, drug reactions, immunologic disease can first present with a skin rash. And so as a concrete example, Lyme disease, which is an infectious disease, might first be noticed because of its bullseye shape rash or alternatively, it might not be, frankly, a bullseye, but a patient who has had Lyme disease spread in their blood might have multiple type spots. And so that knowledge is hard to do with just words.

And so what we’ve just developed is a diagnostic decision support system called VisualDx. It’s now in the marketplace for over 20 years, growing to be used in over 2,300 hospitals and clinics and there are 100 medicals– more than 100 medical schools are teaching with it. And the idea is that you can search by clues and you can see visual representations. Not every diagnosis has a rash. So what we’ve done is we’ve created a diagrammatic view of internal diseases so that you can quickly recognize the patterns. And by this, I mean that you could alternatively put a book online and expect a busy doctor to try to read a book online while the patient’s in the exam room, but there’s not enough time. So what we’ve done is we’ve distilled diagnoses down to these graphics that allow you to see the key symptom findings of the disease and then you’re able to rapidly compare the diseases. So we’ve been focused on delivering information in the exam room in under one minute. That’s really been our charge. And we now are covering every chief complaint, over 3,000 diagnoses, and have amazing stories from professionals, not just in the US, but from around the world that are using the system.

Mike: So how can providers begin to implement these types of tools? Where do you get started, and how does it practically play out?

Dr. Papier: Well, it depends if you’re part of a large health system and you’re relying on the electronic health record and the IT services of that hospital system, or if you’re in a small rural clinic, then the way you take charge is just buy yourself a tool and put on your phone, on your desktop. And with VisualDx, you can do either. You can license it as an individual, as a yearly subscription, or you could license it through your health system and encourage your IT department and your CFO to engage with these tools. And this is so important because there’s a real cost to diagnostic error. Obviously, the horrific cost is injury to people and the harm that we can do to people by missing their diagnosis. But really, importantly, hospital systems don’t realize how much money they’re losing each year because of diagnostic error. As an example, patients that are admitted with a diagnostic error are just sitting in the hospital for no reason are taking up a bed that could be used for an important surgery. So most hospitals today are flooded with patients and we really cannot have inappropriate admissions, yet we tolerate having these patients sitting there, they have the wrong diagnosis.

So one of the areas that I’ve been focused on and the work that we do at VisualDx is we think about this problem of patients with soft-tissue infections. The common term is called cellulitis. So for the non-physicians on the podcast, you get a cut in or break into your skin, say, on your foot and bacteria gets in and then you get infections hacking up your leg. It can go into the lymphatics and eventually the bloodstream and cause you to have bacterial sepsis. So if you have a red leg, often physicians are concerned that that red leg is early cellulitis. And if the physician believes the patient has cellulitis, they often admit the patient for IV antibiotics. So over a half a million patients are admitted every year in United States for cellulitis that the research shows that 30% of patients admitted for cellulitis do not have cellulitis and do not need to be admitted. So it’s over 100,000 admissions with a DRG of probably around $10,000. Over a billion dollars is wasted in this country on the cost of admissions for a disease that patients don’t have. And so the reasons this happens is something called premature closure. So the clinician sees the red leg and a common cause of cellulitis, but there are other reasons to have a red lower leg, and they jump to that first conclusion of cellulitis without thinking of the other possibilities or being unaware of the other diagnoses. Tremendous cost to the hospital system, and a waste of resource, a waste of beds that we need.

The other dynamic here that’s really important to talk about is liability risk and malpractice risk. The medical liability insurers know that the number one reason to be sued in the ambulatory environment and the ER is diagnostic error. Most people think it’s wrong site surgery. The surgeon took out the wrong kidney or amputated the wrong leg or the patient was given the wrong dose of the medication but that’s not the leading cause. The leading cause is diagnostic mistakes, like I’m describing. So the malpractice insurers are engaged with this and participating in a annual meeting that’s called the Diagnostic Errors in Medicine Meeting, where for over a decade we’ve been trying to figure out what are the techniques to reduce diagnostic error. One of the leading liability insurers, Coverys, which is a Boston-based malpractice liability insurer, has certified the use of VisualDx or CMA, and they actually provide a discount on the liability insurance for the clinicians that are using VisualDx and insured by them. And so this is really a breakthrough innovation where a liability insurer is saying that diagnostic errors is a huge problem and we have to do things to reduce diagnostic error, such as supporting better information in the exam room at the time that the doctor’s thinking through the problem.

Mike: If someone wanted to find out more about you or VisualDx, where can they go?

Dr. Papier: Well, there is, and there’s a wealth of information from all the different perspectives, whether you’re a solo practitioner or you’re a medical school or you’re a hospital system, individual providers can purchase VisualDx as a subscription through the iOS Apple App Store, or they can purchase it through Google Play or they can contact us through And so VisualDx, as I said, is growing and really approaching this problem in a unique way, and their prior efforts were really focused on just words. And I think people have realized, look at the success of Instagram, so much more popular than Facebook now, I believe, in the sense that, at least some of the young people, everybody’s using Instagram and it’s really about images. And part of our brain is to think– we think visually and pattern recognition can be near instantaneous and often very, very efficient. So this blending of a technology solution to handle both analytical thinking and pattern recognition is really what we’re doing uniquely with VisualDx.

Mike: Dr. Art Papier, thank you so much for joining us today on The Hospital Finance Podcast.

Dr. Papier: Thanks for having this. This is great.

The Hospital Finance Podcast

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