The Business of Health Care

flying cadeuciiAmerican anesthesiology reached a significant milestone last year, though many of us probably missed it at the time.

In February, 2014, the number of nurse anesthetists in the United States for the first time exceeded the number of physician anesthesiologists. Not only are there more nurses than physicians in the field of anesthesia today, the number of nurses entering the field is growing at a faster rate than the number of physicians. Since December, 2012, the number of nurse anesthetists has grown by 12.1 percent compared to 5.8 percent for physician anesthesiologists.

The numbers—about 46,600 nurse anesthetists and 45,700 physician anesthesiologists—reported in the National Provider Identifier (NPI) dataset for January, 2015, probably understate the growing disparity. Today, more and more physicians are leaving the front lines of medicine, many obtaining additional qualifications such as MBA degrees and embarking on new careers in hospital administration or business.

Physician anesthesiologists can expect that fewer of us every year will continue to work in the model of personally providing anesthesia care to individual patients. Clinical practice is likely to skew even more toward the anesthesia care team model, already dominant in every part of the US except the west coast, with supervision of nurse anesthetists and anesthesiologist assistants.

Continue reading “Why Can’t We All Just Get Along?”

flying cadeuciiOne year ago in these pages, Harvard Medical School’s Stephen Soumerai wrote a scathing essay arguing that employer fines on overweight employees were ineffective.  We’re here to tell you that Professor Soumerai is a cockeyed optimist.  A new review in the American Journal of Managed Care shows that these fines transcend ineffectiveness.  They are counterproductive.

To begin with, forced corporate weight loss programs don’t work.  Of roughly 1000 wellness vendors promising weight loss, only one, the iDiet, has received validation.  Literally no other corporate weight loss program can check three simple boxes that are standard in medical research:

  1. The study was controlled the way grownups would define “controlled,” not using unmotivated non-participants as a control for motivated participants, which Health Fitness Corporation  inadvertently invalidated
  2. the program was sustained for 18 months, rather than eight weeks, which seems to be the new standard for get-thin-quick programs; and
  3. The results showed both high persistence and significant weight loss.

Even that study had significant limitations: One could argue that the sample was small and even 18 months was not a long enough period to determine if weight maintenance was likely to be permanent.

Continue reading “Weight Loss Fines Are Discriminatory and Counterproductive”

Evil Dr Rob Part 2It’s been two years since I first started my new practice.  I have successfully avoided driving my business into the ground because I am a dumb-ass doctor.  Don’t get me wrong: I am not a dumb-ass when it comes to being a doctor. I am pretty comfortable on that, but the future will hold many opportunities to change that verdict.  No, I am talking about being a dumb-ass running the businessbecause I am a doctor.

We doctors are generally really bad at running businesses, and I am no exception.  In my previous practice, I successfully delegated any authority I had as the senior partner so that I didn’t know what was going on in most of the practice.

The culmination of this was when I was greeted by a “Dear Rob” letter from my partners who wanted a divorce from me.  It wasn’t a total shock that this happened, but it wasn’t fun.  My mistake in this was to back off and try to “just be a doctor while others ran the business.”  It’s my business, and I should have known what was happening.  I didn’t, and it is now no longer my business.

Continue reading “How to Avoid Being a Dumb-Ass Doctor, Blog Edition”

flying cadeuciiLet me start this story by telling you the end: I am just fine. For those of you who like me, there is nothing to worry about and all is well. For those of you who don’t like me, sorry to disappoint you, but you’re stuck with me for a while.

I’m telling you these things—news to make you happy or disappointed, depending on your point of view about me—because this story is about my recent trip to the hospital, an unexpected journey that I wasn’t sure I was going to talk about publicly.

First of all, I didn’t want people calling and fretting and thinking I was suddenly in need of hushed whispers and pats on the head and casseroles. Second of all, I didn’t want people thinking they were finally rid of me and gladly so.   But mostly I wasn’t sure I was going to tell this story because I just didn’t want to make a big deal about it. But in the end, I couldn’t help myself. I decided I learned so much on my little stint on the other side of the healthcare desk that I felt I had to share.

It started as a bit of tachycardia, sadly brought on not by a George Clooney sighting, but rather by some anomaly of life which will likely never be known. As my heart started to race faster and faster over a series of hours, and when it became clear that I couldn’t count as high as my pulse was going, I called 911.
Continue reading “The Hospital That Shall Remain Nameless”

Shaywitz 2.oLate last month, President Obama unveiled a $215 million Precision Medicine initiative, which has won early bipartisan support. The centerpiece of this proposal is an ambitious effort to integrate disparate clinical datasets to advance science and improve health.  The question now is whether the National Institute of Health officials entrusted to carry out this program will seize this opportunity to leverage the thinking and experiences of the entrepreneurs, engineers, and data scientists from the private sector who have been wrestling these sorts of challenges to the ground.  The early indications are encouraging.

(Disclosure/reminder: I work at a cloud-enabled genomic data management company in Mountain View, California.)

Data is the organizing principle of Silicon Valley; the landscape is dotted with companies – from behemoths like FacebookGoogle GOOGL -0.99%, Salesforce, and Palantir to younger entrants like ours – devoted to collecting, analyzing, and collaborating around huge amounts of data, often enabled by cloud computing.

The same engineers who gave us photo sharing, Angry Birds, and smart thermostats are increasingly bringing their talents to healthcare, trying to enable health data sharing, motivate healthy behaviors, and empower elders living at home alone.

Continue reading “Good News: NIH Discovers Data Scientists and The Private Sector”

Paul KeckleyUnnecessary care that’s not evidence-based—usually associated with excess testing, surgical procedures or over-prescribing—accounts for up to 30% of what is spent in healthcare. In recent months, enforcement actions against physicians and hospitals have gained increased attention. But unnecessary care and over-utilization is not a new story or one that’s easy to understand.

Background

Medical necessity means something slightly different in every part of the healthcare industry. Varied definitions and interpretations are used by providers, physicians, courts, pharmacy benefits managers, government insurers, private insurers, and consumers. Perhaps the two most important are from the largest and most influential payer, Medicare, and the industry’s most important clinical authority, the American Medical Association (AMA).

Continue reading “Medical Necessity and Unnecessary Care”

Robert PearlAs CEO and Executive Director of The Permanente Medical Group at Kaiser Permanente, I have been following with interest the exchange between Malcolm Gladwell and Steven Brill, prompted by Gladwell’s critique of Brill’s book (America’s Bitter Pill).  Gladwell accurately points out that the solution to the problems of the American health care system that Brill puts forth in the book are very close to the structure of Kaiser Permanente.  We provide world class hospital and ambulatory care to millions of Americans through our dedicated, physician-led Permanente medical groups, and pay for it through the not-for-profit Kaiser Foundation Health Plan.

Brill dismisses Gladwell’s criticism explaining that “Kaiser Permanente is not the same because it doesn’t have a monopoly, or oligopoly power, in any of its communities. It’s not a teaching hospital. It doesn’t have the network of high-quality doctors, or isn’t perceived to, like New York Presbyterian has in New York or the Cleveland Clinic has in Cleveland.” Continue reading “A Response to Steven Brill”

Screen Shot 2015-01-02 at 8.08.19 AMAbout seven years ago, the California Healthcare Roundtable and HealthAffairs sat down to prepare a white paper on the emerging “phenomenon” of urgent care centers, and what it might mean for primary care. At the time the group couldn’t agree that urgent care was a “disruptive” innovation, but it seemed clear to all participants that it represented a threat to primary care: The rise of UC, the group noted, would lead to 1) less preventive care and 2) concentrate acuity in primary care clinics. They wrote: “[Urgent care] means fewer patients per day, a higher intensity environment for providers, and potentially lower reimbursement.”

In particular, the group couldn’t understand if patients were choosing to leave primary care because they didn’t value having a PCP, or if they were settling for the inherent limitations of UC because cost and convenience outweighed its disadvantages.

 Seventy-five percent  [of UC customers] are women ages 28 to 42 and their children. Some hypothesize that this consumer group thinks of its health care relationships differently than do people of the baby boomer generation and older. The younger cohort often has no “medical home,” while baby boomers and older people tend to view the primary care physician as the center of their medical care. Discussants concurred that what the data do not reveal, however, is whether the medical “homelessness” of this younger group and its high relative use of retail clinics reflect how these consumers want to receive their care or is instead merely their experience (or is a function of the fact that they have fewer chronic conditions and thus need less care and care coordination).

Since the roundtable in 2007, there has been a flood of urgent care centers with ongoing rapid growth. The American Academy of Urgent Care estimates that there are around 9300 UCs nationally. Across the country, clinics are sprouting like flowers, sometimes fueled by private equity investors, but often by hospitals and health systems who are reflexively installing UCs in repurposed strip malls, sometimes without a clear strategy other than “keeping market share” in an otherwise low margin business.

The reasons for growth, according to the American Academy of Urgent Care? Primarily extended hours (as compared to primary care) and better wait times and lower prices than the ED.

As the private-equity fueled urgent care bubble expands, here’s my prediction on how this all plays out: Don’t bet the farm on UCs being the final answer to the consumer’s search for value. For all of UC’s utility, it’s also possible that urgent care may just get out- maneuvered by the next generation of primary care.

Continue reading “Competing With Urgent Care”

Screen Shot 2014-12-29 at 11.03.12 AMWe hear a lot about how US medicine is broken, from how much we spend annually ($4 trillion) for unimpressive outcomes, to the growing epidemic of obesity and diabetes, to problematic financial models, to the growing malaise amongst doctors.

Across US health care, a lot of smart people are crafting solutions to these problems, but in my view the reality is that many of them are generating efficiencies on top of a broken product.

The real problem is that conventional primary care as it’s practiced today no longer serves the needs of most people, be they wealthy or under-served, be they patient or provider.

I am starting Parsley Health, a new kind of medical practice that directly addresses these problems, first by providing something called Functional Medicine rather than traditional primary care, and second by providing functional medicine in a tech driven, modern and affordable way.

What is Functional Medicine?

I became a functional medicine doctor because early on I recognized two major limitations of the conventional medicine.

Continue reading “Why I’m Starting a Radically Different Kind of Medical Practice”

Privacy Trumps Convenience

2014 was the year of the Affordable Care Act.  There were other profound and important developments in health, but for consumer interest, media attention, and impact on the health business, the ACA dominated the picture.

2015 is expected to be different.  This increasingly wired, consumer-oriented, and innovative health industry is poised for profound transformation: 2015 will be the year that a true, industry-wide healthcare market begins to take shape.  To help navigate this emerging market, we’ve identified ten Top health industry issues of 2015 driving transformation.

Three issues coalesce around consumer–centric digital health technology:

Do-it-yourself healthcare        
U.S. physicians and consumers are ready to embrace a dramatic expansion of the high-tech, personal medical kit. Our Health Research Institute (HRI) surveys show that clinicians may be more open to using these tools than consumers. One-third of consumers said they would use a home urinalysis device. But more than half of physicians said they would use data from such a device to prescribe medication or decide whether a patient should be seen.

Making the leap from mobile app to medical device        

The proliferation of approved and portable medical devices in patients’ homes, and on their phones, will make diagnosis and treatment more convenient, redoubling the need for strong information security systems. Regulatory approval may provide a competitive edge — 20 percent of consumers and 26 percent of clinicians said FDA approval was important when deciding to use apps.

Continue reading “2015 Forecast: A True Healthcare Market Takes Shape”

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