Health IT

Bob Wachter

The following is an excerpt from the preface of my new book, which  is tentatively titled: “Disrupted: Hope, Hype and Harm at the Dawn of Medicine’s New Age.”  Author’s note and request to THCB readers.

If you’re a 24-year-old who does not plan on getting sick for the next couple of decades, this is probably not the book blog post for you.

By the time you need our healthcare system, it will be wired in ways we can’t imagine today. By then, computers will have transformed healthcare – as they already have retail, publishing, photography, and travel – leaving it better, safer, and maybe even cheaper. Most of the kinks, perhaps other than what our society will do with boatloads of unemployed dermatologists, radiologists, and hospital administrators, will have been ironed out. I hope to live to see this day myself. It’ll be, as my kids say, hecka cool.

But for the rest of us – both those who need our medical system today and those who currently work in it – the path to computerization will be strewn with landmines, large and small. The challenges are everywhere. Medicine, our most intimately human profession, is being dehumanized by the entry of the computer into the exam room. While computers are preventing many medical errors, they are also causing new kinds of mistakes, some of them whoppers. Sensors and monitors are throwing off mountains of data, often leading to more cacophony than clarity. Patients are now in the loop – many get to see their laboratory and pathology results before their doctor does; some are even reading their doctor’s notes – yet are woefully unprepared to handle their hard-fought empowerment.

In short, while someday the computerization of medicine will undoubtedly be that long-awaited “disruptive innovation,” today it’s often just plain disruptive: of the doctor-patient relationship, clinicians’ professional interactions and workflow, and the way we measure and try to improve things. I’d never heard the term “unanticipated consequences” in my professional world until a few years ago, and now we use it all the time, since we – yes, even the insiders – are constantly astonished by the speed with which things are changing and the unpredictability of the results.

Before we go any further, it’s important that you understand that I am all for the computerization of healthcare. I bought my first Mac in 1984, back when one inserted and ejected floppy disks so often (“Insert Excel Disk 2”) that the machine felt more like an infuriating toaster than a sparkling harbinger of a new era. Today, I can’t live without my MacBook Pro, iPad, iPhone, Facetime, Twitter, OpenTable, and Evernote. I even blog and tweet. In other words, I am a typical, electronically overendowed American.

And healthcare needs to be disrupted. Despite being staffed with (mostly) well trained and committed doctors and nurses, our system delivers evidence-based care about half the time, kills a jumbo jet’s worth of patients each day from medical mistakes, and is bankrupting the country. Patients and policymakers are no longer willing to tolerate the status quo, and they’re right.

Continue reading “Disrupted: How Computerization Is Changing the Practice of Medicine In Surprising Ways”

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A time-and-technology challenged FDA, proliferation of software-controlled medical devices in and outside of hospitals, and growth of hackers have resulted in medical technology that’s riddled with malware. Furthermore, lack of security built into the devices makes them ripe for hacking and malfeasance.

Scenario: a famous figure (say, a politician with an implantable defibrillator or young rock star with an insulin pump) becomes targeted by a hacker, who industriously virtually works his way into the ICD’s software and delivers the man a shock so strong it’s akin to electrocution.

Got the picture?

Welcome to the dark side of health IT and connected health. Without strong and consistently adopted security technology and policies, this scenario isn’t a wild card: it’s in the realm of possibility. This is not new-news: back in 2008, a research team figured out how to program a common pacemaker-defibrillator to transmit a “deadly 830-volt jolt,” according to Barnaby Jack, a security expert.

Continue reading “The New Bioterrorism? The Hacked Medical Device”

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The most remarkable thing about Health 2.0 this time around, at least for me? The growing number, and percentage, of attendees old enough to get a reference like “Hey, Known Spender.”

If that wordplay evokes the trumpet blare of the brass band that accompanied one of the more pernicious and offensive TV ad campaigns of the 1970s (derived from the 1966 musical Sweet Charity), then you would have had more company than usual at last week’s 2.0 conference in San Francisco.

For all you Gen X’ers, Y’ers, and Millennials pitching your ever more nifty wares this time around: those horrific ads featured a slinky woman – made-over from the ‘60s musical’s stripper chorus to a ‘70s “empowered” glamour-gal – crawling all over some dude in a tux and singing “Hey, Big Spender, spend a little time with me.” The ads were unambiguous proof that American culture’s direct equation of cash and sex pre-dated the 1980s.

The “Known Spenders” who spent a little time at Health 2.0 this year were, for the most part, old enough to remember that ad. And they are actually make a living today working in corporate health care jobs. They’re the people they call “The Suits” in Hollywood, and they can actually get your products out of beta and into the real world. The slow steady creep of relevance not just of Health 2.0 as a marker of the market, but of the entire dream of consumer health IT, can be measured by the slow steady influx of the salt-and-pepper folks my own age who work for health insurance companies, employer groups, hospital systems, and drug companies. Six years ago, at the inaugural 2.0, The Suits were nowhere in sight. This year, they were everywhere you looked, kicking tires and taking business cards. Skepticism was abundant among those I talked with, as it should be with industry lifers who have endured two full cycles of health IT hype. (Healtheon and Revolution Health were the market toppers of valuation, grandiosity, and absurdity; if the current boom goes bust, we lifers know exactly who it will be.)

Among the two dozen or so people I’ve known over the years and who have yet to be paroled from health care, the consensus at 2.0 was “these are mostly good products, not companies, there is too much overlap, they have too narrow a scope of functionality, and many need to be rolled up. But a few actually have replacement revenue potential.”

As for the first part of that consensus, nothing new here. Nor anything new about the classic chicken-and-revenue problem that has hampered Health 2.0 start-ups from the start. I’m hardly the first, and surely won’t be the last, to point out the obvious: health care is not lacking for great consumer information products, services, systems, or apps; those products etc. are lacking users, adoption, exposure, traffic, critical mass, revenue. By “revenue” I mean “cash,” from paying customers, not promises, sales pipelines, booked revenue, or even signed contracts with guarantees. And I certainly don’t mean investors’ cash. I’m talking about revenue from consumers, patients, providers, or any of the myriad third parties who are spending money today – just not happily.

Continue reading “Hey, Known Spender!”

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Health care had its own version of the LeBron James “Decision” last month with the Supreme Court upholding the critically important elements of the Affordable Care Act. Now that the uncertainty is behind us―at least until the November elections―health care leaders can continue preparing their organizations for the changes ahead.

Fixing the system requires reforms at the macro level. But it also takes a symphony of smaller actions happening in concert. As experience bears out, it is difficult to agree upon a collective action with so many competing interests in health care and the partisanship that has gripped politics. But there is a song that we can all agree upon, loud and in unison. Reduce the waste.

Nearly a third of our health care costs come from wasteful spending and inefficiencies that could be avoided. Left unchecked, this is a nail in the coffin of our system; but, if tackled, is a huge cost containing opportunity. By identifying waste in the delivery system and systematically reducing it, we could lower costs without resorting to budget cuts and fees that compromise the quality of care.

Continue reading “How Do We Bend the Cost Curve? Reduce the Waste.”

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According to CMS, through May of this year, 2,400 hospitals and 110,000 eligible professionals have received $5.7 billion in incentive payments for ensuring meaningful use of electronic health records, representing about half of all eligible hospitals and about 20% of all eligible providers.

Despite this widespread adoption EHRs, reliable market share data by vendor is still very hard to come by.  So, when CMS recently updated its attestation data for midyear 2012, we took notice.  Attestation, remember, is the process by which practitioners legally verify that they have used an EHR in way that merits one of those incentive payments.  The data set includes more than 77,000 different attestations from 2011 through May of 2012 (note that it is not immediately clear why the data set has different totals than the CMS press release).

The sheer number of options for hospitals and providers stood out to us immediately.  There are 405 separate EHR vendors that hospitals or providers have used to attest to meaningful use, with 336 of these providing ambulatory EHR products.  It’s worth pausing here to note that by our count of the data found on the CMS Certified Health IT Product List, there are more than 550 separate ambulatory vendors with complete EHRs approved by CMS, meaning that despite the huge number of options, there were still well over 200 approved ambulatory vendors that have not had a single user qualify for an incentive payment yet!

Despite this enormous number of options, users attesting were fairly concentrated in the top vendors.  Of these 336, the top 15 vendors represented 75% of all providers attesting.  On the inpatient side, this concentration was even more pronounced, with the top 6 representing 75% of the total hospital attestations.

When we organize and dig into the data, a few other points stand out.

Continue reading “Numbers Don’t Lie — The EHR Market Must Consolidate”

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Everyone is always asking me what it is like being an EIR and why I decided to do it after my 5+ years working on Google Health.  First of all, for those of you who are not familiar with the term – an EIR stands for either Entrepreneur in Residence or Executive in Residence.  In the case of Morgenthaler Ventures, they were looking for a person with extensive experience in the Health IT sector at an executive level. This differs from a more traditional EIR title (entrepreneur in residence) where you are asked to incubate a startup from scratch with some support and resources.  As an Executive in Residence, I work hand in hand with the firm’s partners to author the current health IT investing thesis, map out the industry, source companies that match our areas of interest, and help with diligence. The goal of my EIR term is to find a company that Morgenthaler can invest in and then join that company as part of the executive team. I picked Morgenthaler Ventures because of their track record in health IT (invested in Practice Fusion before Health IT was in vogue) and their leadership in the industry with the creation of the first DC to VC conference.

In its 3rd year, DC to VC was initially started by Rebecca Lynn, IT Partner at Morgenthaler Ventures to bring the venture capital community together with Washington D.C. policymakers.  This year, I am proud to say that I am co-directing the DC to VC event and the health IT startup contest along with Matthew Holt and Indu Subaiya from Health 2.0. The contest will take place on the last day of the 2012 Health 2.0 Annual Fall conference in San Francisco on October 10, 2012.  Online applications open today, June 4, 2012 and stay open until August 3, 2012.

Continue reading “A Life in the Day of an EIR: Health IT Ain’t No Bubble for Venture Capital (…. so apply for the DC to VC Health IT startup showcase)”

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In a piece for the New Yorker, Dr. Atul Gawande outlined how, early in the 1900s, more than forty per cent of household income went to paying for food and food production consumed roughly half the workforce. Beginning in Texas, a wide array of new methods of food production were tested. After many pilots, tests and information dissemination, food now accounts for 8% of household budgets and 2% of the workforce. As a wide array of small innovations ultimately led to the transformation of farming, so too is a rapidly building wave of innovative new care and payment models leading to similar breakthroughs in healthcare. I call this Nimble Medicine.

Until recently, attempting a new care or payment model meant long planning and development cycles. The cost and complexity of testing new models prevented many from being tried. Even today, the leading HealthIT vendor is known to charge $100 million and up for its software. Amazingly, they require three months of training before they even let people administer the software.

Continue reading “Nimble Medicine”

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