Innovation

flying cadeuciiThere is a saying that “culture eats strategy for lunch.” Never has this been truer than when looking at primary care or physician group delivery system innovation.  Health care industry leaders must invest more time creating and scaling the right culture as they innovate.

There has been a great deal of controversy on the ability of the Primary Care Medical Home (PCMH) to impact total medical costs. Critics have noted that PCMH is adding additional costs to the structure without systematically demonstrating improvement in total costs and quality.

A great deal of time has been spent debating the proper structures, processes and financial incentives that are necessary to create value in physician-led-risk or shared-savings models. However, I suspect the real issue is that culture is a major driver of performance, and it has not been systematically measured or managed.

At ChenMed, we have developed a primary-care-led model focused on the care of seniors with multiple and chronic health conditions.  Funded through full-risk arrangements with Medicare Advantage plans, we outlined an overview of the original Miami-based model in Health Affairs last year [1].

Over the last three years, we have scaled the model from five centers in Miami to 36 centers in eight markets in the Southeast and Midwest.  This has required us to adjust our model in ways that allow it to readily scale. We have been able to make the fundamental economics work while rapidly scaling the medical practice, and are actively working on innovations to improve value every day.

One of the foundations of our strategy is getting the physician culture right.  This is not easy to measure from a health services and policy research perspective.Yet, it matters a great deal from a practical and business perspective. McKinsey and Company has developed an influence model on how organizations create the right behavior and mindset shifts, which we have found useful [2].

Continue reading “Developing Physician Culture in New Risk Models”

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Screen Shot 2014-05-14 at 8.03.26 AMI WAS NOW the CEO of a rising medical data company.We built automated systems to handle the administrative chores for thousands of medical practices. They didn’t buy anything from us. Instead, they subscribed to a service on the Internet.

This was what would later be called a cloud-based service, but in these early days of Internet era, we were still searching for a name for it. My partner Todd used to say in speeches that he would give Polynesian fruit baskets for life to anyone who came up with a single name for the combination of software, knowledge and work that we were selling. We had moved back east and had a new headquarters in a historic brick armory building along the Charles River near Boston.

Our future looked fabulous, except for one problem: My cousin, the 43rd president of the United States, was about to sign a bill that could destroy us.

This bill, like so many governments initiatives, stemmed from the best of intentions. The idea was to encourage the migration of the health care industry from cumbersome binders full of paper to electronic records. How was this to be accomplished? Well, hospitals and doctors were forbidden by so-called anti-kickback laws from exchanging services, information or products of value with each other. (It’s a law that infuriates me, for reasons I’ll go into later.) The bill before Congress in 2004 offered a regulatory safe harbor for hospitals to provide doctors with all the digital technology the bureaucrats could think of: servers, software licences, and training. That was absolutely the right answer . . . for 1982. The long and short was that hospitals could buy all the old stuff from our competitors, but none of the new still-to-be-named services from us. As often happens, the technology was advancing much faster than the law.

I caught the shuttle down to Washington and commenced lobbying with the fervor of a man with a gun to his head. I raced up and down the marble halls Congress, looking for someone, anyone, who would take the time to learn why this bill was so very wrong, so backward, so devastating, so lethal—at least to athenahealth.

But let me tell you, if you walk into Congressional offices sputtering about a clause in a bill that practically no one has read, something that has to do with hardware and software and online services, people tend to hurry away, or point you toward the door. I could find no one to pay attention. And as I grew more frantic, I started talking louder and faster. That didn’t help things.

Some might find my frustration strange, considering that during this drama my cousin was sitting a mile away, in the Oval Office. Wouldn’t a Bush, facing legislative trouble in Washington, contact someone in the White House entourage? The answer is no. Placing a call to him was not even a remote possibility. For starters, it’s unethical. It is also politically foolish. It would place him, me, and my company in scandal and bring shame upon our family. I would be much more willing to climb the steeple of the tallest church and bungee jump naked in the middle of the night than to call my cousin. And even if I were dumb enough to make the call, I trust George would have the good sense to tell me to get lost.

Continue reading “Government (Or, How My Cousin the President Nearly Killed My Company)”

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the doctor crisis photoDoctors get blamed a lot these days — blamed for aversion to change, for obstructing innovation, and for being self-centered. This familiar litany asserts that in the nation’s drive to transform health care, physicians are part of the problem.

While it is undeniable that doctors are part of the problem in some places, it is equally undeniable that they are leading innovation in many places and must be part of the solution everywhere.

We may well be in the midst of the most unsettling era in health care and that turbulence is bone-jarring to physicians. We argue that there is a doctor crisis in the United States today – a convergence of complex forces preventing primary care and specialty physicians from doing what they most want to do: Put their patients first at every step in the care process every time.

Barriers include overzealous regulation, bureaucracy, liability burden, reduced reimbursements, and poorly designed care delivery systems.

On the surface the notion of a doctor crisis seems altogether counterintuitive. How could there be a “crisis’’ afflicting such highly educated, well-compensated members of our society?

But the nature of the crisis emerges quite clearly when we listen to doctors. Ask about the environment in which they practice and you hear words such as “chaos,’’ “conflict,’’ and “dysfunction.’’ Based on deep interviews with doctors throughout the country, the research firm Harris Interactive reports that a majority of physicians are pessimistic about their profession; a profession Harris describes as “a minefield’’ where physicians feel burned out and “under assault on all fronts.’’

Have terms this extreme ever been used to characterize the plight of physicians in our nation? Burnout, chaos, conflict, dysfunction, minefield, under assault. How can the nation transform its health care system under such disturbing conditions?

Continue reading “The Doctor Crisis”

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flying cadeuciiThe United States spends more than $2 trillion per year on health care, surpassing all other countries in per capita terms and as a percentage of gross domestic product.

New, expensive medical technologies are a leading driver of ballooning U.S. health care spending. While many new drugs and devices are worthwhile because they substantially extend lives and reduce suffering, many others provide little or no health benefit.

Many studies grapple with how to control spending by considering changing how existing technologies are used. But what if the problem could be attacked at its root by changing which drugs and devices are invented in the first place?

Recently, my colleagues and I explored how medical product innovation could be redirected to reduce spending with little, if any, sacrifice to health and to ensure that any spending increases are justified by sufficient health benefits.

The basic approach is to use “carrots and sticks” to alter financial incentives for drug and device companies, their investors, health care payers and providers, and patients.

The ten policy options below could change which technologies are invented and how they’re used. In turn, this could cut spending or increase the value (health benefits per dollar spent) derived from new products that do increase spending.

We urge policymakers—both public and private—to consider these options soon and to implement those that are most promising. Policymakers should also consider how to reduce spending and get more value from health services that don’t involve drugs or devices.

The longer the delay, the more money will be badly spent.

1. Encourage Creativity in Funding Basic Science

The National Institutes of Health (NIH), the leading funder of basic biomedical research, typically favors low-risk projects. Funded researchers who fail to achieve their goals are much less likely to secure additional NIH funding. Encouraging more creativity and risk-taking could increase major breakthroughs.

2. Reward Inventors with Prizes

Public entities, private health care systems, the philanthropic sector, or public-private partnerships could award prizes to the first to invent drugs or devices that satisfy certain performance criteria, including a potential to decrease spending. Winners could receive a share of future savings that their product brings the Medicare program, which spends more than $500 billion annually.

Continue reading “10 Ways Innovation Could Help Cure the U.S. Health Spending Problem”

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apple storeJe n’ai fait celle-ci plus longue que parce que je n’ai pas eu le loisir de la faire plus courte. —Blaise Pascal

Translation: I have made this longer than usual because I have not had time to make it shorter.

As Appley as it gets.

A while ago I was challenged to write about what an Apple-like approach to healthcare might look like.

That challenge has been weighing on me.

For starters, we’re all over Appled aren’t we? Maligned anecdotes about Steve Jobs and the iPhone make their way into almost every presentation remotely related to innovation or technology. Triteness aside, I’ve been stalled because Apple is really a philosophy, not a series of steps or lessons learned. (Although, they are nonetheless methodical.)

Instead, what I’ve been kicking around in the ole noggin are three notional predictions, which I’ll assert are inevitabilities which will fundamentally disrupt healthcare delivery as we know it today.

What follows is about as Appley as I’m likely to get. Despite big-bang product launches, Apple actually plays the long game. They introduce small features into products to affect user behavior years before a flagship product takes advantage of those reprogramed behaviors.

That’s how they disrupt.

I believe there are three meaningful, unstoppable trends, in our current world which will significantly alter healthcare. The steps taken towards these inevitabilities, along the way, are what will define the innovators and leaders. They are the ones who see this future and know how to drive towards it.

The three trends are:

  • Tools and culture which favor individual empowerment
  • The commoditization and automation of diagnosis
  • Accelerated globalization of treatment options

But wait, there’s Moore.

Don’t worry, I’m not going to leave you hanging. I’ll attempt to rationalize each of these points and explain why, particularly when considered as a bundle, they are a powerful force for disruption. And to prime that pump, we have to talk about Gordon Moore.

Continue reading “Moore’s Law in Healthcare – Three Predictions”

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There’s that line about art, “good artists copy, great artists steal.” There’s some debate about if Picasso said it first, but most of us geeks know it from Steve Jobs.

Often, I see things from companies and industries outside of healthcare —processes, products, best practices —which inspire me. I like these little inspirations because they often aren’t rocket science, but nonetheless fuel some creative thoughts about their applicability in healthcare.

The other night, around 9:00 PM on a holiday Monday, I ordered some obscure aviation stuff from Amazon. I needed a new headset, a leg-mounted chart holder, a paper calculating tool called an E6B computer and a portable canister of oxygen.

I have Amazon Prime, their subscription service which provides expedited 2 day shipping, so I expected to see my stuff on Wednesday afternoon. I was blown away when there was an Amazon box outside my door by 9:00 AM the next morning, Tuesday.

A box showed up early, big deal, right?

Here’s what I think happened and why I’m so impressed. I had been browsing for some aviation stuff for a few days. Amazon clearly knows and tracks my window shopping. It’s how they suggest items when you come back to the site.

I believe they preemptively moved some of those obscure aviation items to the closest distribution center in anticipation of my purchase. In fact, Amazon was awarded a patent for exactly that process last week.

By predicting my purchasing behavior, Amazon was able to beat my expectations for delivery – a known threat to their model is the instant gratification of local retail – and get my package to me in 12 hours.

We’ve got a lot of data in healthcare. That’s to the lagging but persistent implementation of electronic medical records, doctors and health systems are beginning to apply some big data science to their patient populations. For instance, any credible EMR can tell a physician how many of her patients have asthma.

More advanced systems, including bolt on solutions can look at disease panels and cross sample against last visit date. Mr. Smith, we see it’s been a year since your last visit, how’s your arthritis? Can we schedule you and appointment with Dr. Jones?

Continue reading “Amazon.com as a Delivery Model for Population Health”

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Last week  I went to a panel presentation sponsored by the group NYC Health Business Leaders on the rollout of New York State’s health insurance exchange.  Among the speakers was Mario Schlosser, the co-founder and co-CEO of the venture-capital-backed start-up health insurance company Oscar Health, which offers a full range of plans through New York’s exchange.

As NPR reported last month in a story about Oscar, “it’s been years since a new, for-profit health insurance company launched in the U.S.”, but the Affordable Care Act created a window of opportunity for new entrants.

Schlosser began his talk by giving us a tour of his personal account on Oscar’s website, www.hioscar.com.  Among other things, he showed us the Facebook-like timeline, updated in real time, which tracks his two young children’s many visits to the pediatrician.

He typed “my tummy hurts” into the site’s search engine and the site provided information on what might be wrong and on where he might turn for help, ranging from a pharmacist to a gastroenterologist, with cost estimates for each option.

Additional searches yielded information on covered podiatrists accepting new patients with offices near his apartment and on the out-of-pocket cost of a prescription for diazepam (which was zero, since there is no co-payment for generic drugs for Oscar enrollees).

As an audience member noted, none of this is new exactly.  What is new is to have this kind of data-driven, state-of-the-art user experience being offered by a health insurer.  Schlosser told the audience that Oscar’s pharmacy benefit manager and other vendors are providing the company with real-time data that other insurers have not demanded.

 

Continue reading “Can Oscar Succeed In Making Health Insurance Fun? Maybe Not Just Yet. But the Startup Is Shaking Things Up …”

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Let’s get the disclaimer out of the way:

We love Uber.

As physicians with roots in the Bay Area, we use Uber all the time. The service is convenient, (usually) swift and consistently pleasant. With a few taps of a smartphone, we know where and when we’ll be picked up — and we can see the Uber driver coming to get us in real time.

When the vagaries of San Francisco public transit don’t accommodate our varying schedules, it’s Uber that’s the most reliable form of transportation. (It might be that we like having some immediate gratification.)

So when we caught wind of the news that Uber’s founding architect, Oscar Salazar, has taken on the challenge of applying the “Uber way” to health care delivery, there was quite a bit to immediately like. From our collective vantage point, Uber’s appeal is obvious. When you’re feeling sick, you want convenience and immediacy in your care — two things Uber has perfected.

And who wouldn’t be excited by the idea of keeping patients out of overcrowded emergency rooms and urgent care waiting rooms? The concept of returning those patients to their homes (where they can then be evaluated and receive basic care) seems so simple that it’s brilliant.

Continue reading “Uber for Health Care?? Not So Much.”

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While your humble columnist eschewed forecasting for 2013, he  has decided to reverse course and inaugurate the 2014 blogging season with a contrarian duodecimal exercise in futurism. Will this antidecimal augury align with the mysterious cosmic order and governing perfection?  Let the readers be the judge in January 2015……

1. Obamacare will neither succeed or fail.  This hugely complex law will have too many outcomes, statistics and analyses that will be subject to too much spin by both supporters and detractors. Like puppies clamoring for the mother’s attention, the loudest wins, but only in 15 minute media increments.

2. Inflation returns, with a vengeance: While we won’t know it until well into 2015 or 2016, 2014 will be the year that the sleeping giant of healthcare costs awakens. Millions of new insureds in an improving economy will finally get their pent-up pricey preference-sensitive health care needs fulfilled.

3. Duh, it’s the delays stupid: While low income Americans will appreciate having access to subsidized health insurance and Medicaid, the middle class’ unsubsidized sticker shock will threaten the fall 2014 elections. Caught between conflicting advice of insurance actuaries and political hacks, the White House’s regulatory choices will be obvious.

4. Commercial scientific misconduct: Unable to resist the allure of bonus payments (like this) or the branding that is dependent on the public release of quality outcomes, at least one large health entity will be caught committing “reporting fraud.”

5. Snowden blow-backas the promise of big-data grows, fearful health care consumers will be even less inclined toward allowing access to their health information.  Too bad they won’t be given a say.

6. Innovator’s Dilemma for health tech: solutions that are simple, transparent and modular will continue to make ‘from the bottom’ inroads into a tech industry that - like early data storage - is too complex, opaque and entangled.

7. Speaking of health techpatient-monitoring solutions that offer more insight and less data will grab market share.  Instead of a series of blood glucose results dumped into an electronic inbox, think algorithms that suggest insulin dose adjustments.

Continue reading “Twelve Things We’re Pretty Sure We’ll See Happen In Health Care In 2014″

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Aspiring healthcare entrepreneurs could be forgiven for assuming our most significant challenge is the need to reduce the cost of care.  Investors and policy wonks alike seem to agree on the overriding need to focus on innovations that will improve efficiency and take costs out of the system.

The appeal of this approach is easy to understand: rising healthcare costs are a real problem, and business process improvement feels like something we already know how to do.  Large companies like GE and Oracle are thrilled by the opportunity to apply their process methodologies to healthcare.  Management journals love the idea of improving healthcare through operational excellence.  An increasing number of foundations have also joined the fray, focused explicitly on supporting innovations that reduce the cost of care.

Yet, as much as operational improvements are urgently needed, they should not represent the primary goal of healthcare innovation.

If we’re truly interested in high value healthcare, we’d do well to keep in mind that for many, if not most serious or chronic diseases, at least in the absolute sense, high value care simply isn’t an option.  We have embarrassingly few therapeutic approaches that can really do much to restore the lives of these patients.  Sufferers afflicted with Alzheimers Disease, pancreatic cancer, brain tumors, and so many other conditions desperately require transformative breakthroughs, not the mucking around the edges that passes for treatment today.

Make no mistake: it’s critical we do the very best we can to provide compassionate, evidence-driven care for patients who are sick right now, and innovations that contribute to the identification and humanistic delivery of the best available care are vitally important. Continue reading “Healthcare Innovation Is Not Just About Cutting Costs”

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