Decentralization and Mining Geodata: Thoughts from Health 2.0

People have been talking for decades about decentralizing much of healthcare away from massive Big Bricks on the Hill — for lots of good, sound reasons revolving around the efficacy of convenient primary care and home care, and the improvement in communications. It hasn’t happened much because these are all “should” reasons, not “have you by the throat” reasons.

The HYBTT reason is arriving: In the approaching liquefaction of healthcare, provider organizations (today’s institutions or others that will arise to compete with them) increasingly will be identifying particular populations in their service area whose primary care (or chronic conditions) they can manage under risk contracts. They will be doing this so that they can give these people earlier, smarter, resource rich care, and profit from driving the cost of care down and the effectiveness up. To serve these populations, providers will locate wherever is most convenient to that population, because especially in chronic and primary care, convenience is clinical. It makes a big difference if the people you are serving can get care downstairs, down the hall, or down the block, instead of across town, down the freeway, at the end of three bus transfers. So we will see a lot of “forward stationed” clinics in workplaces, union halls, schools, convalescent homes, neighborhoods, wherever the risk-contracted population hangs out.

This drives the second strategic observation: Geographic datamining. Providers are not doing this yet very much, but when they come to be at risk for the health costs of populations they will be all over it like your favorite metaphor. It is now becoming trivially easy to mine your records and discover where your patients come from — not just to the zipcode level, or even the block, but to the level of the individual address (HIPAA compliant, as dots on a map).

As a healthcare provider you can parse that information by any parameter (presenting disease, age, payer), as well as by which customers are costing you money, which are making you money. Armed with this information, for instance, you might obviously decide to site some “forward-stationed” facilities in places that are more convenient to your well-insured, higher-paying customers.

But what about the other end? You might also decide to lower your costs for the money-losing populations by “forward-stationing” free clinics in their neighborhoods, where you will at least lose less money treating them than you would in your ER. More aggressively, you might find ways to take on risk contracts for the money-losing populations, give them better, earlier smarter care, so turning their care and costs around, and turning them into positive revenue streams.

There are companies that are selling this kind of GIS (geographic information system) capability. One that presented here, for instance, was Stratasan. In an economic environment in which providers are increasingly at risk for the health and health costs of populations, this information will drive a lot of strategic decisions.

As a healthcare speaker, writer, and consultant, Joe Flower has explored the future of healthcare with clients ranging from the World Health Organization, the Global Business Network, and the U.K. National Health Service, to the majority of state hospital associations in the U.S. Joe writes at imaginewhatif.

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18 replies »

  1. “Camden Coalition”

    See “The Hot Spotters.”

    “…The Camden Coalition has been able to measure its long-term effect on its first thirty-six super-utilizers. They averaged sixty-two hospital and E.R. visits per month before joining the program and thirty-seven visits after—a forty-per-cent reduction. Their hospital bills averaged $1.2 million per month before and just over half a million after—a fifty-six-per-cent reduction…”


  2. Thanks, Joe. It seems that are many ways to achieve alignment of interests, and many ways to define interests, without requiring that those who provide actual care assume direct financial responsibility for every Hershey Kiss a patient may consume.

  3. > not sure if you actually take care of patients

    I am not a doctor. I just listen to lots of doctors, and have for over 30 years in lots of environments — along with lots of administrators, vendors, payers. I try to look at the whole system.

    > Bridges to Excellence

    Yes, an excellent program!

    > the fallacy is in the scalability of these relatively tiny pilot programs… there is not a shred of evidence to date that any of these work or can work across much broader populations.

    I would challenge that, because while healthcare policy and payment systems are made wholesale, healthcare is delivered retail. So if you can reduce the costs for, say, 20,000 people in one setting, you can duplicate that situation seven times and do it for 140,000 people. The questions, for me, are not so much how big the group is, but what kind of group: Employed? Really poor? Illegal immigrants, so not even able to get Medicaid? On Medicare? Dual eligible? As well, some of the specifics of, for instance, the Alaska Natives solution derive from their cultural context. The lesson there is not: “Cookie-cutter what they do,” it’s “Copy the way that they came to a culturally-specific solution, because all solutions need to be tailored to their situation.”

    > “smarter, earlier” help only works if that intervention will change behavior over the longer run… there is zero evidence on that front

    Actually, not so. The success of some of these and many other programs rests precisely on changing behavior. What we have learned from the clinical experience is not, “You can’t change behavior,” it’s “You can’t change behavior by telling the patient to change their behavior in a 7-minute encounter every six months.” It takes a far more trusted and consistent relationship to help people change their behavior.

    > tech companies not taking on risk

    No tech product in itself will create the necessary changes in healthcare. They can be very useful in the project, but they can’t create it. More to the point, some of the payers pushing these new arrangements actually do make guarantees — if you follow this wellness/customer engagement program, and you don’t save money, we’ll refund the fees you paid us for the program.

  4. Most of them, in different ways. That is, most are not strictly fee-for-service, but depend for their pay and continued existence on their outcomes. Vermont Blueprint, of course, is rather new at going statewide. The teams are paid as salaried positions. I would imagine that their continued existence depends on getting real results consistently. Who is really “at risk” for their outcomes are the people paying them, a coalition between Medicare, Medicaid, and the states’ private payers. This is actually a part of the model that seems particularly effective: They are paid by the “at risk” entity (the payers) but they are clinician-led teams operating in the clinical environment.

    Atlantic City Special Care Center is in a similar situation: Paid not fee-for-service but directly by the “at risk” entities, in this case the AtlantiCare health system (for its employees) and the union for the casino employees.

    Camden Coalition of Healthcare Providers is tiny, and has been struggling to find any funding for what they do beyond fee-for-service Medicaid. They just recently got a bill allowing them to get some funding kicked back out o the vast sums that they are saving New Jersey Medicaid.

    Alaska Natives Health Service has, I believe, a mixed payment structure, including some fee-for-service Medicare, Medicaid, and private payment, along with some Indian Health Service money. So they are not, strictly speaking, at risk for the health of their population. My impression is that they “act as if” they are at risk, because they are so tightly identified with their patients. These aren’t just “customers,” these are “us.”

    Boeing Outpatient Intensive Care: Boeing is a self-funded enterprise, so any money they save goes right to the bottom line, so yes, they are “at risk.” This does not give them an incentive to undertreat, because productivity, early retirement, and turnover among their highly-trained employees.

    Orriant Healthcare is a consulting company. It sets up the programs. I believe most of their clients are in Boeing’s situation: They are self-funded, so that the savings go directly to the bottom line.

    You can also look at Blue Cross/Blue Shield of Massachusetts’ Alternative Quality Contracts, which they have 40% of their members on — and hope to up that to 60% this year. They are risk contracts in which the providers are at risk for both the health (measurable health markers and outcomes) and health costs of the people they serve. They have not actually cut premiums yet, though they have slowed the rise, and on some contracts have had no increase this year. I believe, though, that the mechanisms they set up will result in actual cost reductions over time.

  5. I want to hear more detail regarding YOUR proffered solutions.

    ” ‘leaner and smarter’ health care”

    Is doable and is being done.

    “the fallacy is in the scalability of these relatively tiny pilot programs… there is not a shred of evidence to date that any of these work or can work across much broader populations.”

    Yeah, but then you get the “top-down mandate changing 1/6th of the economy” complaint. I really tire of these “perfectionism fallacy” beg-offs. CER is a non-starter because it won’t be perfect. Government (which is US collectively) can’t do anything right. Pilot programs are worthless. ____________ is worthless, blah. blah, blah…

    “point of service price and innovation”

    Can’t disagree in principle, but then you have the problem of short to medium term proprietary business intel survival advantage. Joe has written at some length about this (it’s really just Prisoner’s Dilemma), as has J.D. Kleinke.

  6. joe- you can also look at Bridges to Excellence…

    the fallacy is in the scalability of these relatively tiny pilot programs… there is not a shred of evidence to date that any of these work or can work across much broader populations.

    not sure if you actually take care of patients (I have for 25 years in nearly every setting)… but “smarter, earlier” help only works if that intervention will change behavior over the longer run… there is zero evidence on that front…

    if the tech companies that are creating these new magical data mining projects are actually willing to be a PART of the risk-bearing contracts — that is to say, that their products are so good that they will change the system — let me know…

    I have not yet seen this at THCB or anywhere else… they all want providers/ hospitals, facilities, etc., to pay for their product and, more importantly, the ongoing training and service — while making claims about ‘leaner and smarter’ health care… in other words, pay for this great product, but you take the risk if it does not work as we intend…

    any wonder for the cynicism across the hc community?

    A complete revamping of the nature and benefit of government assistance programs, and the revamping of the private marketplace away from insurance company run provider networks in favor of point of service price and innovation makes much more sense…

  7. > the possibility of enormous profit in the $2.6 trillion hc market is WHY there is such high tech interest and investment to begin with

    Of course. But there is likely to be enormous profit in helping the system become leaner and smarter. A lot of these companies are betting that way.

  8. > then modifying their usage– through bureaucratic fiat (government or private, or most likely a combination).

    You state this as if you know this, and it is the only possible outcome. That is the method most often tried — simply ration care, or cut people out of the system. If they are part of a population that your organization has taken on risk for, you by definition cannot simply cut them out. You have to manage their utilization by giving them more, smarter, earlier help. I’m not making this up. It works. Search keywords: Vermont Blueprint, Atlantic City Special Care Center, Camden Coalition of Healthcare Providers, Alaska Natives Health Service, Boeing Outpatient Intensive Care, Orriant Healthcare — those are a few examples.

  9. Each population has its outliers, its high consumers of resources. The question for each organization managing the health and healthcare costs of some slice of the population is what to do about them, how to manage those consumer of lots of resources. If the organization is at risk for those costs, the most efficient way of dealing with them is more care, but smarter, earlier, closer to the customer.

    By the way, people provided for by unions, Kaiser, and Medicare are not mutually exclusive sets.

    > You think a union does not have control?

    I can’t even parse your meaning. In the programs I am talking about, use of the union’s clinic is entirely voluntary. The members and their families can choose to use different doctors, just as before as provided in their health plans.

  10. 5% of patients = 50% of costs

    that is independent of any of this geographic datamining…

    ultimately, slowly the growth of costs will involve some mechanism of identifying the highest utilizers of health care services, and then modifying their usage– through bureaucratic fiat(government or private, or most likely a combination).

    all this post will do is (a) help marketing (b) be used to make access to services more challenging for those lower utilizers of care — for whom the barrier to getting, say, an mri for 9 months of shoulder pain that they treated on their own or with CAM therapies — will engender greater and greater resentment of the system.

    additionally, those who are simultaneously placing enormous stock in high tech and the evils of profit in health care are, sadly, visually impaired to themselves — the possibility of enormous profit in the $2.6 trillion hc market is WHY there is such high tech interest and investment to begin with…

  11. A selected population like a union is not representative of the population that is bankrupting Medicare. Same thing for Kaiser. It never was a real representative population.

    You think a union does not have control?

  12. Nothing magnanimous about it. Any business model that would depend on the warm-heartedness of the risk-bearing organization would be stupid and unworkable. I don’t detail the entire business model here because I was just writing about how GIS will influence strategic decisions, and I write a lot about business models elsewhere.

    These modern ACO-like risk-bearing organizations are at risk not just for the _health cost_ of their panel of patients, but for their actual _health_. That is, there are quality markers built into the contracts. If the providers don’t meet the quality markers, they don’t get paid. The quality markers include medical process markers, medical outcome markers, and patient satisfaction. If the patients end up in the ER or the hospital, that comes out of the contract, so it is in the providers financial interest to keep them out of the ER and the hospital — but they can’t just refuse to send them to the hospital or treat them. The providers don’t have that coercive power, and if the providers don’t treat the patients, they will miss their quality markers and not make a profit.

    None of these business models are perfect, but there are ways to structure risk-bearing contracts so that they align the providers’ interests with those of the patient. These are not theoretical. They exist.

  13. You have made up some universe in which what I am talking about is coercive. It is not. I am actually describing what is already out there in some locations. Yes, and some of them are clinics sponsored by unions, where the unions run the health plan, and the union members like them. They go to them because it is cheaper and more convenient than to run downtown to see a doctor. It is not true that the risk-taking organization has to have “control,” they merely have to have convenience. When people cooperate with a care manager, they do so at their own choice. And it does work, if I can define “work” as “providing high-quality primary care at lower cost to more people at their option.”

  14. What makes you think that “providers” taking risk will act more magnanimously that insurers taking risk for patients?
    We do know how insurers dealt with “risky” patients. Corporate “providers”effectively transformed into insurers, will do the same.
    The worst thing we can do for the sick and poor is to forcefully align “provider” interest with insurers and do away with the independent doctor’s ethical obligations, or whatever is left of them.
    But, hey, we’re doing it anyway…. and we have much better tools to ferret out the “losers”.

  15. ” So we will see a lot of “forward stationed” clinics in workplaces, union halls, schools, convalescent homes, neighborhoods, wherever the risk-contracted population hangs out.”

    And will we have precinct bosses to round you up when you have failed to get your blood pressure checked? Will they come door to door to check your blood sugar? Will they come and smeel your house inside to see if you or anyone else is smoking?

    Are you kidding? No organization is going to take on a population and be at risk for their outcome unless they have control, not just presence.

    This is nothing more than the managed care model on steroids. It does not work.

    Fund the patient’s HSA and let them keepp what they do not spend. As far as the government is concerned, the cheapest patient is a dead patient. Once the poor risks are gone, the quality looks alot better. and is a lot cheaper.

  16. 1. You can’t “redline” when you are at risk for the population.
    2. “…dots on a map…HIPPA compliant…” Huh? You don’t need to blind data internally to analyze your own operations.

  17. “In an economic environment in which providers are increasingly at risk for the health and health costs of populations, this information will drive a lot of strategic decisions.”

    Let’s hope that doesn’t extend to a return the bad old days of, in effect, “redlining.”

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