Market for cloud-based storage of radiology images to reach $5.4B in 2017, 70% of health care organizations planning on health information exchange participation after half million personal health data downloads, Blue Button expands to most federal health care plans | Your weekly health tech news now on the Health 2.0 News Blog.
In last week’s Wall Street Journal, Princeton economist Alan Blinder exposes four myths about the federal deficit. He saves the most important myth for last. After noting that the long term deficit problem does not cut across all areas of spending, he observes that the problem is almost entirely rooted in the need to fund Medicare and Medicaid. If we base future spending projections on past trends, then Blinder is absolutely correct. Spending growth on Medicare and Medicaid nearly always outstrips the growth in tax revenues. The main contributors to spending growth – demographics, labor costs, and, especially, technology – are likely to keep this trend alive indefinitely. Blinder challenges us to focus the debate about the deficit on the key facts, which essentially means that we should focus on Medicare and Medicaid spending. Let me take up his challenge.
Let’s start with the obvious debating points. There is a lot of fat in both programs. CMS just acknowledged that as much as 10 percent of spending in Medicare and Medicaid is “improper.” This does not include spending on defensive medicine, unnecessary services demanded by fully insured patients, unwarranted variations in practice, and all the other usual suspects. Nor does it reckon with all the waste due to poor health behaviors, although eventually the grim reaper will have his say and dying is usually very costly no matter how well you have pampered your body along the way.
Lots of health startups out there are trying to zero in on ideas that will improve the lives of patients with chronic conditions. And even though patients are the target audience of this technology, companies seem to be designing their products by first asking, “What will health care providers and and health insurers pay for?” It makes sense, assuming that these two groups will foot the entire bill for electronic health (e-Health) innovations. But it doesn’t make common sense. Why not design the tech for those who are going to use it in the end?
The discussion came up at the Digital Health Summit, a two day conference at the International Consumer Electronics Show. Health 2.0′s Matthew Holt moderated a segment called “Who’s Paying the Bill for e-Health?” When Holt asked a panel if consumers would be willing to pay, Senior Advisor of of the American Association of Retired Peoples Bill Walsh indicated that most AARP members would answer “no.”
“What they’re telling us about mobile health is, ‘Gee, this is interesting but why isn’t my insurance company paying for this? This is just another medical device,’” Walsh said.
Perhaps Newt Gingrich’s book Saving Lives & Saving Money has been quietly redacted of a few lines since its original 2003 printing, because otherwise a simple read of the copies now in circulation would find a blueprint for Obamacare just like the first printing did. I dusted off my old, autographed, copy and re-read it, and am providing some highlights for THCB readers.
Much of the book does propose market-based solutions, such as the use of disease management programs to “dramatically improve outcomes.” However, the book also calls for bigger government, in the form of (1) drug coverage for seniors (since passed) and (2) a “tripling” of the National Science Foundation budget.
In addition to those two specific calls for increased government spending, the first printing contains language that might comfort Don Berwick more than Fox News, and not just because Dr. Berwick gets favorably mentioned twice.
Some samples:
P. 31: “The number of uninsured in America is a threat to our civilization.”
P. 54 “Don Berwick[has] pioneered the translation of the teachings of quality experts such as Edwards Deming and Joseph Juran to the healthcare profession.”
P 59 “It is justified to mandate the use of electronic systems to drag the medical system into the 21st century.”
I will suggest that most of us believe the way to control health care costs, and at the same time maintain or improve quality, is to both use the managed care tools we have developed over the years, and perhaps more importantly, change the payment incentives so that both cost control and quality are upper most in the minds of providers and payers.
The Congressional Budget Office (CBO) has just released an important review of Medicare’s results in testing those ideas. The news is not good.
From the CBO’s blog post:
In the past two decades, Medicare’s administrators have conducted demonstrations to test two broad approaches to enhancing the quality of health care and improving the efficiency of health care delivery in Medicare’s fee-for-service program. Disease management and care coordination demonstrations have sought to improve the quality of care of beneficiaries with chronic illnesses and those whose health care is expected to be particularly costly. Value-based payment demonstrations have given health care providers financial incentives to improve the quality and efficiency of care rather than payments based strictly on the volume and intensity of services delivered.
In an issue brief released today, CBO reviewed the outcomes of 10 major demonstrations—6 in the first category and 4 in the second—that have been evaluated by independent researchers. CBO finds that most programs tested in those demonstrations have not reduced federal spending on Medicare.
If you’re a hammer, you just want to smash nails; if you’re a programmer, you just want to build features. But features do not a successful product make. This is the central myopia that eventually blinds even the most brilliant engineer-entrepreneurs, unless they’re smart enough to surround themselves with people who can check their bias.
If you want an interesting example of this phenomenon, look no further than Adam Bosworth, the co-founder and chief technology officer at San Francisco-based health gamification startup Keas. There’s no question about this guy’s brilliance. At Citicorp in the late 1970s, he invented an analytical processing system that helped the bank predict changes in inflation and exchange rates. At Borland, he built the Quattro spreadsheet, and at Microsoft, he built the Access database. He was one of the first to propose standards for XML—the foundation of most Web services today. At Google, he helped to develop Google Docs before moving on to start Google Health.
But as everyone knows, Google Health was a failure—and so was Bosworth’s next effort, Keas, at least until the venture-backed startup went through a dramatic pivot in 2010. How Bosworth figured out that his old approach wasn’t working, and how Keas reinvented itself as a provider of health-focused games for large employers, is the tale I want to tell you today.
I’ve had the luck to attend medical school in the city of San Francisco during what will be looked back on as the start of transformational change in our health care system. My growing interest in technology and new business models as the disruptive forces behind this change, as well as marriage to a technology entrepreneur, has me frequently rubbing elbows with movers and shakers in the digital health space. One question I constantly receive (other than how I feel about being replaced by a computer) is how to get ideas and products in front of practicing physicians for product feedback or to test the market. Even more commonly, I’m asked why we are so resistant to technology and change in the way we practice. My reply usually takes some form of the following.
1. Show us the data.
The robust system medicine has developed for testing innovations in clinical care, disseminating these ideas, and transforming practice standards is being entirely overlooked (or alternatively scoffed at for being too cautious and slow) by most entrepreneurs. We insist on data to show that the newest pharmaceutical drug, procedure, or implantable device is safe and at least as efficacious as placebo, (and due to comparative effectiveness, this may soon become as compared to the standard of care). It should not be any different for an EKG iPhone app I use to rule out a myocardial infarction in your mother, or a motivational weight loss app the patient invests days of their time into with no results. These are not restaurant recommendations where a failure means bad sushi. These are people’s lives and well being, and we feel it’s unethical to start recommending unproven products.Continue reading…
The huge fuss over Paula Deen’s type 2 diabetes is understandable. She is, after all, the queen of high-calorie Southern cooking. And diabetes rates are especially high in the South.
Perhaps less understandable is the reaction of the American Diabetes Association. As reported in the New York Times,
Heredity, according to the American Diabetes Association, always plays some part. “You can’t just eat your way to Type 2 diabetes,” said Geralyn Spollett, the group’s director of education.
Wrong. You most definitely can eat your way to type 2 diabetes.
Type 2 diabetes is closely linked to overweight and obesity. No, not everyone who is overweight develops type 2 diabetes. But most people who have type 2 diabetes are overweight.
The solution to the nation’s long-term deficit problem is generally portrayed as a choice among sharp budget cuts, major tax increases or a combination of the two. Given the magnitude of the problem, some level of sacrifice is probably unavoidable. But there is a third, overlooked approach to major budget savings — innovation — that the new congressional supercommittee should also include as a key component of its deficit-reduction strategy.
Innovation in this case is the process of trying a range of promising approaches and using rigorous evaluation methods to determine which of them really work. In many areas of the economy — such as information technology, agriculture and manufacturing — innovation has often identified ways to both reduce cost and improve performance. This has led to amazing progress over time, including exponential gains in computing power over the past half-century at a steadily decreasing price. So a logical question is: Can innovation in policy produce more effective government at lower cost?
The answer is yes. There are proven examples, from U.S. welfare policy and other areas, where innovative reforms produced major budget savings while simultaneously improving people’s lives. This suggests that part of the answer to our deficit problem lies in American ingenuity and not just sacrifice.
According to an article in CNN, some doctors in the U.S. are going broke. Read it here . I feel sorry for anyone who goes broke, but this is not unexpected.
According to the author, some doctors have unsustainable debt and are facing reimbursement reductions by insurers. A good question is why the unsustainable debt? After all, many of our institutions have become bloated and can’t adapt to the economic downturn.
The article mentions a cardiologist who is going broke. According to a StudentDoc survey, the average cardiologist makes $403,000 per year. The average cardiovascular surgeon makes $558,719 per year. That’s not bad in either case.
My point is a lot of very highly paid people in every walk of life end up in bankruptcy. No matter how much you make, you can always spend more. I believe the health care industry has been as guilty of over-optimism as the real estate and finance sectors.
People have been saying for years that many clinics and hospitals will face a solvency crisis brought on by excessive borrowing to fund sleek new facilities and excessive purchases of uber-costly medical equipment. Some doctors became wealthy during the good years, and some of them made purchases not easily retracted now that the economy has turned down.
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