Healthcare’s Silicon Valley problem: can startups really work with healthcare organizations?
Startups and healthcare organizations: fundamental foes or perfect partners?
When opposites attract: how startups and healthcare organizations can improve care together
Silicon Valley wants to love healthcare. The industry is enormous and full of inefficiency, which is to say, perfect for technology investment. So it comes as no surprise that venture money in healthcare technology startups has quadrupled since 2011 to $4.5BN in 2015. Moreover, the government wants to invite Silicon Valley-style innovation in healthcare. In January, CMS leaders stated that the next wave of EHR policy will focus on promoting startup innovation in healthcare by incentivizing open APIs and interoperability. Everyone agrees—so let’s just get going, right?
Here’s an important truth to recognize on the eve of what some like to call the “disruption of healthcare”: Silicon Valley and healthcare are fundamentally at odds. In technology we fail fast, launch and iterate, proudly make mistakes and learn from them. In medicine, the first principle is “do no harm.” Entrepreneurs are obsessed with growth–exponential growth, hypergrowth, 10X growth–and the faster the better. Conversely, in healthcare organizations, progress is measured in months and years. My company is currently in Y Combinator, a three-month accelerator program. I have had phone calls with healthcare organizations that took longer than that to schedule.
The philosophies and operations of the two world are at odds in many ways. Too many well-intentioned startups have come up against these tensions and lost steam.
Despite this, healthcare organizations and startups can make perfect partners. I believe more startups should try to serve healthcare organizations, and more healthcare decision-makers should choose to work with startups. Here are some lesser-discussed advantages for both sides.
The conventional wisdom in the circles I hang out in – pro-Hillary, morally conscious,happy bunnies who pretend to enjoy French wine and opera – is that the greatest scourgeon humanity after the bubonic plague is inequality of wealth. They worship Pope St. John Paul Piketty and canonize Archbishop Paul Krugman. Not only is inequality bad for its own sake, they say, it makes people ill, like medically ill.
Their premise always struck me as specious. I once took them through a thought experiment. Imagine, I said, you time travel to the Bengal famine. There was a lot of equality then – people were equally malnourished. Everyone’s ribs protruded equally because of muscle wasting from marasmus. The loss of protein from kwashiorkor made sure everyone’s belly popped out without prejudice. Starvation because of poverty is a great leveler. It cares little about gender, caste or religion. It is non-judgmental.
The fact that I was once the CEO of a health insurer may cause you to read this with some skepticism.
I invite and challenge your skepticism. And I will do my very best to keep this piece strictly factual and not stray into the ambiguities that necessarily accompany complicated matters.
So bear with me.
Health insurers are not popular. No one wants to go to the prom with us. We have been vilified by no less than the President of the United States. Heady stuff. Let us see if this vilification and what I call the cartoonization of insurers has served us well in the healthcare debate. I think it has not, because for reasons I hope to make clearer, it has taken the focus away from the real causes of our cost and quality nightmares.
Health insurance started in the Depression with the Blues, although they were not at first called that. They typically were formed by hospitals (the Blue Crosses) and physicians (the Blue Shields), so that some payment for services rendered might be, well, “insured.” Provider self interest cloaked in the public interest. Perhaps there was alignment. And there was a Depression going on after all.
At first, the role of the health insurer was strictly financial. The insurer financed all or a portion of covered health services, and far, far fewer services were covered then than today. That’s all an insurer did or was expected to do. It was not there to manage doctors or hospitals or patients or anything else. Originally, this financing was done through “indemnity” plans, which allowed patients to see anyone they wanted, and paid a set dollar amount per service or per day of hospitalization (e.g., $50/day of hospitalization). Thus, if you chose a more expensive provider, the difference was on you. Insurers back in the day did not negotiate reduced fees with providers (“fee discounts”). It was much more civil then.
The Washington Post recently ran an article by Marlene Cimons, a Medicare Part D drug plan enrollee. Her late father had been a pharmacist and he had owned a drugstore while she was growing up. She thought it would be nostalgic to patronize a neighborhood drugstore rather than a big chain pharmacy. She found a neighborhood drugstore in her preferred pharmacy network and had her prescription transfer there. She was stunned, however, when a 90-day prescription that should have required only a $3 co-pay turned out to be $58.
When she inquired the drugstore claimed it stood to lose money on her particular prescription. Who knows; maybe its profit margin wasn’t as high as the pharmacy thought it should be. In order to fill her prescription the drugstore basically required her to willingly pay an extra $55 more than its contractual agreement stipulated. Of course, that violated the contract the drugstore had signed with her Medicare Part D plan. The agreement the pharmacy had signed with her drug plan did not allow it to arbitrarily charge higher prices and Ms. Cimons left without her prescription.
MACRA (the Medicare Access and CHIP Reauthorization Act) is a mess. It is extremely difficult to comprehend, it is based on assumptions that defy commonsense and research, and it may raise costs.
The Medicare Payment Advisory Commission (MedPAC) would never say what I have just said, but MedPAC definitely understands MACRA’s defects. The transcripts of MedPAC’s October 8, 2015 and January 15, 2016 meetings indicate that members and staff perceive daunting impediments to the implementation of MACRA. But those transcripts also suggest that MedPAC won’t tell Congress to rewrite or repeal MACRA. Rather, the evidence suggests MedPAC will mince words. It appears MedPAC will send CMS and Congress a few wishes dressed up as “principles” and wait for MACRA’s inevitable failure before offering more useful advice.
Before I attempt to explain MACRA, let me first convey to you MACRA’s mind-numbing complexity by quoting four commissioners. Each statement below is followed by the last name of the commissioner who made it, the date the statement was made, and the page number of the transcript where the statement appears.
Well, it’s not Zika and it won’t kill you, but pornography is being discussed—seriously—as a public health problem, even a “crisis.”
The path to this claim is a long one, with a slow burn over many years. It was kicked into higher gear in recent months with:(a) legislative action in one state;(b) a coverstory in TIME magazine (April 11 issue);(c) a Washington Post op-ed piece by anti-porn advocate Gail Dines; (d) a response to that in Atlantic Monthly; and (e) the publication of two books that discuss at length the effect of porn and the new sexual culture on teen girls—American Girls-Social Media and the Secret Lives of Teenagers by Mary Jo Sales and Girls & Sex-Navigating the Complicated New Landscape by Peggy Orenstein.
The legislative action took place in Utah. The Republican-led House of Representatives in that state became the first legislative body in the nation to pass a resolution declaring pornography “a public health hazard leading to a broad spectrum of individual and public health impacts and societal harms.” Dines and her fellow anti-porn crusaders want to carry that fight to other states.
This is going to be fun to watch! (Pun intended.)
The annual Lown Institute Conference advocates for the “right” kind of patient care, as in “the correct course of action.” But the political meanings of “right” and “left” also echo, sounding like a healthcare version of the recover-lost-glory demands of Donald Trump and the moral crusade of Bernie Sanders.
The program for this year’s meeting, held in Chicago, urged attendees to “take back health [care];” you could almost hear a Trumpian, “Make medicine great again!” In an opening address, the institute’s senior vice president, Shannon Brownlee, proclaimed, “We are gathered out of a shared sense of moral purpose and a shared sense of outrage at the state of American healthcare.” The targets of that outrage that “we” need to take back healthcare from comprised a Sanders-type litany of the “pharma, biotech and device companies…[who] have illegally marketed products.”
There was one more villain, very carefully defined. That would be “a culture of overtesting and overtreatment…[that] harms patients, clinicians and communities.” Got that? While Brownlee’s acclaimed 2007 book, Overtreated, repeatedly highlights the abuses of fee-for-service medicine, the Lown Institute’s namesake founder and its president are academic physicians. And so, the doctors and hospitals responsible for and often profiting from overtreatment magically become just one more set of victims of the “culture.”
Ideological blinders notwithstanding, the institute’s work celebrates and highlights an impressive array of individuals working diligently for every conceivable kind of “right care.” There was Dr. Jeffrey Brenner, a Camden, NJ family physician whose description of his dogged, data-driven efforts on behalf of the poor and sick brought a standing ovation. And Dr. Joanne Lynn, a long-time advocate for the frail elderly, explaining why a MediCaring community model that mixed medical and social services was what the vulnerable old and their families really needed.
April 22 marks the 400th anniversary of the death of the greatest novelist who ever lived, Miguel de Cervantes. Though the day will pace unnoticed by most physicians, it is in fact one many should note. Why? Because both his life and work can serve as vital sources of inspiration and resilience for health professionals everywhere.
In a 2002 Nobel Institute survey, 100 of the world’s most highly regarded writers named his Don Quixote the greatest novel of all time, outscoring its nearest rivals –works by Dickens, Tolstoy, and Joyce – by more than 50%. Said the head judge who announced the results, “If there is one novel you should read before you die, it is Don Quixote.”
What does the Medicare Access and CHIP Reauthorization Act (MACRA), signed into law in 2015, mean for healthcare organizations and providers? At HIMSS 2016, the CMS Center for Clinical Standards and Quality Director, Kate Goodrich, MD, stated MACRA’s goal: “to have a single, unified program with flexibility. The new Merit-Based Incentive Payment System (MIPS) will offer that flexibility and not be a one-size fits all program. The new rule will reimburse physicians based on four factors.”
Health systems are still waiting for additional details about the “four factors” Goodrich mentioned (listed in this article under “MIPS”) or how CMS will reward providers for delivering better care. We’re aware of MACRA’s general structure, but still waiting for clearly defined rules and regulations. Until then, it will be difficult to evaluate this new law.
Even though health systems are currently in a waiting period for clarifying details about the proposed MACRA regulations (with major impacts in 2019), MACRA’s base year will likely be 2017—and 2017 is just around the corner. This article provides an overview of MACRA and guidance about what health systems should do to prepare for MACRA now.
Alzheimer dementia mortality is increasing in the United States, while heart disease and cancer death rates have decreased at least 25% recently.1 New cardiac and cancer treatments frequently make headlines. However, the assessment of Alzheimer’s therapy is stark: “…there are currently no treatments that change the course of this progressive brain disorder,” [original italics] so stated in the 2014-2015 Alzheimer Disease Progress Report by the National Institute of Aging (NIA).2
President Obama signed the National Alzheimer’s Project Act in 2011, with a goal of having effective therapy by 2025. Now five years later, clinicaltrials.gov lists fewer than 120 Alzheimer drug trials in the US recruiting subjects, with nearly 500,000 new patients each year. Heart disease has almost 800 drug trials, while adult cancer has almost 4000 drug trials listed.
Clinical research efforts in a disease are reflected by the number of pertinent clinical trial publications. We examined Pub Med data along with US mortality statistics to show the juxtaposition of those measures for Alzheimer’s disease, heart disease, cancer and six other leading causes of death, (Figure 1).3,4
Reductions in US disease mortality have been proportional to the number of trials conducted in each disease except Alzheimer’s, during the years 2000-2013. Alzheimer’s disease is a significant outlier, since mortality is increasing while the number of peer-reviewed publications lags behind other conditions.