Category: THCB

Regression to the Mean

You may have heard about the Sports Illustrated Effect, the notion that people who appear on the cover of the magazine are likely to experience bad luck, failure, or a career spiral.

Over the 30 years of my own professional life, I’ve watched many colleagues become famous, receive significant publicity, then fail to live up to the impossible expectations implied by their fame. They regress to the mean. Nature seems to favor symmetry. Things that rise slowly tend to decline slowly. Things that rise rapidly tend to drop rapidly.

Fame is usually a consequence (good or bad) of invention, innovation and accomplishment. Fame itself is generally not what motivates a person to accomplish their feats. An Olympic athlete is usually inspired because of a highly competitive spirit. An inventor is usually inspired because he/she believes there is a better way. Fame that is the consequence of a feat can affect future behavior. It can become an intoxicant and motivate someone to strive for accomplishments that keep the fame coming.

I’ve thought about my own brushes with fame.

When I was 18 and started at Stanford, I realized that my scholarships would only cover the first year of tuition. I visited the Stanford Law library, read the US tax code and wrote software for the Kaypro, Osborne 1, and CP/M computers that calculated taxes. The software shipping from my dorm room generated enough income to start a small company. When the PC was introduced, we were the first to provide such software to small businesses seeking to compute their tax obligations. By the time I was 19, I moved into the home of Frederick Terman, former Provost of Stanford, and the professor who first encouraged William Hewlett and David Packard to build audio oscillators and form a new company called HP. The story of a 19 year old running a software company and living in the basement of founder of HP was newsworthy at the time. I did interviews with Dan Rather, Larry King, and NHK TV Japan.Continue reading…

HIMSS11 Recap

“We just need to do it.”  That’s the comment I heard from a hospital CMIO on a HIMSS shuttle bus Thursday morning. He, of course, was talking about “meaningful use,” the standard by which providers will qualify for federal Electronic Health Record (EHR) subsidies. This year’s edition is the first HIMSS conference since the incentive program started in October (for hospitals) and January (for individual providers).

Yet, HIMSS11 was not all about meaningful use. “Meaningful use in some ways fell off the radar,” another CMIO said on the same bus ride. The new buzz—and source of anxiety—is about Accountable Care Organizations.

The healthcare world is waiting nervously for HHS to release its proposed ACO regulations. HHS Secretary Kathleen Sebelius was on hand for a keynote address Wednesday morning, but gave no hint of when the regs might come. Instead, Sebelius and departing national health IT coordinator Dr. David Blumenthal mostly stuck to their general stump speeches, perhaps not wanting to stir up political controversy in this time of divided government.

In some ways, Blumenthal’s presence at HIMSS was notable for something he didn’t show up for. Deputy National Coordinator Dr. Farzad Mostashari, likely to be the interim coordinator when Blumenthal returns to Harvard in April, led the ONC town hall on Tuesday. Mostashari caused some seismic ripples through much of the vendor community on Monday by saying that ONC will be working with the National Institute for Standards and Technology and other organizations in the next six months to find ways to measure EHR usability, and that usability likely will be part of Stage 2 meaningful use, starting in 2013.Continue reading…

Jonathan Bush @HIMSS11

We caught up with always outspoken athenahealth CEO Jonathan Bush backstage in Orlando.

OCR Imposes $4.3M Penalty for Violation of HIPAA/HITECH Privacy Rule

UNTIL TODAY, many health care providers questioned whether HHS and the Office of Civil Rights (OCR) would ever issue any significant penalties for violations of the HIPAA Privacy Rule. However, will OCR ever be able to collect the penalties.

Today, HHS Office of Civil Rights (OCR) announced a civil money penalty (CMP) of $4.3 million against Cignet Health of Prince George’s County, MD for violating the HIPAA Privacy Rule. This is the first ever civil money penalty issued by OCR for a violation of the HIPAA Privacy Rule. It is significant not only because it is the first – but also because of the size of the penalty and the basis for the violation.

OCR issued a Notice of Final Determination on February 4, 2011, outlining the procedure for payment of the $4.3 million civil money penalty. The Notice of Final Determination also indicates that Cignet failed to request a hearing on the matter or reach settlement with OCR. Prior to the issuance of the final notice, OCR had issued a Notice of Proposed Determination on October 20, 2010, which details the basis for the penalty, details the findings of fact, grounds for violation of HIPAA, and calculation of the penalty amount.Continue reading…

Two Kidneys and 100,000 Lives

This story about a kidney transplant mix-up in California is bound to get lots of coverage. It is these extraordinary cases that get public attention. I am sure it will lead to a whole new set of national rules designed to keep such a thing from happening.

Of course, such rules already exist, and it was likely a lapse in them that led to this result.

Nonetheless, we will “bolt on” a new set of requirements that, in themselves, will likely create the possibility for yet a new form of error to occur.

This kind of coverage and response is a spin-off from the “rule of rescue” that dominates decisions about medical treatment. We find the one-off, extreme case and devote excessive energy to solving it. In the meantime, we let go untreated the fact that tens of thousands of people are killed and maimed in hospitals every year.

Those numbers are constantly disputed by the profession. To this day, many doctors do not believe the Institute of Medicine’s studies that documented the number of unnecessary deaths per year.

And you never hear anyone talking about this 2010 report by the Office of the Inspector General, which concluded:

An estimated 1.5 percent of Medicare beneficiaries experienced an event that contributed to their deaths, which projects to 15,000 patients in a single month.

As the IOM notes, “Between the health care we have and the care we could have lies not just a gap, but a chasm.”

There is an underlying belief on the part of policy makers and public and private payers that the focus on quality is best addressed through payment reform. Let me state as clearly as I possibly can: That is wrong. It is a classic example of the old expression: “When you have a hammer, everything looks like a nail.” Changes in payment rate structures, penalties for “never events,” and the like can cause some changes to occur. Their main political advantage is that they give the impression of action, and their major financial advantage is a shift in risk from government and private payers to health care providers.Continue reading…

HIMSS11 Update from the Chairman

As the Chairman of the board of HIMSS, the Health Information Management Systems Society, which is the largest information technology organization in the world, I’ve been very busy at our annual conference in Orlando, Fla.

As I move through this enormous venue, talking to as many of our 30,000 attending members as possible, I can’t help but think about how much work we all have to do in the coming years.

As healthcare and IT professionals, we are privileged to live at a moment in history when the work we do, the product of our shared passion, the professional discipline to which we devote so much of ourselves, is taking its place as the central catalyst of a transformation in healthcare that is in many ways, unprecedented.

Whereas previous breakthroughs in medical technology, such as the invention of the X-ray or the discovery of antibiotics, have obviously been profound, and powerful; I can think of none that ever impacted the entire medical practice model.

And that is exactly what the technology-driven transformation of healthcare is poised to deliver.Continue reading…

Let’s Face(book) the Hard Truth About Healthcare

‘In the time when new media.

Was the big idea.’

These two lines at the end of the album track  ‘Kite’ earned U2 a place in a recent list of suspect popular song lyrics. Some Health 2.0 vendors are also struggling to get ‘social media’ to rhyme with  ‘healthcare’ but will no doubt carrying on trying to do so. With Goldman Sachs throwing $1.5 billion in Facebook’s direction it makes sense for anyone in the online health business to position themselves as close to the social media company as possible, on the off chance that they will be able to pan a few nuggets out of the fast flowing stream of cash.

While no doubt some of the funds the bank is putting together will be used for healthcare related applications it is not immediately obvious what Facebook can do that Google and Microsoft have not already tried. Both these companies are trying to sell to healthcare providers whose business models if they do exist are confused and, in some cases failing. One way to gain a better understanding of the healthcare market is to view it as a mathematical equations that can be solved by eliminating one variable at a time.

So What If The UK’s National Health Service Did Not Exist?

You log on to and are greeted with a message saying “Sorry, this service has been discontinued. The UK government can no longer afford to provide you with healthcare.” And that is it, apart one last piece on advice. “Please take care.” This presumably aimed at Darwin Award candidates who were hoping to break the land speed record using fireworks and a skateboard and fully expect the local hospital to fix any resulting damage. Also perhaps directed at anyone with a grumbling appendix thinking of entering a baked bean-eating contest. (More about these people later.)

So what difference would it make if there were no healthcare provider? For a start everyone in the UK, apart from the 1.3-million ex-NHS workers, would be £1600 a year better off. A young person leaving school would have saved enough to pay for their university education. A young couple in their mid twenties would have saved enough to put a down payment on their first house. OK average life expectancy would fall and the last couple of years (or most likely months) of a person’s life would probably be more unpleasant, but the proceeding sixty five or so years would be a lot better. There, two of the government’s major economic headaches eliminated in a stroke – an unfortunate turn of phrase in this case. With an extra £100 billion per annum sloshing around in the economy most of the 1.3 million former NHS employees would be able to find new jobs.Continue reading…

Computers in 2020

It is 2020.   Computer evaluation of patients before they visit their doctors has come a long way.

Medical records containing  demographic  data,   personal histories,  medication use,  allergies, laboratory results,  radiologic images,  electrocardiograms, rhythm strips, and even the chief complaint and symptoms of the patient ‘s  present illness, as spoken and digitized by the patient,  are available prior to the visit.

These records, synthesized, summarized,  algorithmized,  and otherwise massaged by massive computer banks,  give doctors everything they want to know before seeing ore examining the patient.

  • the differential diagnosis,
  • the most likely cause of the visit,
  • optimal treatment options,
  • a review of recent medical literature in the last 24 hours on the subject,
  • the best current medical practices,
  • the best value for the dollars in the immediate region and at national centers,
  • the best, most cost-effective and results-effective,  specialists  and medical centers  where  to go should further evaluation be needed.
  • the tests and procedures to be done before the patient leaves the office.

This barrage of information is available to consumers and physicians alike before and immediately after the visit.   Furthermore,  with advances in speech recognition,  patients and doctors will be able to talk to the computer in each other’s presence, ask questions, and settle any lingering doubt.Continue reading…

What Venture Capital Can Learn from Emerging Markets

Venture capitalists are increasingly interested in emerging markets, and in working with local funds based in those markets (despite the fact that reverse innovation in venture capital seems counterintuitive). The reason for the interest in in part because the industry has suffered from poor returns on investment over the last decade; indeed, some sectors, including biotechnology, report negative aggregate returns. China and India, in particular, offer attractive liquidity and investment opportunities VCs haven’t seen for a while.

The interesting part of this shift is that VCs are taking a more holistic or “systems” approach to investing than they typically do in developed markets. Traditionally, VCs evaluate each investment as a discrete entity; the firms in their portfolio rarely interact with one another. In contrast, emerging-market VCs such as Nadathur Holdings (established in 2000 by N.S. Raghavan, one of Infosys’ co-founders) create intentional links between firms. Nadathur’s portfolio includes firms operating in drug discovery research, companion diagnostics, pharmaceutical analytics, reimbursement claims processing, patient relationship management, and specialty healthcare delivery for running clinical trials — and they all work together. In effect, the VCs at Nadathur Holdings serve as the executive team for a miniature healthcare innovation ecosystem.

Why do VCs in emerging markets take a systems approach? Because of three significant challenges innovators face in emerging markets:

  1. Innovation ecosystems are not well-developed. The supporting industries that an early-stage tech start-up needs simply don’t exist locally. VCs encourage upstream and downstream, often service-based, investments. These can be exited at lower multiples, with the trade-off of higher success rates for the R&D-intensive high-multiple investments.
  2. Technology-intensive firms are expected to generate revenues before they make an exit; local investors are reluctant to put money into start-ups centered on intellectual property. Portfolio firms upstream or downstream can help establish commercial proof, generate retained earnings and make it easier to get additional customers.
  3. Few local financial intermediaries (including VCs) exist. A portfolio that contains an entire ecosystem helps to decrease risk by allowing inferior business models to be refined or killed faster.Continue reading…

Employers as Doctors

Unless you spend a lot of time around health policy wonks, you’ve probably never heard of the term “value-based health insurance benefits.”  In fact, you may not even know that it’s the hottest new fad in the field.

Here is my layman’s summary: If you are like most people, you are not a very good consumer of health care. Odds are, you will fall for the latest fad advertised on TV or follow the advice you get at the bridge club instead of buying the care that has been scientifically shown to be better for you.

So as a corrective, a lot of employers are finding ways to “nudge” you into better decisions through financial incentives. Say you have a chronic condition and need to take certain medications. Your employer might drop your deductible down to zero (or may even pay your to take them) to encourage your compliance. But for services where there appears to be wasteful overuse (such as MRI scans), the employer might impose a hefty $500 deductible.

This idea intrigued me, so I turned to a rather lengthy article in the Washington Post, which informed that value-based insurance benefits are incorporated into the new health reform law, “including the requirement that new insurance provide free recommended preventive services such as mammograms and colon cancer screenings.”

In the world of big business, this idea is all the rage. One in every five employers employing at least 500 people is already doing it. Four in five employers who employ at least 10,000 workers say they are interested.

So if big business is for it; the government is mandating it; and health policy wonks like it; how could anyone possibly obj-……..Continue reading…


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