Category: Health Tech

David Gratzer is Nice. Dennis Kucinich is not.

6a00d8341c909d53ef0105371fd47b970b-320wi I had David Gratzer on THCB a while back. He was so nice, that it was really hard for me to get mad with him—even though his book was basically a pack of lies. He seriously suggested that the UK under Blair was NHS was going to covert into an American-type system, and he couldn’t answer why he allowed his wife to come here and be uninsured!  (Of course my father the gynecologist always told me that all psychiatrists are nuts anyway)

Then last week the single payer crowd finally got to appear before a Congressional committee, and for some bizarre reason Gratzer was there too (I guess he provided balance).  And the very nice David Gratzer finds that Dennis Kucinich is not quite so nice. Watch this…

Interview with IPC The Hospitalist Company’s Adam Singer

I don't delve into the world of hospitals, physicians and health care operations as much as I should. So when I was asked to interview Adam Singer, the CEO of IPC The Hospitalist Company, the biggest company (and a publicly traded one at that) managing a group of hospitalists–the internists who run patient care in more and more big and small facilities, I thought I should!

What I didn't realize is that not only does Adam know lots about the present and future of hospitalists and how that role has emerged in recent years, he also has some pretty strong views on the relationship between hospitals and doctors (keep 'em separate), bundling (no, thanks) and also the supply of physicians (let in more international docs or we're in a big hole). So it's a wide ranging discussion and one I think you'll enjoy. Here it is.

Canadians? Not as good as us!

Several of my friends in the blogosphere are getting very excited because eHealth Ontario has pissed away a few million dollars and the now fired CEO got more bonus than was seemly. So she gave Accenture and Price Waterhouse Coopers low 7 figure no-bid contracts and it’s now transpired that consultants billed food and random travel for expenses. MrH at HISTalk gives it two separate mentions in his section of the news and Inga piles in as well.

But I must remind you that as in all things Canadians pale in comparison to how we do it here.Continue reading…

Matthew went to Redmond, 2–Bert van Hoof, HealthVault & devices

Continuing my tour around Microsoft’s HealthVault team I met with Bert van Hoof. Bert is the devices guy who showed me lots of ways to get data into HealthVault. If you’re interested in how a power user links devices and data (and if you excuse my amateurish video work), you’ll like this one!

If you’re having trouble with this video in IE, you may need to download the latest FlashPlayer version. (Sorry, our video service Vimeo is having some problems that appear to need the latest version of FlashPlayer. You can do that here. Alternatively Firefox seems to work fin (but don’t let the folks at Microsoft know that I told you that!)

Matthew went to Redmond, part 1– Bill Reid, Healthvault

Last week I went to a search summit in Seattle where Microsoft told us all about Bing, their latest attempt to do something about Google’s Windows-like market share in search. After a quick chat with Health search guru Alain Rappaport,  I ducked out early to go meet with the healthcare team in Redmond—focusing mostly on HealthVault.

Here’s the first of four interviews that THCB will be showing over the next four days. This is Bill Reid, who’s the Director of Product Management for HealthVault. (Excuse the shaky handheld!). Bill gives the latest view from Healthvault about how the roll out is going and what we can expect.

By the numbers, on single payer the Democrats are wussies

Matthew HoltNow before I explain why I say the Democrats are girlie-men, let me say three quick things.

1. I am not a supporter of Medicare-for-all, or Canadian style, single-payer (or anything primarily based on fee-for-service payment) although they are both clearly superior to the American status quo. (I am in favor of real universal insurance, but that’s different and less limited than just single payer).

2. It’s still only 50–50 that we’ll get any reform this year, and what we will get will basically be an expansion of one of the worst-designed government programs—Medicaid—mixed with some very modest regulation of the worst behavior of the private insurance companies. And with the exemptions to the individual mandate and for small business at best we’ll get to around 95% coverage—and that’s not counting the undocumented immigrants, who are about another 3–5% of the population and who will still get care and thus still have to be paid for somehow. And the likely Kennedy/Baucus compromise plan has no sustainable insurance payment structure that I can see.

3. The data is a little murky and all sides kinda cheat with polling data (and bankruptcy data too).

But imagine for a moment that Dick Cheney & George W. Bush had 60 votes in the Senate, a disgraced  opposition, and carte blanche to do what they liked because of a real national crisis (In other words a much better political situation than they faced in 2001 & 2003).

And imagine that there was a policy that their party’s supporters overwhelmingly favored.  Do you think for a moment that they’d be looking for compromise even if what they were doing was egregiously and clearly wrong in both terms of public policy and fairness? For instance, cutting tax rates on dividends to less than half what poor suckers who work for a living have to pay, even though the benefits went largely to millionaires and billionaires. Or even worse eliminating estate taxes, when the benefits went only to millionaires and billionaires.

Actually we don’t have to imagine. We know what Cheney/Bush did. They passed the legislation they wanted, and damn the rest of us. And then did it with way less political clout than Obama has—Bush didn’t even win the election after all in the way most of us understand (err…by getting more votes than the other guy).

Now imagine that there’s a policy that polls show at least 35% and (depending who you believe) perhaps up to 60% of all Americans want, and that the same polls show that a vast majority of Democrats want it. And of course Obama’s political situation is way stronger than the Cheney Administration’s was.

In that situation and if they had a different political philosophy, wouldn’t the Cheney Administration just ram through single payer?

So by the numbers, in not even considering the single payer option (not even Kennedy’s plan comes close), the Democrats are proving themselves to be wussies.

CODA: I changed one letter in one word of this piece so that the humorless crowd in the comments didn’t detract from the real offensive stuff going on here–50 million un and under-insured with no political will to do anything serious about it. But if the comments don’t make sense, my original defense is in there too.

American Well gets busy with guidelines, Optum

Our friends over at American Well have two announcements today. First, they’re releasing what they call Online Care Insight, which is essentially the integration of care guidelines into their online care system. We saw a glimpse into this at the Health 2.0 Hawaii chapter meeting last March (sorry if you weren’t there!). Essentially this is a decision support service that helps physicians figure out if the online visit in front of them is appropriate for online care, and then offers clinical decision support during the visit (such as medication reminders, gaps in care, and other alerts)

The second piece of news is that American Well and Optum Health will be combining the American Well online visit service with Optum’s eSync care management platform. eSync basically integrates the data analytics portion with care management, so that a plan or employer can figure out who’s got what dread disease and reach out to them using a series of different contacts. Usually this means email, or nurse or health coach call. Now an online physician visit is part of that continuum.

(Optum Health is a subsidiary of United HealthGroup, and eSync was introduced at a sponsored Deep Dive at the recent Health 2.0 Meets Ix conference. FD Both American Well and Optum have sponsored the Health 2.0 Conference).

Obviously given United’s scale & Optum’s reach into the self-funded employer market this is big news for American Well and online care. The press release also says that the service will be available to individual consumers. I assume that this means that some part of United’s multi-state physician network will be on the system, and that there’ll be an option for consumers who are not in a United plan to access it. If it does mean that, then when this is launched the American Well service will essentially be available nationwide. But that’s my early morning speculation. I’ll try to track down someone from American Well to get more accurate details.

What’s good for General Motors is good for America

In 1953, Charles Erwin Wilson, then GM president, was named by Eisenhower as Secretary of Defense. When he was asked during the hearings before the Senate Armed Services Committee if as secretary of defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively but added that he could not conceive of such a situation “because for years I thought what was good for the country was good for General Motors and vice versa”. Later this statement was often misquoted, suggesting that Wilson had said simply, “What’s good for General Motors is good for the country.” (From Wikipedia’s History of General Motors)

The American auto industry exploited the loophole by ramping up production of big passenger vehicles that sat on truck beds. The mini-van evolved into the the extended pick-up trucks and SUVs that proliferated during the next two decades. The American public loved the big vehicles, which were affordable because national energy policy made low gasoline prices a priority. The SUVs and trucks were hugely profitable for the manufacturers, offsetting losses incurred partly because of labor-related costs. Detroit’s dependence on these vehicles though was risky, as became clear last year when fuel prices rose steeply and the industry effectively crashed. (Peter J Boyer, The Road Ahead, The New Yorker, April 27, 2009)

This has been a tough couple of weeks for anyone believing in radical change, Obama-style. There has been unnecessary compromise over closing Gitmo and investigating torture. The lobbyists for America’s health care immediately recanted their promised voluntary cost cutbacks. The response so far from the White House has been a statement from Orszag that’s none too radical, essentially saying that bending the curve is OK.

And now there’s the revelation that some idiot at Blues of N. Carolina had already planned a smear campaign against reform, even while the AHIP crowd seems to be winning, as represented by the mealy-mouthed proposals coming out of Baucus’ committee—as Baucus himself ducks meaningful dialogue over alternatives.

So realistically, as I’ve been saying for several months, the best we can hope for from the current body politic is some kind of national exchange and a sorting out of the scummy underbelly of the individual health insurance market. (Incidentally I was watching The Rainmaker, made back in 1997, over the weekend and life has totally imitated fiction in the individual market since then—yes, I’m talking about MEGA but not just them!).

But even if we get some kind of exchange with some kind of vaguely unenforceable individual mandate and some type of guaranteed issue, the basic structure of health insurance passing through the excesses of the FFS system won’t change. Real sustainable change will only happen if we create a single universal pool and give the insurance intermediary some type of global budget, such as a fixed voucher payment per member. No one in the Baucus world or the White House, with the exception of Zeke Emmanuel is talking about that, so it’s not going to happen. And the second best choice—the establishment of a competing public plan that is budget limited—is likely to be bargained away.

So unless some secret mechanism that we’re not being told about will be sprung from the wings, realistically the best that can be done is that we’ll end up with the Massachusetts scenario. More people insured at more cost, unsustainably. And widespread practice and cost variation will continue.

The data of course tells us that on any metric you pick, spending doesn’t equal quality. Just this week the Dartmouth guys found a nil or negative correlation between spending per patient in individual hospitals and outcomes. It’s got to the point when you barely need to read the abstract on these studies. (I guess if you like you can read Atul Gawande running through the numbers yet again in this weeks New Yorker)

But if something can’t for on forever, it will stop (known as Stein’s law). Which is why I opened this piece with a reference to that wonderful New Yorker article about the meltdown in the auto industry.

The auto industry’s last two decades resulted from three irrational government policies that were kept in place by a weird combination of political forces. First, fuel prices were kept artificially low—in part by a deal between Reagan & the Saudi’s to break the Russians, and also by the reticence of American politicians to put European-level taxes on gasoline. Of course, fossil fuel producers and users didn’t have to bear the real costs of these cheap prices. But the planet and its (present & future) inhabitants do.

Second, as pointed out in the New Yorker article, the CAFE standards ridiculously excluded SUVs and mini-vans—proving that partial regulation is much worse than using taxes to do the same thing. We’re still waiting for a sensible carbon tax. Third, partial taxation is just as bad. For weird historical reasons there is a 25% tariff on foreign trucks and SUVs which means that the Japanese couldn’t compete effectively (e.g. destroy the lumbering big 3) in that market, and the big 3 could make far more profit on the SUVs than they would have done in a free market. A combination of the auto companies, the oil companies, the unthinking consumer, and bought-and-paid-for politicians enabled this to happen.

The parallels are obvious. In American health care policy, for the Big 3, substitute the AHA, PhRMA, AHIP, ADVAMED and the AMA. For the dumb carbon fuel policies, substitute an irrational employer-based insurance system with a wrap-around and uncontrolled Medicare and Medicaid system, all paying suppliers using Fee-For-Service. For the problems of global warming and pollution substitute the societal ill-effects of spending too much money on health care services that make outcomes worse, and leave less money for education, infrastructure and other more worthwhile spending. For SUVs and mini-vans substitute cardiology, orthopedics, neuro-surgery, general surgery, oncology drugs, and all the other service-lines that make hospitals profitable, but do very little for the overall health of the population. And of course the whole thing stays together because Congress is in the special interests’ pocket, the public responds well to prods from special interests (especially doctors), and it doesn’t understand the raw deal it’s getting in the bigger picture.

There’s even a parallel lies and dissemination industry. The auto and oil industries fund their “global warming is a myth crowd”, health care has Betsy McCrackers, Grace Marie Turner and the rest of the free-market nut-jobs—all on the teat of some sub-segment of the health care business which should rationally be put out to pasture.

So assuming that we don’t fix this problem in 2009, what happens when health care has its meltdown moment, or when as Alan Greene and George Lundberg like to say, the health care bubble will burst?

Lundberg argued earlier this month on THCB that there was an excessive trillion dollars spent in health care—somewhere around 40% of current spending. Actuarial firm Milliman did more work on this and suggested that we can move health care spending from the current 16% of GDP to 12%. Now they and fellow travelers like George Halvorson seem to hope that this can be done in some seamless and painless fashion. But that hardly seems realistic. Instead my scenario is that some future cataclysmic event finds the next President offering the health care industry the kind of choices that Obama has just been offering the auto industry.

Which takes me back to Boyer’s wonderful piece about the auto industry. Essentially the industry has been given extremely limited choices of how to restructure itself. They were told to:

  • Massively restructure their obligations to their retirees and employees
  • Change their work arrangements to match those of the Japanese transplant factories
  • Close many factories and lay-off many employees
  • Change their present and future product mix to reflect the worldwide energy crisis
  • Reeducate the buying public as to what to expect from a car (50 miles range and being plugged in nightly?)

Note that many of the Senators from “transplant states” with like Tennessee and Alabama felt pretty aggrieved that GM and Chrysler were getting all this help to compete with their “foreign” imports. Those of you who get Sen Dave Durenberger’s occasional (and prescient) health policy commentary emails may note that he frequently describes Medicare as being a redistribution mechanism whereby doctors and hosptials in high costs states like Louisiana and Florida get subsidies from taxpayers in low cost ones like Minnesota.

The way these hard choices were made at GM and Chrysler were essentially that the Treasury took over the companies and their strategy. Both the CEOs of GM and Chrysler are either gone or going, and the Federal government is directing traffic.

There isn’t quite the centralization of production in health care that there is in autos, but a 40% fall in revenues would effectively mean the government would take over the industry. So what might the equivalent of a fast GM-type restructuring look like in health care?

  • Massively restructure their obligations to their retirees and employees. The health care industry mostly rewards specialists, technology & pharma manufacturers, and certain segments of the hospital business. Those payment schemes would necessarily be slashed. We’re not talking about narrowing the RVU imbalance here, we’re talking about some kind of massive fee-cut backed up by a global budget cap.
  • Change their work arrangements to match those of the Japanese transplant factories. No prizes for guessing this. Virgin Mason and a few others have already significantly reduced all of their costs by introducing Japanese-style quality innovation process. Under current payment schemes that was a crazy thing to do. But in this scenario those hospitals and physician groups that survive would not get the choice. If the accountable health care organization, or medical home ever gets off the ground, the customary relationship of referrals from PCP to specialist and from specialist to hospital will change remarkably.
  • Close many factories and lay-off many employees. If you replace the word “factories” with the words imaging center, hospitals and clinics, you’re getting the picture.
  • Change their present and future product mix. From inpatient care and intensive procedures to prevention and primary care, with extreme makeovers in terms of chronic care process management.
  • Reeducate the buying public as to what to expect from a car. This may be one of the hardest parts of all. The American public regards $4 a gallon gasoline as a pestilence sent to punish them. Similarly, the move to reduce inappropriate health technology use, overhauling end of life care, and changing how people approach their health, is fraught with political peril. But the need is the same, and at some point we’re all going to have to realize that the consequences of our orgy of medical care overuse are dreadful.

Any restructuring like this will cause extreme pain. In addition, we need to make sure that the reduction in health care spending is balanced by a comparative increase in wages, or other spending. In other words, we can’t suck 3–4% out of local economies without adding it back in.

But in the end, like the auto restructuring, we desperately need this health care restructuring. And what’s now necessary for GM will end up being a good thing for both the nation’s health care system and the nation.

This doesn’t mean it will happen, or at least not soon. But one way or another, the health care system needs to share Detroit’s fate.

Coda: Mike Cassidy, San Jose Mercury News Columnist wrote a not dissimilar piece piece on Saturday which I saw on Sunday. I’d started this piece last week, so this is a case of great (?) minds thinking alike—not plagiarism, honest!

I’m not sure that’s how Uwe meant it!

The AP has a puff piece on the greatness of Karen Ignagni. Well greatness if greatness is defined as doing anything it takes to screw the nation on behalf of her organization’s members, all the while telling bold face lies about their activities. But the lies of Karen Ignagni have been well documented here on THCB and we don’t need to rehash them now.

But then the AP reporter Erica Werner quotes Uwe Reinhardt and has this somewhat remarkable passage:

"Whatever AHIP pays her, it's not enough. She's unbelievably effective," said Princeton economist Uwe Reinhardt. "It's just amazing what she's achieved for them against all odds." Ignagni's total compensation, according to AHIP's most recent filing from 2007, was $1.58 million, which includes $700,000 in base salary, $370,000 in deferred compensation and a bonus. Ignagni won't say how many hours a week she works. The number's so high it's embarrassing, she said.

Among successes cited by Reinhardt and others is helping persuade the Bush administration to develop private insurance plans within Medicare that are producing unexpectedly high payments for private insurers. When Congress was considering expanding a children's health insurance program in 2007 by taking money from the private Medicare Advantage plans, Ignagni worked successfully to stop it. Those private plans are being targeted again by Obama, who wants to squeeze them to pay for his health care agenda. Ignagni's industry group is organizing older people to defend the plans.

There’s lots of more puffery about how she’s good at building consensus among the diverse interests in her group. My take on that is “we’ll see”.

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More on HITECH , Microsoft mea culpas, Google, et al

I draw your attention to a troika of articles, all of which show how things can be slightly misinterpreted.

First, who knew that Blackford Middleton was either the most influential health policy wonk out there, or single-handedly responsible for the Haliburtonization of health IT? If you read the WaPo article about it, it looks as though there was some kind of terrible conspiracy to impose an evil fraud in terms of unnecessary health IT spending on the taxpayer. And for example MedinfomaticsMD over at Health Care Renewal (who appears to have jumped from the position that some health IT installations have real problems to the less tenable one that all EMRs kill) is just one going loopy about it.

I've known Blackford for a while, and even though I don't necessarily agree with everything he espouses I think two things are clear. One, the studies his team did (and does) at CITL were done honestly and competently, and they in general reflect what most of us have observed–EMRs have the potential to improve care quality and save money, but that most of the money saved flows back to payers. This has been the experience both in integrated systems in the US, and in health systems in Europe. There are those of us who think that much of the $2.4 trillion is wasted and IT might be part of the solution to trim that waste.

So it was not a great stretch for the Obama team to make the logical leap that health IT is a good thing, and and that subsidies will have to be given to physicians to get them to adopt EMRs (or wider uses of clinical IT). Fer chrissakes even many on the right agree with them. This was not Halliburton sticking it to the US taxpayer in order to boost Dick Cheney's stock options. (Insert your favorite conspiracy theory about the reasons for the Iraq war here if you don't like that one)

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