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Category: The Business of Health Care

What Health Reform Can Learn from the Environmental Movement

Over past few years, we’ve seen numerous articles about impact of the environment changes on the health of our population.  They range from increased rates and severity of respiratory disease to the resurgence of infectious diseases due to increasing temperatures.   However, it hadn’t really occurred to me until this weekend while attending a film festival in Colorado (name undisclosed because I don’t want it to get more crowded!) that there were interesting parallels between the environmental and health care reform movements.

And while this should probably not be a surprise given that healthcare and the environment are two of the most “wicked problems” facing our country – tough to describe, multiple causes and not easily solved with one answer – I nevertheless was intrigued by the similarities.

1)      Local, local, local– The environmental movement has finally figured out that change will only occur if you make the issues local – it’s not just about the planet but about your backyard.  (My father who could not hear me utter the word climate change without breaking into hives or leaving the room, recently told me he thinks “something may be happening because the fish in the river he spends half his days on are starting to die”)   Those of us in healthcare have known forever that the organization, delivery and financing of healthcare is local.  And while the biggest changes over the past few years have been driven by government policy, the tough part lies ahead and will only be successful because of the actions at the local level.

2)      Show me the money- Whether it’s the environment or healthcare – until it impacts the consumer’s bottom line (property damage, rising gas prices, higher out of pocket expenses), it can be tough to get a majority of people to devote their time and energy to change.   In healthcare we are still in the early days but are starting to see the impact of people having to pay more out of pocket for their medical care.  Time will tell whether the impact is all positive, but at least we are recognizing that financial incentives can play a key role in changing behavior.

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What if Google Does It?

I’m a nerd. Instead of watching Hollywood movies, I watched the entirety of Google’s 3.5 hour keynote from their recent developer conference, Google IO. I really appreciate watching and learning from technology companies operating at spectacular scale. They put on quite a show (at least for geeks like me).

One hour and eighteen minutes (the link should take you the right spot in the video) into the keynote, Google executives unveiled new discovery and curation features for the Android Play Store for apps for teachers to use in class. Google hired a team of educational content experts to review and curate in-class apps. Google will release certified apps to a special section of the Android Play Store that educational IT staff and teachers can peruse.

Google will also provide tools for educational IT admins to centrally manage and distribute those apps throughout the school per teacher, class, grade level, and more. Google is dramatically simplifying IT management in large bureaucratic organizations that can’t attract top IT talent. This is a godsend for teachers who have wanted to deploy apps in class, but who haven’t had the necessary IT support.

This is a brilliant concept. In highly regulated, slow changing industries such as healthcare and education, the biggest barriers to adopting and integrating third-party apps into the core workflows are fear of inaccurate information and IT distribution and management challenges. Google is doing a tremendous favor for the educational system. This move will materially improve the uptake of in-class apps.

Obviously, this begs the question, “Why doesn’t Google do the same thing for healthcare?” Happtique and Healthtap recognized this need some time ago. They’re curating apps and providing IT infrastructure services to help manage and distribute those apps to employees along different job functions, roles, locations, etc.

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Driving Front Line Innovation In Health Care

Jennifer Stinson was a nurse at The Hospital for Sick Children (SickKids) in Toronto who enjoyed brainstorming new ideas for improving care, especially for the kids with cancer she treats. But even as she gained status by getting her PhD and becoming a clinician scientist, she came up against persistent bureaucratic and organizational barriers to innovation.

Stinson’s challenge is common at big organizations, but overcoming bureaucracy and breaking down silos is especially critical in healthcare. To tackle these obstacles at SickKids, CEO Mary Jo Haddad in 2010 elevated innovation to a “strategic direction,” and engaged Innosight to help devise a full system needed to spur innovation. The resulting system has three major components:

  1. An Innovation blueprint detailing the types of innovations the organization wants to encourage. SickKids prioritized encouraging doctors, nurses and clinicians to look for unmet needs they could address, rather than wait for solutions from IT or top management. That required creating a focus group with 25 front-line healthcare workers to discover and catalog key “jobs to be done” (like reducing the length of hospital visits), surveying all 5,000 employees, and training most of them on how to integrate the innovation system into their daily practices.
  2. An innovation pipeline to reliably take ideas from concept to reality. This involved establishing a new 18-member Central Innovation Group of leaders from different areas of the hospital, a team that was tasked with prioritizing and advancing ideas and projects through various stages. The team helped innovators test prototypes, make adjustments, and then scale to a wider population.
  3. An innovation culture that features the right people, in the right roles, speaking a common language of innovation. A key enabler of this culture was the establishment of a $250,000 Innovation Fund to provide seed money for promising ideas. Now, instead of being stalled by permission hurdles that suppress initiative, promising new ideas could be funded, fast-tracked and prototyped.

Consider how the new system helped Stinson bring a transformative innovation to life. Every year at SickKids, thousands of children are battling various forms of cancer. It’s vital that they keep accurate diaries tracking their pain, but if it’s not done daily the data are virtually worthless. Typically these diaries must be filled out by hand, an annoying task that children with cancer aren’t motivated to do. The result is poor reporting and suboptimal pain management.

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The Affordable Care Act: Like It Or Not, It’s Catalyzing a Golden Age In Health Care Investing

Now that President Obama has been re-elected and the Supreme Court has upheld the Accountable Care Act, healthcare reform is here to stay. So what does reform mean for healthcare investors? I believe it will usher in a new fertile period for innovative,venture‐backed companies that can navigate the brave new world of healthcare delivery and management.

The Accountable Care Act impact on healthcare IT investing is already being felt.Venture investment in 2013 is showing significant growth from last year. In 2012,according to PWC, a global accounting firm,the life sciences sector which includes healthcare IT accounted for 25 percent of all venture capital dollars invested which totaled nearly $1.2 billion in 163 deals,more than double the $480 million in 49 deals in 2011 and almost six‐times the $211 million in 22 deals in 2010.

Now is the time to make order out of chaos and to set the stage for a next‐generation healthcare system that can effectively service our nation. At Psilos Group, we have just released our fifth Healthcare Economics and Innovation Outlook and identified the following four areas as the most promising opportunities for healthcare investors in 2013 and beyond: Private health exchanges, consumer‐focused insurance programs, 21st century healthcare technologies, and innovations that reduce error and waste.

Investing In Exchanges

The healthcare insurance marketplace—and the way insurance is bought and sold—is facing massive change.Healthcare insurance exchanges, both public and private,promise to create a more organized and competitive market for buying healthcare insurance, which could moderate price increases that are currently spiraling out of control.

From our perspective, exchanges are an intelligent place to invest. Software and services will power the exchanges. Psilos envisions massive opportunities for technologies that enable operators of both public and private exchanges to build high functioning platforms, including the shopping software and back‐end administrative technology and service products needed to serve tens of millions of people efficiently.

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Why Disease Management Won’t Be Going Away Any Time Soon

We’re all aware of the past criticisms of “disease management.” According to the critics, these for-profit vendors were in collusion with commercial insurers, relying robo-calls to blanket unsuspecting patients with dubious advice. Their claims of “outcomes” were based on flawed research that was never intended to be science; it was really intended to market their wares.

But suppose this correspondent alerted you to:

1. A company that had developed a patient registry to identify at-risk patients who had not received an evidence-based care recommendation? Software created mailings to those patients that not only informed them of the recommendation but offered them a toll-free number to call if there were questions. Patients who remained non-compliant were then called by coordinators, who made three attempts to contact the patient and assist in any scheduling needs. If necessary, a nurse was available to telephonically engage patients and develop alternative care options.

If you think that sounds like typical vendor-driven telephonic disease management, you’d be right.  You’d also be describing an approach to care that was studied by Group Health Cooperative using their electronic record, medical assistants and nurses.  When it was applied to colon cancer screening, a randomized study revealed each additional level of support progressively resulted in statistically significant screening rates.

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How the Best Innovate and Commercialize

With an unprecedented amount of attention and dollars spent on healthcare-related research at academic medical centers, institutions are often blazing their own trails with regard to innovation and commercialization.  In an attempt to consolidate a diverse array of approaches, Cleveland Clinic Innovations and the Council for American Medical Innovation have joined forces to release the first-ever comprehensive study of technological innovation and commercialization at the nation’s top healthcare institutions.

The Medical Innovation Playbook will offer an in-depth characterization of how each of the top medical centers has organized to stimulate innovation and its commercial application. The Playbook will include profiles of at least 75 academic institutions and medical centers that, when combined, will result in an easy-to-understand guide that will be a resource for practitioners, academic executives, trustees, policy makers, companies, entrepreneurs and investors.

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The Promises and Pitfalls of Pay for Performance

There’s been a great deal of discussion about health care payment reform. Prominent in this discussion is “Pay for Performance” (P4P). The idea is simple — rather than pay providers based on volume of care (fee-for-service) or number of patients (capitation), tie their payment to a measure(s) of performance. There has been substantial concern about the quality of care delivered to patients, so pay for performance appears to make a lot of sense. Don’t we want to reward providers for good performance? Shouldn’t this encourage them to provide high quality care?

Unfortunately, this is not as straightforward as it might appear. While the idea of pay for performance is very appealing and intuitive, there are some major pitfalls in implementation.

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The Patient-Centered Practice, Revisited

It is as natural for doctors, hospitals, health plans and others to aggressively affirm their “patient-centeredness” as it is for politicians to loudly proclaim their fealty to the hard-working American middle class. Like the politicians, the health care professionals no doubt believe every word they say.
The most accurate measure of “patient-centered” care, however, lies not in intentions but implementation. Ask one simple question ­– what effect does this policy have on patients’ ability to control their own lives? ­­­– and you start to separate the revolutionary from the repackaged. “A reform is a correction of abuses,” the 19th-century British Parliament member Edward Bulwer-Lytton noted. “A revolution is a transfer of power.”

With that in mind, which purportedly patient-centric policy proposals portend a true power shift, and which are flying a false flag?

Falling Short Of Shifting Power

The two most prominent examples of initiatives whose names suggest power sharing but whose reality is quite different are so-called “consumer-driven health plans” (CDHP) and the “patient-centered medical home” (PCMH). Both may be worthy policies on their merits, but their names are public relations spin designed to put a more attractive public face on “defined contribution health insurance” and “increased primary-care reimbursement.

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Employee Benefits Gone Wild

Say “employee benefits” and pensions and health care will jump to most people’s minds. Maybe life and disability insurance will pop up as well. But employers in Silicon Valley are going way beyond that. They’re providing housekeeping, cooking, babysitting and a host of other services as perks for their employees. According to The New York Times, here is what some California companies are doing:

At Evernote, a software company, 250 employees — every full-time worker, from receptionist to top executive — have their homes cleaned twice a month, free.
Stanford School of Medicine is piloting a project to provide doctors with housecleaning and in-home dinner delivery.
Genentech offers take-home dinners and helps employees find last-minute babysitters when a child is too sick to go to school.

To hear the employer representatives tell it, companies are providing their workers with services that make it easier to balance home and family life in an age when there are few stay-at-home spouses and work is stressful.

But a more likely explanation is economics.

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Health Expert Insight for 2013: Jeff Goldsmith and Charlie Baker

We talk to people every day about the barriers, fears, and motivations they have around their health, and often have the luxury of funneling the insights we learn back into the larger healthcare ecosystem. So here’s a doozy:  recent Eliza survey data (from October 2012) suggests that 82% of people say they would like their health plan more if they were more proactive about covered health care benefits … and two-thirds of people believe that their health plan is not telling them enough about what’s going on with healthcare reform and how it will impact their care in the coming years.

Based on this data, we wanted to dig a bit deeper into what exactly we can tell people to expect on that front. So we engaged Jeff Goldsmith and Charlie Baker in a conversation on everything from whether or not the Affordable Care Act is implementable (2:50) to the readiness of state and federal exchanges (5:00) to how employers will be stepping up to fill in critical health components (10:15) to the impact of increasing consolidation (15:00) to how the physician realm can keep a semblance of competitive tension in the provider networks (25:25).

And finally, we asked them the question we should all be asking ourselves:  will the care you are going to get in 2015 be better than the care you got in 2009? [40:41]

Click here to listen to the Podcast.

The good news is that many of these trends can be addressed through strategies like a stronger consumer-focused angle; higher-touch yet lower-cost communication between healthcare organizations and the people they serve; and a deeper understanding of how to proactively encourage health in both traditional (preventive health) and not-so-traditional (patient advocacy) ways. All eminently doable, right?

So listen, learn, and enjoy… and most importantly, stay ferociously committed to a healthier 2013 for all of us.

Alexandra Drane is the Chief Visionary Officer of Eliza.

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