Category: The Business of Health Care

MOOCs Ain’t Over. Till They’re Over …

Jan 24, 2014• 1

By Michelle R. Weise

Over the last month, journal headlines have been heralding the death of massive online open courses (MOOCs). You could almost hear the sigh of relief from the academy. With Sebastian Thrun himself acknowledging the “lousy” quality of the MOOC product, told-you-so skeptics have been giddily pointing out that Udacity, in its failure to disrupt higher education, is now moving on to vocational training.

Sadly, what audiences are missing is that Thrun’s shift to workforce training is precisely what has the potential to disrupt and severely impact traditional postsecondary education. We at the Christensen Institute have already written extensively about how MOOCs were not displaying the right markers for disruption (see here, here, here, and here), but we became more hopeful as they started to offer clusters of courses. Coursera announced Foundations of Business with Wharton, while edX and MITX introduced the Xseries in Computer Science as well as Supply Chain & Logistics.

These moves appeared to map better to employer needs and what we describe as areas of nonconsumption. In their turn away from career-oriented training, colleges and universities have unwittingly left unattended a niche of nonconsumers—people over-served by traditional forms of higher education, underprepared for the workforce, and seeking lifelong learning pathways.

What most people forget when they bandy about the term “disruptive innovation” is that disruptive innovations must find their footholds in nonconsumption. McKinsey analysts estimate that the number of skillsets needed in the workforce has increased rapidly from 178 in September 2009 to 924 in June 2012. Unfortunately, most traditional institutions have not adapted to this surge in demand of skillsets, and as a result, the gap has widened between degree-holders and the jobs available today.

Field Report from JP Morgan 2014

Jan 21, 2014

By Paul Keckley

Last week, HHS issued its much-anticipated report about the first wave of enrollees in the state and federal health exchanges. Its release coincided with the 32nd Annual J P Morgan Healthcare Conference in San Francisco, arguably Woodstock for health care investors.

HHS reported that, as of December 28, 2.2 million signed up for coverage. They are older and probably sicker than the overall population of 50 million uninsured in the U.S.:

Per the analysis, 54% of these are female, 71% are eligible for financial assistance and most signed up for silver plans (60%) vs. the more expensive platinum (7%) and gold (13%) or the less costly bronze (1%) options.

The 14 states run exchanges fared well in the first 90 days accounting for 956,991 enrollees—most in blue states where governors were supportive of the exchange effort. In fact, 10 exceeded their enrollment target even though the national target fell 1.1 million short.

How to Cut Medicare Spending: Attack Large Claims!!

Sep 26, 2013• 4

By Bob Hertz

Medicare reform thus far has been focused on $79 office visits, co-payments for home health care, hospital readmissions, Miami infusion clinics, the price paid for scooters, $45 resting EKG’s, the Plan B deductible, etc. These are important areas to pursue — but they are not where the real money is.

While we are debating the ‘doc fix’, the drug companies, device companies and hospitals are backing up the truck and cleaning out the store!

Consider the following paid claims paid by Medicare in Indiana in 2011:

113 Heart Transplants: average payment was $773,877 a piece
96 Bone Marrow Transplants: average payout was $509,637 apiece
129 Liver Transplants: average payout was $367,000 apiece
2,200 Tracheostomies: average payout was $376,103 apiece
1,517 Open Heart Surgeries: average payout was $185,000 apiece

Altogether, the 12,000 largest claims in one state totalled $2.4 billion in Medicare spending. If the other states are consistent, then large claims like these ate up $120 billion of Medicare’s total spending of $545 billion. And when you factor in sepsis treatments, defribillator-implants, and similar claims that cost “only” $75,000 each and so did not make the above list…….. then almost two-thirds of Medicare spending — over $300 billion a year — is focused on just ten percent of beneficiaries.

State Insurance Exchange Blind Spots: Unknown Risks and Unintended Consequences

Sep 23, 2013• 6

By Seth Kneller

October 1st marks the first ever public exchange open enrollment season. This means some of the speculation around consumer awareness and understanding, enrollment/uptake, premiums, and payer participation (not to mention the technical readiness of the exchanges) will finally subside and give way to a clearer picture of the PPACA’s initial success in mandating individual health coverage.

Despite this approaching level of clarity, however, several very significant “blind-spots” will continue to persist, principally for the health insurance carriers that choose to participate by offering PPACA compliant plans in the exchange.

This is due to the law’s guaranteed issue mandate prohibiting health carriers from denying coverage based on preexisting conditions. As a result, the traditional enrollment process which consists of a comprehensive assessment of each applicant’s health status and risk cast against the backdrop of time-tested underwriting guidelines is completely thrown out.

What takes its place is an extremely limited data set (i.e., the member’s age, tobacco/smoking status, geographic region, and family size) from which carriers can determine pre-approved premiums and variability therein. To use an analogy, health insurance companies no longer have a “bouncer at the door” turning people away, or a sign reading No shirt, No shoes, No service at the entrance.

In other words, everyone, regardless of their risk profile, must now be welcomed in with open arms and with very limited risk-adjusted rates.

This wouldn’t necessarily be a problem if the enrolling population comprised a well understood risk pool representing a true cross-section of the population. The reality, however, is that a predominantly unknown and potentially unhealthy population will flood the individual health insurance marketplace in a two weeks just as most states quickly phase out their high-risk pre-existing condition pools and shift them into the exchanges.

Blood Pressure Monitoring, Telemedicine, and Automated Hovering: A Future Model for Disease Management?

Jul 19, 2013• 7

By Mike Miesen

Use of an at-home telemonitoring blood pressure device significantly reduced out-of-control high blood pressure, according to a recent study in the Journal of the American Medical Association. It’s another data point showing the potential of telemedicine to have a profound effect on American medicine, by positively modifying health behaviors, providing real-time data to clinicians through “automated hovering,” and helping Americans get and stay healthy – all of which holds the promise of bending the cost curve.

Led by Karen Margolis, MD, MPH, a Senior Investigator at Health Partners Institute for Education and Research, the cluster-randomized study investigated whether using a cloud-connected, at-home blood pressure monitor paired with pharmacist and case manager support would lead to controlled blood pressure more than typical care, which involved check-ups with a physician.

Those using the telemonitoring device were 90% more likely to have controlled blood pressure at both the six and twelve-month checkups than the control group (57.2% and 30%, respectively), and had, on average, statistically significant lower systolic and diastolic readings.
Continue reading…

What Happens In New York Stays In New York

Jul 19, 2013• 4

By David Dranove

While sitting in the crowded waiting room of a medical specialist’s office I was forced to listen to the television set directly over my head. Cranked up so that everyone could listen above the din of conversation, Wolf Blitzer introduced a video clip of the President hailing the latest news from New York about health insurance exchanges.

Speaking as if he was still on the campaign trail, the President’s words came through loud and clear over the television: thanks to his health reform, premiums in the New York exchange would be half that of premiums in the individual market. This was a model the entire nation should embrace.

No one heard me mutter under my breath that this was a model for New York and a small handful of other states that previously regulated their individual insurance markets effectively out of existence.

What the President undoubtedly knows, but dared not say, is that New York’s individual insurance market is unlike any other state. In New York, insurers cannot charge higher premiums to high risk enrollees.

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As a result of this aggressive community rating, high risk individuals are disproportionately represented in New York’s individual policy risk pools. This drives up premiums, which drives away low risks, driving premiums even higher. Insurers in New York are counting on the purchase mandate, combined with purchase subsidies, to lure low risks into the pool.

This is why they have lowered premiums.

The Father of Microlending Takes on U.S. Health Costs

Jul 11, 2013• 2

By Malorye Allison Branca

What can a microlending bank in Bangladesh teach us about trimming healthcare costs in New York City? Perhaps much more than we think.

Nobel Peace Prize-winning economist Muhammad Yunus founded Grameen Bank, revolutionizing the fight against poverty by handing out “micro” loans of less than $30 to Bangladeshi women during the mid 1970s. He went on to spread microfinance around the world, including to Queen’s, New York, where the flagship Grameen America office serves 12,000 women.

Now, he’s piloting a breakthrough health program aimed at dramatically cutting costs while improving the health of those borrowers in Queens. It’s a tall order, given that these women are mainly immigrants, single working mothers, and living on $20,000 a year or less.

What’s more, the program is designed to become self-sustaining. The borrowers will pay for some of the services from the start. Over time, their payments will cover more of the costs. That, Yunus argues, is the only way programs for the poor can be long lasting and deliver the quality of service people want. Even the wealthiest nations, Yunus says, are starting to realize that their “free” health systems are still too expensive to pay for.

Healthcare insiders will be incredulous. How in the world will the priciest healthcare system serve people living below poverty without relying mainly on charity? Yunus answers that question, and explains why he’s going into health care in the first place, in a recent Financial Times op-ed [i].

In his work with the world’s poor, Yunus has been continually rankled by the fact that health care costs are such a burden to so many and are continually rising. For the poor, health costs are an especially serious threat, because even small bills can cause financial ruin. To someone living on $25 per day, for example, a $300 prescription represents weeks of food and transportation.
Continue reading…

What’s Changed Since the Obamacare Verdict

Jun 26, 2013• 3

By Dan Diamond

Ever since its controversial passage in 2010, the Affordable Care Act has been plastered with a range of polemic labels. Critics say Obamacare is job-killing; supporters herald it as life-saving.

Here’s another, perhaps unexpected label: personally profitable.

If you were among the true believers in the law a year ago today, there was easy money to be made. Nearly 80% of bettors on InTrade expected the law to be found unconstitutional; strategically spending about $25 in favor of the ACA could’ve netted you $800, based on how InTrade’s short-selling rules worked.

Much has changed, certainly, since Chief Justice John Roberts cast the deciding vote to uphold the law. (Beyond those bettors’ account balances, and the existence of InTrade itself, which mysteriously shut down in March.)

Here’s a look at how the Supreme Court’s decision on June 28, 2012, affected five hot-button issues related to the health law.

States’ decisions on Medicaid expansion

As of June 27, 2012: Several states with progressive governors and legislatures, like California, had moved to expand Medicaid ahead of the Supreme Court’s ruling. The Golden State’s leaders also had pledged to pursue universal coverage if the ACA was ruled unconstitutional.

But most states were waiting on the resolution of the constitutionality battle.

Since June 28, 2012: After the Court’s decision that the mandate was constitutional but that the Medicaid expansion was optional for states — which “took everyone by surprise,” said Matt Salo, executive director of the National Association of Medical Directors — governors were suddenly forced to decide whether the expansion made financial, and political, sense. Within a week, about ten states had signaled they’d expand Medicaid under the ACA.

However, many wary governors chose to wait for the November elections, and the knowledge of who would hold the White House, before announcing their plans; following President Obama’s reelection, a flurry of governors clarified their Medicaid stances throughout the winter and spring.

What Health Reform Can Learn from the Environmental Movement

Jun 20, 2013• 3

By Michelle Snyder

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.

What if Google Does It?

Jun 20, 2013• 4

By Kyle Samani

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.