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Category: The Business of Health Care

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.

From ZPICS to RADVS: The Alphabet Soup of Patient Charts and Payment Tracking

We’ve written about the Recovery Audit Contracts (RAC) program previously and thought it would be worthwhile to check back in on recent news in this space.  According to CMS, in FY 2012, RAC auditors collected $2.29B in 2012, nearly three times the amount recouped in 2011.

What’s apparent from this data is that a large step up in audit activity is obviously occurring, which will only accelerate in 2013 as auditors begin looking at evaluation and management (E&M) CPT codes commonly used by family physicians outside of the hospital setting.  In fact, when we match this CMS data against the latest results from the American Hospital Association’s RACTrac survey of 2,260 hospitals, it’s even more obvious that the level of activity around responding to requests for patient charts and managing the audit process is growing at an extremely rapid pace.

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Is Fee-for-Service Really Dead? Really?

The 21st century challenge for the American health care delivery system is to deliver higher quality care for less money.   Republican and Democratic experts agree that payment reform involving transitioning from fee-for-service to global, value-based systems is necessary for us to achieve that goal.  Accountable care organizations (ACOs) are the new entities that will receive the new global payments and distribute them to the doctors, allied health professionals, hospitals, and post-acute care facilities that care for the patients; Medicare ACOs are being piloted under provisions in the Affordable Care Act (ACA) and Commercial ACOs are being developed by private insurance companies, hospitals, and physician groups.

The ideal payment system would support the ideal value-driven health care delivery system.  Distinguished expert panels convened by the Commonwealth Fund and the Institute of Medicine have described the attributes of a system that would be far superior to our current delivery system:

· Care would be patient-centered
· Care would be safe
· Care would be timely and accessible
· Care would be efficient with little waste
· Care would be coordinated among providers and across facilities
· Continuity of care and care relationships would be facilitated
· Collaboration among providers would deliver high quality, low cost care
· Patients’ clinical information would be efficiently exchanged
· Caregivers would engage patients in ways that would maximize health
· Accountability for each aspect and for total care would be clear
· Continuous innovation, learning, and improvement would occur

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