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Profit-seeking Health Insurers Seek Profits

Healthcare reform becomes official this week, as many of the provisions of the legislation kick in. One provision requires insurers to accept children with preexisting conditions while capping what they can charge, undoing a standard industry practice. Several insurers have indicated that they will stop selling child-only policies. Industry officials are having a field day criticizing insurance industry greed.

Maybe these officials haven’t noticed, but insurers are greedy and there is nothing anyone in the Obama administration can do about it. Maybe it needs repeating. Insurers are greedy, have always been greedy, and always will be greedy. So are all investor-owned companies. People don’t invest in health insurance companies (or any other investor-owned companies) for charity. They invest in them to make money. (Investors tend to be greedy too, and that includes the pension funds that most working Americans rely upon for their comfortable retirements.)Continue reading…

Risky Business

At my annual physical exam last week, my primary care doctor employed a widely used web-based calculator to plug in cholesterol levels and other risk factors to estimate my likelihood of having a heart attack during the next ten years. I thought this was a neat idea until it produced an answer of 8%.

Wait, you mean I have a one in twelve risk of a heart attack over the next decade? That sounded really high. She calmly and thoughtfully explained that the main value of the algorithm was to help make a judgment about prescribing statins or other interventions that could lower risk. She also noted that anything under 10% at my age was a very good number.

So, I was going to write this post to tell this story and to make the point that these kinds of estimates can be shocking for the uninformed unless we have a context within which to interpret them.

I was also going to assert that the estimates give an impression of precision that may not be valid. What is the standard deviation around the estimate? How often is the actual estimate found to be true?Continue reading…

Live Health 2.0 Code-a-Thon at Google, Oct 2

Health 2.0 is thrilled to announce the kick-off to Health Innovation Week: BannerWLogoour first official code-a-thon where developers of all skill sets will get together, learn more about the vast amounts of health data that are available, build innovative health applications, and win prizes. The Health 2.0 Developer Challenge Code-a-thon will build on the existing online challenges, follow on from the Hacking4Health event on September 11, and introduce new datasets with some live on-site challenges.

Where & when?:

Saturday, October 2, 2010 — 9am – 8pm
Google Campus, Olympus Mons Room,
Building 1400 Crittendon,
Mountain View, CA

Confirmed speakers include:

  • Roni Zeiger, Chief Health Strategist, Google
  • Samantha Chui, Solutions Engineer and Mike Mee, API and PAT Product Manager, Keas
  • Sean Duffy and Zhen Zeng, IDEO
  • Walter Luh, CTO and interim CEO, Ansca Mobile….and more to come

But this not about sitting back and listening–it's about getting your hands dirty in the code and the data AND in a ground-breaking first for the Developer Challenge, we are pleased to announce that First DataBank will provide its drug databases free-of-charge to anyone developing applications – for any of the Challenges – that require content to support medication-related decisions and help improve patient safety and healthcare outcomes. You will want to take advantage of this unprecedented opportunity! More details on accessing this data will be announced soon.

This event is free to all–bring your laptop and ideas and we'll supply the pizza and jolt cola (or maybe something healthier). Come to the LIVE CODE page on health2challenge.org to sign up.

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Mau-Mauing the Medical Loss Ratio

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Senator Max Baucus recently admitted that he never read the new health care law. But that hasn’t stopped him from trying to re-write it after the fact, in a way that would drive more health plans from the market and give consumers less choice.

The new law reduces choice of health plans by giving government the power to control the Medical Loss Ratio (MLR) — the amount of dollars an insurer spends on medical care divided by the total premiums. Policies that cover large businesses will have to achieve an MLR of 85 percent, while those for small businesses and individuals will have to achieve an MLR of 80 percent. This sounds simple but leaves many issues unresolved.

Calculating he MLR can be quite complicated — especially when the government gets involved. Suppose, for example, an insurer invests in information technology that it gives to patients or providers in its network in order to improve co-ordination of care. Is that a medical cost?

Furthermore, the MLR regulation is deadly for increasingly popular consumer-directed plans. Suppose a traditional policy costs $4,000 and spends $3,400 on patient care, for an MLR of 85.00. With the consumer-directed policy, the patient controls $800 more of the medical spending than with the traditional policy, through a higher deductible, and his premium goes down by $800. In this case the MLR goes down to 81.25 ($2,600/$3,200). There is no real difference, but the new regulation could require insurers to rebate $120 — the amount by which the ratio falls short of the required MLR. (In real life, the consumer-directed plan would have lower total costs than in this simple arithmetical example, because cutting out the middleman and giving more health dollars to patients to control themselves motivates them to get better value for money.)

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Petitioners Ask OSHA to Regulate Resident Physician Work Hours

On September 2, Assistant Secretary David Michaels for Occupational Safety and Health received a petition requesting that OSHA regulate resident physician and subspecialty resident physicians.  “Depending on the type of residency, physicians-in-training can work anywhere from 60 to 100 or more hours a week, sometimes without a day off for two weeks or more.”  The petition requests that OSHA exercise the authority granted under §3(8) of the Occupational Safety and Health Act to implement the following federal work-hour standard:

(1)   A limit of 80 hours of work in each and every week, without averaging;

(2)   A limit of 16 consecutive hours worked in one shift for all resident physicians and subspecialty resident physicians;

(3)   At least one 24-hour period of time off work per week and one 48-hour period of time off work per month for a total of five days off work per month, without averaging;

(4)   In-hospital on-call frequency no more than once every three nights, no averaging;

(5)   A minimum of at least 10 hours off work after a day shift, and a minimum of 12 hours off after a night shift;

(6)   A maximum of four consecutive night shifts with a minimum of 48 hours off after a sequence of three or four night shifts.

More information about the petition can be found at the Public Citizen-run website, WakeUpDoctor.org.Continue reading…

Diffusion of EHR Innovation

No matter what your opinion of Electronic Health Records (EHR) is, you would probably agree that the concept of computerizing medical records represents an innovation of sorts. The spread of innovation, or its diffusion, has been researched and modeled by Rogers[1] as a bell shaped advancement through populations of Innovators, Early Adopters, Early Majority, Late Majority and Laggards (the blue curve in the figure below). At some point during this spread of an innovative solution a Critical Mass of adopters, or Tipping Point, is reached and the innovation is assured widespread diffusion (Gladwell[2]).  Adoption is usually described by an S-shaped curve of adopters vs. time, and the rate of adoption is the slope of the S-shaped curve at any given time (the red curve in the figure).

The Tipping Point occurs right after the rate of adoption assumes its largest value which will be maintained throughout most of the adoption process. It is worth noting that the diffusion of innovation model is not predictive. Many innovations linger and die within the Innovator circle. Another important aspect of the model is that the time variable is not constrained. Depending on the rate of adoption, it may take weeks, months or many years for an Innovation to spread throughout a given population. There is no question that EHR adoption is slowly moving up on the ascending side of a classic diffusion model bell curve, but is it moving fast enough? Is the tipping point visible? Are we there yet?

DiffusionsContinue reading…

Because it’s on the Interwebs, it must be true

Locally we’re supposed to diss the SF Weekly because it’s been trying to put the “genuine independent” local free weekly the SF Bay Guardian out of business and has lost a major lawsuit against it. But SF Weekly reporter Ashley Harrel has written an excellent article figuring out that one San Francisco plastic surgeon has paid a marketing company to plaster good reviews about her all over the web, and to make her the number 1 result on Google for “San Francisco Plastic Surgery”. The marketing agency unsubtly used the same name in all its reviews–the actual shortened version of the owner’s name–and has a video up on its site featuring the doctor as a happy client. Not exactly bright. Harrel also reminds us of the case of the chain plastic surgery center LifeStyle Lift that conducted a huge astroturfing operation and eventually settled with the NY Attorney General promising to stop.

Only one person on the San Francisco consumers bible Yelp seems to have noticed about this article but the person who died from a minor procedure hasn’t posted–although a few grumpy others have. (So apparently you either like this doctor or she kills you. My dad the surgeon always said he buried his mistakes!). And frankly that’s true for many patients and many doctors. In any event, the doctor is on probation from the state medical board–although that seems like a slap on the wrist.

The answer is twofold. First, get state medical boards to be more pro-active and aggressive in dealing with bad doctors. But realistically we know where that’s been going for years and its unlikely to change.

The second answer is to get better information in specialized places on the web, and elevate those.

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Health 2.0 Europe: Alensa Demonstration

Alex Savic from Alensa AGA presented a demonstration on the main stage of the at the Health 2.0 Europe Conference, April 6-7, 2010, in Paris, France. He introduced a new product called NextWidgets which is a tool which health publishers can use to create a store inside a widget.

Cliquez pour la vidéo en français French

Five Big Ideas that Shaped Health Reform

During the Great Health Reform Debate of 2009-10, much of the public discussion and media analysis focused on the political battles, the legislative process and specific elements of the health reform bill.  We talked a lot about daily public opinion polls, the futile search for bipartisanship, the political implications of the Massachusetts special election and the impact on the upcoming mid-term elections.  We also learned more than we probably wanted to about filibuster rules, reconciliation bills and CBO scores.  And we were inundated by detailed descriptions and analyses of the public option, abortion, payment reductions to Medicare Advantage plans, excise taxes on “Cadillac” health plans, and many other specific policy issues.

Future historians, however, will want to look more deeply for the policy frameworks and political forces that shaped the health reform bill.  From a high level vantage point, there are Five Big Ideas that established the fundamental framework for the bill.  With some exceptions, these ideas were not the subject of much public discussion or formal debate in Congress, but each of them shaped the reform bill in fundamental ways. As Ezra Klein and others have observed, much of the form of the health reform bill was established long ago.

1. Managed competition

Why didn’t we go down the path of a single-payer health system?

For many years, a single-payer system was the holy grail of the liberals, and it was the driving force behind the campaigns of many of the current reform advocates.  To the disappointment and frustration of those advocates, however, the battle had already been fought and lost long before the 2009-10 debate.  In 1978, Alain Enthoven published a two-part article in the New England Journal of Medicine entitled “Consumer Choice Health Plan: A National Health Insurance Proposal Based on Regulated Competition in the Private Sector.” The title said it all.  It was a proposal for national health insurance (i.e., providing coverage to everyone) through a structured marketplace of private insurers and providers.  As Enthoven described it in a 1993 Health Affairs article, “The History and Principles of Managed Competition,” his concept built on earlier work by Paul Ellwood, Walter McClure and Scott Fleming, as well as the experience of the Federal Employees Health Benefits Plan (FEHBP). In the 1992 Presidential campaign, both of the candidates endorsed this approach to health reform, and it was one of the foundation elements of Bill Clinton’s reform proposal in 1993.  In the work of many policy experts since then, it became the de facto consensus approach.

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