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PODCAST/TECH: Healia, Vimo, Healthline–3 Health 2.0 Execs talk about their business

So in a first for THCB I put together a 4 way skype call for a podcast. On the call are three Health care tech start-up leaders: Dean Stephens, President, Healthline; Tom Eng, Chairman, Healia; and Chini Krishnan, CEO, Vimo.  The podcast is here, and I think you’ll find it pretty interesting.

Unfortunately the recording quality isn’t great. And worse there’s an ugly period between 29.30 and 32.00 mins when the others couldn’t hear me even though the recorder could (although Skype’s IM function did work and saved the day). So please wind on when your MP3 player gets to that part. (Someone who knows might want to help me with my recording setup and editing skills!) For those of you who can’t deal with the thrill/drawbacks of the new technology, the transcript will be up in a few days.

INTERNATIONAL: Cuba exporting doctors

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Here’s a long and interesting article on Cuban Medical Diplomacy. Essentially Castro has been exporting doctors all over the place, and now Chavez is using Venezuela’s oil money to pay for it. I was reading along wondering why we hadn’t imported a few Cuban MDs to handle the US inner cities when I discovered that apparently they offered to send 1,000 to Louisiana after Katrina, but were turned down.

The article is pretty favorable, even though it’s clear that the export of doctors and concentration on the medical care system is at least partly a propaganda stunt by the Cuban government. A couple of things worth noting, though.

First, sending doctors overseas to help other poor people may be worthy and all that (and has the positive benefits of upsetting foreign medical associations, as it’s done in Venezuela) but it doesn’t mean that human rights within Cuba are respected any more than there were during the Cold war. And sometimes the lack of human rights compounds the medical problems there. For example a colleague of mine’s daughter went to Cuba  to do a medical mission/training and met and married a Cuban doctor while there. That doctor was not allowed to leave with her to go to the US, and when he formally applied to do so, was fired from his job, and no longer allowed to practice. Thankfully he escaped by sea, after several, several terrifying attempts. But there is no justification for refusing to allow people to leave a country; and in this case it caused his medical training to be wasted.

Second, and this is my cynical side talking—isn’t excessive spending on health care something that only rich country like ours can afford? What has a poor country like Cuba gone without to provide doctors for the rest of the developing world?

TECH/QUALITY/THE INDUSTRY/HOSPTIALS: Transforming patient care, with UPDATE

Cisco has produced a video on transforming patient care which includes discussion from “Crossing the Chasm” author Geoffrey Moore, Jeff Rideout, Cisco’s head honcho Medical Director, several hospitals execs, and a cameo from me. Go to this site to register and take a look. I’ll also be answering questions in the discussion segment for the next week.

UPDATE: Now I’ve seen it. So here’s my take! I may look wooden and my answers are sometimes to questions that I wasn’t asked (oh, the  magic of editing!), but you only have to put up with literally a minute or two of me. The rest of the session is really interesting–everyone else is much more eloquent than I am and the technology featured-especially the instant translation services at San Mateo County hospital–is very interesting. Yes it’s product placement for Cisco, but well worth watching nontheless. Interesting that video-conferencing and PACS are what the hospital people view as the important changes, while I was talking mostly about IP telephony, automating vital signs recording (telelmetry) and location tracking. I must still be a futurist!

PBMs: Caremark sneaking out at the top? with UPDATE

CVS has noticed that big PBMs are now making all their money on mail-order pharmacy, particularly from dumb clients who can’t be bothered to cross check what the PBM is charging for mail-oder generics with the price they can get at (say) Drugstore.com. So the chain stores “logical” next step is to buy the second biggest mail order pharmacy — Caremark —and get the attached smoke screening benefits management organization thrown in with the deal. The NY Times (surprise surprise) is focused on the wrong end of the deal, thinking that Caremark is a “middleman”. But the key is that all the profitability of PBMs comes from their mail order pharmacies, now that the rebating game is drying up.

And that profit comes from selling generics with huge mark-ups. So when Wal-mart puts CVS’ margins on their retail store cash business under threat, it’s not a stupid defensive move to acquire a big mail order house. On the other hand they’d better hope for better luck than the last time (part of) Caremark — the then PCS— was bought by a drug store. Rite-Aid bought PCS in 1998 for $1.5 billion, and sold it for $1 billion to Advance Paradigm in 2000.

But the Medpartners/Caremark guys, ten years after their disastrous foray into physician management, aren’t dumb. The generic mark-ups are about the last place the PBMs have to run to maintain their incredibly profitable business. And that party will end too, when the employers wake up.

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Given what the stock has done since they changed their focus to the small PBM they found that they owned by accident in the late 1990s, it looks to me that they’re sneaking out at the top.

UPDATE: Apparently the top wasnt quite as high as some punters this morning thought it was. Caremark opened at 54 spent most of the day at 51 and then fell when the final offer was revealed at 48 and change.

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PODCAST: David Gratzer transcript

Here’s the full transcript from the David Gratzer interview—if you prefer the podcast version I’ve linked to it here. There are lots of comments there too.

Matthew Holt: This is Matthew Holt, and we’re back with another podcast on the Health Care Blog, and today my guest is David Gratzer. David is a psychiatrist who is still practicing psychiatry, but is also, part-time, a Fellow at the Manhattan Institute, and has written a new book called "The Cure", subtitled "How Capitalism Can Save American Health Care." David, welcome to the Health Care Blog.

David Gratzer: Good afternoon.

Matthew: Let me start off, David. Obviously, with your subtitle, you’re a proponent of free markets in health care, but you come at this from a couple of interesting backgrounds. One is that you’re a Canadian who has moved down to the U.S., to practice medicine down here. The other one, which I found was very interesting is, at the very start of the book, in the introduction, you raise the entire issue of what it’s like to be somebody who has a relative, in this case your wife, who has no insurance in the U.S. and needs medical care. You raised the issue of your wife’s treatment, and I hope she’s fine now, without being overly personal about her, how did you end up in the situation that you were in the U.S. without insurance? David: Well, it certainly was an unfortunate circumstance. A lot of people go without insurance for a variety of reasons. I had access to American health care, but not access to American health insurance. My wife had, as you know from the start of the book, injured her back on the bunny trail on a ski trip. She tells the story slightly differently involving a large mountain, gale-like winds, and heroic efforts on her part. But she had ruptured a disc in her back, and she, as a result, needed surgery. And I’d certainly read much about the American health care system, but what came across me then was not just the confusion about pricing, and I talk about the foot-and-a-half-long bill that I had received, which, as a doctor, I could see was completely inscrutable. But also just the issues around quality.

There we were, trying to find a neurosurgeon, and I went to the Internet and found no information. I went about calling neurologists and trying to get their opinions on neurosurgeons in western New York. So I have a greater appreciation of the frustration that millions of Americans, not just those, incidentally, without insurance. I think even if you’re insured, health care is such a black box of uneven quality, of difficulty gathering basic information, and at the end of the day you’re left with ever-rising prices, with inscrutable bills. I wanted to start the book that way because even though I think there’s greatness in American medicine, and I think one should never lose sight of that, and there’s never been a better time to be, frankly, a patient or a doctor than today, I also wanted to emphasize, literally from page one of the book, that there were huge problems with American health care. And, that even though I took a free market approach to looking at reforms, I wasn’t going to undermine that or downplay that. Matthew: And I understand that. Were you living in the U.S. as a resident at the time? David: I was actually, as I am now, dividing my time. I opted not to get health benefits when I joined the Manhattan Institute. To provide the answer to the insurance question, that’s why. Matthew: The reason I raised that is, and to get to the nitty-gritty of it, you’re not going to get any argument from me about the U.S. health care system having many, many problems, but you’ll get an argument from me about the solution to that. But one of the things that I find curious, from those people that are on the right – the thinking libertarians, to tease my colleagues at the Cato Institute about being, and I think you voice a similar opinion in the book, is the solution to the problem of access. There are many different ways you can talk about solving the problem around pricing and transparency, and getting to understand what people are purchasing, and I think people agree that there needs to be more of that, however it comes out. But the question is, how do you get people to not be uninsured? And I think you’re basically suggesting a voluntary solution here. Do you want to say a bit more about what you think the solution is to dealing with the lack of insurance?

Continue reading…

BLOGS/TECH/QUALITY: HealthTrain, the Open Healthcare Manifesto

Yesterday saw the official launch of HealthTrain, the Open Healthcare Manifesto. Dmitriy Kruglyak has been working on this for some time with a large group of collaborators, and I have joined several others to sign on. The manifesto lays down some principles for how the new media of social networks and open access to publishing technology (e.g. blogging) ought to be used within health care. It’s an interesting and common sense filled set of guidelines which I hope will give the concept of “open healthcare” some visibility and some direction.

So instead of perusing my blog today, I hope that instead you’ll read the manifesto (It’s only about 12 pages).

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