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Tag: Joe Flower

There Are Buoys: The Real Path to Lower cost in the Coming Catastrophic Deformation of Healthcare

There are buoys, far out in the ocean, that bob in the waves and signal, through satellites, when the surf will rise at Mavericks on the California coast, or when the tsunami will hit.

Here comes.

Healthcare in the U.S. is a hollow economy, inflated, impossible, all over patches and gimcracks and work-arounds puffed up on clouds of hot air generated by sweaty, dedicated crews of policy panjandrums and podium pundits burning forests of acronyms. True, that’s just looking at the bad side. But this bad side goes all the way around.

Will it pop? Will it undergo catastrophic exothermal deformation? Is it the Hindenburg nearing Lakehurst? This could be.

Look, this is the 21st Century. Whatever its name, catastrophic deformation, restructuring, “disruption,” or “creative destruction,” this is normal for businesses, industries, entire sectors. We have talked and whined and freaked out about massive change in healthcare since we had a peanut farmer in the Oval Office, and it hasn’t happened. Not really. Trust me, I was there, I watched it not happen. Nothing like the video stores, big-box malls, and Fotomats whose husks litter the landscape like the yonquerías of Baja. Nothing like Eastern Airlines, Western Airlines (“The only way to fly”), Northwest Airlines, Pacific Southwest with its dayglo go-go-booted stews, PanAm, and all the others whose logos adorn the Electras, L-1011s, 727s and Constellations parked wingtip to wingtip in the Mojave.

Healthcare has planetary inertia, gas giant inertia. It snacks on cost-cutting schemes like DRGs and Certificate of Need commissions and just gets bigger. It downs slices of GDP — 12 percent, 15, 18, 19 — and just gets bigger. Right through recessions, reforms, budget cuts. It’s Hungry Mungry. Its extraordinary resistance to deep transformation, compared to other industries and sectors, makes us ask why. What is holding it together? And makes us ask: What would do it? What would puncture this hollow, makeshift gas envelope? 

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Six Assertions on Knowing the Unknowable Future of Healthcare

Some things never change. Joe Flower is one of those things. Pay attention. Joe was the keynote speaker at Health 2.0 Silicon Valley earlier this month. We’re excited to feature the text of his remarks as a post on the blog today.  If you have questions for Joe, you can leave them the comment section. You’ll find a link to a complimentary copy of his report Healthcare 2027: at the end of this post. You should absolutely download and read it. And take notes.

The future. The Future of healthcare. 
Here are the seven words at the core. If you take nothing else away from this, take these:

Everything changes.
Everything is connected.
Pay attention.

— Jane Hirshfield 

We are gathered here on holy ground, in Silicon Valley, the home of the startup, the temple of everything new, of the Brave New World.

And healthcare? Healthcare is changing — consolidation, new technologies, political chaos, a vast and growing IT overburden, shifting rules, ever-rising costs, new solutions, business model experiments.

So when I say, “The Future of Healthcare,”
what are the pictures in your head? Catastrophic system failure? The dawn of a bright new day of better, stronger, cheaper healthcare for everyone, led by tech? Do we have all the confidence of a little girl screaming down a slide? Do we just say in denial about the future and end up in a kind of chaotic muddling along?

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Looking Back From 2019: Why the Republicans Nationalized Healthcare

Screen Shot 2016-05-08 at 11.41.21 AMIt was the Mother of unintended consequences.

By the time of the 2016 elections, health plans, hospitals and health systems had squeezed and consolidated and trimmed and cut costs under the gun of lower Medicare reimbursements and the new rules of Obamacare — but mostly they had adapted. Most of them had survived.

On November 9, the country woke to find itself with a Republican President-elect, a Republican majority in the House, and a Republican majority of 55 in the Senate. The Grand Old Party was dedicated to repealing #EveryWord of the Affordable Care Act, the hated Obamacare which was, after all, “destroying the country,” “the worst thing to happen to the country since the Civil War,” and “equivalent to slavery.”

The changes to healthcare did not wait until Inauguration Day, much less until the 115th Congress could assemble to gut the law. They began instantly.

November 9, of course, was just nine days into the annual Open Enrollment period for plans under the Affordable Care Act exchanges. Many of the 12.7 million who had signed up for 2016 could see that the subsidies they were getting through the exchanges would likely disappear in the wake of the election, and decided not to sign up. “Why chance it?” as Betty Cornwall of New Rhodes, Kentucky, put it to Fox News’ Megyn Kelly.

Health plan strategists, masters of not getting blindsided by risk, decided that it was a bad idea to sign up millions of people for plans without knowing what would happen to the law. They did not want to get stuck with serving people who did not pay, and did not want to get blamed for dumping people after they had signed up. So most large health plans withdrew immediately from the exchanges, before many more people could sign up, draining the exchanges in many states of any choices at all.

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The Healthcare System Link in the San Bernardino Shootings

Screen Shot 2015-12-02 at 4.08.30 PMAnother day, another mass shooting. At this point the news reports say nearly 30 down, 14 or more dead, multiple perps, at a banquet for the San Bernardino, California, Department of Public Health.

And instantly the argument is all about the guns. I understand that, and I’m not even saying that it’s not about the guns.

And instantly we want to say these folks are crazy and of course that’s true. It doesn’t matter if they frame their reasons around Allah or “no more baby parts” or Obama’s impending takeover of the U.S. using ISIS fascist armies disguised as Syrian refugees pouring over the border from Mexico, doesn’t matter. Anyone who turns a gun on other human beings in a school, a clinic, a public street is we can safely say, nuts, if “nuts” has any real meaning any more.

But there are crazy people in every culture, and we have always had crazy people in ours. The percentage of people who are crazy does not scale across societies and across time with the number of people walking into theaters, malls, and bus stations with guns blazing.

Even the number of guns per capita, or the caliber and size of magazines people can buy, or the rules around buying them do not scale directly with mass violence. There is something else going on here.

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Obamacare is failing? Not so fast.

Joe-Flower

“See? Obamacare is failing!” according to industry expert C. Little, citing Wolf Report 712A just filed by Boy W. Cried.

What is the hue and cry about this time? United Healthcare is saying it has lost large bales and wads of money on Obamacare exchange plans, and just may give up on them entirely. Anthem and Aetna allow that they are not making very much either. Some new not-for-profit market entrants have gone belly up, and the others are having a hard time.

Before we perform the Last Rites over Obamacare, perhsp we should think for a moment about the hit ratio of the first 711 Wolf Reports from Boy W. Cried and ask a few questions.

First: Do we trust implicitly the numbers that the health plans are giving out in press releases, citing unacceptably high medical loss ratios? Medical loss ratios (MLRs) are self-reported. Yes, there is a certain amount of accountability. The numbers have to square with expenses given on their corporate tax forms and so on, but there is wiggle room in just what is reported and how. If is a reasonable supposition that if you wanted to look for the professionals with the greatest skill in juggling numbers, you would find them working for insurance companies, especially health plans, because the stakes are so high. These numbers people at the top of their game have huge incentives to report a high MLR, so if there is wiggle room, I am sure they will find it.

Beyond that, MLR is reported by state, by market segment (large group, small group, individual), against what portion of a premium is “earned” within that reporting period, and by calendar year rather than any company’s financial year. To say, “Our MLR is X” is to claim that X the correct aggregate number across their entire multi-state system, from all their subsidiaries, appropriately weighted for the size of each region. We don’t have access to those numbers, just to what they are telling us. There are plenty of reasons for them to want to report the highest MLR they can get away with, plenty of reasons to be skeptical of the numbers they are giving out, and plenty of reasons not to base drastic policy changes on such pronouncements.

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“Winning” by Defeating the Triple Aim

Joe-FlowerYou follow movies? That is, not just watching them but thinking about how they are built, looking at the structure? In classic movie structure there is a moment near the end of the first act. We’ve established the situation, met our hero, witnessed some good action where he or she can display amazing talents but also what may be a fatal weakness.

Then comes the moment: Some grizzled veteran or stern authority brings the hero up short. Think of Casino Royale, that scene where Daniel Craig’s Bond (after those brutal opening scenes) is back in London and is confronted by Judy Dench’s M. Or Obi Wan Kenobi challenging Luke: “You must learn the Force.” Or that moment in the classic Westerns when the tired, angry old sheriff rips off his badge and throws it on the desk, leaving the whole problem to the young upstart deputy. But before he stomps out the door he turns and says to the young upstart, “You know what your problem is, kid?”

And then he tells him what the problem is: not just the kid’s problem, but the problem at the core of the whole movie. He just lays it out, plain as day.

In healthcare, this is that moment. We are near the end of the first act of whatever you want to calloutthis vast change we are going through.

And where are we? Across America, the cry of the age is “Volume to value.” At conferences we all stand hand over heart and pledge allegiance to the Institute of Health Improvement’s Triple Aim of providing a better care experience, improving the health of populations, and reducing per capita costs of health care.

But in each market, some major players are throwing their muscle into winning against the competition by defeating the Triple Aim, by increasing their volume, raising their prices, doing more wasteful overtreatment, and taking on little or no risk for the health of populations. At least in the short term, the predatory strategies of these players are making it more difficult for the rest of us to survive and serve.

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Does Prevention Save Money? ____ Yes ____ No

Or…it’s complicated.flying cadeucii

The New York Times today published a story titled, “No, Giving More People Health Insurance Doesn’t Save Money.” A piece of the argument is, as the author Margo Sanger-Katz puts it, “Almost all preventive health care costs more than it saves.”

What do you think? What’s the evidence? Leave aside, for the moment, the “big duh” fact that at least in the long term saving people’s lives in any way will cost more, because we are all going to die of something, and will use a lot of healthcare on the way. Leave aside as well the other “big duh” argument: It may cost money, but that money is worth it to save lives and relieve suffering. Leave that argument aside as well. The question here is: Does getting people more preventive care actually lower healthcare costs for whoever is paying them?

My thoughts? #1: No consultant worth his or her salt trying to help people who are actually running healthcare systems would take such a blanket, simple answer as a steering guide. Many people running healthcare systems across the country are seriously trying to drop real costs, and how you do that through preventive care is a live, complex and difficult conversation all across healthcare.

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GOP Has the Fear: King vs. Burwell

Republicans have raged against Obamacare for six years now. But do they really want to see it crash?

We are rapidly approaching the day when the Supreme Court announces its decision in King v. Burwell. The case found a four-word phrase in the 900-page law that says that the tax subsidies are available to people who get insurance through exchanges “established by the state.” Both Republicans and Democrats who actually put the law together, as well as their staffs, say that was a mistake, that no one meant to exclude people on the federal exchange, it is just an artifact of the drafting process that contravenes the whole sense of the law.

The result, if the course found for the plaintiffs, could be rapid and dire: Some 7.5 million would suddenly be paying full freight for healthcare insurance, most would probably stop paying and be force off the plans, and both healthcare and the insurance industry would face a sudden large drop in the revenue streams they need to stay afloat.

But what do Republicans really think?

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Half the Cost. Half the Jobs?

flying cadeuciiHealthcare costs far too much. We can do it better for half the cost. But if we did cut the cost in half, we would cut the jobs in half, wipe out 9% of the economy and plunge the country into a depression.

Really? It’s that simple? Half the cost equals half the jobs? So we’re doomed either way?

Actually, no. It’s not that simple. We cannot of course forecast with any precision the economic consequences of doing healthcare for less. But a close examination of exactly how we get to a leaner, more effective healthcare system reveals a far more intricate and interrelated economic landscape.

In a leaner healthcare, some types of tasks will disappear, diminish, or become less profitable. That’s what “leaner” means. But other tasks will have to expand. Those most likely to wane or go “poof” are different from those that will grow. At the same time, a sizable percentage of the money that we waste in healthcare is not money that funds healthcare jobs, it is simply profit being sucked into the Schwab accounts and ski boats of high income individuals and the shareholders of profitable corporations.

Let’s take a moment to walk through this: how we get to half, what disappears, what grows and what that might mean for jobs in healthcare.

Getting to half

How would this leaner Next Healthcare be different from today’s?

Waste disappears: Studies agree that some one third of all healthcare is simple waste. We do these unnecessary procedures and tests largely because in a fee-for-service system we can get paid to do them. If we pay for healthcare differently, this waste will tend to disappear.

Prices rationalize: As healthcare becomes something more like an actual market with real buyers and real prices, prices will rationalize close to today’s 25th percentile. The lowest prices in any given market are likely to rise somewhat, while the high-side outliers will drop like iron kites.

Internal costs drop: Under these pressures, healthcare providers will engage in serious, continual cost accounting and “lean manufacturing” protocols to get their internal costs down.

The gold mine in chronic: There is a gold mine at the center of healthcare in the prevention and control of chronic disease, getting acute costs down through close, trusted relationships between patients, caregivers, and clinicians.

Tech: Using “big data” internally to drive performance and cost control; externally to segment the market and target “super users;” as well as using widgets, dongles, and apps to maintain that key trusted relationship between the clinician and the patient/consumer/caregiver.

Consolidation: Real competition on price and quality, plus the difficulty of managing hybrid risk/fee-for-service systems, means that we will see wide variations in the market success of providers. Many will stumble or fail. This will drive continued consolidation in the industry, creating large regional and national networks of healthcare providers capable of driving cost efficiency and risk efficiency through the whole organization.

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Will Tech Revolutionize Health Care This Time?

the scanadu
After decades of bravely keeping them at bay, health care is beginning to be overwhelmed by “fast, cheap, and out of control” new technologies, from BYOD (“bring your own device”) tablets in the operating room, to apps and dongles that turn your smart phone into a Star Trek Tricorder, to 3-D printed skulls. (No, not a souvenir of the Grateful Dead, a Harley decoration or a pastry for the Mexican Dia de Los Muertos, but an actual skullcap to repair someone’s head. Take measurements from a scan, set to work in a cad-cam program, press Cmd-P and boom! There you have it: new ear-to-ear skull top, ready for implant.)

Each new category, we are told, will Revolutionize Health Care, making it orders of magnitude better and far less expensive. Yet the experience of the last three decades is that each new technology only adds complexity and expense.

So what will it be? Will some of these new technologies actually transform health care? Which ones? How can we know?

There is an answer, but it does not lie in the technologies. It lies in the economics. It lies in the reason we have so much waste in health care. We have so much waste because we get paid for it.

Yes, it’s that simple. In an insurance-supported fee-for-service system, we don’t get paid to solve problems. We get paid to do stuff that might solve a problem. The more stuff we do, and the more complex the stuff we do, the more impressive the machines we use, the more we get paid.

A Tale of a Wasteful Technology

A few presidencies back, I was at a medical conference at a resort on a hilltop near San Diego. I was invited into a trailer to see a demo of a marvellous new technology — computer-aided mammography. I had never even taken a close look at a mammogram, so I was immediately impressed with how difficult it is to pick possible tumours out of the cloudy images. The computer could show you the possibilities, easy as pie, drawing little circles around each suspicious nodule.

But, I asked, will people trust a computer to do such an important job?

Oh, the computer is just helping, I was told. All the scans will be seen by a human radiologist. The computer just makes sure the radiologist does not miss any possibilities.

I thought, Hmmm, if you have a radiologist looking at every scan anyway, why bother with the computer program? Are skilled radiologists in the habit of missing a lot of possible tumors? From the sound of it, I thought what we would get is a lot of false positives, unnecessary call-backs and biopsies, and a lot of unnecessarily worried women. After all, if the computer says something might be a tumor, now the radiologist is put in the position of proving that it isn’t.

I didn’t see any reason that this technology would catch on. I didn’t see it because the reason was not in the technology, it was in the economics.

Years later, as we are trending toward standardizing on this technology across the industry, the results of various studies have shown exactly what I suspected they would: lots of false positives, call-backs and biopsies, and not one tumor that would not have been found without the computer. Not one. At an added cost trending toward half a billion dollars per year.

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