Tag: Startups

TECH/CONSUMERS/HEALTH PLANS: Not much employer backing for HSAs

Jan 5, 2007• 4

Those of us who feel that the CDHP movement is largely being used as cover by employers for reducing the benefits (i.e. compensation) that they’re paying employees will not be too surprised by this new analysis. The source, Vimo, though is somewhat surprising for two reasons. First, it’s a little technology start-up that’s providing comparison shopping for health, and second—as is clear when you listen to the interview I did with CEO Chini Krishnan—they are more than favorably disposed to the notion of individuals doing their own shopping for not just health insurance but all types of medical goods and services. So it’s hard to imagine them benefiting from bad news about HSAs. Yet what they’ve discovered, confirming research done by the more usual suspects such as HSC, is that as employers convert their benefit offerings over to the HDHPs, they are not funding their employees’ HSAs.

Here’s the key part from their analysis:

First, the difference (in numbers) between HDHP (3,168,000) and HSA (820,000) means that there are a lot of individuals within the group and individual markets who aren’t opening HSAs, even though they’re entitled to them. Second, HSA asset levels are also lackluster. The same AHIP study lists the average HDHP deductibles as HDHPs $2,378 for single coverage and $4,760 for family coverage. The average HSA balance in the Inside Consumer Directed Care survey ($1,180) is less than fifty percent of the average deductible for single coverage.The simple fact is that HSA creation and asset levels are lagging HDHP enrollment by a significant margin.

And realistically given that some people are funding their full HSAs, given that the average is well below half the maximum, the median HSA account probably contains close to $0. What’s going on then? Well Vimo knows the answer.

Certainly there are immediate and significant savings available when companies or individuals migrate to HDHPs. This cost differential can be pocketed as a one time gain, or it can be used to fund most or all of the HDHP deductible by depositing the difference into an associated Health Savings Account. It would seem that many employers are opting for the one time gain.

If you’re in a business which depends on these accounts and CDHPs being adopted by a bunch of happy consumers, you can see that there is plenty of potential for angst amongst employees who discover that the move to the CDHP is basically telling them that they have to dip into their own pocket for something the company used to provide. In what is a very considered and well put-together report—which I’d recommend you read all of—Vimo discusses the impact of this “transfer” on both consumers and employers. And true to their business model they are squarely on the side of looking out for consumers and employees.

I approve of them telling the truth, even if it’s a truth that opponents of the CDHP movement will highlight. After all, if this thing is done wrong, the longer term political consequences may be a future in which there is no such thing as a high-deductible plan or HSA—and that will leave Vimo with a whole different business problem.

PODCAST/TECH: Interview with David Blauer at Click4Care

Jan 3, 2007

Here’s the full transcript of the David Blauer podcast interview from December.

Matthew Holt: Well hello again. It’s Matthew Holt at THCB and it’s time for another podcast. This one is also about technology, somewhat different than some of the technology we’ve been talking about recently. We’re now back in the world of technology to help improve health and health management, in particular connecting with health plans. Today we have David Blauer who is the CEO of Click4Care. David, how are you?

David Blauer: I’m doing well, thanks. Thanks for having us.

Matthew: Great. Let’s start off with the basics. Click4Care has been around for a few years now and has been known to some of us on some sort of inside baseball view of the world in terms of what’s going on within health plans. It’s pretty fair to say you guys have been building out your product line and building out your client base without making a lot of marketing publicity splash. You coming on this show is part of changing that. Can you give me a quick background as to what the basic business problem is that Click4Care is helping to solve and how you’re solving it?

David: Sure. Our application is built on the premise that preventive healthcare is more effective than reactive healthcare. When we formed the business, we took a look at the industry. Like everybody else, I think, we noticed that if you look at any P&L for a health plan, 85% of the costs for that plan are being driven by medical costs rather than administrative costs. People had spent a lot of time, at that point, trying to refine and skinny down administrative costs as far as they can refine them. But people haven’t found technologies to address the 85% of the cost structure that comprised medical costs. When we looked further, we saw that the sickest 1% of an insured population was driving 40-50% of all those medical costs. The sickest 5% of any insured population was driving nearly 90% of those medical costs. If you continued to drill down, you found that the people responsible for those small percentages were typically moribund, chronically ill people. It became clear to us that there needs to be a technology platform that enables people to identify those risky people driving all the costs and automate the workflows throughout the supply chain to support those people who are driving all those costs in a preventative way that prevents them from incurring those costs by staying healthy.

TECH: Health2.0–this time it’s different?

Dec 28, 2006• 14

Dmitriy is worried that Health 2.0 is turning into a bubble. His piece Health Social Networking & Web 2.0 Bubble is a response to his rather prominent featuring in Laura Landros’ WSJ column. He’s concerned that it’s yet another bubble with no business model behind it. I’ll say more about this later, but there are two reasons to be less pessimistic than Dmitriy.

First, the business model is better because a) the tools are significantly cheaper to build and b) one player (You know who) has figured out how to build an advertising supported business online that really works—and is insanely profitable.

Second, even if there are no great riches to be had by independent Web2.0 and Health2.0 companies, the tools, techniques and technologies of Health2.0 will be adopted by the health care system and the consumers of health care. And that will be the most important feature of the entire “movement”.

TECH: Laura Landro picks up on Health2.0

Dec 27, 2006• 2

Now I know that Laura Landro reads (rather than just reccomends) this blog. Today in her The Informed Patient column in the WSJ she discusses the burgeoning patient to patient discussion movement, which is a big part of Health2.0. On the other hand she could just have been talking to Dmitriy who gets plenty of press in her column for his work at TMBN. Others getting mentions include DailyStrength, Healia, and OrganizedWisdom. There’s also quite a bit of discussion of Second Life, which I have been trying my hardest to avoid—given that I waste most of my life online as it is…

But her description of what’s happening behind Health2.0 is excellent:

The social-networking revolution is coming to health care, at the same time that new Internet technologies and software programs are making it easier than ever for consumers to find timely, personalized health information online. Patients who once connected mainly through email discussion groups and chat rooms are building more sophisticated virtual communities that enable them to share information about treatment and coping and build a personal network of friends. At the same time, traditional Web sites that once offered cumbersome pages of static data are developing blogs, podcasts, and customized search engines to deliver the most relevant and timely information on health topics.

TECH/CONSUMERS: Revolution Health & MedBillManager

Dec 27, 2006• 6

Rhpreview
OK for those of you desperate to take a look at Revolution Health’s "invite only" site, here is an officially blessed invitation to go sign-up (and of course to look at what $500m buys you!).

Meanwhile, at the other end of the opulence scale, start-up Medbillmanager is attempting to compete with Revolution/Intuit et al in the way consumers deal with their medical and insurance billing/payment.

Obviously it’s early days. But it’s well worth taking a look at both of these two sites to see how new web technologies are putting information, organizational capability, and just maybe power, into the hands of consumers.

PODCAST/QUALITY/TECH: An hour with Brent James

Dec 22, 2006• 1

This was a total pleasure. Yesterday I got to spend an hour talking with Dr. Brent James, one of the leaders in the patient safety movement, instituting process change in health care, and the man responsible in large part for InterMountain Healthcare’s status as the health care system known for delivering some of the best quality care in America (and the world). Brent of course was on the IOM Committee responsible for the "To Err is Human" report and is involved in the new IHI "5 Million Lives" campaign. Brent has much to say about all of that and a lot more, and it is fascinating stuff.

So for your year-end enjoyment here’s the podcast of our conversation. (A transcript will be up in a few days).

TECH/CONSUMERS: Deciphering a revolution?

Dec 21, 2006• 1

Fard gets a sneak peak at Revolution Health’s site over at HealthCare Vox.

HEALTH PLANS/TECH: Looks like the Deal’s over–or is it?

Dec 21, 2006• 6

So it looks like from Justen Deal’s website that he’s essentially going to be fired in absentia by Kaiser. My assumption is that he knew this was going to happen all along, and was essentially preparing the way for some kind of entry into politics and/or law career. Kaiser too seems to yet again be getting unnecessarily gummed up about the whole thing—for example according to Deal having people from the insurer side handle the case, rather than from the medical group which he works for.

I don’t know much about employment law, but I do know that California is an “at-will” state, which means that you can fire anyone for basically any reason. It’s obvious from Halvorson’s reaction, let alone the exasperated comments from Permanente’s Andy Wiesenthal on THCB, that they had no further interest in communicating with Deal after he went public, and didn’t want him around. So I don’t see why that didn’t happen straight away. Making up a (fake?) policy about “not abusing the email system” is basically a waste of time.

Deal seems to be appealing to a base of supporters within KP in order to “right” the ship. But if there really is malfeasance and/or an Enron-type meltdown going on within KP over HealthConnect–as opposed to normal teething problems from a huge IT installation (which as you know I suspect to be very, very unlikely) –the best route would be to go to those people who do oversee non-profits. That is regulators and the politicians who supervise them.

Given the various issues that Kaiser is having with the State DMHC over other aspects of its behavior , I suspect that Deal must be involved in some protracted discussions with local politicians. After all if there really is financial mismanagement going within KP, then Chuck Grassley is interested in this type of thing, as is Pete Stark.

If on the other hand, Deal is not pursuing those options, then I’m a little curious as to what this whole thing has been about. As an appeal to the massed ranks of KP employees about HealthConnect might seem appropriate if it was a worker’s collective, but it’s hardly likely to sway the board. Unless of course there’s something going on in the works that we can’t see.

TECH/POLICY/PHYSICIANS:American medical care, or Larry Weed on Speed

Dec 20, 2006• 2

Denver
(This one is long on links and short on explanation….sorry, but it’s all old ground here on THCB).

Larry Weed was at IHI last week using the same line that he was using in 1998 and was probably using for years before that.

"What’s the point of outcomes data?" Weed wonders. So what if there are four times the rate of prostate surgeries in Salt Lake City as in Denver? "I wouldn’t know whether I should move to Salt Lake so they don’t miss my cancer of the prostate or move to Denver so I wouldn’t have unnecessary surgery."

That statement has been true for a while, but Eliott Fisher et al are basically now showing that care is better in Salt Lake City. As Fisher says in the roundtable in the Health Affairs blog

The increasing fragmentation — almost atomization — of medical care, and a payment system that rewards commercial behavior on the part of physicians that, from all of my work, looks as if it’s on average certainly wasteful and quite often harmful.

The situation is certainly worse in Miami (and the rest of Florida), and it costs a hell of a lot more there. I know that’s true because Brian Klepper says so too! (read down in the article for his quote). And even the pestilent sore-lickers at the NY Times have finally figured it out.

And much of the reason is the inconsistent incentives that, Jeff Goldmsith points out in a recent Health Affairs article, are making the physicians primarily in the Sunbelt leave their compact with the hospitals and open up their own shops/heart hospitals—all of which are turbocharging the natural incentives that FFS gives them to do more anyway. Not that this is exactly hurting all hospitals; some of the biggest of which are having banner years. But while everyone in the business makes hay, there are those who suffer as a consequence.

And we’ve known about this for thirty years and nothing has been done to stop it.

PS. “Larry Weed on Speed” is an Ian Morrison line about the future of the EMR. 25 years later no one is using the Problem Knowledge Coupler. Which is a pity and a problem.

TECH: Interview with David Blauer, CEO of Click4Care

Dec 18, 2006

Click4carelogo_1
David Blauer is trying to raise the profile of Click4Care. He gave an interview to HISTalk a while back, and we tried to connect then. It didn’t happen for a few technical and timing reasons, but thanks to the diligence of his PR ~~slave~~ handler Kim Miller, it happened this week. Click4Care is a relatively new software company (although a lot older than most of those Health2.0 companies I’ve been featuring) that’s spent a lot of time building a very, very complex system for what can broadly be described as care management, sold primarily to plans and payers—with United HealthGroup being the marquee customer so far.