Robert Mittman has another iHealthbeat article out in his technology Foresight Series. This one is on the connection between nature and human technology, known as Biomimitecs. Well worth a read.

Not long ago, I postulated about the idea of giving Don Berwick the $100M the federal government has set aside for healthcare IT to develop an open source enterprise EMR system.

It seems that CMS is going down that road with this $100,000 grant to the AAFP… although I can’t imagine that $100K will get them far at all (perhaps a requirements document?). Ideally, a project like this should be a public /private partnership: the government has money, trade organizations (are supposed to) understand the needs of healthcare workers (the "voice of the customer") and healthcare IT vendors / consulting firms (are supposed to) know how to develop and deploy scalable, reliable software/web-based applications.

I’ve blogged over time about WedMD’s role as a business (three variant parts plus a plastics company looking in vain for synergies) and it’s role as a potential analytics player. However, in its role as a claims transaction clearinghouse and processor (the former Envoy-NEIC), WebMD does not appear to be out of the woods from complaints about its inability to route and process claims.

Given that we are nine years on from Jim Clark’s vision of a transaction system in the middle of health care routing all that paper to the right place in the blink of an eye, the fact that the most hyped health care IT company of all time cannot get its systems to work is a little disappointing. Even the pessimists among us meeting Healtheon for the first time in 1995 might have hoped for a little better by now!

The Bridges to Excellence program, that the very careful THCB reader may have noted was discussed in the P4P piece by the HSC folks referenced in yesterday’s post, is in the news today for offering to hand out cash to doctors. If it was sponsored by a bunch of pharma companies, Eliot Spitzer would probably be getting the handcuffs out now, but as it’s sponsored by lots of big employers and run by the thoroughly worthy NCQA (and I really mean that) led by Peggy O’Kane, it’s actually a good thing.

As, the HSC folks report, "Bridges to Excellence" makes incentive payments to physicians who show improvements in diabetic and cardiac care and invest in information systems and care management tools". The new story is that up to $50 per patient will be paid to doctors who are investing in the IT tools. Theoretically a GP with a panel of 3,000 patients that might amount to $150,000. In fact one practice got $40,000 already, almost real money, and certainly enough to get well up the IT curve. Of course a cynic (i.e. me) might say that this is a Johnny-come-lately attempt to copy the British government which gave its GPs enough money to get computerized in the 1990s and is now paying them based on their ability to manage patients to certain care process targets. But it’s definitely a move in the right direction.

With rosy prognostications , encouragement from Leapfrog , the support of our Fearless Leader, and leading healthcare organizations pledging billions for Healthcare IT, the universal adoption of electronic medical records and CPOE seems like a done deal.

But debt and pressures on reimbursement margins could derail even the best-intentioned efforts. Baptist Health System Inc. is pulling the plug on its multimillion-dollar effort to install Siemens Medical Solutions Health Services Corp.’s Soarian software throughout its hospitals in favor of maintaining its 1989-era systems (). Hailed by then-CIO Charles Jones as a tool to” provide our clinicians with the best tools…to enhance care delivery and patient safety,” Baptist has since changed direction.

“Given the substantial investment, resource and time commitment required to participate as a Soarian early adopter, BHS … has decided to halt implementation of Soarian.”

As Sutter announces ambitious plans to spend over $1 billion on IT systems, one wonders if it will be willing to make cuts elsewhere to maintain its plans in the face of reduced reimbursement from CalPers to maintain its decade-long IT vision.

The ever-reasonable Dr. Donald Berwick, president and CEO of the not-for-profit Institute for Healthcare Improvement, calls for the government to provide web-based, downloadable (and inexpensive) IT systems to overcome the high initial capital costs of the technology and cultural change barriers to the adoption of complex integrated systems:

“Berwick called for information standards for coding systems and interoperability among these systems. As a separate effort, the government should sponsor an electronic medical record…that anyone could download online… The record could act as a foundation if users wanted to build more expensive proprietary systems. He likened the free EMR model to the creation of the Internet, which was developed by the government and “essentially given to the public.”

With the present healthcare IT funding proposal not expected to have much of an impact on adoption, perhaps $100 m toward Berwick’s proposal would be better spent!

There’s a long article from CNET about the problems that WebMD is facing:

While the true scope of WebMD’s “lost” or HIPAA non-compliant claims is hard to ascertain from this article, it appears that payers, providers and the AMA are taking the opportunity to shake down the company for more “hand” in negotiating rates on clearinghouse services:

According to Eric G. Brown, vice president and health care analyst at Forrester Research, “WebMD’s problems with customers seem to stem more from attitude–the arrogance of a dominant player–than from technology failures. “They’re perceived as the Microsoft of the health care sector.”

Kimberly Grose, vice president of network services and operations for Harvard Pilgrim, based in Wellesley, Mass. adds that “Thirty-five cents may not seem like much, but it adds up quickly for Harvard Pilgrim because it handles 19 million transactions annually.”

All of this portends bad news for WebMD’s Envoy business:

Forty-eight percent of the plans already exchange claims directly with at least some providers.

“While large providers and payers can bypass middlemen, Envoy is becoming a clearinghouse ‘for leftover claims’ from small providers that don’t want to be bothered by the effort of setting up direct connectivity with hundreds of payers, said Sean Wieland, a research analyst with W.R. Hambrecht.”

At least WebMD has its online content business to drive profitability… right?

I’ve noted the incredible new success of Boston Scientific’s Taxus stent several times in THCB. Taxus is moving from factory to artery as fast as it can be pushed off the production line. However, the New York Times reports that the FDA is looking into some stories of problems with the stent in its first month. The lead quote criticizing Taxus is from Dr William Campbell at Borgess Medical Center in Kalamazoo. While I’m sure the problems they have seen with Taxus are real, it’s worth noting that Campbell’s colleague Dr. Tim Fischell basically invented the rival Cypher stent (see the last line of this press release)and their program is funded by its manufacturer, J&J’s Cordis unit.

The number of problems with Taxus quoted thus far are very small and probably not indicative of anything, as the NY Times quoted one cardiologist:

“I would not be alarmed by a few reports,” Dr. Hodgson said. “Those same things have happened with previous generations of stents and balloons.”

But do not doubt that there is a huge battle for supremacy here in a very large and growing market , and the impact of these reports will be felt as the marketing machines pushing these rivals go to work.

I’ve been continuing to watch the online consult service provided by RelayHealth (the former Healinx). It’s an online system allowing secure interactions and requests from patients to doctors’ offices. It’s up and running in Mass and in California, sponsored by Blues plans in both places. The SF Business Times reports that about 1,000 California doctors have signed up. Apparently, Blue Cross of California plus Healthnet are about to join anchor tenant Blue Shield in reimbursing for online visits. What does the services do?

RelayHealth’s approach, which incorporates reimbursement for physicians along with other clinical and business-oriented components — such as scheduling appointments, refilling prescriptions, obtaining lab results, updating patient information, collecting copayments and submitting claims — is rapidly changing physicians’ attitudes. It isn’t intended for emergency or urgent-care situations, and generally allows physicians the flexibility to respond within an eight-hour time frame.

“The structured web visit is the sexiest thing,” notes Darryl Cardoza, Hill Physicians’ chief operating officer, but other functions, such as electronic prescriptions and appointment scheduling, “are equally important.”

Of course Healinx has been pushing this since 1999 and only 1,000 of California’s 60,000 doctors are signed up–meaning that it takes years to become an overnight sensation.

Hat-tip to iHealthbeat

Both Boston Scientific and J&J are printing money every time they send another drug-eluting stent off the factory floor. In fact neither of them can keep up with the demand. J&J recently had some production quality problems which may limit its ability to meet demand but that hasn’t stopped its Cordis unit which makes the Cypher stent playing a big part in its recent rise in Q1 profits. Yahoo reports:

“Cypher, which revolutionized the stent market when it was launched last April, had first-quarter sales of $562 million and held 57 percent of the entire stent market until Boston Scientific’s Taxus coated stent was approved March 4. That forced J&J’s price down to about $2,675 from an original list price of about $3,200.”

Boston Scientific’s Taxus stent has had a stellar launch, and contributed to its stock price going up like a rocket ship in the last 6 months.

However, there are two sides to this picture, and if you are a hospital the other side is not pleasant. Forget for one moment the data that suggests that stents are not cost-effective compared to other types of heart surgery. Everyone’s ignored that and the use of PCTA (angio) and stents has been increasing for years. Of course, if you’re going to have a stent, why wouldn’t you want the latest and greatest, especially if its going to avoid the restenosis and the need for more procedures that’s plagued their use in the past? Well let me suggest who might not want one or sometimes more $3,000 drug-eluting stents to be used in that angioplasty. I’m referring of course to the hospitals that in general are paid a flat fee for each procedure, and are not being given extra money to cover the new and more expensive stents they are buying.

A new report out from the Society for Cardiovascular Angiography and Interventions makes very sobering reading for hospital executives in light of the demand from doctors and patients for the new drug-eluting stents.

“The authors found that the average hospital loss per initial DES patient was $1,389 when all sources of payment were considered, whereas BMS and CABG procedures generated $285 and $1,283 in profit respectively. As DES adoption increases and/or the average number of stents per procedure increases, hospital profits decrease. Profits may be maintained until the average number of DES (drug-eluting stents) per procedure reaches 1.8 and the conversion from BMS (metal stents) and CABG are over 80% and 15% respectively.”

You read that right. If the new stents become the standard, hospitals are going to find that if only 15% of CABGs and 80% of traditional stents go over to drug-eluting stents, they are going to find one of their major profit-centers turning into a loss-center.

Needles to say, this is not considered good news in the executive suites of the nation’s hospitals. But who are they to say that the latest and greatest technology should be denied to patients? And will the Congress help? Unlikely according to the other story I’m posting today.

Pretty interesting technology column from Robert Mittman over at iHealthbeat. This one focuses on the growing internal interaction between man and machine known as cyborgs. Given that I live in a state run by a guy who imitated a machine better than the previous governor imitated a human, and that anyone with any implanted medical device in some definitions qualifies, I guess we should be paying attention. I particularly like the story of the two batty college professors attempting to live as cyborgs–somehow you get the impression that they weren’t the cool kids in the back of the school bus. But the forecast is that the implantable devices and wearable exoskeletons are going to have a big impact in the next five to ten years.

Meanwhile, in a related field the Health Technology Center had a report out last week on the impact of sensors in the future. The report says:

In the next five to ten years smart sensors should be able to do such things as automatically activate an implanted insulin pump, release heart medications or regulate the heart rate by real-time monitoring of blood pressure and oxygen saturation, according to the report. The study also examines three other categories of sensor technology: biometric monitoring, point-of-care testing and environmental monitoring.

Showing that all of this stuff is related to the scribblings of obscure (and not so obscure) forecasters, here’s Paul Saffo’s excellent essay on Sensors from 1997.