In an excellent article at HealthLeaders, Brian Klepper believes that enough is enough and that transparency gleaned from large data sets is the key to solving the health care crisis. I think he’s mostly right, but of course what he doesn’t realize is the potential for delay caused by the ingenuity of the arguments that providers will use to show that “my patients are sicker.”
A long and detailed story about Steve Case and Revolution Health is up on Bloomberg.com. It was kind of weird, I vaguely thought I recognized some stuff in it, then found myself being quoted. Then I remembered that I’d been interviewed about it ages ago by the author Bob Van Voris. If I remember rightly I was mostly grouchy about the name. I mean, they may turn out to be good businesses, but is what he’s doing Revolutionary?
So for rewriting Alain Enthoven’s lectures from the late 1980s and missing the main points, apparently Michael Porter is being paid $50,000 a day, and that is a discount from his apparently usual fee of $100,000! Damn, that’s nice work and yes I am very jealous. Hopefully I’ll soon have his co-author Elizabeth Teisberg on THCB to explain what I don’t understand about their book which I’m chunking through at the moment.
When I said he was sinking in the health care quagmire, I should have said that he would be rolling in it.
I recently met Michael Howe who is CEO of MinuteClinic, and he had the good graces to call me back and talk on the day that they sold out to CVS. Very classy as it would have been easy to blow me off.
So the rumor quoted here is that CVS paid $170m for the company—certainly an endorsement that they at least think that retail NP clinics are real. But if you want to really know more, look at this new report on retail clinics from the California Health Care Foundation written by Mary Kaye Scott. Very nice summary indeed.
Via KevinMD I got to this story about the (lack of) take-up at a new in-store clinic run by TakeCare—kinda surprising as I think I’d be happy to go to one. But then with a bit of Googling around I found something that I’d missed. Rick Scott has left the secure Federal facility in which he’s been spending the last ten years and is back in health care. Here’s what Milt Freudenheim wrote in the NY Times last month.
A clinic company with somewhat grander ambitions is Solantic. Its clinics are staffed by doctors and provide a wider range of services that include X-rays at $90 apiece (or two for $150). For routine services, Solantic’s prices may be slightly higher than at other clinics — $55 or more for a Solantic doctor visit compared with $45 to be seen by a nurse practitioner at a rival’s clinic. But having doctors on staff "dramatically increases the number of services we can provide to a patient," said Richard L. Scott, the chairman of Solantic, which is based in Jacksonville, Fla.Mr. Scott built Columbia- HCA Healthcare into the nation’s largest hospital chain. But in the late 1990’s, the company faced an array of charges that it had defrauded the government, charged private insurers for unnecessary tests and improperly paid kickbacks to referring doctors. The board forced Mr. Scott out, and the company paid billions of dollars in fines and penalties; Mr. Scott was never charged with wrongdoing. "I always wanted to create a clinic business when I was in the hospital business," Mr. Scott said.
This sounds fantastic. I just never knew that there was so much potential for up-coding and fraudulent Medicare billing in this brave new world of consumer-centric health care delivery. After all according to TakeCare, there’s not much appeal to the senior crowd so far:
Since its debut in October, Take Care has been bombarded by those in the generations accustomed to the quick fix. Thirty percent of its clients are between the ages of 19 and 35, and 33 percent are between 36 and 55. Only 13 percent of the patients are 55 and older.
But if Rick’s involved, then there must be! I hope his fellow investors are ready for the fines to come when there’s a less friendly Administration in power….but hey everyone knows that the big fish in corporate frauds never do hard time, do they? Well not in health care, anyway. Right, Mr Scrushy?
Over in the disease management world, a little piece of consolidation late yesterday. Healthways is buying Lifemasters for some $307m. Healthways is running at a $400m annual revenue rate and has a $1.75 billion market cap, so that suggests that Lifemasters is less than one fifth of its size, even though it’s apparently been growing fast the last couple of years. (It’s private so there are no official numbers). It’s also been around a long long time (I met the first founder in 1995!) waiting for DM as a market to take off. You can tell that in part from its funders:
LifeMasters Supported SelfCare, Inc. is privately held. Financial backing is provided in part by Intel Corporation, Lightspeed Venture Partners, Pacific Venture Group, Knotty & Co., VantagePoint Venture Partners, SightLine Partners, National Healthcare Services, The Northwestern Mutual Life Insurance Co., J. and W. Seligman & Co., Landmark Partners, ORIX Venture Partners, Siemens, Pacific Life Insurance Company, Cove Investments, Comerica Bank and Lion Investments Limited.
Sixteen different venture investors suggests that a lot of money has gone in over the years, and most of those investors must be tired enough that they are taking the rather thin bird in the hand than the fatter one which apparently was not hiding behind the IPO bush. Still with Medicare getting interested in DM, and the whole market belatedly taking off (Lifemasters is advertising over 60 vacancies on its website), it’s a little curious that they decided to take the offer rather than soldier on alone. Still Healthways stock is down some 5% on the news, so its investors aren’t exactly thrilled.
Anyone know more or have any thoughts?
I must be getting vaguely famous as I was sent (unsolicited) a copy of a new book by Maggie Mahar called Money-Driven Medicine. On Sunday it was reviewed in the Boston Globe, which fairly accurately portrayed it as an indictment of 30 years of corporate medicine. Here’s the Globe’s conclusion:
The core message of "Money-Driven Medicine" is that the quintessential doctor-patient relationship has been transformed by the requirements of corporate medicine into a retailer-consumer relationship, and every sector of the system is trying to sell its products and services to that consumer and reap profits for its stockholders.This market-driven system, Mahar shows, turns the law of supply and demand on its head. The competition generates excess supply, but that does not lead to less costly medical care. It is the cost of replicated facilities, equipment, products, and services, along with millions spent on marketing and advertising, that keep the cost of medical care in this country soaring
So unlike many others, as this was a book looking at my core topic, I read it cover to cover. It’s a good read and broadly accurate as a narrative. If I had to nitpick I’d complain that Mahar spends too much time quoting other people rather than telling the story herself. I got the impression that being a financial journalist who came to health care as a fresh topic, she was a little over-wowed by what she found — although I guess that means that old middle-aged fogeys like me are too cynical about how badly people in the system behave. But at least the people she quotes at length like Jamie Robinson and Sheryl Scholnick are pretty sensible.
There were also one or two minor gems. I didn’t know that the AMA had a televised presentation opposing Medicare in 1962 immediately after JFK had a rally promoting it in Madison Square Garden—although it’s worth remembering that the AMA (and by extension most doctors) opposed Medicare and universal health insurance basically all through the 20th century. I also missed the fact that the SEC dropped an investigation into Bill Frist’s brothers conduct in the Columbia/HCA scandal immediately before the 2002 elections under pressure from the Administration—but that’s not exactly surprising.
Overall it’s a pretty comprehensive review of the corporatization of the health care system, and probably a pretty good introduction for people who don’t understand health care much. Although I remember another other book very like it written in the 1980s (which I can’t remember the title of) which also decried the new world of the for-profit hospital chains and that was before the most recent round of Columbia/HCA and Tenet undertakings.
Where I disagree with Mahan is that the perversion of medicine by money is somehow a recent thing caused by Wall Street & corporate incentives — sure you could argue that it’s worse now, but the manipulation of the health care system for the ends of power and profit is as old as the economy. And the impact that has had on the quality and cost of medical care is just as crucial, as whatever Tenet, HCA or HealthSouth has been up to. Paul Starr and Michael Millenson wrote much better books about that in the 80s and 90s. On the human issues involved Jonathan Cohn has what promises to be an even more interesting book coming up (although I’ve only seen two chapters)
Meanwhile I’ve given the book to John Irvine, who’s a more recent arrival in health care than I am…so I hope that he’ll be able to do an interesting review later unclouded by my biased perspective.
Next week I’ll be at some of the Consumer Directed Health Care Conference in SF. It’s a weird match of the business guys trying to extort the last dollar out of the HDHP/CDHP buzzword before it dies its inevitable death, the wing-nuts promoting it who still can’t do basic math, and the real long term players, mostly on the IT side, who are trying to figure out how to put customer service and patient self-involvement into the care process. Sadly all too few of the latter, and none of the Information Therapy crowd who actually know something about it.
I’ve already interviewed Grace-Marie Turner about this, (no prizes for guessing which category she fits into) they have everyone’s favorite (lack of) market-theorist Reggie Herzlinger (although earlier than I like to get out of bed, so I’ll probably skip it) and even Newt is making an appearance.
It’s kind of funny that Grace-Marie and Sally Pipes are on suggesting in a only slightly loaded way that a Consumer Driven Health Care System will Succeed and a Government Run/Single Payor System will Fail and there is no one from the other side to respond. Couldn’t they afford Uwe? Was Jamie Robinson busy? David Himmelstein unavoidably detained by the FBI? Alain Enthoven couldn’t make the drive up from Stanford? Ian Morrison booked elsewhere. Couldn’t find my phone number on my web site? (UPDATE: apparently they talked to Brian Klepper, found out he wasn’t a fan and never called back).
Don’t worry, they did find one blogger’s number—Dmitriy Kruglyak of The Medical Blog Network is giving a talk on Blogs & Open Media: A New Force in Consumer-Driven Healthcare. I don’t know what he’s going to say, but the title looks good and correct.
However, given that this is a conference about making health care an easy experience for the consumer, you’d think that they would have paid a little attention to “their” consumers the attendees. So you want to see Reggie’s talk on the first day? Go to this screen — look at the far right and tell me what time Reggie’s on in the 8.30 to 12 range. Meanwhile go to any session and hit the “session description” button. It launches a word document no less, which for most browsers spells trouble. And on the three that I’ve opened at random there’s no more info than is in the session description on the main page.
OK. Let me stop griping about user interfaces, remind you that good customer service, patient-centered care and high deductible health plans are not necessarily causally or even collinearly related, go the conference and report back.
In this pretty impressive article, The Consequential Divide: Which Direction Healthcare?, Preston Gee points out that too many people face the future in health care by "wishing would make it so". This was something that we had to contend with at IFTF all the time–people saying "you want X, therefore you’re predicting X" about our forecasts. That’s certainly what most people like to do, and then are unprepared when Y arrives instead.
One way around this–which we used extensively at IFTF–is to create scenarios which give alternate views of the future, and provide clues so that the client could recognize which scenario it ended up in. Then you develop a plan for each scenario, and enact it according to the future you find yourself in.
My only problem with Gee’s argument is that he suggests we’re either going to a consumerist-HSA future or to a single payer one. If I was forced to guess I’d say that we’re going through a consumerist-HSA future to a single payer one–and a damn violent upheaval it’ll be too. So that will make the timing of many initiatives very tricky.
But there are plenty of other potential scenarios: consumerism might remain a small deal for most health care providers, or a modest upturn in the employment world might release some of the cost pressure off employees, or a rash of hospital bankruptcies lead us to the "Blade runner" or "Brazil" scenario, or a sensible coming together of providers, plans and employers plus an individual mandate gets us to a quasi-universal insurance with modest price controls. (If you want the full list you’ll have to hire me!)
Bill Walsh probably figured out the best way to use scenarios. In his day the 49ers had a play ready for virtually every eventuality (e.g. for 3rd and 15 on the opponents 30, losing by 6 with 45 seconds on the clock, Montana would fake to rice and dump off to the fullback, or whatever). Scenario-based strategic planning doesn’t have to be that complex. But health care organizations need to realize that there are a range of possible futures out there, and if they want to be live in all of them, they need to prepare.
More from the World Health Care Congress. Keynote is from Bill Castell, head of GE healthcare. He says that we need to bring “Care to the individual rather than the patient to the Institution”
Ten realities of global health care
1) Obesity: Need to work on preventing this from occurring, especially cardiovascular & cancer2) Demographics3) Cost of chronic disease4) Threat of Pandemic5) Volume/price equation (India and China vs US as a market)6) Infinite demand and constitutional right7) Capitalism and Sustainability8) West’s replacing carbon knowledge underpinning democracy9) Take the knowledge dividend back into society (asset not a liability)10) Global level playing field for intellectual property
Technology changes: Ultrasound is becoming cheap and ubiquitous; EMRs are changing clinical process; remote monitoring is emerging. For example, they believe that they can move from 43% to 85% survival in cardiac disease, so long as you can move from late stage to early stage disease.
Believes there’s an opportunity to fundamentally change health care….
However, Noel Tisch (Prof at Michigan business school) says, we’ve heard lots of promises about fundamental changes in health care before…..he thinks that leadership is the key. Worst people in the world to develop leadership are profs and consultants! Has to be done by leaders. He believes that the most important aspect of leadership is the time spent by CEOs to teach his new leaders. Pepsi was a great example of that (Roger Enrico CEO).
If we extend life, we will add yet more cost unless we reduce disability. This is clearly GE’s aim. What data do you have to suggest that the cost of dying will be more affordable in such a future?
Health care industry has to develop the options for the best care we can deliver. Longevity is changing but society has to develop the maturity to answer the question?
When you speak in terms of “raising the bar on leadership” please discuss the challenges of “leading” unmotivated, less than healthy populations who are not willing, at least today, to take some responsibility for their own health?
If you can create an environment where people get personal dignity back, then they re-engage in community & society. All of us have the responsibility to help and work with the underprivileged.
What is it the US healthcare can possibly learn from emerging countries like India?
Things like the $12 “Jaipur” foot can be solution for not just the third world but have wider implications elsewhere.
Do you see R and D continuing to leave Europe for the US and Asia, and what is the message for Europe?
The issue for Europe is tricky, as it lost to the US for health care innovation. We need better definition of outputs. but we never see the consumer data published. Final thoughts: Find 3% of your time to touch other peoples problems and you’ll find that it improves your own business and work. Tisch-think of value of return on time
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