Tag: The Insider’s Guide To Health Care

E-Health – It All Depends on How It’s Used

Technology isn’t a quick fix. Just ask General Motors. In the 1980s, the auto giant spent $50 billion to automate and computerize its plants in an effort to compete with Toyota. Today, GM is emerging from bankruptcy while Toyota still leads in producing high quality, fuel-efficient vehicles.

What happened? “The Japanese have a great way of describing the error that General Motors made,” said Thomas Kochan, co-director of the Institute for Work and Employment Research at the Massachusetts Institute of Technology Sloan School of Management. “It’s workers who give wisdom to these machines.”Continue reading…

Explaining Runaway Costs: The Lobster or the Salad?

LOBSTER_GRAM_300Have you found yourself ‘splaining to friends and family why the healthcare system is so damn expensive? I’ve been teaching health policy for a couple of decades, and I’m surprised that my two favorite stories haven’t yet surfaced in all the discourse. Here they are, in the hopes that they help you, or someone you love, understand why medical care is bankrupting our country.

Let’s start with the Expensive Lunch Club, a story I first heard from Alain Enthoven, the legendary Stanford health economist. It goes like this:

You’ve just moved to a new town and stroll into a restaurant on the main drag for lunch. None of the large tables are empty, so you sit down at a table nearly filled with other customers. The menu is nice and varied. The waiter approaches you and asks for your order. You’re not that hungry, so you ask for a Caesar salad. You catch the waiter looking at you sideways, but you don’t think too much of it. He moves on to take the order of the person sitting to your right.

“And what can I get for you today, sir?”

“Oh, the lobster sounds great. I’ll have that.”

You’re taken aback, since the restaurant doesn’t seem very fancy, and your tablemate is dressed rather shabbily. The waiter proceeds to the next customer.

“And you, ma’am?”

“The lobster sounds good,” she says. “And I’ll take a small filet mignon on the side.”

Now you’re completely befuddled. You tap your neighbor on the shoulder and ask him what’s going on.

“Oh, I guess nobody told you,” he whispers. “This is a lunch club. We add up the bill at the end of the meal, and divide it by the number of people at the table. That’s how your portion is determined.”

You frantically call back the waiter and change your order to the lobster.

“If the waiter makes a 15% tip on the total bill and you ask him to recommend a dish,” Enthoven asked our health econ class, a glint in his eye, “do you think he’ll recommend the salad or the lobster?”

“And if most of the lunch business in town is in the form of these lunch clubs, do you think you’ll find more restaurants specializing in lobster or in salad?”

I have always found this story to be the best way of explaining how the fee-for-service incentive system drives health inflation – and how it isn’t just the hospitals, or the providers, or the patients who are the problem. It’s everyone.

The second story involves one of the great innovations in the annals of surgery: laparoscopic cholecystectomy, or “lap choley” for short. As you may recall, the old procedure for removing a gall bladder involved an “open cholecystectomy,” a traditional “up to the elbows” surgical procedure. It was a nasty operation: patients stayed in the hospital for a week, recuperated for a month, and ended up with a scar that began in their mid-abdomen and didn’t end till it reached Fresno. The surgery was exquisitely painful, and had a high complication rate and a non-trivial mortality rate. And it was hecka expensive.

In the late ‘80s, along came lap choley, in which the surgeon makes a few inch-long slits in the abdomen, then inserts narrow mechanical arms that can cut and sew while allowing him to monitor the patient’s innards through a tiny camera. With this revolutionary “keyhole” procedure, patients had shorter hospital stays (1-2 days instead of a week), a much shorter convalescence, and a far lower complication rate (and negligible mortality). And costs were reduced by about 25 percent.

This was innovation – the new procedure was safer, less painful, and far less expensive. So what do you think happened to national expenditures for surgical management of gallstone disease after the advent of lap choley?

You know the answer. During my training in the 1980s, we were taught that you only removed a gall bladder containing gallstones when it was infected (“cholecystitis”), unless the patient was diabetic (the much higher complication rate of cholecystitis in diabetics justified prophylactic cholecystectomy). We told all the other patients with known gallstones to avoid fatty foods and to come to the ER promptly if they had severe belly pain, developed a fever, or were mistaken for a pumpkin. Most of these patients ultimately died with their gallbladders still in their abdomens, not the pathology lab.

But lap choley led to “indication creep” – the surgery now seemed benign enough that we began to recommend cholecystectomy for anybody with “symptomatic gallstone disease.” Since everybody ends up with an ultrasound or CT at some point in their life, we find lots of gallstones. Symptomatic? How many people do you know who never have belly pain? Do you? (Perhaps you need your gall bladder out.)

So, whereas technological innovation usually lowers costs in other industries (Exhibit A: Moore’s Law), in healthcare it often raises them as the indications for expensive procedures change faster than the unit price.

Is there a way out of the lap choley conundrum? Perhaps comparative effectiveness research will help – it might tell us precisely which patients will, and won’t, benefit from lap choley. All the usual issues must be navigated.

The expensive lunch club and the story of lap choley are two reasons why our healthcare system consumes 16% of our GDP. Sure, there is waste, greed, and fraud in healthcare, but I find the stories helpful because they illustrate how the actions of perfectly reasonable doctors, patients, and administrators will lead to inexorable inflation if the system isn’t changed in fundamental ways.

That increasingly seems like an awfully big “if”.

Robert Wachter is widely regarded as a leading figure in the modern patient safety movement. Together with Dr. Lee Goldman, he coined the term “hospitalist” in an influential 1996 essay in The New England Journal of Medicine. His most recent book, Understanding Patient Safety, (McGraw-Hill, 2008) examines the factors that have contributed to what is often described as “an epidemic” facing American hospitals. His posts appear semi-regularly on THCB and on his own blog “Wachter’s World,” where this post first appeared.

Meaningful Use vs. Meaningless Adoption of Electronic Health Records

Dr. David Blumenthal, the new National Coordinator for Health Information Technology, has stressed that  the goal of the ARRA/HITECH initiative is to improve patient care, not to mindlessly adopt health information technology. In this regard, he wrote that many CCHIT-certified EHRs “are neither user-friendly no designed to meet HITECH’s ambitious goal of improving quality and efficiency in the health care system.”

It is therefore disconcerting that the Association of Medical Directors of Information Technology (AMDIS) just weighed in on the issue of meaningful use with their letter to Dr. Blumenthal, recommending that the new national HIT Policy Committee use the 2008 CCHIT certification criteria to determine which hospitals and physicians get HITECH incentive dollars.Continue reading…

A Declaration of Health Data Rights

THCB & Health 2.0 are happy to be a small part of a very important declaration, made today by a mix of patients, physicians, technologists and concerned citizens. It’s a Declaration of Health Data Rights, and it’s extremely important because access to usable data is a very pressing problem in the health care system, and one that we have the opportunity to solve if we bake the concept into regulation and practice now, as electronic health data becomes more pervasive. Here’s the declaration:

In an era when technology allows personal health information to be more easily stored, updated, accessed and exchanged, the following rights should be self-evident and inalienable. We the people:

  • Have the right to our own health data
  • Have the right to know the source of each health data element
  • Have the right to take possession of a complete copy of our individual health data, without delay, at minimal or no cost; If data exist in computable form, they must be made available in that form
  • Have the right to share our health data with others as we see fit
These principles express basic human rights as well as essential elements of health care that is participatory, appropriate and in the interests of each patient. No law or policy should abridge these rights.

More information about how you can support this declaration, how it was created, a FAQ and what you can do to get involved is all at

A Dream of Reason


The dream of reason did not take power into account…Modern medicine is one of those extraordinary works of reason…But medicine is also a world of power.

-Paul Starr, The Social Transformation of American Medicine, 1984

Today’s unveiling of a Declaration of Health Data Rights is an important action, long overdue, that represents a collaborative effort by a group of health care professionals – activists, entrepreneurs, technologists and clinicians – all colleagues we hold in high esteem.

The Declaration’s several points arise from a single, simple premise: that patients own their own data, and that that ownership cannot be pre-empted by a professional or an institution. And there lies its power, especially in the context of early 21st Century health care. It is a transformative ideal that currently is not the norm. But we join our colleagues in declaring that it should be.Continue reading…

Clinical Groupware: When Not-As-Good Is Actually Better


In a February 13, 2009 blog post I introduced the idea of Clinical Groupware as a low cost, modular, and cloud computing alternative to traditional electronic health record technology for physicians and medical practices. Central to the concept of Clinical Groupware is IT support for care coordination and continuity, achieved through shared access to personal care plans and point-of-care decision supports. In this post I’d like to put a few more ideas on the table, specifically with respect to the market niche that Clinical Groupware may ultimately fill, including comments by several individuals whose opinions or work may be crucial to the success of Clinical Groupware over the next 1-3 years.  (Anything farther out than that is simply dreaming.)  Consider this an interim report on an emerging story with an indefinite timeline.

Interest in this topic has been, of course, heightened by the recently passed federal AARA/HITECH, provisions of which will provide incentive payments to physicians of as much as $44,000 over a five year period commencing in 2011, provided that the physicians can demonstrate the “meaningful use” of “certified EHR technology.” It’s always more exciting when there’s real money in the mix. Will Clinical Groupware qualify as “certified EHR technology?”  Many physicians and developers are hoping it will. Here’s why.Continue reading…

A Self-Fulfilling Prophecy: The Continuity of Care Record Gains Ground As A Standard

Brian KlepperWe live in a time of such great progress in so many arenas that, too often and without a second thought, we take significant advances for granted. But, now and then, we should catalog the steps forward, and then look backward to appreciate how these steps were made possible. They sprung from grand conceptions of possibilities and, then, the persistent focused toil that is required to bring ideas to useful fruition.

We could see this in a relatively quiet announcement this week at HIMSS 09. Microsoft unveiled its Amalga Unified Intelligence System (UIS) 2009, the next generation release of the enterprise data aggregation platform that enables hospitals to unlock patient data stored in a wide range of systems and make it easily accessible to every authorized member of the team inside and beyond the hospital – including the patient – to help them drive real-time improvements in the quality, safety and efficiency of care delivery.”

Continue reading…

Google Health sharing–simple but potentially important


Today late afternoon PST Google flipped the switch on an important change/add to Google Health.

Recently they’ve been adding more and more little features, such as printing & graphing, and in the last month getting CVS retail pharmacies on the network (to join Walgreens), and sucking up device data. But this new one may be the most interesting, as Google Health has added the ability for users to invite others to see their records.

Anyone who’s used Google Docs (and that includes all of us working at Health 2.0) immediately gets addicted to sharing those spreadsheets and text documents with a wider team. It’s so easy, you just invite them to it, and then one day you wake up and you’re sharing hundreds of documents with everyone you work with and cannot imagine how you did it before.

Continue reading…

Yelp: The Backlash Begins…

Picture 25There's a pretty serious article about Yelp, which has become the dominant player in restaurant and 
service reviews in the SF Bay Area, in a local alternative weekly The East Bay Express called Yelp and the Business of Extortion 2.0.

Now recently Yelp has seen a couple of its reviewers sued for reviews about health care providers (both chiropractors), and the issue about what reviewers can say online is probably still to be worked out.

But this article is about something much worse. It accuses Yelp of changing reviews, eliminating them, and generally breaching the church/state line between community and sponsorship.

And it goes both ways. Businesses that advertise get bad reviews “disappeared” and those who don’t find their good reviews are vanishing.

Continue reading…

Podcast: Blues VC fund invests in Phreesia

I’ve been following Phreesia since it was two guys in an apartment trying to figure out how to make the patient check-in at the doctors office a better and more useful experience. Today they announced an $11m series C round with new investor BCBS Ventures, a new-ish fund backed by 11 Blues plans. (FD: Phreesia has presented and exhibited at Health 2.0, and I think they’re a great example of using light-weight web technology to solve a messy process problem.) I spoke to Chaim Indig, CEO & President of Phreesia, and new investor Paul Brown, Managing Director of BCBS Ventures Inc this morning. Here’s the interview.


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