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Where have all the savings gone, long time passing? by Eric Novack

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Where have all the savings gone, long time passing?

I am not the first to comment on this New England Journal of Medicine article, but it does deserve a place here at THCB. 
It has been the dogma of many at THCB that prevention = savings, and substantial ones at that!Put in the context of this study from the Netherlands, also published this month, is it time for some health care reformers to change their tune on how the health care reforms they promote will save money?

And before simply putting the savings to ‘pay’ for this on the elimination of administrative costs, please see my previous post.

And before saying that electronic medical records will, by themselves save 80 billion dollars per year (as I heard former President Clinton say at a Wisconsin rally this weekend- as an aside, I love XM radio for unlimited access to C-SPAN), consider the $4 billion struggle at Kaiser Permanente to get medical records for a measly 8.6 million patients… Now, with over 300 million in the country, that might mean an investment of well over $120 BILLION (with a B) to TRY to computerize the electronic medical records of the country.
 

Do not misread me to claim I am a proponent of the status quo, nor that I am not in favor of the WORD OF 2008—change— it is simply that I would like to hear more from those who want to institute certain kinds of change— how will they really ‘save money’ while simultaneously increasing access without severely impacting my liberty as a patient.

HEALTH PLANS: $9 million? OK, We’ll change our tune

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On Thursday HealthNet was being sued by the LA City attorney’s office and saying that it was doing nothing wrong and would keep on trucking:

Health Net’s Olson said the company’s application had been approved by regulators and didn’t need to be changed.”There are 110,000 Californians who figured it out and were able to fill out the application in a way that got them low-cost, high-quality coverage,” he said. “It’s fine and it’s working.”

Presumably they had faith that the arbitration process that many health plan policyholders have to go through would mitigate any risk.

What a difference a day makes.

Friday, the arbitrator in the case of the cancer patient whose insurance was retroactively terminated—this was the case which revealed the bonuses paid to staff who cancelled policies— awarded $9 million in punitive damages to the patient. This isn’t quite the $89 million that was awarded against HealthNet in 1993 in the Fox-Hipple case, but the difference is that in arbitration there’s usually no appeal (that $67m was never paid in full).

Jay Gellert, HealthNet’s CEO immediately announced that they would stop retroactive cancellations. But of course with lawyer William Shernoff now smelling blood, and with Blue Shield still fighting for the “right to recission” in the courts, the damage isn’t over.

Hopefully this will eventually mean that the companies will accept real regulation and real reform in the individual market, which essentially means ending it. 

(FD I am a HealthNet individual policy holder and they haven’t “recivved” me yet. Then again I haven’t had a claim in 3 years!)

HEALTH PLANS: L.A. sues Healthnet

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In the latest fall out over health plans behaving badly, the City of Los Angeles is suing Healthnet about its policy of paying bonuses to staff for cancellations.

The suit alleges that Health Net sold at least 100,000 individuals policies over the last four years. If the city attorney proved that each policy was falsely advertised and vulnerable to an unfair cancellation — and if the maximum penalty was assessed in each case — the company’s liability could run into the hundreds of millions of dollars, sources close to the investigation have concluded.

Healthnet isn’t sounding too contrite, though. 

Health Net’s Olson said the company’s application had been approved by regulators and didn’t need to be changed.”There are 110,000 Californians who figured it out and were able to fill out the application in a way that got them low-cost, high-quality coverage,” he said. “It’s fine and it’s working.”

POLITICS: Ghost in the Attack Machine

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I’m up at Spot-on discussing the return of one of the more improbable and unlovable charcters in the last health reform debate, and her recurrence as a Ghost in the Attack Machine. As ever come back here to comment…

It’s almost full-on election season so I’m getting email from the Republican National Committee suggesting that there are problems with both the Sen. Hillary Clinton and Barrack Obama plans for health reform. Funny that – given my politics – but it gets better.

The RNC thoughtfully sent along a copy of a Wall Street Journal op-ed featuring an appearance by that blast from the health reform past, Betsy McCaughey who these days hangs her hat at the ultra-right wing Hudson Institute. In the 1990’s she was a brief star of the new right after writing, in early 1994, a magazine article in the then-quasi-liberal magazine The New Republic. Called No Exit, it contained a damning account of the Clinton Health Plan and got a fair amount of attention at the time. No Exit was a fair load of old tosh (you really keen health policy archaeologists can unearth the Clinton White House’s full rebuttal to see what I mean).

Read the rest

THCB UPDATE

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Careseek CEO Gale Wilson Steele writes in to comment on the ongoing controversy over physician ratings:

"It’s not surprising that physicians are uncomfortable with the idea of others "rating" them.  After all, what do others know about how well they provide healthcare?

This, actually, is very similar to the reactions professors first had on RateMyProfessors, where professors protested that students only cared about whether their tests were fair, and scoffed saying that the “kids” knew nothing about the professors’ degrees, research projects, etc.  In the minds of those who stood at the lectern, it was about academic qualifications; for those in the seats, it was about staying awake.  Today, professors are much more comfortable with the fact that they can be listed on a website and reviewed, and in fact, are somewhat insulted if no student has taken the time to list them.  Secretly they even hope to receive a few “chili peppers”, meaning that they are “hot” professors!

Ultimately, a few professors responded in kind and created Rateyourstudents.blogspot.com, a sort of RateMyStudents site.  By now it has turned into a cynical professorial rant about teaching.

So with new physician rating and review sites coming online nearly every week, how are doctors going to handle being rated by their patients?  Physicians also complain “What does a patient know about how well I practice medicine?…Patients don’t know about my years in school, my research, my etc.” 

Will doctors ultimately create a site called RateMyPatients, where they can rant over the injustices of healthcare and the assaults they take daily from their patients?  Or will they praise these sites as a place to learn how to improve their practices or as sources of patient testimonials to their excellence? 

The latest twist on who rates whom is eliminating the issue of reviewer qualification, namely NursesRecommendDoctors.com.  No one will deny that this population of over 3,000,000 trained medical professionals has a keen insight into the practices of physicians, their bedside manners and clinical competence.  It will be interesting to see if this trusted group of patient advocates will have the willingness to share what everyone wants to know…who are the best doctors?"

TECH: Google to Store Patients’ Health Records

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The AP has announced that Google’s first step into the world of storing health records will be in conjunction with the Cleveland Clinic—which of course already has a boatload of patients using EMRs and PHRs on the Epic MyChart system. The idea (presumably as this is a leak from within Cleveland Clinic not an official announcement) is that those records can be stored in Google, and presumably will be transportable—somewhat similar to what Microsoft and Dossia are promising. Nothing earth-shattering yet, but an interesting beginning.

And of course we’ll hopefully get some more details next week at the HIMSS conference where Google CEO Eric Schmidt is speaking, and the Health team is having a party to which they kindly invited me (Thanks, Missy!)

Google has been much criticized for its slow pace in health. But speaking as one who now runs big components of our little business on Google via Checkout (and integrates it with rival services like WuFoo and TypePad) — I think that this (and HealthVault et al) is a small step towards a much bigger online future for health care transactions. At least, I hope so!

HOSPITALS: The SEIU & Paul Levy lovefest continues

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The SEIU has been trying to organize Beth Israel Deaconess Medical Center, who’s CEO Paul Levy’s most famous accomplishment is writing a blog called Running a Hospital. (What could be more worthy than that? Yes, we feature Paul’s posts on THCB fairly often because we think he’s really good).

In his writing about the SEIU Paul has been, as Eric Idle (or was it Graham Chapman) used to say, cruel but fair. He nominally is neutral on what his employees decide to do about unionization but it doesn’t take much reading between the lines to show what he really thinks about the SEIU and its campaign.

And now, while Paul is off luxuriating on the sunny climes of an English February, the SEIU is striking back—pointing out that BIDMC includes bad debt in its charity accounting and is therefore overstating the amount of charity care it gives out. This isn’t exactly a rarity amongst hospitals, but it’s not that often that the SEIU gets it reported in that collectivist organ known as The New York Times.

POLICY: The financial castrophe of uninsurance will get worse

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Just another reminder about the perversity of our insurance system. Steve Lopez in the LA Times writes a about a 57 year undergoing chemo whose COBRA benefits are running out . Whether or not chemotherapy is always the right option in these cases (and you’ll get plenty of arguments about that here on THCB), there is no excuse for a system where financial catastrophe will be visited on families by the random luck of getting sick.

But of course this problem is growing rapidly. Health Affairs confirms today with an Urban Institute study what’s well known—health insurance coverage has been declining while the economy has been expanding. This is the complete opposite of the 1990s, where the numbers covered by employer-provided health insurance increased as the economy improved.

So of course in the coming (or present?) recession the horror stories like that of the teacher and those Jon Cohn wrote about in Sick are just going to multiply.

HEALTH 2.0 Accelerator

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At the end of Health 2.0 in September 2007, CommerceNet’s Marty
Tenenbaum proposed the creation of an industry initiative to accelerate
the Health 2.0 vision. This initiative would do for Health 2.0 what
CommerceNet did for e-commerce, educating and catalyzing the market
through visionary integration projects that demonstrate the potential
of Health 2.0 to improve people’s lives. This first organizational
meeting will forge a direction for the Health 2.0 Accelerator,
exploring potential projects and organizational structures.

Come prepared to share your ideas about the need for a Health 2.0
Accelerator and what it should focus on: What are the problems that are
preventing your technology or organization getting specific tasks done?
What standards are needed to facilitate data exchange and mash-ups?
What partnerships would make your services or products more valuable?
How could a Health 2.0 Accelerator help?

This session is open to attendees at Health 2.0 San Diego only. Please pre-register for this session by clicking on this link.
You are also encouraged to propose a specific topic for discussion as a
potential project, and should come prepared to speak about it briefly
(PowerPoint ok).

UPDATE: Health 2.0 Connecting Consumers and Providers is officially sold out. You can sign up for the waiting list here. You will be notified by email if additional passes become available due to cancellation or a capacity increase.

EXHIBITORS: Want to get your healthcare service or product in front of the right people?  Health 2.0 is the place to be. Connect with investors and high level executives and opinion leaders at the top health systems, health plans and technology companies around the country.  Email in**@********on.com with "exhibitor info please" in your subject line and we’ll get back to you in two shakes.

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