Sector Wrap: Health Insurers Fall. UNH is down $5 or close to 10% from its high on Tuesday with Allen’s conecession in VA giving the Dems the Senate being probably the clincher today.
And was I short, like I said I would be on Monday? Back then the 45 Nov puts were trading at 20 cents, today they’re 55. So how many did I load up with? (no need to add the next sentence!)
Here’s a piece from veteran SF Business Times health care reporter Chris Rauber on the Kaiser saga. I still basically stay where I was, but it’s worth noting that the presumed reason that Cliff Dodd resigned on such short notice (i.e. was canned) is not because HealthConnect (Epic) doesn’t work—it’s because the story that he was a director of the consulting company paid $1m in fees by KP while he was CIO is presumably true! That’s such a visible conflict of interest, it’s bizarre that he and the rest of the board thought they could get away with it. So I suspect that he never told them and no one bothered to ask until Justen Deal dug it out of various filings. Of course you may have your own opinions. I also just noticed that Dodd’s sole academic qualifications were that he has a BA in Sociology. I’ve got one of those (well, sort of)—perhaps they should give me the job!
However, there is no evidence that any other major EMR system works better than Epic, or is written on a more sophisticated, more modern code than MUMPS. The only real competitor in existence when the decision was made was Cerner’s Millenium—not known for its drop dead gorgeous implementations, and lacking an outpatient function at that time. The others, Soarian (Siemens), Eclipsys, McKesson did not have proven ambulatory and in-patient systems.
Why didn’t KP just buy Epic, as has been suggested? Perhaps you should ask the folks at Phillips about how easy Judy is to work with, and how willing she is to sell.
While we can all snipe from the sidelines, there is no question that getting clinicians to use process automation software of any type is really, really, hard. So I’m not surprised that this isn’t all smooth sailing.
Finally, the real scandal at Kaiser this year has not been about the IT system, or even about the pecadillos of various Kaiser executives. The real scandal has been the opaqueness of the management of the kidney transplant program’s collapse, even though that’s stayed out of the national press (beyond the LA Times and Chris Rauber’s work).
At a meeting about PR for blogging that I spoke about, Kaiser’s new press rep (didn’t catch her name) said that they were going to behave differently in the future. At least Halvorson wrote an email about this latest brou-ha-ha. We heard zip from him or TPMG about the kidney scandal.
It shows yet again that the worst way to deliver a baby is by C/S following a long failed labour. If you could guarantee a normal labour then that would probably be best for mother and baby, at least at the time. This doesn’t allow for the increase in prolapse and Sphincter Weakness Incontinence (Stress incontinence)in later life. It also shows that female doctors are the poorest judge of how they should deliver!
Lonny Reisman is a physician who came up with what he believes is a way to improve medical care and patient outcomes by tracking data and feeding it back to practitioners in close to real time. Aetna liked the idea so much they bought the company, Active Health Management, for $400m big ones last year. More importantly, it might be one way that population care management can become real in the continuing absence of the EMR.
Here’s the podcast.
It’s really interesting stuff and rather better sound quality than some of the recent ones–there’ll be a transcript up soon.
I was going to do a post election special, but Joe Paduda beat me to it over at Managed Care Matters. I was also going to short United Healthcare, given that the Dems win will likely make it rough on those who feed at the trough of Medicare managed care. But of course I failed to do so, mostly because I’m spending all my money on putting in a new kitchen. And of course had I done so, I’d have made out, but again for a different reason. As it turns out, the stock rallied up on Tuesday and then fell Wednesday because the company released news that its problems with the options back dating scandal would be worse than were originally thought.
But longer term, the value health plans contribute when they’re not putting their heads into the Medicare trough seems to be diminishing, and employers seem to be getting wise. If the government (or at least Henry Waxman and Pete Stark) start really asking tough questions, and if Dick Cheney is not the deciding vote in the Senate, which is looking more and more likely, well perhaps the six year bull market in health insurer stocks is over. But I’ve been saying that for a while.
On the other hand, health plans do have some potential to do good. See my podcast with Lonny Reisman of Active Health Management to see what that might be.
My piece about RHIOs as ASPs is up at Digital Healthcare and Productivity
Want to be a fraudulent gazillionaire running a public company? Get your CFO (or in Scrushy’s case a plethera of them) to commit fraud, blame it all on them when it gets discovered, and suggest that as CEO it’s got nothing to do with you, and who were you to know anyway—after all you were just the CEO?
OK, so it didn’t work for the Enron guys, but then again everyone in Houston knew someone who lost their job or life savings. Most San Franciscans haven’t got a clue what McKesson does, or that it’s one of the biggest companies in town. So when the Jury Acquits, Hangs in Trial of McKesson’s Former CEO and GC, it shows that McCall gets off the Scrushy way. Well done. Now will some one give me a big public company to run?
You be the judge!
Ian Morrison is trying to point out to the upper echelon of America’s body politic (i.e. the rich bit of its health care system) that some compromise may be reasonable in order to avoid single payer.
Brian Klepper and Alain Enthoven are pointing out why that compromise is necessary now — not something that a random walk through the unthinking business columns of the NY Times might suggest.
Of course they’re all optimists. As I’ve told all three (all of whom I know and greatly admire), I think the systems will trundles on till the middle of next decade when at the behest of the China central bank (or whoever controls economic policy then) the President will be forced to put AHIP, the AHA, the AMA, PhRMA and their Congressional lackeys in a room and offer them two choices. And single payer will be the more acceptable one.
Gadlfy has been telling me that I’m MIA on the big Kaiser story, but luckily MrHISTalk has picked up the slack and has printed the Internal E-Mail Criticizing Kaiser’s HealthConnect Lands Employee in Hot Water. In addition in a presumably related move CIO Cliff Dodd has quit. Gadfly also tells me that the 25yr old malcontent Justen Deal (who I’d never heard of before yesterday) was previously a Kaiser cheerleader. Well nothing like a convert to preach a new religion. And his new faith is that Epic sucks, HealthConnect is a disaster responsible for a forthcoming financial crisis at KP, and that Halvorson is incompetent/a crook (take your pick)
I have no idea whether the Epic solution will or won’t work in the long run, but I suspect that it was rather better than the IBM/Colorado solution, given a conversation I had a while back with some internal KP tech savvy docs about the state of that code. The truth is presumably somewhere in the middle. Unless Halvorson actually has secret stock in Epic or is being paid off into some Swiss bank account, something that’s rather unlikely given the way Judy Faulkner runs that private company, then there doesn’t seem to be any direct conflict of interest. Lots of big IT projects don’t work as advertised—in fact few do! And Kaiser is a highly fragmented and political organization (always has been, always will be), so betting the farm on a one-stop EMR solution probably did require getting most of the board to leave. I’m amazed Halvorson got it done at all.
And I cannot believe that HealthConnect is by itself responsible for all the anticipated losses—the move towards HDHPs is far more likely to hurt KP’s bottom line, as they are just not set up for that type of an environment (in which the risk pools is destroyed). It’s just not in their nature.
And at least the attempt behind HealthConnect is to improve care. Much more concerning is the organization’s reaction to the kidney transplant scandal, which as some of my commenters mentioned at the time called into question the financial ethics of TPMG.
But I guess this new little outburst doesn’t help! And I have heard quite a few KP docs bitching about the new system. Any more want to chime in pro or con or neutral?
….and of course much more from a not exactly neutral source at Gadfly’s blog
After being at war in several markets for the past few months (Florida and Denver come to mind) HCA has agreed a national contract with UnitedHealthcare. United has been having member retention problems in N. California, meanwhile losing a major client might have hurt HCA’s bid to go private. So someone clearly blinked here. Anyone got an idea as to who?
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