THCB

Categories

Above the Fold

TECH: Intel inside, but inside what?

• 8

I spent Monday morning at a press conference where Louis Burns, the head of Intel’s health initiative, talked about what Intel is up to in health care, and Robert Pearl, the CEO of TPMG (the Kaiser doctor group), talked about their move to EMRs.

Kaiser is clearly making some progress—for instance they’ve now got messaging between physicians and patients running in N. California. Pearl repeats the line, which I buy, that the medical groups which have electronic clinical records and manage chronic care for their patients automatically will produce superior quality patient care. Unfortunately, there are two major problems. First, getting people to move to a Kaiser (or equivalent) from the disaggregated FFS doctors that 90% of Americans now use will require Kaiser to be cheaper than competitive plans (which it’s not any more) and to get employers to force their employees to move to those integrated systems. Something that has been really tricky for employers to do. Second, when I asked Pearl about it he said, speaking personally, that employers (and America as a whole) were going the wrong way by moving towards high-deductible health plans because it was a short-term way of cutting costs, and reduced the sensible use of preventative care.

Intel’s health group wants to move towards more preventative care (and less reliance on intensive acute care). They are pushing technology to create smart homes, and easier communications between patients, caregivers, and clinicians. They’ve spent a ton of effort researching all of this on an ethnographic layer, and in ergonomic use cases.

The problem is that not much seems to changed since Andy Grove’s 1996 Fortune article. Health care sucked then. Intel spent a fortune over a decade trying to change it. Health care sucks now.

So what’s Intel really doing? Well it’s helping on standards (that’s original, huh!). It’s doing lots of (free?) consulting with hospitals. And it has a new tool that looks like a more advanced version of Health Hero’s health buddy with video, and a new prototype for a portable tablet that’s designed for health care. And some snappy videos showing how it might work out. But 6 years with 200 people working away? Is that all Intel has come up with? I’m afraid it appears so.

But in some ways it’s worse; as I wrote in Spot-on a couple of weeks ago, on the benefits side it’s changing its health plan into the style that actually is pushing individuals away from integrated health plans like Kaiser. So to some extent, while they’re featuring Pearl and Kaiser, they’re not really corporately pushing the solution that would increase the adoption of the technologies they think will improve health care.

So what’s the real problem? The real problem is that America’s system is so screwed up, that just saying that “every other industry has changed and health care will” as I heard many times at the conference, is not realistic in the cottage industry that they also kept saying it was. And we’ve spent a decade of massive dislocation staying a cottage industry. And the change in the payment system required to move this is a long way away in time.

Meanwhile, Intel (as with Cisco) will continue to do fine so long as health care keeps buying new IT. But I remain confused as to what their health care initiative is going to actually do to improve their bottom line any time soon. I don’t really think that educating tech journalists about health care (which was what yesterday seemed to have been about) advances the agenda too much. And the industry-wide problems that they are recounting are well beyond Intel’s control.

I hope that I’m missing something here. As their hearts are clearly (both logically and emotionally) in the right place.

POLICY: Can Consumerism Save Healthcare? by Brian Klepper

• 51

THCB welcomes back old friend Brian Klepper from the Center for Practical Health Reform. He’s been asked to help various newspapers through the maze of consumer-driven health care, and here’s his take on the matter. You’ll note he gives it an easy ride, in that he doesn’t descend into the mire of risk pooling. Here’s Brian’s take:

In January’s State of the Union Address, President Bush called for expanding Health Savings Accounts (HSAs) as one sensible approach to curb rising healthcare costs. An HSA is a tax-favored healthcare-dedicated savings account that a patient controls. Combined with out-of-pocket requirements and a High Deductible (also called “Consumer Directed”) Health Plan (HDHP), these financing devices can provide comprehensive coverage. Federal 2006 HDHP family coverage guidelines call for deductibles of at least $2,100, with maximum out-of-pocket expenses of $10,500. To his credit, the President also proposed tax changes that would give individuals the same advantages employers already enjoy when they buy health insurance.                                                              The main logic and “sell” of these plans is that HSAs and HDHPs give patients more “skin in the game,” more awareness of healthcare costs, and more control over healthcare spending. The increased involvement in healthcare decision-making encourages healthier lifestyles and smarter healthcare purchasing decisions. In turn, the changes in patients’ buying behaviors will drive down healthcare costs.The reality may be somewhat different.First, there’s little question that HSAs and HDHPs will become major forces in the health insurance market the same way that managed care did in the 1990’s. They’re less costly for employers than conventional plans, so there’s every reason to believe that the market will grow quickly. A recent Kaiser Family Foundation study found that 20 percent of employers offering health insurance already make HDHPs available. Nearly every major health plan now offers an HDHP. And the health insurance industry association, AHIP, claims that HDHP enrollment tripled in the last 10 months, to 3 million lives.The deeper question is why. Are HDHPs becoming more popular because they urge patients to be more sensitive to cost? Or are they successful because, as the scale of healthcare cost has grown out-of-reach, skinnier benefits and higher out-of-pocket costs constitute a lower cost insurance alternative?Both. Employers clearly see HDHPs as a less expensive way to continue offering health coverage. It’s also apparent that, when care costs employees more, they’ll ask more questions.But studies also show that half of employers offering HDHPs do not help fund the HSAs. This may not be a problem for high-income or some middle-income workers. But if you’re low-income – one-quarter of workers make less than $18,800 per year and one-third of families make less than $35,000 – the increased out-of-pocket requirement can be onerous, especially if there’s a serious medical problem. Hospitals and many doctors are already experiencing rapidly increasing bad debt associated with these plans, because HDHPs without funded HSAs are, for many people, simply coverage that can’t be accessed. How about information that helps consumers become better purchasers? There are good Web sites that help patients learn more about their conditions and treatments. But so far, even though inexpensive evaluation tools exist, consumers still can’t get much information on the pricing and performance of hospitals, doctors and drugs. It’s hard to be an effective shopper if you don’t know what things cost or how the vendors stack up. Will consumerism significantly impact out-of-control health care costs? In truth, patients’ diagnostic and treatment choices represent a tiny portion of larger healthcare cost. The real money is associated with chronic disease and catastrophes. In those cases, healthcare professionals, not patients, guide the purchasing decisions. That’s exactly as it should be. But for consumerism to work, healthcare professionals must then be publicly accountable for their financial and clinical results.More to the point, unless consumers have access to robust information about pricing and performance, mechanisms like HSAs and HDHPs won’t really impact cost so much as finance it, merely guiding how the money flows. Even Regina Herzlinger, a renowned conservative Harvard-based healthcare economist, challenged Mr. Bush on this. “Health savings accounts are being touted as a way to control costs, and I very much doubt that claim.”The real roots of our healthcare crisis reside in the ways suppliers and clinicians are rewarded to deliver goods and services that are inappropriate, unnecessary and wasteful. Most healthcare experts agree that half or more of healthcare cost is due to these factors. Making healthcare affordable, stable and sustainable once again will require the infusion of skills and tools – compatible information technology platforms, clinical/administrative practice standards, pricing/performance transparency, payment that’s tied to outcomes – that other industries have long taken for granted. No matter how it’s pitched, consumerism just won’t get us there if these other components aren’t available to support the process.When it’s more mature, healthcare consumerism will likely include the mechanisms that help patients become better buyers and impact cost. Until then, HSAs and HDHPs are less expensive, slimmed down, short-term solutions that can work well if you’re healthy or financially secure. But they’ll do little to address our rapidly collapsing healthcare system. And as a national solution, they’re inadequate and oversold.

TECH: Reality check from HISTalk

• 1

MrHISTalk this morning gives a reminder to the world that health care IT ain’t a place of hot innovation

Computerworld correctly identifies a lack of hospital funds as a barrier to the interoperability lovefests going on, but then says this: "Because many hospitals run on 20-year-old IT systems, smaller institutions are often left behind, while leading ones forge ahead." Well, I know lots of big, leading hospitals and most of them run clinical software at least 20 years old. In fact, most of the shiny displays on the HIMSS floor were selling software that’s at least 20 years old. Old stuff: GE/IDX, QuadraMed, MEDITECH, Misys, most of McKesson and Siemens. Relatively new (10 years or so): Cerner, Eclipsys, Epic. Architected and developed in this millennium: zero.

Yup it was called Cerner “Millennium” for a reason—it was supposed to come out then! (Like many other I fondly remember the good old days of 2000 and in some alternate universe I’m retired on a 1,000 acre country estate from my i-Beacon stock options)! Nothing essentially wrong with old reliable systems, but Web2.0 this is not. Plus MrHISTalk didn’t mention health plan systems, most of which may be even older….

POLICY: How did this sneak into the WSJ?

The opinion pages of the WSJ are known for being full of neo-cons and conservatives — people who think that they know what’s best for you and aren’t afraid of getting the US Government to use its power to enforce it here and abroad. The only libertarians with a megaphone I know are the love ’em or hate ’em John Tierney in the NYTimes, and the pop-culture joker John Stossel on PrimeTime 20/20 ABC.

But what’s this, on Feb 21 the WSJ had a signed op-ed column from staffer George Melloan called Musings About the War on Drugs. The column suggests what anyone who isn’t blind, deaf, dumb, biased or making a living from prohibition already knows — the war on drugs is a complete failure that is contributing to most of the worse elements of society. It continues only as a full employment act for some very unpleasant agencies of the US government (the heartless DEA prominent among them), even more unpleasant private corporations, and international criminals and terrorists — all of whom apparently have similar personal ethics.

Given that the WSJ is usually a mouthpiece for some of the worst hypocritical pontificators of the fascist social conservative right (Bill Bennet, anyone), is something going on that we should know about?  After all a much more rational media organization of the right, The Economist, has been pushing for an end to drug prohibition for years. I’m hoping that this isn’t just a flash in the pan…

THCB: Friday’s out with the trash

• 2

So a few quickies. I’m getting lots of requests for advertising/sponsorship on the blog and with John’s help we now have a link at the top for advertising information. So if you have a product or service to sell and want to sponsor/advertise THCB and reach a keen, pretty big and growing daily health care audience, email me.  And if you are a reader, there are plenty of ways a click or two around the site such as buying a book or signing up for a magazine, can help THCB and keep paying for the lights to stay on….

Of course, my main gig is as a pundit and a consultant, and so my real hope in doing THCB is that some readers working in the strategy/marketing/policy/research part of health care corporations might be interested in hiring me, either for a strategy/research/marketing project or as a speaker. With my consulting hat on I’m rather more focused and less flippant than my THCB pundit side might show, but I bring the same honest and direct approach. Again, please email me for information, or look here.

Finally, as some of you know I just got engaged to the lovely Amanda. But of course I did that before I knew that there were other options.

BLOGS: Health Wonk Review

• 5

Inspired by the Nick doing Grand Rounds, Joe Paduda at Managed Care Matters has put together the first bi-weekly edition of a compendium of the best of blogging about health care policy, business, technology and anything that isn’t really clinical in nature. We’re hoping that it’s going to be a companion to the main Grand Rounds and that it’ll be a place to find some of the best insight into our evolving health care system. And while Joe kindly calls me a co-founder, and I will be hosting in two weeks, this is all his work and he gets the plaudits.

So go on over to the first Health Wonk Review

Consumers: Patient Power Inc.

• 3

death wears a smile todaySomebody has come up with the really clever idea of building a site specializing in patient empowerment t-shirts. A new company called MedTees has set up an online store where you can find pro-patient stuff  you would never find anywhere else. They specialize in shirts that let patients poke fun of their conditions – a very good thing for people who have gone through serious operations or who suffer from chronic illness. 

The woman in the picture is Helen Smith,  a Tennessee psychologist who nearly died as a result of a misdiagnosed heart problem. She says her shirt helped her recover from the trauma of nearly dying. Helen is better known as in the blogosphere as Dr. Helen. She talks about her story here.

UPDATE: The Chicago Tribune ran a story on Wes and Diane Fisher, the couple who came up with the idea. They plan to take the project non-profit.   

TECH: WebMD, a little curious…

• 8

Milt Freudenhiem gets to chat with Marty Wygod, and what he wants to talk about is how WebMD Health “Wants to Go Beyond Information”. WebMD is the old consumer web businesses of WebMD plus the private-labeled consumer sites they run for health plans and employers. Now while you could have (or maybe did) read all about WebMD Health’s strategy on THCB last year (hey the Times is only 6 months late so we’ll be charitable), the weird thing is why it’s being featured.

After all EmDeon, which is the old WebMD’s businesses that comprises the old Envoy claims transaction system and the older Medical Manager practice management system, and the Porex plastics company that was Wygod’s original holding company, still owns most of WebMD Health. Plus it’s vastly bigger. The web business brought in $4 million profit on $45m in revenue last quarter (or an annual run rate of $200m). Pretty decent growth from a $120m business in FY 2004, but not exactly Google-type margins. Meanwhile the real revenue (some $1.2 bn annual run rate) is in the old transaction services and practice management systems. Although the margins there are of course much lower (under 4% compared to 10% on the web side).

Now they say they want to sell off the transaction business and the practice management part. Which leaves them the WebMD Health web business and the plastics company. This is full circle. WebMD was originally a fake web-company. It couldn’t make its core web services work (either technically or as a business), so it took the logical approach of converting its incredible bubble stock price into the acquisition of MedEAmerica, Envoy, Medical Manager and a few other companies that had actual businesses. Now with Web2.0 emerging, and health plans finally deciding that they do give a rats arse about their customers’ online experience, it’s going back to being a web company.

The key issue though is that it’s doing it as an ASP, and it’ll be putting its client health plans’ members’ data on its own servers. That potentially gives it lots of power, which is whey health plans were afraid of it back in the late 1990s and created a fake competitor to it called….(forgot the name, answers on a post card please) Medunite (thanks!) which they later disbanded. Theoretically WebMD could be moving clients between plans as they own the relationship. So it’s an interesting concept, and they have enough tools that they could get it — the consumer eHealth experience — right eventually.

But all the same, 10 years to build a web business that’s $200m in revenue.  Given the amount of cash Marty Wygod already had, it barely seems that all this chopping and changing to come out with a small web company justitfies the brain damage of the last decade. And furthermore, is it really worthy of a NYT exclusive profile?

assetto corsa mods