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HOSPITALS: How to play nice with workers, and how not to

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If you hadn’t noticed, the next round of unionization will come in the big service industries. This is going to build over time, but health care services will be the biggest push because (with the obvious caveat about overseas surgeries) it’s hard to move health care jobs off-shore, and it’s hard to replace labor with technology in those jobs (though lots of people will be trying!). So if you’re a hospital chain how do you handle the fact that the SEIU is targeting your industry? You basically have two choices. Enter into a partnership agreement with the unions and hand over a small slice of the vast profits you are making as an organization to your workers. Or tough it out, continue to make as much as you can, and let the unions eat cake.

In Northern California we have both examples. Sutter is deciding to essentially risk its non-profit status by being not only the consistently most expensive provider chain, but having a nasty fight with the SEIU at its most profitable hospital, Cal Pacific.  And of course the unions are highlighting the amount of money they’re making and helping get the Department of Justice to investigate.

Kaiser Permanente on the other hand has a big deal with its unions in which everyone gets a decent pay rise (at a time when KP is making bank, one might add) and about which the unions are deliriously happy. Here’s what the union rep said.

"This is the best (union) contract in the country," said Sal Rosselli, longtime president of SEIU’s Oakland-based United Healthcare Workers West and its predecessor, Local 250. "It’s the best contract we’ve ever reached with a hospital system." Praising Kaiser for including workers in every stage of planning, Rosselli called it "the opposite extreme" from Sutter Health, which runs California Pacific Medical Center in San Francisco, now in the third week of a bitter UHW strike. "Kaiser is serious about being the health-care provider of choice," he said, "and to do that it needs to be the health-care employer of choice."

Given that there is a huge connection between employee satisfaction and patient/member satisfaction, Kaiser might be on to something. Either way, at its current rosy spot in the revenue cycle, it’s a little odd that Sutter is drawing such a strong line in the sand. Perhaps someone wiser than me can explain why.

TECH: IDX and GE in a lovefest–We’ll see

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IDX was being shopped earlier this year as its founder Rich Tarrant wants to run for a Senate seat as a Republican in Vermont where Bernie Sanders will probably enjoy pointing out how much money he’s got and how he got it. Now that its been sold apparently it thinks that GE is a perfect match. It certainly seems so for IDX’s shareholders, as it was basically going nowhere with somewhat older hopsital technology, and having trouble getting outside the business of big (usually academic) medical groups with its physician systems. Plus there was the UK fiasco. And getting a 25% premium makes for a very nice exit.

The whole thing is somewhat curious. Other than Epic is not available, Cerner was too expensive, and IDX was being shopped, why did GE buy it — and why did they pay so much?  As has been pointed out at length over at the HISTalk blog, IDX has a mixed product line and a mix of customers. Even more weirdly they have a deal with Allscripts (that makes ambulatory EMRs) that is responsible for a decent chunk of Allscripts customers, and even if Glenn Tullman (Allscripts CEO) made nice noises about it, it’s hard to see why GE (which owns the Logician EMR product which its renamed to Centricity in the brochure, but still not renamed on the screen) wouldn’t start favoring its own product — unless it buys Allscripts next and merges the two ambulatory EMRs into one. Perhaps then they’ll bother with at least a comsetic veneer of pretending that its all one product line.

What’s really going on here is the confusion amongst the big FDA-regulated imaging device guys (GE, Siemens, Philips, Toshiba) about how this IT stuff is playing out. They know that their hospital clients are slowly integrating the IT and Med Tech side of their houses, and they face the fear that if they can’t supply both ends of the chain, then they may lose business on their more profitable med tech products to a rival (i.e. Siemens) that can cut the customer a deal on the other end. But there is not really a good HIT candidate to buy, so maybe a mere $1.4bn on a not-so-good one is enough for now.

My guess is that the integration of Med Tech and IT as a serious business effort is ten years away.  By then the leading IT systems (e.g. Cerner and Epic) risk being out of date.  At that point maybe Siemens Soarian (or its successor) or whatever GE is building with Intermountain, or whatever McKesson ends up doing, or maybe whatever Oracle builds in 2007-9, will be the hot newly rearchitected product that will dominate the hospital IT market — which by then may be much bigger than the med tech market. But that’s all speculation as to how it will shake out longer term. 

For now it strikes me that GE will sit on IDX for a while, try to figure out how to sell more of some EMR (probably Logician) into its physician practice customers, and milk the revenues from its bigger hospital clients, while it talks to them and sees if it can get them interested in whatever great new products that it may develop some time down the track. It’s kind of a tweener strategy which is, as has been said, not like GE.  But they’ve seen Siemens fall somewhat flat with its SMS acquisition, and they’re make a decent amount off PACS (although a whole lot less than the Healthcare Informatics Top 100 has been reporting until this year when it corrected its standings). So the IDX acquisition gives their IT guys more products to sell, a decent customer base, and won’t probably screw-up their lucrative imaging business too much.

But still paying 25% over what the market thought IDX was worth strikes me as being a little odd.

CONSUMERS: Medicare Part D … as in Detail by Mr Jib

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The Sacramento Bee has a good article which exposes a little detail which may be important to people who are thinking about signing up for Medicare Part D.  It turns out that people who are in managed care plans and sign up for a free standing drug plan with a different company may find their existing coverage terminated.  According to the Bee:

Seniors who are members of managed care health plans and then enroll in a drug plan offered by another organization could be dropped from their health plan, according to health plan and Medicare officials. Marketing campaigns for Medicare’s new prescription drug benefit plans are set to start Saturday. Advocates for seniors are worried that the benefits will be attractive enough to get seniors to sign up without first calling their HMOs.

From the managed care plan’s perspective, signing up for a drug plan offered by another managed care plan is seen as a decision to leave…

Oh. And Medicare Part D. marketing starts Saturday. 

Go read the article.

— Mr Jib

CONSUMERS: A little help from my friends, by Mr JiB

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THIS IS A GOOD idea. Barry Katz came up with Lotsa Helping Hands after his wife’s four year ordeal with cancer. The web-based calendar system he developed helps friends and family volunteer their time and support.  Beth Israel Deaconess Medical Center, the Colon Cancer Alliance and the other groups have already signed on.

—Mr JiB

PHARMA: Senator Grassley, I presume? by Mr JiB

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IN CALIFORNIA things are starting to heat up in advance of the November special election. Proposition 78, the drug-industry backed ballot measure targeting high prescription drug costs, picked up a key endorsement this week. On Monday, Governor Arnold Schwarzenegger gave his blessing to the proposal.  The politically powerful American Association of Retired People (AARP) formally announced its support on Wednesday, said it is siding with Proposition 79.  

Proposition 79, the alternative backed by Health Access California, key consumer groups and major unions, is seen as taking a tougher line on costs. It is also intensely disliked by drug companies, who see it as likely to encourage similar attempts to pass tougher laws in other states.  Recent tracking polls show support among Californians for the two measures about even. That is a bit of a surprise for those who were predicting the campaign would essentially be a formality, given the lobbying power and resources of the pharmaceutical industry.

HealthVote.org has been tracking ad spending, as it did during last year’s election. Huge amounts of money have been spent already. But the real action is likely to come over the last six weeks of the campaign.  According to the group’s release today:

Prop. 78 supporters aired 11,485 ads in California’s five largest media markets (Los Angeles, San Francisco, San Diego, Sacramento and Fresno) through September 25 at an estimated cost of $13.4 million. Proponents of Prop. 79 launched their ad campaign on September 29.

When the Prop. 79 spot is posted, I’ll link to it, so you can take a look. But for now, you can go take a look at the spots the campaign for Prop.78  is running here.UPDATE: Lisa Girion has a piece on the topic in today’s LAT. The paper’s take:

Californians like the idea of a statewide drug-discount program for the poor: A recent Field Poll found Proposition 78 leading by a healthy margin. But that support sagged when respondents learned that the nation’s big drug makers were behind the initiative.  And therein lies the problem for supporters of the measure: Its biggest backer is also its biggest liability. 

— Mr JiB

POLICY: On von Eschenbach’s appointment, by Gregory Pawelski

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Greg Pawelski with a view on the new head of the FDA

More and more physicians and patients are turning to individualized therapies to treat cancers. Under this approach, scientists study how an individual’s cancerous cells respond to several drugs. Doctors have learned that even when the disease is the same type, different patients’ tumors respond differently to chemotherapeutic drugs. Treatments need to be individualized based on the unique set of molecular targets produced by the patient’s tumor, and these important treatment advances will require individualized assay-testing which can improve patient survival in chemotherapy for cancer. Assay-directed chemotherapy is an individualized approach to killing cancer. It’s time to set aside empiric one-size-fits-all treatment in favor of recognizing that breast, lung, ovarian and other forms of cancer represent heterogenous diseases, where the tumors of different patients have different responses to chemotherapy. It requires individualized treatment based on testing the individual properties of each patient’s cancer.

From yesterday’s Associated Press article:

WASHINGTON (AP) — The new acting   chief of the Food and Drug Administration says he will be presiding over a   transformation in medicine as scientists come to understand diseases in a more   detailed way that could improve doctors’ ability to treat patients.   

Now,"We are discovering so much about diseases like cancer at the molecular   level,"said von Eschenbach, a urologic   surgeon by training. "Much of what we have  done … has been based   on a model of empiricism." Soon, doctors will be able to intervene with   medical treatments more effectively matched to a specific patient’s illness.   

Read the rest at USA Today

Dr. Andrew C. von Eschenbach, tapped by President Bush as the temporary   chief of the regulatory agency, said Sunday that discoveries about diseases at "a molecular level" will lead to a new kind of health care. Doctors treat illnesses based on how well other people have   responded to a given treatment. Soon, they will develop a tailored response  built around specific understandings of the patient, the treatment and the   disease, he said.   

HEALTH PLANS: It’s too late Riker, they’ve assimilated them all….

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Today the Wellpoint Borg collective has assimilated the last of the resistant for-profit Federation Blues spaceships that was challenging them in the outer Galaxy. But shouldn’t it be the Empire crushing the rebels rather than being the rebels (or am I mixing two famous sci-fi memes).

Given that the attempts by other Blues to turn for-profit have mostly been nixed, the health insurance now left with a big chunk of regional non-profit Blues, and 6-10 big national for-profit giants (with Wellpoint and United being more gigantic than the rest) and Kaiser and its lookalikes. But there isn’t such a thing as a national health insurance company–all of them are basically still running local market plans, and all are vulnerable to the cream-skimming going on in the HDHP market.

I guess there are some consolidation savings somewhere in all this mix, but I don’t see how any of this revolutionizes healthcare, although it does seem to have succeeded in revolutionizing the bank accounts of lots of execs at formerly sleepy health plans.

HOSPITALS/INDUSTRY: How stupid is Navigant really?

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So Navigant Consulting has been gilding the lily on its expenses in the apparently somewhat shoddy consulting job it’s doing at King-Drew.  Their basic excuse is that their private sector clients (almost all non-profit hospitals by the way) are quite used to not caring about the fact that they do things like leave rental cars in airport short-term parking for a week, take one day trips to work on other clients business, and fly their employees from San Diego to Los Angeles (a two hour drive) on a routine basis, and then send their clients the bill.

So Navigant is apparently dumb enough to think:

a) that their other clients won’t notice them basically calling them dumbb) that the King/Drew contract was sufficiently low profile that no one would care about what they did, despite the fact that the LA Times just won a Pulitzer Prize for investigating other malfeasance at the hospital, andc) that contracts they sign about expense reimbursement policies don’t apply to them.

BTW almost all of my clients either give me a total "capitated" fee for my expenses, or I make damn sure that they have an idea of what expenses are coming down the pike. And I don’t work for anyone who would have to respond to a Freedom of Information Act request!

PHARMA/POLICY/POLITICS: Well at least he gets to put “former FDA Commissioner” on his resume!

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So just like that after a contentious time getting confirmed, FDA Commissioner Lester Crawford resigns, after only formally being in the job for less than three months (although effectively having basically run the agency for three years). I wonder what further skeletons have crawled out of his closet?

Get ready for more confirmation fatigue as the Administration searches for someone else ready to screw their reputation by placing politics (and deeply unpleasant, mean spirited politics at that) before science.

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