SAP is a giant of ERP but over a decade or so has been layering both new acquisitions in analytics (Business Objects, Success Factors) and developing the Hana “cloudfirst” data platform. They’re actually a quiet giant in health care, in part because of a partnership with Epic. But the next step is providing what they’re calling a “democratization of data analytics” allowing line managers & clinicians to really understand what’s happening at the coal face of care delivery. It’s a complex space, but one David Delaney, Chief Medical Officer at SAP, explains in this interview from HIMSS17
Above the Fold
The American Health Care Act (AHCA): Why It’s Not Going Away Anytime Soon and What You Need to Know
Last Monday, as promised, House Speaker Paul Ryan fulfilled his pledge to offer up the GOP’s plan to replace the Affordable Care Act.
In reality, America’s Health Care Act (AHCA) is not a new plan. Rather, it’s an updated version of the “Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015” that passed the 114th Congress October 23, 2015 before being vetoed by President Obama. Surrogates for this plan are quick to point out that their Repeal and Replace effort also encompasses administrative orders from HHS Secretary Tom Price, executive orders from President Trump and legislation to be passed through regular order (requiring 60 Senate votes). But the AHCA is unquestionably the first and most important of these elements: it signifies to Repeal and Replace proponents that the new Republican majority intends to make good on its promise to dismantle the Affordable Care Act.
Its status is this: the AHCA cleared the House Ways and Means and Energy and Commerce Committee votes last week. Later today, the Congressional Budget Office will render its assessment of the plan’s financial impact and its underlying assumptions about possible changes in insurance coverage. After passage in the House, it will go to the Senate where it will be modified and likely passed along party lines under the restrictions of reconciliation. Its sponsors hope it will be law within six weeks as their initial phase of Repeal and Replace.
A few thoughts on the eHealth Hub SME Survey and EC2VC Investors Forum
We very recently supported the new EU-funded project eHealth Hub in surveying over 300 European digital health SMEs. I expected some of the results but got a few surprises too I wanted to share.
82% of EU startups stated revenues under 100K€, including 39% of them still being pre-revenues:
So I guess they are right when they say digital health is still young in Europe. I hate hearing it because reviewing Health 2.0 Europe demo applications year after year, it is clear that the maturity of the solutions is definitely up. I can only conclude that the supply side is maturing faster that the demand side – whether we are talking of consumer or professional facing solutions.
I was also surprised to see that most SMEs are working on B2B or B2B2C solutions:
Surprised because we always benchmark our investment flow to the US’, but the lion’s share of the deals is still going to B2C solutions over there. We tend to blame it on investors, but maybe our investment flow would be a lot greater if only that ‘C’ was stronger and Europeans were ready to open their wallets and become health consumers?
How Trump Can Kill the Cancer In Obamacare Without Congress
Cancer is a devious and devastating disease. All it takes are a few bad cells to grow uncontrollably, first destroying organs, then an entire person. It can also lie dormant for years after supposedly being cured, then at some moment awaken from its remission slumber to resume its search-and-destroy mission. Even if cancer is controlled, it can still leave its victim in a weakened or debilitated condition, a shadow of its former robust self.
What if the Affordable Care Act, affectionately known as Obamacare, was unintentionally infected with cancer back in 2010 when it was voted into law? What if the cancer could be reactivated at any time? After all, we had to “pass the bill to find out what’s in it” according to one of its proponents. Surprise, the dormant cancer is already in the law.
Ideally, cancer is removed from the body entirely. A true cure. For Obamacare, this would mean repealing the bill entirely. Despite campaign promises of repeal, legislatively, this is a nonstarter. This is worth a brief review as many think a simple repeal bill from the House is possible.
A Dishonest Conversation on Healthcare
The conversation our country is having about healthcare right now is not honest. It’s not just the Republicans, the Democrats are just as dishonest, in a different way. Republicans talk about government death panels denying care. Democrats talk about insurance company death panels. Both positions are intellectually dishonest. Both Republicans and Democrats know that a part of insurance is drawing boundaries around the care that would be paid for by the group. Any care outside that boundary doesn’t get paid for. You can frame it any way you want, but this is a critical part of any insurance.
Insurance, whether healthcare or auto, is a risk pool. A group of people pay into the pool and hope they don’t have to use it – hope they don’t have a wreck on their car, don’t have to go into the hospital. Those few that do have to use it consume most of the money in the pool – the risk pool spends tens of thousands on the people that have serious car accidents, or hundreds of thousands of dollars on someone that has cancer. That means that everybody else in the pool helps pay for the costs of the unlucky few. Healthy me pays for the costs of tripped and broke his leg Bob.
The worst part of the Affordable Care Act that nobody talks about is its removal of caps on annual and lifetime awards. There is no limit to the risk that the risk pool assumes. Before the ACA, an annual cap for an insurance plan might be $500,000, with a lifetime cap of $2 million to $5 million. Now those caps are gone – there is no limit to the amount of money a risk pool has to pay to keep someone alive.
The New FDA Commissioner
That the appointment of Scott Gottlieb to head the FDA has elicited a decidedly mixed response is a good thing. I fear consensus as much as the late Christopher Hitchens loved dissent which, he believed, was an indicator of a healthy democracy, which means that rather than facing the morgue, the US might be going through her healthiest days in these times.
Gottlieb has served on the boards of industry, and earned a nifty pocket money doing so. Detractors argue that he’s unfit to head the FDA because of his financial conflict of interest (FCOI). I will not revisit the arguments for and against physician’s FCOI with industry, because all arguments for and against have been made, and it’s unlikely that anyone’s mind will change with new evidence or new arguments. Suffice it to say that both sides have plausible arguments, and we’ll never know the truth, because to know the real impact of physician’s FCOI with industry we need parallel universes with everything held constant, except the degree of physician ties with industry, and measure the net benefits to society in terms of morbidity, mortality, drug prices, and innovations.
Price Transparency and All Its Very Large Warts
Transparency – including price, quality, and effectiveness of medical services is a vital component to lowering costs and improving outcomes. However, it is imperative transparency go hand-in-hand with financial incentives for patients and consumers; otherwise the quest will be in vain. The single best way of reducing costs while not worsening health outcomes is to redistribute resources from less cost-effective health services to more cost-effective ones. Americans are extremely uncomfortable with the idea of making decisions based on cost but we must become fluent in the language of cost and more comfortable making decisions based on price information for healthcare expenditures to stabilize.
Legislators in more than 30 states have proposed legislation to promote price transparency, with most efforts focused around publishing average or median prices for hospital services. Some states already have price transparency policies in place. California requires hospitals to give patients cost estimates for the 25 most common outpatient procedures. Texas requires providers to disclose price information to patients upon request. Ohio passed price transparency legislation last year; however a lawsuit filed by the Ohio Hospital Association has delayed implementation. The cost of a knee replacement is $15,500 at the Surgery Center of Oklahoma, whereas the national average is $49,500.
Healthcare Economics: Why This Stuff Doesn’t Actually Work The Way You Think It Does
This is a letter I sent to Gary Cohn, appointed by President Trump to head the National Economic Council and, among other things, come up with a plan for reforming healthcare. Formerly president of Goldman Sachs, Cohn may be a wizard at finance, but healthcare economics are wildly different and famously opaque. So I thought I would help him out.]
Subject: A brief on healthcare economics. (8 minutes)
o Why healthcare economics are different.
o Why the ACA is failing.
o What would work.
Who I am (credentials): Independent healthcare author and analyst since Jimmy Carter’s administration. Speaker, consultant across the industry at all levels, including insurers, hospitals, device manufacturers, employers, Veterans, pharma, World Health Organization, Department of Defense. Look me up: ImagineWhatIf.com. Books on Amazon.
Core problem: The core problem in healthcare reform is the actual cost of medical care.
o Healthcare in the U.S. by any measure costs about twice what it should.
o Medical prices are completely disconnected from the cost of production.
o Few medical providers even know the true cost of ownership of their products.
o By a number of analyses at least one third of that (well over $1 trillion this year) is waste, paying for things that we don’t need and that don’t help.
o Solving just the federal part of this would completely wipe out the deficit.
Trying to “take care of everybody” will always be impossible politically and economically as long as healthcare costs twice what it should and wastes trillions of dollars.
Solvable: This is a solvable problem. Change the relationship of the sector to its true customers by shifting the payment structure, prompting business model innovation. Stop paying for waste, and $1 trillion/year in unneeded overtreatment will disappear. Prices will drop to something like a true market price. This will not happen overnight, but it could happen over five years with vigorous implementation.
Why does it cost so much?
No price signals: The structure of the U.S. healthcare market since the early 1980s has made it opaque to price signals. Customers in healthcare ask a different question than customers in most markets. Whether hospitals (as customers of suppliers) or individuals needing an operation, healthcare customers mostly don’t ask, “Can we afford it?” Or even, “What’s the best value for the money?” They ask, “Is it covered? Can we get reimbursed for this?” And the reimbursement or coverage is set by complex non-market mechanisms that in most parts of the market are themselves opaque to the customer. So there is no real customer and no real price signal in most relationships throughout the market.
Continuous Coverage Clauses in Healthcare Reform: Are They Benign?
A House proposal for repealing and replacing the ACA surfaced this week. The Republican’s healthcare plan tries to seduce us by promising lower premiums and removal of the individual mandate. No longer will Obamacare encroach on personal freedom and financial stability, they boast. But let’s not be fooled by their ACA alternatives. The GOP proposal is no better for us. In fact, it is worse.
I share this insight as a physician and policy maker in-training. In this role, it is my duty to identify, mitigate, and manage threats to patient health and wellbeing. Sometimes, these threats are obvious – say, a heart attack, pneumonia, or financial hardship imposed by exorbitant medical bills. But at other times, I must rely on my training to detect more subtle health threats, like heart murmurs, hypertension, and “continuous coverage” clauses in healthcare bills.
That last threat may sound unfamiliar, but continuous coverage provisions have consistently shown up in the Republican Party’s prominent healthcare proposals. Continuous coverage clauses mislead us into thinking we will be guaranteed insurance at low market rates. But the catch is if there is a lapse in coverage lasting more than two months, then insurance companies can hike up the price of the policy. The most recent proposal capped this price hike at 130% of regular premium rates for the first year. But this limit may change, as previous versions allowed premium rates to reach 150% for the first 18 months.
The continuous coverage provision aims to fulfill the same objective as the ACA’s individual mandate; both policies induce young and healthy people to buy insurance. The participation of these sprightly citizens helps to pay for and offset the large, costly claims of the ill and old, thereby lowering premiums across the whole population.
But there is a striking and dangerous difference between the policy nudges in Obamacare and those in the replacement plan. While the ACA’s individual mandate taxes us if we opt out, the continuous coverage clause would punish us at a point when we are trying to opt in. For any of us, the cost of re-gaining insurance following a temporary lapse could be so high that we would not be able to afford new coverage.
Even those Americans who are neither sick nor poor at the moment could be adversely affected by Republicans’ continuous coverage nudge. The need for acute or chronic medical care is impossible to predict, and financial health is likewise uncertain. As Sendhil Mullainathan, a Harvard Economist, and Eldar Shafir, a Princeton Cognitive Scientist elucidate in their book, Scarcity, none of us is immune to the sorts of mistakes that cause insurance lapses. Citing studies from a variety of fields, these experts explore how financial and emotional stress leads to difficulty performing tasks, like paying bills and making deadlines. This happens because the more tasks we are responsible for doing, the fewer we are able to do well.
What does this mean for healthcare reform and for Americans’ wellbeing? Changing jobs, moving, launching start-ups, and filing for divorce are all occasions where even the healthy and wealthy might need a new insurance plan but would be limited in their capacity to meet this need. In the face of these major life events, anyone could have limited cognitive bandwidth, making all citizens prone to unintended breaks in coverage.
So far, Republican leaders have narrow-mindedly put forth alternatives that seem better than Obamacare. And, at first glance, their continuous coverage clause does appear benign. But the nudges in their proposals won’t shepherd us to safety. They’ll push us off a cliff.
Perhaps the continuous coverage provision would be less dangerous if we were to de-link insurance from employment, as changes in job status are among the most common reasons for breaks in coverage. Unfortunately, Republicans are unlikely to pursue this sort of reform, because, even if premiums were lowered in an absolute sense, patients would feel as though they were higher; costs would come visibly out of our wallets instead of being paid for invisibly by employers. An alternative way to make continuous coverage clauses more humane would be having insurance as our default status in America. This won’t happen either; these leaders have consistently opposed universal coverage.
Because the Republicans’ objective appears to be seduction, not protection, it is hard to believe they will take the necessary steps to keep Americans covered. To my medical eye, the replacement plan we’ve heard about thus far would harm more individuals than anything we’ve experienced in the ACA. If you would like a second opinion, I’d be happy to refer you to another specialist. But most doctors agree: health policies should facilitate insurance coverage, not discourage it.
Maggie Salinger is a MD MPP candidate at Emory Medical School and the Kennedy School of Government. This post originally appeared in the Kennedy School of Government blog.
Health Catalyst: Dale Sanders on what’s next for analytics & big data
One of the more interesting guys in health tech is Dale Sanders who’s been data geek/CIO at multiple provider organizations (InterMountain, Northwestern, Cayman Islands), was in the nuclear weapons program in the US Air Force back in the day, and now is the product visionary at Health Catalyst. Health Catalyst is a very well-backed date warehousing and analytics company that has Kaiser, Partners, Allina and a host of other providers as its customers and investors (and has been a THCB sponsor for a while!). I’ve interviewed CEO Dan Burton a couple of times (here’s 2016) if you want to know more about the nuts and bolts of the company, but this chat with Dale at HIMSS17 got a tad more philosophical about the future of analytics–from “conference room analytics” to “embedded decision support.” I found it great fun and hope you do too!
