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Bigger Hospitals Mean Bigger Hospitals with Higher Prices. Not Better Care.

Hospitals are busily merging with other hospitals and buying up groups of doctors. They claim that size brings efficiency and the opportunity to deliver more “value-based” care — and fewer unnecessary services.

They argue that they have to get bigger to cut waste. What’s the evidence that bigger hospitals offer better value? Not a lot.

If you think of value as some combination of needed services delivered for the right price, large hospitals are no better than small hospitals on both counts.

The Dartmouth Atlas of Health Care and other sources have shown time and again that some of the biggest and best-known U.S. hospitals are no less guilty of subjecting patients to useless tests and marginal treatments.

Larger hospitals are also very good at raising prices. In 2010, an analysis for the Massachusetts attorney general found no correlation between price and quality of care.

study published recently in Health Affairs offered similar results for the rest of the country: On average, higher-priced hospitals are bigger, but offer no better quality of care.

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I’m a Doctor. And This Stuff Even Confuses Me!!!

Extremely irate on the East Coast writes:

I’m a doctor. I have an MBA from a prestigious business school. I understand medical billing. Here’s a story for you that sums it all up.

After many years as an independent, my OBGYN recently joined a large physician group affiliated with a nationally known academic medical center.

(I’ll keep the name of the institution out of this since I like my OBGYN and several of my friends work at the medical center.)

Late last year I had a minor procedure at the academic medical center. My OBGYN handled the surgery. Everything went smoothly.

When the bill came I was charged a reasonable $600. This year I had to have a repeat of the same procedure. My OBGYN again performed the procedure. Same outcome. Same nurses. Same specialist. Same room. When my bill came in the mail I got the shock of my life. The total was four times as much as it had been a year earlier!!!! I had no idea.

My OBGYN’s office told me there is nothing they can do. Prices are set by the new academic medical center supergroup. As far as I can tell, the only thing that has changed is the sign over my doctor’s door.

What recourse do I have? What consumer protections does the ACA contain designed to prevent this kind of behavior?

I’m a doctor. I understand the issues involved. If I’m confused, how is the average consumer supposed to deal with this? This is extremely bad.

Lost in the health care maze? Having trouble with your health Insurance? Confused about your treatment options? Email your questions to THCB’s editors. We’ll run the good ones as posts.

Healthwise Adds Informed Medical Decisions: Don Kemper Interview

Today venerable health content creator Healthwise merged with the Informed Medical Decisions Foundation which was previously funded by (and had an exclusive relationship up until last month with) Health Dialog. I asked Healthwise CEO–and old friend of Health 2.0–Don Kemper what was happening and what it meant. I also snuck in a smidgen of snark about a conference we worked on together five years ago.–Matthew Holt

Matthew: Don, you’re merging Healthwise with the Informed Medical Decisions Foundation. So I know the two organizations are both non-profits but as a poorly informed outsider I always thought of you as rival content creators, with Healthwise selling your content and services to insurers and providers and Informed Medical Decisions being funded by Health Dialog which then got to use and sell the content and decision support aids it created to its customers. Am I wrong?

Don: You aren’t completely wrong—but then not overly well informed either. We have always thought of ourselves as sister organizations rather than rivals. We have collaborated well in advocacy efforts to promote the role of the patient. Health Dialog has had a near exclusive relationship with the Foundation until recently. Health Dialog has been a long-term client of Healthwise, too—just not an exclusive one. When the restructured Health Dialog-Foundation relationship dropped the exclusivity requirement it allowed us to proceed with the merger discussions.

Matthew: Now that change occurred for Informed Medical Decisions and you two can merge, what do they have that Healthwise hasn’t got, and vice versa?

Don: The Foundation has three things that will add greatly to the Healthwise mission:

1. Medical Evidence—Their assessment of medical evidence in key areas goes deeper than we have been able to go. Whereas we have often waited for treatment guidelines to change before reflecting the changes in our content, their medical editors are often involved in making the guideline changes. Getting that information into the patient’s hands six months earlier could make a life or death difference.

2. Value Demonstration—The Foundation has developed research relationships with many health services researchers around the country. By setting up and evaluating demonstration sites for shared decision making (SDM) they have proven how SDM improves decision quality and reduces the use of expensive but preference-sensitive treatments.

3. Practice Change Management—The Foundation has gained a great deal of experience in helping clinicians build SDM into their workflow. Those learnings will help as we integrate patient engagement into the mainstream of care.

What they get from us is “reach.” People now turn to our information, tools and solutions over 340 times a minute. (180 million times a year). Fifteen percent of US physicians can now prescribe Healthwise patient instructions through their EMRs.

Healthwise has invested heavily in the technology needed to integrate into EMRs and has excelled at building broad-based solutions that fit within a health plan’s or health system’s workflow. It would have been hard for the Foundation to have matched that without us.

Matthew: So how will this actually work. How many people do you have, how many do they? Who gets to keep their jobs? Is this a real merger or a takeover?

Don: This is a merger made in heaven. No one will be out of work. Continue reading…

The Weightlessness of Obamacare

So many old rules in health care and insurance no longer seem to apply.

I keep stumbling upon situations, where, what used to be up is now down and what used to be down is now up.

No one seems to know for sure how things will settle out under the new reality created by Obamacare and the even more unpredictable reactions to the law by health care companies, employers and, most especially, you and me.

I’ve started using the term “weightlessness” to describe this state we’re in. Picture the astronauts on the international space station, floating through a room, flipping at will, as likely to settle on a wall or on the ceiling as on the floor.

That’s what life is like under Obamacare now—for physicians, hospital administrators, insurance executives, benefits brokers and employers.

Here are a few examples:

1. I wrote last week about how a chunk of workers, even at large employers with generous benefits, would actually get a better deal on health insurance from the Obamacare exchanges than from their employers. So their employers are starting to consider whether they should deliberately make health benefits unaffordable for those low-wage workers, so they can qualify for Obamacare’s tax-subsidized insurance.

That could be good for both employers and employees. The effect on taxpayers, which would switch from granting a tax credit to employers to instead granting it to the employees, is unclear.

2. Even though insurers were certain that price would be king on the Obamacare exchanges, that hasn’t led most customers to buy the plans with the cheapest premiums. As I wrote Friday, 76 percent of those shopping on the exchanges in my home state of Indiana have picked the higher-premium silver and gold plans, with only 24 percent picking bronze plans.

“There are a few geographies where we believe we are gaining share despite lower price competition which points to the value of our local market depth, knowledge, brand, reputation and networks,” WellPoint Inc. CEO Joe Swedish said during an January conference call with investors.

It’s possible that’s a result of older and sicker patients being the earliest buyers on the exchange, and that as healthier people buy coverage, they’ll gravitate to the low-cost bronze plans. But that hasn’t happened—which, as I wrote on Friday, has proved wrong hospitals’ concerns about the super-high deductible bronze plans.

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In Defense of the Defense of Mammograms

To the two certainties of life, death and taxes, add another two: mammograms and controversy surrounding mammograms.

The Canadian National Breast Screening Study (CNBSS) has reported results of its long term follow-up in the BMJ: no survival benefit of screening mammograms.

To paraphrase Yogi Berra “it’s mammography all over again.”

Is the science settled then?

No.

Before I wade further it’s important to understand what is implied by “settling the science.”

Einstein said “no amount of experimentation can prove me right; a single experiment can prove me wrong.”In physical sciences a theory need only be disproven once for it to be cast aside. Heliocentricity cannot coexist with Ptolemy’s universe. The statement “all swans are white” is disproven by a single black swan.

What do we do with the studies that showed survival benefit of screening mammograms? Why does the CNBSS not close the debate over mammograms, like Galileo did with celestial egocentricity?

The simple and simplistic answer is because there are powerful advocacy groups, special interests; the pink-industrial complex who have a vested interest in undermining the science.

But that lends to conspiratorial thinking. Special interests cannot undermine Maxwell’s equations or Faraday’s laws just because they do not like them.

The testability of Maxwell’s equations is inherently different from verifying that screening mammograms increase life expectancy. We must acknowledge two types of science; the former, physical science, a hard science; the latter, a hybrid of biology and epidemiology, soft science.

Soft science is a misnomer. There is nothing soft about performing a randomized controlled trial (RCT), the methodological gold standard; in ensuring factors that falsely augment or attenuate impact of screening mammograms are evenly distributed, data reliably collected, cause of death accurately recorded and correctly inferred. But the human factor and all its inevitable foibles are unavoidable in soft sciences.

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How Much Is Health Care Worth?

Higher education has a relative value problem.

The product of higher education is widely embraced in the United States: 20 million students attend our 3000 schools of higher learning.

Per the Bureau of Labor Statistics, a college grad can expect to earn 1.7-2.7 times the lifetime income of a student who finished high school and entered the workforce.

A college degree provides higher employment security: in 2012, the unemployment rate for college grads was 4.5% versus 8.3% for those with high school diplomas.

Colleges play a key role in our local communities—for economic development, workforce development and as a major employer.

And a recent Pew Research survey (February, 2014) found 9 of 10 with college degrees believe the investment has or will pay off.

Higher education does not have a value problem: its value proposition against the option of not getting a degree is solid.

But higher education has a relative value problem.

Since 1985, the price of higher education has increased 538% versus medical costs (+286%) and the consumer price index (+121%).

Stated differently, annual tuition increases have been 7.4%–more than healthcare (5.8%) housing (4.3%) and family income (3.8%). Last year, students and families paid $154 billion in tuition and fees to attend college: 60% borrowed $106 billion to help pay their bill.

In the end, 38% enrolled in four-year degree programs and 21% in two-year degree programs will not graduate on time. One in seven with student loan debt will be delinquent on their debt, and student loan indebtedness, now at $1 trillion, will shortcut household discretionary spending that might otherwise be injected in our economy. And incomes for college grads have stagnated for the past 12 years.

The perplexing question facing higher education is this: does a college degree pay? And more precisely, what is relative value of each institution’s offering given alternatives?

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On THCB This Month …

If the massive data breach affecting millions of Target customers taught us anything, writes THCB contributor Joe Flower, it’s that we’re really not as good at computer security as we thought we were.

Uber for Healthcare? Not so much.

Does your patient have the right to refuse a flu shot? Actually, yes.

What we really need is an electronic medical record that works like Wikipedia.

The numbers are in. And the EHR incentive program is on track, writes National Coordinator Karen DaSalvo .

Teach your EMR to do e-mail??? Unthinkable! Impossible! Or is it?

Why the SGR fix won’t work. And may make things a lot worse.

PCORI chief Joe Selby writes comparative effectiveness work on cardiovascular disease shows the potential of Affordable Care Act funding for research.

Last week’s announcement that pharmacies and major retailers have agreed to participate in the Blue Button initiative drew some notice. Is Washington’s much-talked about plan to get people sharing their health records about to start a revolution?

Are ACOs the delivery model of the future? Or a passing fad?

Ode to the fat man.

N=1. My experience with the new healthcare system.

News that the much reviled SGR formula may be on the way out, but it may be a little early to start cheering, writes former finance committee analyst Billy Wynne.

Apple may be getting ready to make a big healthcare move. Maybe.

Actually,  transparency doesn’t work

Actually, I love my EMR.

How can patients on Medicaid possibly be worse off than those who don’t have insurance?

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Medical Students: The Anti-Millionaires

A few months ago, CBS Moneywatch published an article entitled “$1 million mistake: Becoming a doctor.” Aside from the possibility that devoting one’s life to helping others might be considered a mistake, I was struck by the “$1 million” figure.

Was it actually that much? I mean, $1 million is a lot of money. When I was younger, millionaires seemed a rarefied breed. They drove expensive cars and had houses with names like “Le Troquet” or “Brandywine Vale.” The figure was supposedly calculated using the following factors:

  • The cost of school, inclusive of tuition, fees and insurance
  • The interest on the loans incurred to pay for the above items
  • The income lost by not working full-time for 10 years, assuming an average income of $50,000 per year

Before coming to medical school, I worked in the pharmaceutical industry. I even turned down a hefty promotion to start my education as soon as possible, rather than defer for a year or two.

Thus, my back-of-the-envelope calculations made it fairly obvious that, including benefits, bonuses, and potential promotions, my medical decision was not a $1 million mistake, but was more like a $1.3 million dollar disaster.

Of course, people tell me that I’ll be profitable and that I’m a good credit risk, but what I really am is one of a rarefied breed that drive economy cars and have houses with names like “Apt. #203.” What I really am is an anti-millionaire.

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Conversa Wants to Fill the Gap

Conversa is a brand new company, aiming to fill the space between physician visits with easy and useful communications between doctors and patients. The logic is that most health care happens outside the exam room, but most of the effort of automating health care has been put into recording what happens in the medical setting, with little feedback or follow up from patients (HealthLoop is another company aiming at this space).

Why are we featuring Conversa? Well somewhat unusually for a Health 2.0 startup they come with buckets of experience. CEO West Shell was at the helm at Healthline, Product Head Phil Marshall built lots of tools at WebMD and Chief Marketer Anna-Lisa Silvestre was behind the roll out of probably the biggest patient portal ever at Kaiser Permanente.

I got all three of them on the video-line to tell me about Conversa.

[youtube]http://www.youtube.com/watch?v=UVD2f1VK24M&feature=youtu.be[/youtube]

Learn more about Conversa’s launch here.

Why Healthcare Should Be Worried About the Target Cyber Attacks

If you are a CEO or COO of a health care organization, and your IT people have been trying to get your attention, it’s time to have a serious sit-down with them.

If they haven’t been trying to get your attention, it’s time to have an more serious sit-down with them, complete with charts and graphs and arrows on fip charts.

Here’s why: Remember in November it was revealed that the Target retail chain’s computer systems were compromised? Some 70 million names, home addresses and phone numbers were stolen (pretty good raw material for identity theft) and 40 million credit card numbers.

It has turned out since then that some two dozen other companies, including Neiman-Marcus, the Michael’s arts-and-crafts chain and the White Lodging Services hotel management firm, have been hacked in similar ways, with the attackers software sitting in the companies’ servers, credit card machines and cash registers often for months before they were detected, sucking down every transaction, every bit of data moved about.

Hey wait, you say, I have every confidence in our computer security. Why we passed a security audit just recently.

Heh. So did Target — just before they discovered the break-in. They got a clean bill of health, and the auditors failed to find the malware installed on every server, every credit card terminal, every cash register.

Why? Because the attackers have gotten way more sophisticated, and they used new techniques and methods of entry. You can now buy ready-made hacking software designed to do this on the Internet for less than $1000.

Here’s the kicker: Target has security guards at the doors, it has those beeper tags on small high-value items so you can’t sneak them out without paying for them, it has burglar alarms — but the perps in the biggest heist in the company’s history entered through the thermostat.

Got that? The thermostat.

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