The Health Care Blog – Page 607 – Everything you always wanted to know about the Health Care system. But were afraid to ask.

Above the Fold

Folly To Forecast Startup Performance?

Sep 19, 2012• 2

By David Shaywitz, MD

Several days ago, Paul Graham, co-founder of noted Silicon Valley accelerator Y-Combinator (YC), wrote an exceptional post, “Black Swan Farming,” observing how crazy difficult it is to predict success in the startup space, and noting that just two companies – Airbnb and Dropbox – account for about 75% of the total value created by all YC-associated companies.

Yesterday, Dave McClure (the white-hot seed-stage Silicon Valley investor, familiar to readers of this column – see this discussion of his small bets style in connection with digital health) responded in a post titled (what else?) “Screw the Black Swans” that his investment model (at 500 Startups) is slightly different.

While most VCs are looking for the big score, McClure said, he’s deliberately seeking singles and doubles, which he basically expects will result in a similar expected value for his portfolio but reduce the chances of getting shut-out. He anticipates and is hoping for a greater number of successes (albeit more modest ones) than achieved by other VCs.

This will be a familiar dialog not only to investors but also to those in biopharma (who perhaps should be thought of as investors as well), as they continuously need to decide whether to go for a risky potential blockbuster or more of a sure-thing that ostensibly may be associated with a smaller market.

I’ve been fascinated with this exact question for a while (see here and here), and I’ve always looked at the problem a bit differently than McClure – which, if I’m right, may actually be good news for him.

Asking the Wrong Questions About the Electronic Health Record

Sep 19, 2012• 35

By Ashish Jha, MD

The wrong question always produces an irrelevant answer, no matter how well-crafted that answer might be. Unfortunately the debate on health information technology seems to be increasingly focused on the wrong question. An Op-Ed in the Wall Street Journal argues that we have had a “Major Glitch” in the use of electronic health records (EHRs). This follows on a series of recent studies that have asked the question “do EHRs save money?” Or “do EHRs improve quality?” with mixed results.

While the detractors point to the systematic review from McMaster, boosters point to the comprehensive review published in Health Affairs that found that 92% of Health IT studies showed some clinical or financial benefit. The debate, and the lack of a clear answer, have led some to argue that the federal investment of nearly $30 billion for health IT isn’t worth it. The problem is that the WSJ piece, and the studies it points to, are asking the wrong question. The right question is: How do we ensure that EHRs help improve quality and reduce healthcare costs?

The fundamental issue is that our healthcare system is broken – our costs are too high and the quality is variable and often inadequate. Paper-based records are part of the problem, creating a system where prescriptions are illegible, the system offers no guidance or feedback to clinicians, and there is little ability to avoid duplication of tests because the results from prior tests are never available. Even more importantly, the paper-based world hampers improvement because it makes it hard to create a learning environment. I have met lots of skeptics of today’s health information technology systems but I have not yet met many physicians who say they prefer practicing using paper-based records.

The problem is that some Health IT boosters over-hyped EHRs. They argued that simply installing EHRs will transform healthcare, improve quality, save money, solve the national debt crisis, and bring about world peace. We are shocked to discover it hasn’t happened – and it won’t in the current healthcare system.

Morgenthaler’s Picks: The Top Twelve Health IT Startups

Sep 18, 2012• 6

By Missy Krasner

Today we announced the 12 startup finalists for the 2012 DC to VC contest. DC to VC is a nation-wide contest to find the most promising health IT startups looking for Seed and Series A ($2-5M+) funding. An annual event started by Morgenthaler Ventures over a 3 years ago to help close the gap between what was going on in Washington D.C. (at ONC, CMS and the White House) and aligned interests in the Silicon Valley on health IT investing, the event has now grown into a large health IT startup competition. Morgenthaler Ventures got interested in this space when they invested in Practice Fusion over 3 years ago (they just invested in Doximity – see funding announcement). I joined as an Executive in Residence (EIR) in January after leaving Google Health and asked Matthew at Health 2.0 to combine forces with us to make the event even bigger–given he was our featured MC last year and will be again this year, too.

This year the application pool was overwhelming; we received over 140 applications to compete in the contest. Our pre-selection judges worked with us to narrow down the applications to the 13 finalists below who will present to a packed room of venture capitalists, angel investors, government officials and entrepreneurs on the last day of the annual Health 2.0 conference on October 10, 2012 in San Francisco, CA. Registration is open to all, so grab your seat fast as the room is getting packed!Continue reading…

How ObamaCare Could Cause Nonprofit Hospitals To Lose Tax-Exempt Status

Sep 18, 2012• 10

By David Whelan

Affordable Care Act (ObamaCare) has been knocked for its alleged unintended consequences. The bill’s attracted speculation that workers will lose their health plans, college grads will stop looking for jobs, and even that fewer people will get married.

Those are just the effects related to insurance regulations. Less attention has been given to how hospitals and health systems might change after ObamaCare.

The most common theory is that reform causes consolidation. But what if the effect on hospitals is even more radical? What if the legislation changes the largely nonprofit nature of the industry?

Right now approximately 60% of the 6,000 or so hospitals in the U.S. are nonprofit, while 25% are government-owned. The rest–fewer than 1,000–are for-profit. There’s a reason the pie cuts this way.

Religious groups, especially Catholic orders, opened many of these facilities as charitable institutions. (Ever driven by a hospital with Mercy in its name?)

Then during the post-war infrastructure boom the federal government offered subsidies to cities that wanted hospitals. Getting the money required nonprofit tax status and a promise to provide “community benefit.”

The Doctor-Patient Relationship. Is Over.

Sep 17, 2012• 28

By Rob Lamberts, MD

Probably the hardest part of making the change from a traditional to a direct-care practice is the effect it has on relationships. I am only taking a maximum of 1000 patients (less at the start) and will be no longer accepting insurance. These changes make it impossible for me to continue in a doctor-patient relationship with most of my patients.

For some, this transition will be more hassle than anything. Some people do everything they can to avoid my office, and so are not going to be greatly affected by my absence. They will simply choose another provider in our office and continue avoidance as always. There are others who see me as their doctor, but they haven’t built a strong bond with me (despite my charm), so the change may even be a welcome relief, or a chance to avoid initiating the change to another doctor.

But there are many people, some of which have already expressed this, for whom my departure will be traumatic. ”Nobody else knows me or understands me like you do,” one person told me this week. ”I’ve seen you for so many years, you just know so much more about me than any other doctor,” said another. I’ve seen tears, have gotten hugs, and get frequent demands for a clearer explanation as to what I am doing and why. It’s been a rough week for me, as I don’t feel I can cut off these relationships without some sort of closure. Fore someone who sometimes goes overboard in the importance of others not being mad, it’s been hell.

Out of the Box Thinking on Avoiding Hospital Readmissions. Stop Trying

Sep 17, 2012• 16

By Dr. Wes

As a cardiac electrophysiologist, I’m pretty far removed from public policy. But I have to admit that I was interested in the latest move by CMS to cut their Medicare payment rates to hospitals by invoking pay cuts for hospital readmissions. The Chicago Tribune‘s article is enlightening and filled with some interesting anecdotes after the first round of pay cuts were implemented:

(1) The vast majority of Illinois hospitals were penalized (112 of 128)

(2) Heart failure, heart attack, and pneumonia patients were targeted first because they are viewed as “obvious.”

(3) “A lot of places have put a lot of work and not seen improvement,” said Dr. Kenneth Sands, senior vice president for quality at Beth Israel.

(4) Even the nation’s #1 Best Hospital (according to US News and World Report) lost out.

So what’s a hospital to do?

The Coming Health Care Singularity

Sep 17, 2012• 7

By Adrian Gropper, MD

According to Wikipedia, the Technological Singularity is the hypothetical future emergence of greater-than-human superintelligence through technological means. The Healthcare singularity could be the time when patients have access to better information and make better decisions than their physicians. The drive to this near future is fueled by the open and globaIized energy of patients as compared to physicians handicapped by closed and parochial health IT.

Physicians have skills. Institutions have capital. Patients have freedom, and that is what tips the information balance in their favor. When it comes to health IT, physicians and institutions are still busy installing closed, proprietary, single-vendor systems that erect strategic barriers to communications every chance they get. The protection of professional licensure and institutional consolidation gives both parties a sense of security even as the patient and policymaker barbarians are massing on the Web.

The Institute of Medicine just released Best Care at Lower Cost: The Path to Continuously Learning Health Care in America. Aside from reaffirming the $765 billion of “Excess Costs”, the study highlights the following:

The committee also believes that opportunities exist for attacking these problems— opportunities that did not exist even a decade ago.

Continue reading…

The Wrong Way to Save Money on Health Care

Sep 14, 2012• 40

By Robert Reich

Employer outlays for workers’ health insurance slowed from a 9 percent jump last year to less than half that — 4 percent — this year, according to a new survey from the Kaiser Foundation. Good news?

Our political class believes it is. The Obama administration attributes the drop to the new Affordable Care Act, which, among other things, gives states funding to review insurance rate increases.

Republicans agree it’s good news but blame Obamacare for the fact that employer health-care costs continue to rise faster than inflation. “The new mandates contained in the health care law are significantly increasing the cost of insurance” says Wyoming senator Mike Enzi, top Republican on the Senate health committee.

But both sides ignore one big reason for the drop: Employers are shifting healthcare costs to their workers. (The survey shows workers contributing an average of $4,316 toward the cost of family health plans this year, up from $4,129 last year. Many are receiving little or no employer-provided coverage at all.)

Score another win for American corporations — whose profits continue to be robust despite the anemic recovery — and another loss for American workers.

Those profits aren’t due to a surge in sales. Exports are down (Europeans, Japanese, and Chinese are all pulling in their belts) and American consumers don’t have the dough to buy more.

The Great Cheesecake Robbery

Sep 13, 2012• 47

By Rob Lamberts, MD

In a well-publicized and well-written article in the New Yorker, Atul Gawande (one of my doctor writing heroes) talks about his visit to the popular restaurant, The Cheesecake Factory, and how that visit got him thinking about the sad state of health care.

The chain serves more than eighty million people per year. I pictured semi-frozen bags of beet salad shipped from Mexico, buckets of precooked pasta and production-line hummus, fish from a box. And yet nothing smacked of mass production. My beets were crisp and fresh, the hummus creamy, the salmon like butter in my mouth. No doubt everything we ordered was sweeter, fattier, and bigger than it had to be. But the Cheesecake Factory knows its customers. The whole table was happy (with the possible exception of Ethan, aged sixteen, who picked the onions out of his Hawaiian pizza).

I wondered how they pulled it off. I asked one of the Cheesecake Factory line cooks how much of the food was premade. He told me that everything’s pretty much made from scratch—except the cheesecake, which actually is from a cheesecake factory, in Calabasas, California.

I’d come from the hospital that day. In medicine, too, we are trying to deliver a range of services to millions of people at a reasonable cost and with a consistent level of quality. Unlike the Cheesecake Factory, we haven’t figured out how. Our costs are soaring, the service is typically mediocre, and the quality is unreliable. Every clinician has his or her own way of doing things, and the rates of failure and complication (not to mention the costs) for a given service routinely vary by a factor of two or three, even within the same hospital.

Continue reading…