The Health Care Blog – Page 613 – Everything you always wanted to know about the Health Care system. But were afraid to ask.

Above the Fold

Let’s Do the Numbers

Aug 17, 2012• 10

By Paul Levy

Julie Creswell and Reed Abelson offer a story in the New York Times about the HCA for-profit hospital system, noting “A giant hospital chain is blazing a profit trail.” The HCA story and similar ones about other hospital chains financed by private equity force us to consider how a such firms can achieve a return on equity that satisfies investors.

The answer is that they cannot, if we think about running the business on a long-term basis. What makes it work is extracting cash and the exit strategy, the heart and soul of private equity.

As Warren Buffett might say, let’s keep this simple. A for-profit hospital system has the following disadvantages vis-a-vis a non-profit hospital system: (1) Its finances are a mixture of equity and taxable debt, both of which are more expensive than the nontaxable debt of a non-profit; (2) it pays taxes–federal and state income tax, property tax, and sales tax–on which the non-profit is exempt; and (3) it is an unattractive vehicle for charitable donations, compared to the tax-advantages offered donors of non-profits.

These are hefty financial advantages for non-profits, which nonetheless are fortunate if they are able to earn an operating margin of 3%. Admittedly, that’s 3% of revenues, not a 3% return on capital.

An equity investor in a for-profit doesn’t care about margin, strictly speaking, but rather is focused on the rate of return of his or her investment. But let’s stick with the operating margin just for a moment, and let’s just accept that a 3% margin would not generate the kind of equity return demanded by the market place: You pick the hurdle rate: 15%, 20%, 25%, more? It doesn’t matter. A three percent margin just doesn’t get you there.

Using Predictive Modeling to Make Better Decisions

Aug 17, 2012• 7

By Russ Richmond, MD

In an article posted earlier this year on this blog I argued that hospitals have traditionally done a sub-par job of leveraging what has now been dubbed “big data.” Effectively mining and managing the ever rising oceans of data presents both a major challenge – and a significant opportunity – for hospitals.

By doing a better of job connecting the dots of their big data assets, hospital management teams can start to develop the crucial insights that enable them to make the right and timely decisions that are vital to success today. And, better, timelier decisions lead to improved results and a higher level of quality patient care.

That’s the good news. The less than positive story is that hospitals are still way behind in using the mountains of data that are being generated within their institutions every day. Nowhere is this more apparent than in the advanced data management practice of predictive modeling.

At its most basic, predictive modeling is the process by which data models are created and used to try to predict the probability of an outcome. The exciting promise of predictive modeling is that it literally gives hospitals the ability to see into (and predict) the future. Given the massive changes and continuing uncertainty that are buffeting all sectors of the healthcare industry (and especially healthcare providers), having a clearer future view represents an important strategic advantage for any hospital leader.

How Do We Bend the Cost Curve? Reduce the Waste.

Aug 17, 2012• 1

By Wendy Everett, ScD

Health care had its own version of the LeBron James “Decision” last month with the Supreme Court upholding the critically important elements of the Affordable Care Act. Now that the uncertainty is behind us―at least until the November elections―health care leaders can continue preparing their organizations for the changes ahead.

Fixing the system requires reforms at the macro level. But it also takes a symphony of smaller actions happening in concert. As experience bears out, it is difficult to agree upon a collective action with so many competing interests in health care and the partisanship that has gripped politics. But there is a song that we can all agree upon, loud and in unison. Reduce the waste.

Nearly a third of our health care costs come from wasteful spending and inefficiencies that could be avoided. Left unchecked, this is a nail in the coffin of our system; but, if tackled, is a huge cost containing opportunity. By identifying waste in the delivery system and systematically reducing it, we could lower costs without resorting to budget cuts and fees that compromise the quality of care.

“Healthcare” vs. “Health Care”: The Definitive Word(s)

Aug 17, 2012• 44

By MICHAEL L. MILLENSON

A recent contributor to this blog wondered about the correctness of “health care” versus “healthcare.” I’d like to answer that question by channeling my inner William Safire (the late, great New York Times language maven). If you’ll stick with me, I’ll also disclose why the Centers for Medicare & Medicaid Services is not abbreviated as CMMS and reveal something you may not have known about God – linguistically, if not theologically.

The two-word rule for “health care” is followed by major news organizations (New York Times, Washington Post, Wall Street Journal) and medical journals (New England Journal of Medicine, JAMA, Annals of Internal Medicine). Their decision seems consistent with the way most references to the word “care” are handled.

Even the editorial writers of Modern Healthcare magazine do not inveigh against errors in medical care driving up costs in acutecare hospitals and nursinghomes. They write about “medical care,” “acute care” and “nursing homes,” separating the adjectives from the nouns they modify. Some in the general media go even farther, applying the traditional rule of hyphenating adjectival phrases; hence, “health-care reform,” just as you’d write “general-interest magazine” or “old-fashioned editor.”

KP’s Ray Baxter Talks Weighty Issues

Aug 17, 2012• 2

By Matthew Holt

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Kaiser Permanente is a different kind of health system, as we all know. It has been a major funder of the HBO Series Weight of the Nation — reviewed by Kristin Molven in a companion piece on THCB today. Matthew Holt interviewed Raymond Baxter who is Kaiser’s Senior Vice President of Community Benefit, Research and Health Policy about the role KP plays in community and policy issues, and what we know and what we should can and should do about obesity.

A Big Fat Stupid Law??

Aug 16, 2012• 4

By Marion Nestle

Remember menu labeling?

The Affordable Care Act instituted national menu labeling—the posting of calories on the menu boards of fast food chains.

The FDA still has not issued final rules, leaving vast amounts of time for lobbying and pushback.

Now John Carter (Rep-TX) has introduced HR 6174, the anything but “Common Sense Nutrition Disclosure Act of 2012.”

This bill was introduced under lobbying pressure from the pizza and supermarket industries.

Its purpose is to exempt supermarkets and convenience stores from having to post calorie information on prepared foods. This would allow pizza chains to list calories per serving, thereby defeating the entire purpose of the menu labeling law.

The pizza industry learned that it could get Congress to do what it wanted. Even a dab of tomato paste on pizza now counts as a vegetable serving in school meals.

If you thing calorie labeling on pizza might be a good idea, now is the time to write your congressional representatives. Here’s how.

Marion Nestle is the author of What To Eat and is the Paulette Goddard Professor of Nutrition, Food Studies, and Public Health at New York University. Nestle blogs regularly at Food Politics.

The Coming Battle for Medicare

Aug 16, 2012• 68

By Robert Laszewski

Republican Vice Presidential pick Paul Ryan isn’t the only one Democrats are piling on this week. The knives have come out for Senator Ron Wyden, the Oregon Democrat.

I guess that isn’t a surprise. If Ron Wyden is right on Medicare then so are Paul Ryan and Mitt Romney.

The fundamental problem here is that the Democrats have decided that their best path to victory in the November elections is to say that the Republicans want to destroy Medicare as we know it and that the Democrats can preserve it.

The truth is that no one can preserve Medicare as we know it. There isn’t a prayer that your father’s Medicare will be around in 10 years. There is a legitimate policy debate going on about the direction we will have to go with it.

There is just plain going to be less money to spend on senior health care than there would have been if we let the program continue on its present unsustainable track. Health care providers and patients are going to have less money.

The question is who will control that money.

Gamification

Aug 16, 2012• 5

By John Halamka, MD

Recently, I’ve met with several internet startups, web thought leaders, and venture capitalists.

There’s one word that’s come up in every conversation and it’s not Plastics. It’s Gamification.

Gamification, described by Wikipedia is applying gaming principles to non-gaming applications and processes,

“in order to encourage people to adopt them, or to influence how they are used. Gamification works by making technology more engaging, by encouraging users to engage in desired behaviors, by showing a path to mastery and autonomy, by helping to solve problems and not being a distraction, and by taking advantage of humans’ psychological predisposition to engage in gaming.”

My Doctor Is a Computer!

Aug 16, 2012• 67

By James Salwitz, MD

There was no mistake, but a bad thing has happened. Despite the best efforts of the doctors, Bob’s wife is very sick. Due to a rare side effect of treatment, her liver is failing. Bob believes this could have been prevented. He is very mad.

“When we go to see the doctor, he stares at the computer,” says Bob. “He does not look at us. Most of the time, the doctor is not even listening to us. He just sits there typing at the keyboard, gaping at the screen. If he had been listening when my wife talked about the pain, then he would have stopped the drug. Then her liver would be fine. She would be OK. All you doctors have become nothing but computers.”

Now here it gets interesting. After I listened carefully to Bob and sat with him at his wife’s bedside, I decided to check “the computer.” There in the doctor’s records I saw a long discussion and analysis of the problem with her liver. Quite opposite of ignoring her, her doctor had listened, had changed therapy and was watching her liver carefully. Sadly, despite the change, her liver had gotten worse. The problem therefore, was not that the doctor was not listening. He definitely was. The problem was that the computer had stopped him from communicating.

It is strange to think that a system of information and data exchange, which allows you to communicate with anyone around the entire world, interferers with connecting to the person right in front of you. We see it constantly as cell phones, Ipads, computers and even that “old” obstructer the television, get between us. At the time we need to communicate most desperately, electronics can block that most human connection of all, the physician – patient relationship.

Can Good Care Produce Bad Health?

Aug 15, 2012• 48

By AMY BERMAN, RN

For those of you who haven’t yet heard, I have recently been diagnosed with Stage IV inflammatory breast cancer. This rare form of breast cancer is known for its rapid spread. True to form, it has metastasized to my spine. This means my time is limited. As a nurse, I knew it from the moment I saw a reddened spot on my breast and recognized it for what it was.

My recent journey through the health care system has been eye-opening. In only a few months, I have witnessed the remarkable capabilities and the stunning shortcomings of our health care system firsthand. I am writing here because in the time I have left, I hope my story and my journey can help illustrate why some of the reforms that my colleagues and I at the John A. Hartford Foundation, as well as many others, have championed are so important.

At the cancer’s earliest appearance, I consulted with a well-regarded oncologist in New York. After the tests were done she regretfully informed me that my disease was not curable. Because my cancer is hormone-receptor-positive, she recommended an evidence-based course of medications aimed at slowing the progression of the disease. Before I committed to this course of care, I wanted to get a second opinion. I secured an appointment with the pre-eminent researcher/clinician in the field of inflammatory breast cancer, at a top medical institution in Philadelphia.