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Health Care, Not Coverage

For the next three months, the Supreme Court will mull the constitutionality of the new health care law. At stake is the government’s requirement that its citizens buy private health insurance. But whatever the outcome, it’s a foregone conclusion that some fundamental change must be instituted in the financing of health care delivery.

Today, enormous sums of taxpayer money are spent on the administration of health care programs such as Medicaid. Those administrative costs could be sharply reduced and the savings put to what is really needed — providing health care. With the information technology available today, public agencies should consider eliminating their function as a government-run insurance operation and focusing their resources on paying providers to deliver care.

Consider Medicaid, the shared federal and state program for the poor. When Medicaid was created, it was designed to replicate the private insurance function. But the basic purpose of insurance is to protect the policy holder’s assets against a catastrophic event causing risk of personal bankruptcy. Because the very nature of qualifying for Medicaid requires recipients to first spend down their assets and then earn an annual income below a certain percentage of the federal poverty level, what assets is the policy protecting? The person doesn’t need health insurance. He needs health care.

Unnecessary bureaucracy

When the government created Medicaid as a look-alike insurance product, it developed an oversight operation that has not kept up with what technology can do to make a system run more efficiently. And unlike private insurance, it built a system requiring monthly updates of each of its 50 million recipients’ eligibility, including filled-out and faxed-in monthly reports, income receipts, etc.

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Compliance

“Why aren’t you taking your cholesterol medication?”  I asked the woman.

With the coronary disease I diagnosed a year ago, my discovery that she had not taken her medication was very troubling.

“It made me tired,” she replied matter-of-factly.  ”And besides, the cardiologist said the stress test was negative, so my heart is fine!”

I ordered the stress test after her heart calcium score was significantly elevated, revealing significant atherosclerosis.  She totally misunderstood the results, and I needed to fix that problem.  So I pulled out my secret weapon: a good analogy.

“The purpose of the calcium score test was to see if you had termites in your home”  I explained.  ”I found them.  The negative stress test just said that the termites hadn’t eaten through your walls.  It’s good news that your walls aren’t falling down, but they will if we don’t stop the termites.”

Her eyes opened wide comprehension: the termites were eating her walls.  She was living on borrowed time.

“Would you take a medication if it didn’t have side effects?” I asked.

She quickly nodded.  Of course she would.  From now on she would be a compliant patient.

Compliance is good.  Noncompliance is bad.  It’s something I learned very early in my training: patients who do what their doctors say are compliant (good), and those who don’t follow instructions are noncompliant (bad).  If you are lucky as a doctor, you have compliant patients.  They are the best kind.   They obey their doctors.  They are submissive.  Noncompliant patients are bad; they are a bunch of deadbeats.

Please hold your nasty comments; I don’t really believe my patients should obey or submit to me.*

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Medicare Announces 27 ACOs. A New Species?

I’m surprised and intrigued by Medicare’s announcement of 27 new Shared Savings model ACOs.

Surprised

I had been anticipating this announcement as a defining moment for Medicare’s thrust into accountable care. My expectations had been that we would see either:

Boom — a big splash of new Medicare shared savings ACOs announced, including big name hospitals and medical groups that were starting large scale ACOs, perhaps with hundreds of thousands of patients.

Bust — no one showed up at the party. Providers would have concluded that Medicare ACOs were too risky, bureaucratic, and high effort.

Intrigued

What we got is something in the middle:

  • Very small ACOs. Many only meet Medicare’s minimum of 5K patients; most are in the 8 to 25K range; and the largest ACO anticipates 70K patients. Collectively these 27 ACOs plan to serve 375K patients, less than 1% of the entire Medicare population.
  • 13 are smaller, physician led
  • Only 10 hospitals are involved across the 27 ACOs
  • Very few household names

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mHealth Apps & Patient Engagement – Moving Beyond Transactions

Despite a constant buzz around the idea of using mobile technologies for patient engagement, the depth and breadth of these solutions has remained consistently thin and frankly dated. Today, healthcare organizations who are adopting and deploying engagement solutions are focusing these efforts on marketing/patient retention (e.g., simplifying transactional processes such as appointment scheduling, prescription refills, etc., online access to lab results & records) and accelerating payments (online bill-pay). Despite all the talk about using mHealth for care provisioning, our research for the upcoming report that will be released later this month, mHealth Adoption Trends for Provider-Patient Engagement, finds a market that is still in an early, embryonic stage of development.

So why the disconnect between the hype of mHealth for care provisioning and reality? Of the many potential reasons, there are two that are dominant: a lack of solutions with proven clinical efficacy and few financial incentives to drive adoption.

While there is little argument that increasing the interaction between a care team and their patients is a good thing, the best means for accomplishing this feat are still unclear. A year ago, Group Health published results from an internal study testing just what impact this increased communication may have on outcomes and patient satisfaction. What they found comes as no surprise to us as trusting advocates of patient engagement. In this study, Group Health provided patients suffering from depression a relatively simplistic form of engagement wherein patients were able to communicate with their care team through the EMR portal. The results, impressive: antidepressant medication adherence increased 33%, overall depression scores decreased, and satisfaction with treatment improved 61%.

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The Bar Has Gotten Higher

When I first entered the venture capital business 10 years ago after being an entrepereneur, my partners warned me that “my bar” for new investments would get higher over time.  In other words, the criteria to make a new investment – clearing “the bar” – would get more strict with time as I developed more experience and saw more things.  I found this to be very true, and the notion that investors get wiser and more selective over time has become common wisdom in the industry.

But there’s something very new going on in the last few years – something very striking.  Simply put, the collective bar of the investment community to fund young companies has recently gotten higher – much higher.

The entrepreneurs I speak to are feeling it every day.  When they pitch their new idea to investors, they are told to build a prototype first.  When they build the prototype, they go get customers.  When they get customers, they are told to show engagement metrics.  When they show engagement metrics, they are told to run some monetization experiments.  When they run monetization experiments, they are challenged to prove scalability.  Maybe I have Passover on the brain this week, but it’s like investors are putting entrepreneurs through a nightmarish version of Dayeinu, where no matter what they achieve, it’s never enough (speaking of Passover, if you haven’t seen this Jon Stewart clip of Passover vs. Easter, it’s a must.  I’ll wait.).

Why is the new investment bar so high today?  Isn’t there plenty of euphoria and “animal spirits” to go around with the IPO market returning, marquee acquisitions (e.g., Instagram at $1 billion) and the impending, earth-shattering Facebook IPO?

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Another Look at Health Insurance Exchanges

Of all the provisions of the ACA, probably none has received greater attention from health insurers than the exchanges. Though the exchanges are expected to be the conduit for just a small fraction of all the insured at their start in 2014, they will be where most of the growth in health insurance lies. Given the rule that the individual exchanges must be integrated with Medicaid, their role will be critical for any insurer that wants to compete and grow in the individual or Medicaid markets. The dominance of the exchanges for growth in the small group and even the Medicare markets may not be not far behind. It should be no surprise if, eventually, all fully-insured business goes through the exchanges, leaving only self-insured plans outside.

So getting it right matters. Now is the time to think hard about getting it right, before the exchanges are created and inertia sets in. And, as some have argued, getting it right means that we think about the exchanges as places for people to choose their health care, not just their health insurance. So how should we do that?

Here is what we should not do: make it easy to choose care without considering both the quality and the cost of care delivered by the care system. It would be an enormous lost opportunity to improve consumer attitudes towards health care if we built the exchanges to make it easy for people to reason: “I like doctor A. Doctor A accepts insurance products X, Y and Z. Of these three, insurance product X seems to have the lowest cost, so I’ll choose product X.”

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What Keeps Me Up at Night 2012

I’ve written several posts about the issues that keep me up at night.  Here’s what I wrote in 2011.

Today, my team presented a list of risks to the Compliance, Audit and Risk Committee at BIDMC.   Here’s my list of top risks for 2012:

1.  Old Internet browsers – many vended clinical applications require specific versions of older browsers such as Internet Explorer 6, which are known to have security flaws.  We’ve worked diligently to eliminate, upgrade or replace applications with browser specificity.   At this point we are 96% Internet Explorer 8/Firefox 7/Safari 5 minimizing our risks to the extent possible.

2.  Local Administrative rights – Of our 18,000 devices on the network, a few thousand are devices that require the user to have local administrative rights to run their niche applications (often the research community doing cutting edge research with open source or self developed software).   We have done everything possible to eliminate Local Administrative rights on our managed devices.

3.  Outbound transmissions – Security has historically focused on blocking evil actors from the internet.   Given the current challenges of malware and infections brought in from the outside, it’s equally critical to block unexpected outbound activity.

4.  Public facing websites –  any machine that touches the internet has the potential to be targeted for attack.  We’ve implemented proxy servers/web application firewalls on most public websites.

5.  Identity and Access management – Managing the ever changing roles and rights of individuals in a large complex organization with many partners/affiliates is challenging.  If an affiliate asks for access to an application, how do you automatically deactivate accounts when users leave an affiliate, given the lack of direct employment relationships?

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If the Supreme Court Kills ObamaCare, Should We Thank Mitt Romney?

There is no doubt that the campaign to “repeal and replace” ObamaCare will have its weakest standard bearer if Mitt Romney becomes the Republican candidate for President. His embrace of an “individual mandate” to buy health insurance or pay a penalty, as legislated in his 2006 Massachusetts health reform, is anathema to those faithful to the ideal of limited government. When Mr. Romney declares that he will issue a universal waiver from ObamaCare’s regulations as his first executive order, the people who should be voting for him fear that such action would be a substitute for repeal, instead of a preparation for it. (Do these folks really think a clean repeal bill, like the one passed by the House of Representatives in January 2010, will be on the president’s desk on inauguration day?)

But maybe we should look at it another way: If Mitt Romney had never signed his 2006 law (which was motivated, as the president’s men are so fond of telling us, but an idea generated at The Heritage Foundation), those of us committed to defeating ObamaCare would never be in the fortunate position we are today – the whole, ungodly mess hanging by a thin thread after a brutal hazing in the Supreme Court last week.

Without Massachusetts’ 2006 law, there is almost no likelihood that the Democrats would have written an individual mandate into the bill. Instead, they would have just hiked taxes. The only reason they painted a thin varnish of so-called “individual responsibility” onto the bill was so that they could pin some of the blame on Mitt Romney and certain conservatives who had embraced it. As noted by Avik Roy, the individual mandate was traditionally anathema to liberals, who prefer straight-forward tax hikes.

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