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Above the Fold

And What Happens if the Individual Mandate is Struck Down?

Aug 23, 2011• 4

By ROGER COLLIER

An alarming article in Politico.com looks at what could happen if the Supreme Court determines that the Affordable Care Act’s individual mandate provision is unconstitutional—something that the current conservative leaning of the Court seems to indicate is somewhat more likely than not.

Assuming that such a possible decision by the Court follows that of the Eleventh Circuit Court of Appeals in ruling that the mandate is unconstitutional but the remainder of the ACA may stand, the Politico.com article anticipates some potentially disastrous consequences.

The provisions of the ACA—some of them already in force—include guaranteed issue, elimination of annual and lifetime limits, and a ban on basing premiums on health status, essentially decoupling coverage and premiums from insurance risk. Without the requirement for almost everyone to have coverage, there will be nothing to ensure that the risk pool contains a large percentage of individuals in good health as well as those with medical problems, and nothing to stop anyone from waiting until they’re sick or injured to demand coverage.

Peter Pronovost is a Liar. He Must Be. Isn’t He?

Aug 23, 2011• 1

By PAUL LEVY

Peter Pronovost and his subversive friends are at it again. Imagine, first they assert that implementation of a standard protocol and checklist could reduce the rate of central line associated bloodstream infections.

“It wouldn’t work here. Our patients are sicker.”

Then, to make matters worse, they go and contend that reducing the rate of central line infections saves money. Here’s the abstract from the American Journal of Medical Quality:

This study calculates the costs and benefits of a patient safety program in intensive care units in 6 hospitals that were part of the Michigan Keystone ICU Patient Safety Program. On average, 29.9 catheter-related bloodstream infections and 18.0 cases of ventilator-associated pneumonia were averted per hospital on an annual basis. The average cost of the intervention is $3375 per infection averted, measured in 2007 dollars. The cost of the intervention is substantially less than estimates of the additional health care costs associated with these infections, which range from $12,208 to $56,167 per infection episode. These results do not take into account the additional effect of the Michigan Keystone program in terms of reducing cases of sepsis or its effects in terms of preventing mortality, improving teamwork, and reducing nurse turnover.

A Student’s Summer Reflections on Price Transparency

Aug 23, 2011

By JEFFREY HERMAN

I can’t think of a single industry that is more inherently personal—more emotional than health care.

Everyone has a story of how the health care system has impacted their lives. My family’s experience with the healthcare system had both positive and negative results. Thankfully, my brother survived a brain tumor as a young child and my father’s heart disease was treated early enough to prevent a heart attack. However, the bills for these procedures were astonishing. Perhaps even more shocking was the complete inability of doctors and insurance companies to give an accurate estimate of what the procedures would cost. There was no more clarity with routine follow-up procedures like MRIs and stress tests. On any given day, a doctor may order the same test several times, so how does uncertainty exist about how much it costs? And if doctors don’t know the cost, how are patients supposed to be informed consumers of health care?

Many insured patients don’t worry about how much a procedure costs—frankly, with third-party payers, they often don’t have to. In fact, if you are sick and diagnostic tests are covered, you might push for your doctor to administer all potentially beneficial services. However, at some point the over-utilization of services at unclear prices results in detrimental care that is ultimately more costly than helpful. In some cases, particularly for patients with high deductibles or loop holes in their insurance plans, these costs may even cause significant financial harm.

Meaningful Use Requires Meaningless Data

Aug 23, 2011• 21

By DINOSAUR, MD

Race is a medically meaningless concept.

Spare me the few tired cliches about prostate cancer, diabetes, and sarcoidosis being more common in blacks than whites, or even the slightly increased risk of ACEI cough in patients of Asian descent. We screen Jews of Ashkenazi descent for Tay Sachs without any racial labeling. All that information is readily accessible under the Family History section of the medical history. It is no more than custom which dictates the standard introductory format including age, race, and gender. It turns out I’ve blogged about this before at some length (pretty good post, actually). What is new is the advent of electronic medical records.

Much hullabaloo has been made about federal stimulus funds allocated to doctors as payments for adopting EMRs; “up to $44,000!” Here’s the problem with that figure, though, including how it breaks down (source here):

[M]aintaining [an EMR] costs multiple thousands of dollars a year. Bear in mind that they’re not talking about a lump sum payment of $44,000. It’s $18,000 the first year, $12,000 the second year, $8000 the next, $4000 the next, and then $2000, for a total of $44,000 spread over five years. FOR A SYSTEM EXPECTED TO COST AN AVERAGE OF $10,000 PER DOCTOR PER YEAR, not counting the start up costs, which run in the vicinity of $50,000. $44,000 over five years for something that will cost us $90,000 over the same period? And that’s even if they actually get around to giving out the money in the first place! According to this, in order to qualify for “meaningful use,” EMRs must be used for ePrescribing, for communicating with other EMRs like labs and hospitals, and for transmitting information on performance measures (the paternalistic proxy for “quality”) to the government.

Health Policy Schizophrenia

Aug 22, 2011• 21

By JOHN GOODMAN

The Obama administration has told us how it intends to change Medicare many times and in many places.

It wants to replace fragmented decision making by independent doctors with coordinated care delivered by doctors working in teams, connected to a medical home. It wants Medicare to purchase quality, not quantity. It wants decisions to be evidence-based. It wants electronic records in order to standardize care and reduce errors.

So how does the administration plan to get all this done? It plans to spend hundreds of millions of dollars on pilot programs to try all these ideas out and then ……

Wait a minute. Aren’t these ideas already being tried out somewhere? Yes. In Medicare, as a matter of fact. How well are they working? As a long-time critic of managed care, I admit the results look pretty good.

Decision Fatigue. For Doctors, Too?

Aug 22, 2011• 2

By PAUL LEVY

This article by John Tierney in the New York Times suggests that humans suffer from decision fatigue, the tendency to make worse decisions as you make a series of hard decisions as the day goes along. Here are some pertinent excerpts:

No matter how rational and high-minded you try to be, you can’t make decision after decision without paying a biological price. It’s different from ordinary physical fatigue — you’re not consciously aware of being tired — but you’re low on mental energy. The more choices you make throughout the day, the harder each one becomes for your brain, and eventually it looks for shortcuts, usually in either of two very different ways. One shortcut is to become reckless: to act impulsively instead of expending the energy to first think through the consequences. The other shortcut is the ultimate energy saver: do nothing. Instead of agonizing over decisions, avoid any choice. Ducking a decision often creates bigger problems in the long run, but for the moment, it eases the mental strain. You start to resist any change, any potentially risky move. Once you’re mentally depleted, you become reluctant to make trade-offs, which involve a particularly advanced and taxing form of decision making. Continue reading…

Health 2.0 Show on Big Data–12 noon PST Monday

Aug 21, 2011

Join us for the next episode of the Health 2.0 Show, airing Monday, August 22nd at 12:00 PM PST (3pm EST)–Yes that’s tomorrow or even today (depending on when you read this!!) We’ll give a preview of the 2011 Health 2.0 fall conference session, Data Drives Decisions: The New World of Analytics, Data Mining and How Big Data Will Transform Health Care.

In recent years, the world of data has evolved and researchers are able to spend less time gathering data in the traditional sense, and more time analyzing and tailoring data that fits their needs. As data is mined and dissected in new and innovative ways, it not only affects research, but health care decisions and outcomes, and ultimately, helps our current system become smarter. In addition to diving into the content, we’ll feature a few special guests and talk about some of the exciting demos we have planned. Our guests will be:

Tod Fetherling–Health Data Source
Sarah Mihalik–Explorys
David Hadden–Therasim

So to register, just hit the button below–and yes it’s FREE

If you’d like to see past episodes of The Health 2.0 Show, check out our archives.

Dave Chase, brilliant but wrong!

Aug 19, 2011

I’d like to welcome Dave Chase, new THCB contributor who’s writing about the Carnage in Health IT.Go read his provocative article then sneak back to hear from me why he’s wrong! Love ‘em to death but the RockHealth crowd is the kids on the outside–the only slightly more seasoned Health 2.0 companies (of whom Aavdo is one) know that they have to work with the system to get going. Even the ones focused on consumer end users (patients or doctors) like Sermo & American Well have been making alliances and getting customers in the old HC world since before day 1. And in fact the carnage in Health 2.0 has been very limited compared to (say) the consumer Web world of the early 2000s. Why? because they all started much smaller and most didnt rise so much money but went looking for customers–in the old HC world. Which is why change is slower.

Finally I love ZocDoc, but equating raising money with market success is a stretch. Unlike OpenTable which only had to drop a booking system into restaurants, there’s lots of different systems that an appt booking system has to integrate with in a doc’s office. And those systems have their own vendors who are competing directly with ZocDoc’s features.

And of course while I might want to go to lots of different and new restaurants all the time, I’m likely to want to stick to only a few doctors–once I find the ones I want. So I’m not sure a consumer wants a one stop place for every possible doctor, and it’s possible that a doctor doesn’t want just a one point solution for appointments. At any rate it’s damn early in the game and I guarantee you that despite the very encouraging progress and the boatload of roubles they just got, Cyrus and his team at ZocDoc know that they’re in for a long ground war and have not declared victory and gone home yet.

Why Bother With Government?

Aug 19, 2011• 85

By EDWARD D. KLEINBARD

On Friday, a federal Court of Appeals held unconstitutional a central feature of the new healthcare law-its requirement that almost all Americans obtain healthcare insurance through private insurance markets. This ruling came only days after the debt-ceiling debacle — a “tempest in a tea party” — during which our country’s credibility for honoring its debts was held hostage to the conviction that tax revenues should regularly ratchet down, but never up. Both the subtext of the majority’s opinion in the healthcare case and the anti-tax fervor evident in the debt-ceiling debate share a common underlying philosophy: the belief that government activity is largely hostile to prosperity and the pursuit of happiness, and therefore the less of it, the better. But this view of government is incorrect.

Government, to paraphrase Congressman Barney Frank, is just the name we give for the things we the people decide to do together. And taxes in turn are just the amounts we chip into the collective pot to buy whatever package of goods and services that we have agreed to purchase collectively.

In ordinary commercial settings, the private sector is more efficient at allocating scarce resources than is the government, which is why the United States relies so heavily on private markets. So why should we bother to do things together through the mechanism of government? One answer is that only government can address an “incomplete” market, which occurs when the private sector cannot or does not provide a market solution to an economic problem. Healthcare insurance is a classic case of an incomplete market that results in real economic burdens.

Lessons from the Carnage in HealthTech

Aug 19, 2011• 10

By DAVE CHASE

Recently ZocDoc had a huge funding round demonstrating the success that they are having. There’s a number of lessons learned from ZocDoc’s experience. Unfortunately, many haven’t demonstrated Zocdoc’s wisdom leading to a large number of healthtech failures. A recent study highlights this phenomena. After interviewing 110 digital health entrepreneurs, RockHealth recently released its study Rock Report: State of Digital Health demonstrating the disconnect between the startups getting funding and what many startups are pursuing. This disconnect is the last and most important reason healthtech companies have failed that are detailed below. The following are the top reasons why healthtech companies have failed or had to do major pivots in order to survive:

Lack of Specific Focus or Adoption point

It’s well documented that a lack of focus kills startups whether they are in healthcare or not but it is particularly prevalent in healthcare. The diversity of opportunities in healthcare is so great that it’s tempting to try to solve it all. These startups are ignoring the old saying about how to eat an elephant — one bite at a time. Too many startups are trying to swallow the elephant whole.

Expected consumers to pay

With the exception of weight loss programs, there aren’t many examples of consumers paying directly for health services. Over time, this is likely to change as more of the burden of healthcare costs gets shifted to consumers as was highlighted in a Healthcare Disruption series (see links below). However, I’d be very cautious about any business expecting to have consumers pay in the near-term.