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Patient Care in the Cloud

By VIJAY GOVINDARAJAN AND JUSTIN CHAKMA

When we envision an emerging market, we think of a rapidly growing country with small purchasing power, little infrastructure, and diminishing natural resources. These three aspects of emerging markets require innovations that can subsequently be taken global — a phenomenon known as “reverse innovation.” However, a fourth and powerful driver of reverse innovation is the comparative absence of intermediaries: an institutional gap.

As Tarun Khanna has described, institutions such as venture capital firms, legal support, universities, regulators, and third-party auditors help to make markets and value chains more efficient. Institutional voids can persist for decades, and cannot be resolved by throwing more capital at the problem. They also differ from physical infrastructure and limited natural resources, as they often manifest themselves in non-physical forms.

A concrete example of an institutional void is universities for training physicians. It takes more than a decade to train medical specialists. Building new medical schools or expanding existing ones will only have an impact on the needs of the local healthcare system in the distant future.

Medtronic is exploring ways to address that void in the area of chronic disease management.

Sixty-nine percent of deaths in the developing world are due to chronic disease, yet only 2.3% of international aid is allocated to chronic disease. In the United States, hospitalization of chronic disease patients accounts for the majority of health care costs. But innovation in managing chronic disease is happening faster in emerging markets such as India as a result of the scarcity of physicians.

India, which has more than one billion citizens, has only 100 qualified cardiac electrophysiologists. To tackle this institutional void, Medtronic developed a low-cost, pill-sized pacemaker that can be inserted into a stent, then embedded in the heart. This device eliminates the need for invasive inter-cardiac leads that deliver electricity to synchronize the heart. A much larger group of cardiologists and cardiac surgeons will be able to perform this procedure.Continue reading…

How to Blow the Big One: A Methodology

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By JOE FLOWER

[Note to the reader: Anything that is in italics and square brackets (such as this note) is addressed to you, personally. Yes, you. Try it on, see if it fits.]

Healthcare has, right now, the greatest opportunity we have seen in our lifetimes to make a big change, to rebuild itself in a hundred ways to become better for everyone, and cheaper—to get cheaper by getting better. We’re not talking “bending the cost curve,” cutting a few points off the inflation chart. We’re not talking a little cheaper, a little less per capita, a few percentage points off the cut of GDP that healthcare sucks up. We’re talking way cheaper. Half the cost. You know, like in normal countries.

We’re not talking a little better, skipping a few unnecessary tests, cutting the percentage of surgical infections a few points. No. Don’t even think about it. We’re talking way better. Save the children, help the people who should know better, nobody dies before their time, no unnecessary suffering. Seriously.

I don’t know how high you want to aim, but personally, I think we should aim at least as high as the cutting-edge programs and facilities that are already out there, in the system as it exists today, cutting real healthcare expenses of real people, even “frequent fliers,” by 10, 20, even 30 percent, while making them healthier, much healthier. At least. To me, that’s a wimpy goal, just doing as well as some other people are already doing. Because these programs are just getting off the ground. They’re in the first few iterations. The stretch goal, the goal we can take seriously, is to cut real costs by 50 percent, by making people healthier. There is at least that much potential out there.Continue reading…

The Fall and Rise of Asynchronicity

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By PAUL LEVY

The daughter of a friend was bemoaning poor connectivity of the internet at a university in Europe. She said, “It’s vital since I don’t have any other method of communication.”My friend noted, “I was telling her how we only had letters and occasional long distance phone calls in college….”

One of my most widely read blog posts was entitled, “Blackberry Cold Turkey,” in December of 2006. The impetus was when my telecom provider wrote in November to tell me that my bare bones wireless data service was going to be discontinued, but that I could “upgrade” to one with a higher price with more functionality, if I also bought a new device. I decided it was time for a life-changing experience and tossed my Blackberry in the trash. This reminded me of a major functionality of email.

The most important attribute of email is the asynchronicity of the medium: The sender and the receiver do not have to be in contact at the same moment. This enables efficient communication. You can integrate emails into the fabric of your life. You originate a message when you want, and you reply to another’s when you want.

Until the “revenge effect” occurs! How does this work? Email was invented. Then Blackberries were invented so we could be sure, when we are away from our computer, to receive emails as soon as they are sent and reply to them immediately. In fact, we feel compelled to read and respond in real time. Asynchronicity disappears.Continue reading…

Health 2.0 Pavilion @ Maker Faire Bay Area THIS WEEKEND

By MATTHEW HOLTThe Health 2.0 Pavilion is officially open for business at #m... on Twitpic

Maker Faire Bay Area is the worlds biggest DIY and tinkerers festival–at the San Mateo County Fairgrounds (about 20 mins south of San Francisco). I’ve heard it called a cross between the Home Depot & Burning Man. And this year for the first time, Health 2.0 is there with its own pavilion and lots of great speakers–and lots more hands on activity. Below is one photo and there are more on Health 2.0 News.

Here’s the Health 2.0 Stage schedule, with our own Lizzie Dunklee taking the stage at 11 am this morning to kick it all off.

My Own Story of ALS

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By AL LEWIS

I would like to introduce our newest regular contributor, Al Lewis. Some of you might recall him from his guest-postings, sometimes offensive, usually controversial but always based on both fifth-grade arithmetic and principles of economics, two subjects that he respectively took in fifth grade and taught for two years at Harvard.

Al is asking for a tiny bit of help from us, which is to go to his ALS site and “like” it and maybe add a facebook comment.   He is trying to get CMG Marketing (the official licensing contractor for Major League Baseball) to sell Lou Gehrig jerseys to raise money and awareness for ALS.  Increasing the popularity of that site increases the likelihood of his getting CMG’s attention with his fundraising idea. –  Matthew Holt

It occurred to me that I have yet to post my own story in detail, and some of you asked me to do that after seeing my wedding photo.

Janet and I had dated for a while, and though we had broken up, we had become more like “besties” when she started to feel that something was amiss.  I (and other close friends) took her to several doctors to try to discern what was wrong.   I know many of you experienced the same thing with your loved ones, where you had to visit multiple doctors before getting a diagnosis.   Then came the day — and no doubt you had a similar day too — when you finally get the definitive diagnosis.  The Mass General neurologist, Dr. Cros, had very thoughtfully scheduled this visit as the last one of the day, so that the four of us there could be in his office into the evening, asking questions, holding back tears, cross-examining him to make sure we hadn’t overlooked any possibility for treatment, even something in early-stage clinical trials, with mice even.

After that, we went about our lives.  Of course I continued to be supportive as best friends would be.  But I couldn’t stand to watch her deteriorate in front of me like this.     At one point her condition had declined so much that at her health club (Mt. Auburn) where she had been a member of for 20 years, someone asked what was wrong.  About a day after I told the person at the front desk, the manager wrote back and said he was going to comp her membership for the rest of her life.Continue reading...

High costs cut drug use…and not in a good way

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This pretty interesting study from Avalere Health confirms what several others have shown. If you add a user fee to any medical procedure people use less of it. And of course their decision to use it less is not based on whether it’s medically necessary or not; it’s based on how much it costs and what their income is. The difference with this study is that it’s about the use of expensive cancer drugs which are increasingly oral, now that oncologists aren’t being rewarded as much for delivering them via infusion. Co-pays of $500 or more saw “abandonment” rates of 25% or more. Other factors creating increased rates of abandonment included lower income (duh) and whether the patient was covered by Medicare or commercial insurance. The study was (of course) funded by a gaggle of drug companies. They didn’t fund the (non-existent) parallel study of which of these drugs actually did the cancer patients any good, but it’s not logical that cost should be the determinant of whether a drug–especially presumably a life-saving one–gets used.

One Clue to Why Health Care Costs are So High?

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By DAVID WILLIAMS

I often hear from hospitals that they’re being squeezed greatly on cost and not getting paid enough by government and private payers. I have some sympathy for this argument, but on the other hand somehow this country outspends every other country by at least two to one, and hospitals are a big part of the reason.

So what gives?

An article in yesterday’s Wall Street Journal (One Way for Hospitals to Cut Costs of Tests), reporting on an Archives of Surgery study, provides part of the answer.

Making physicians aware of the costs of blood tests can lower a hospital’s daily bill for those tests by as much 27%, a new study suggests.

Researchers simply told the doctors what things cost.

“There was no telling anyone when, or when not, to order a particular test,” says Elizabeth Stuebing, a study co-author…

But she says it shows what can happen merely by giving physicians information they don’t usually have. “We never see the dollar amount of anything,” Dr. Stuebing says. “The first week I stood up and said that in the previous week we’d charged $30,000 on routine blood work and I could hear gasps from the audience.”

The situation doctors are in today is sort of like being sent to a store and told to get what they need, but not paying for the goods and not  knowing the prices of the items or even which items are expensive and which are cheap. That’s certainly a formula to run up the bill, even if inadvertently –which is what the “gasps from the audience” indicate.

The experiment was analogous to putting prices on the items in the store, but still letting the shopper buy whatever they thought they needed. That’s a step in the right direction but not exactly draconian from a cost control standpoint! (Of course there are some cost control measures hospitals impose centrally, which is different from my shopping analogy.)

I have mixed views on whether physicians should be exposed to what things cost. Pricing in hospitals is not like pricing in stores, because “charges” are often a small fraction of what’s ultimately reimbursed. I don’t know that I want doctors making tradeoffs based on faulty data or an incomplete understanding of patient preferences.Continue reading…

Much More Reform Needed for Medicare?

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By ROGER COLLIER

This week’s startlingly gloomy annual report from the Trustees of the Medicare Trust Funds lent new urgency to the need for further Medicare expenditure reforms. Whether Washington DC politicians will respond with more than sound bites is less likely.

The Trustees’ report shows a dramatic deterioration—even based on the most optimistic assumptions— in the financial position of the Part A Trust Fund, along with expectations of continued faster-than-GDP growth for Parts B and D.

Compared with the prior year’s Trustees’ report, which forecast that the Part A Fund would run out of money in 2029, the latest report estimates that the fund will dry up in 2024—five years sooner. The reasons for the sudden acceleration of financial disaster include a significant drop in revenues from taxes on workers’ earnings due to the ongoing recession, and new forecasts of longer life spans for beneficiaries.

The report also includes new forecasts for Medicare Part B and Part D, which operate on a pay-as-you-go basis using mixes of beneficiary premiums and general federal monies. While Parts B and D will not exhaust their respective trust funds, they will have increasing impacts on the deficit as their federal subsidies are forced to increase. Medicare B costs are projected to grow at a 4.7 percent annual rate (based on current law), and Medicare D at a 9.7 percent rate through 2020, compared with forecasts of 5.2 percent annual GDP growth.Continue reading…

The System Firsthand

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By BRAD FLANSBAUM, DO

Grandma and me

Grandma is 93.  The matriarch of my family is in worsening health, and her decline is difficult to observe.  We all experience the travails of the US health care system at some point, and in my family’s case, ours is no exception.  The stress on my mom and aunt is considerable, and my grandmother is increasingly alarmed at her frailty and poor memory.

Through July of 2010, she was independent.  She walked daily, traveled, drove (that is another story), and enjoyed her brainteaser and crossword puzzles.  By all accounts, she was happy, albeit with the usual pangs of age.  She took no medication.

Last summer that changed when she fell and underwent a 3-day hospital stay.  Her memory was not the same and her gait was unsteady thereafter.  It was a minor stroke.

After discharge, her functional status worsened, and the vicious cycle we all witness as docs—setback beget setback—reared its head.

My mom sold the house, and grandma moved into an assisted living facility, a lovely place, but it was not home.  Her refrains, “the food and company are lousy, and I am depressed and lonely,” along with an assortment of other issues —all upsetting, given the vitality of this woman until recently—presented and intensified.  Relocation trauma is a known condition, but one you would differentiate only if you witnessed it firsthand.  I am now familiar with a (new) geriatric term.Continue reading…

It’s All Going According to Plan

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By JONATHAN HALVORSON

Most people regard health care reform in America as thoroughly bungled. The proverbial train left the station weak and wheezing, was pushed off the rails by hooligans and is about to crumple in an inglorious heap in the ditch. Only about 20% say the reform hits the sweet spot, with the rest convinced it went too far or didn’t go far enough.

To review the most recent pilings-on: in a time of huge Federal deficits, we get depressing predictions that the PPACA will do little or nothing to slow the growth of health care costs. Only a year after passage of what was supposed to be comprehensive reform, Democrats acknowledge that Medicare and Medicaid spending remain out of control and propose new cuts in the hundreds of billions. In the span of four months, Republicans switched from posing as aggrieved defenders of Medicare spending, to proposing to slash it and leave seniors to absorb the spillover. Medicaid funding is probably even more precarious, since fewer Medicaid recipients vote.

To add injury to injury, the Supreme court may rule to invalidate the entire law, or perhaps just the mandate to purchase insurance, thereby removing the most hated part of the law, but eliminating the “universal” part of universal coverage and inviting an actuarial death spiral. Oh, and the few reforms that look like they might bring costs down, like the IPAB board in Medicare and the minimum medical expense ratio for insurers, are under threat of being watered down. A year after legislation has been passed that will transform nearly a fifth of the American economy, to the casual observer it looks like nothing much has happened and nothing in the future is secure, especially anything that the big industry players don’t like.

In light of this and more, pessimism is understandable, but what we are witnessing in these turns of events is not mere politically-driven chaos. There is good reason to think that events are unfolding more or less in line with a staged strategy for deep reform that emerged out of the experience in Massachusetts. The strategy is essentially this: enact universal coverage first to precipitate a sense of crisis. This will lead to deep reform on the problem that exacerbates all other problems: the cost of health care. Readers of this blog need little reminding that these costs are twice as high as in any other nation.Continue reading…

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