In a move I don’t quite understand, Wal-Mart has bought search & content site Kosmix for a reported $300m. Kosmix has been doing various things around presentation of search information from different sites and places on the web (including an interesting mash-up of Twitter called Tweetbeat. But it’s most of interest to us as its flagship RightHealth site has been a leader in Health 2.0. While not exactly Google-type money $300m for a company which had raised a total VC investment of about $55m is not nothing. But it appears that Wal-Mart bought it for the technology potential more than for the current revenue or the RightHealth site. So lets hope that we’ll be seeing more investment and more products from RightHealth in the coming years–rather than it being tossed as part of a larger social media strategy from the Beast of Bentonville.
Above the Fold
ACO Fairy Tale Faces a Rumpelstiltskin Moment
By MICHAEL MILLENSON
The ACO fairy tale is drawing perilously close to an unhappy ending.
The government’s long-awaited draft regulations on Accountable Care Organizations have brought a dose of ugly reality to a concept that’s always seemed coated with a patina of pixie dust. Unless those regs are substantially changed before the clock strikes Jan. 1, 2012 — the statutory date for ACO implementation — Cinderella’s going to turn back into a scullery maid and the horse-drawn carriage transporting her to the Health System Transformation Ball will be revealed as nothing more than four mice and a pumpkin.
The essence of the ACO concept is using financial incentives to reward doctors and hospitals for redesigning care processes to provide “high quality and efficient service delivery,” in the words of the Patient Protection and Affordable Care Act. As I wrote last fall, ACOs have been the one reform beloved by Republicans and Democrats; doctor groups and insurance companies; policy wonks and profit-seeking capitalists. This unusual unanimity was due in part to a lack of specifics that enabled every stakeholder to gaze upon the ACO and see reflected their very own version of Prince Charming.
Conservatives hail the ACO as marketplace medicine, while liberals focus on organized systems of care replacing fee-for-service chaos. Providers applaud a reform that places them at its center, while health plans know that providers asked to bear financial risk — if an ACO doesn’t measure up, the government won’t pay up — will seek out actuarial experts like them as partners. ACOs also are expected to require the products and services sold by a host of consultants and entrepreneurs.Continue reading…
Bureaucrats vs. Entrepreneurs
By JOHN GOODMAN
I used to think the biggest obstacle to getting agreement about health care reform was ideology (socialism vs. capitalism). Then I decided it was sociology (engineers vs. economists). I now am inclined to believe it is psychology (bureaucrats vs. entrepreneurs).
I came to this realization after reading through a long list of comments to a Health Alert I posted the other day about a health care entrepreneur (more on that below).
The entrepreneurial approach is the way we are trying to solve big problems in many other fields. Take the Ansari X Prize, established by citizen-astronaut Anousheh Ansari and her husband, Amir. They awarded $10 million to the first group to build a privately-funded spacecraft capable of carrying three people 100 kilometers above the earth’s surface twice within two weeks. Interestingly, 26 teams from seven nations spent more than $100 million competing to win the prize.Continue reading…
To get the MU money, just a test
When ONC lunched the meaningful use program paying doctors up to $44,000 or more to adopt electronic medical records, I wondered–“how would they know?” Then I was told there would be a test. But I misheard, it’s not a test. Instead providers get to attest. For those of you like me with poor English skills, that means you get to self-report, which sounds much easier. Go to this page, follow the instructions and the money will magically arrive. Of course you have to be a qualified entity (doctor, hospital, etc) and you have to be getting funds from Medicare or Medicaid. And of course there’s never been any fraud or false reporting in those programs, so we’re completely assured that our tax-dollars (or the loan from the Chinese) are being well spent. Actually there will be audits and checks, and next year the bar for not only the use of the EMR but also the burden of proof will be raised. But for now, this looks like a way to spend that ARRA money fast and you can’t believe that this opportunity will happen for America’s providers again.
Interview with Louis Burns, CEO, Care Innovations
Louis Burns is CEO of Care Innovations, the joint venture between Intel and GE that’s aiming to change the world of home care and patient to clinician connectivity. Clearly there’s been lots of money and effort invested — but what are they doing and where are they going? And what new products and services can we expect (beyond the ones Eric Dishman told me about last Fall)?
Last week I got to speak to Louis to figure out at least some of the answers to those questions. Not the least of which is, why did these two giants decided to team up?
Here’s the interview
Rest in Peace: Personal Health Records (PHRs)
While doing some research the other day on personal health records (PHRs), I came across this article, describing Revolution Health’s announcement — without much media attention — about dropping its PHR at the beginning of 2010. (Disclosure: I worked for Revolution Health in 2005-2006, and now have a business relationship with the company that acquired them, Everyday Health.)
The most interesting statement I found in this brief news article was, “The e-mail did not indicate why the company decided to terminate its PHR service. The company advised users to download their PHR as a .pdf file and save the document for their records.”
Ah, a PDF. Yes, that’ll make it extremely easy to get that data into some other PHR (sarcasm alert).
And that led me to understand the underlying problem with all PHRs today, and the problem PHRs have always had — nobody trusts the companies who offer them, and few people understand what they are or why they should care.
And that led me to understand the underlying problem with all PHRs today, and the problem PHRs have always had — nobody trusts the companies who offer them, and few people understand what they are or why they should care.
I kind of chuckle when I hear a company describe that a part of its business strategy is the personal health record. I first heard of a PHR back in 1999, when I worked for drkoop.com, at that time competing for the #1 spot as the leading consumer health website with WebMD (drkoop.com lost). Drkoop.com’s management had this brilliant idea that everybody would want — and pay for — a personal health record online. In fact, this was the founding principle of the company that eventually became drkoop.com (as seen in one of their SEC 10k filings from that time):
To say that the idea of a personal health record (or personal medical record, as they called it) has been kicking around the Internet for a long time would be an understatement. (Drkoop.com dropped the idea altogether after a falling out with their PHR development partner, HealthMagic.)
Our company was founded in July 1997 as Personal Medical Records, Inc. During 1997 our primary operating activities related to the development of software for Dr. Koop’s Personal Medical Record System.
The 100% Estate Tax
By MERRILL GOOZNER
There is a dangerous but beguiling econometric logic behind the idea that turning Medicare over to the insurance industry will lower health care costs. It’s an idea that could catch on if the general public became convinced that there is nothing we can do acting together as a society to lower the cost of care. Only the market can do it, the Republicans claim. Force seniors (or the poor or anyone, for that matter) to have more skin in the game, and they’ll use their clout as consumers to separate the wheat from chaff in modern medicine. Expensive, wasteful tests, procedures, and drugs will wither for lack of customers.
Democrats, in attacking the Republican plan that passed the House yesterday, relentlessly hammered away at the cost to future seniors of having “more skin in the game.” Two-thirds of the cost of care within a decade of Medicare privatization in 2023 will fall on them. But the 2030s must seem very far away to people in their 40s and 50s. Isn’t it likely that they won’t think about that far-off time, but instead grab on to the promise of future lower costs, which, let’s be frank, the Affordable Care Act (health care reform) may not be able to achieve.
So here’s the real argument young and middle-aged people need to hear, and the real reason why the “more skin in the game” argument can never work for seniors or other vulnerable populations, including them when they reach that age. Seniors and the poor account for over half of health care spending. Within those groups, 5 percent of the population accounts for 50 percent of health care costs; and 20 percent of the population accounts for about 80 percent. These costs come for the most part at times when economic incentives have no influence at all on medical decision-making: in medical crises; in treating chronic conditions; and, for most Medicare patients, in the last six months of life.
That’s why a voucher program for Medicare, which will shift an increasing share of those inevitable costs onto the elderly themselves, can fairly be categorized as a 100 percent estate tax or death tax. People under 55 need to know that if the plan crafted by Rep. Paul Ryan were passed, most of them will never have a cent to leave to their children. It will all go to the health care industry to support the American way of dying.
Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, Financial Times, The American Prospect and The Washington Post. You can read more pieces by Merrill at GoozNews, where this post first appeared.
The Health Insurance EHR
Kaiser Health News recently published excerpts of an interview with the CEO of Aetna, Mark Bertolini. Interesting article and interesting subject, but one thing Mr. Bertolini said in connection with Aetna’s acquisition of Medicity, a vendor of Health Information Exchange (HIE) platforms, caught my attention: “We are as much a health information technology company as an insurer”. United Healthcare has also been engaged in significant HIT acquisitions for quite some time. They bought an EHR, Care Tracker, and an HIE vendor, Axolotl, amongst other things. According to the Aetna CEO, in order to create a system that functions properly, insurers “have to be able to provide an infrastructure”. So is this the future? Will health insurance giants be providing insurance coverage to customers, and HIT infrastructure, including EHR software, to physicians and hospitals?
Most HIT experts are forecasting consolidation in the EHR market, which is currently fragmented into hundreds of less than optimal disparate software products, but is anybody seriously contemplating that the emerging forces in health care technology will be the payers? If you think about this for a moment, and if you remember doctors’ plight that EHRs mostly benefit payers, this outcome doesn’t seem so far-fetched. After all, selling health insurance and selling EHRs follows pretty much the same paradigm.Continue reading…
Summary of CMS Proposed Rule on Accountable Care Organizations
By JORDAN T. COHEN
(Second in a series. See Part 1.)
CMS recently released the proposed rule that will regulate PPACA’s Medicare Shared Savings Program (MSSP). The MSSP relies on the accountable care organization (ACO) model in order to generate and distribute savings. HealthReformWatch.com has discussed the general framework for ACOs before. Clocking in at nearly 500 hundred pages, the proposed rule helps to flesh out what was largely a philosophical exercise in cooperative health care delivery. Below are what I believe to be a number of key pieces of the proposed rule.
Proposed Rule Highlights
The 2 ACO Models – (425.7)
There will be two ACO models. The choice between models appears to be largely geared towards minimizing ACO risk while hospitals and providers are first bringing their ACOs online.
- One-Sided Model: A one-sided ACO shares in the savings, but is not on the hook to share in any of the losses (i.e., costs surpassing the ACO’s benchmark as determined by CMS, see below).
- Two-Sided Model: A two-sided ACO shares in both the savings as well as the losses.
Basic Time frame and Structure
Not surprisingly, ACO hopefuls must form an agreement with CMS directly. ACOs under the MSSP must last for not less than three years after the application has been approved. (425.18). The performance period will be 12 months. The ACO must have at least 5,000 beneficiaries, and must include a sufficient number of primary care physicians to treat the ACO beneficiary population.Continue reading…
Did Nine Patients Have to Die?
Recently, nine patients died in Alabama when they received intravenous nutrition that was contaminated with deadly bacteria. This type of nutrition is called total parenteral nutrition, or TPN, and is used to nourish patients by vein when their digestive systems are not functioning properly. It is a milestone achievement in medicine and saves and maintains lives every day.
What went wrong? How did an instrument of healing become death by lethal injection? What is the lesson that can emerge from this unimaginable horror?
This tragedy represents that most feared ‘never event’ that can ever occur – death by friendly fire. No survivors. Contrast this with many other medical ‘never events’ as defined by the Centers for Medicare and Medicaid Services, such as post-operative infections, development of bed sores in the hospital or wrong-site surgery. Under the ‘never events’ program, hospitals will be financially penalized if a listed event occurs. Many physicians and hospitals are concerned that there will be a ‘never events’ mission creep with new outcomes added to the list that don’t belong there. Medical complications, which are unavoidable, may soon be defined as ‘never events’.
Do we need a new category of ‘never ever ever events’ to include those that lead to fatal outcomes?
The facts of the Alabama deaths have started to emerge. Apparently, a water faucet in the pharmacy was contaminated. Protocols and processes are violated every day in all spheres of professional life; and we usually get away with them. The absence of serious consequences breeds complacency, which is shattered by an occasional tragedy. Isn’t it after a horrible traffic accident that a local government decides to erect street lights that were requested by local residents for years? I read earlier today that the Federal Aviation Administration is requiring extensive inspections of a few hundred airplanes when small cracks were discovered in a few of them. This followed a near disaster when a 5 foot hole burst open in the roof of an airplane during flight. The plane landed and all survived. Of course, a very different outcome was possible.
