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Three Formulas

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By MERRILL GOOZNER

During the last election campaign, Tea Party-backed Republicans across the country rode to power on a tidal wave of advertising attacking health care reform as a cut in Medicare.  It is. If efficiency programs like the accountable care organizations being formed across the country don’t hold down spending by about $500 billion over the next decade, an Independent Payments Advisory Board would make recommendations for holding growth in Medicare spending to the growth in the domestic economy (GDP) plus one percentage point.

In most years when the economy is humming along, that would be about 4 percent. Over the past decade, health care spending for seniors grew at about 6 to 7 percent — the same as health care spending for the rest of the population. So if the Medicare delivery system reforms don’t work, Congress will either have to adopt the IPAB’s recommendations or institute cuts of its own to ratchet down spending.

This week, President Obama upped the ante to meet his budget deficit reduction targets over the next decade. Medicare spending would be held to GDP plus 0.5 percent, another approximately $300 billion in cuts. About $50 billion would come from eliminating unnecessary errors and hospital re-admissions. The rest was unexplained.Continue reading…

Fostering Innovation in Healthcare IT

By JOHN MOORE

As in most sectors, innovation in healthcare IT (HIT) is by and large incremental. A tweak here and added feature there to some existing application, e.g., what we are seeing today from EHR vendors as they strive to meet meaningful use criteria. Occasionally, we may see a vendor develop something new and novel – one might put porting their EHR application onto an iPad as an example of such – but really, is that innovation or just an attempt to meet existing customer needs by tweaking software to meet the design criteria of a new form factor?

Innovation, true innovation that breaks from existing norms is exceedingly rare. Even in an industry sector such as HIT where we are seeing an unprecedented amount of money being spent, it has been difficult for this analyst firm to find real innovation that gets us excited and thinking beyond the limited constructs that seem to keep this industry perpetually incased, like an insect, in amber. Part of the reason lies with tradition (culture), another part with entrenched interests (existing/legacy IT vendors) and arguably the most important business models.

But that may begin to change as nothing elicits innovation more than a substantial change to core models of doing business. The Center for Medicare and Medicaid Services (CMS) recently released proposed rules for the establishment of Accountable Care Organizations (ACOs), which is a move towards bundled payments. Here in Massachusetts, the Governor announced introduced a bill as well to “expand the use of alternative payments and significantly reduce fee-for-service payments by end of 2015.” It is actions such as these that will open the floodgates ushering in some truly innovative approaches to optimizing the delivery of quality care.Continue reading…

Cato’s Cannon on Medicaid–Right but Wrong, again

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One of my sparring partners, Cato libertarian whizz-kid Michael Cannon, has a new column out about Medicaid and why block grants would stop a big problem. He’s right about the problem. Because states get a matching (and in some cases way more than matching) grant from the Feds, they are incented to make their Medicaid programs more expensive. Cannon echoes Ryan’s solution which is to just give them a fixed amount of money (the block grant). But that would instead incent states to spend as little as possible on Medicaid, making the program even worse for poor people than it already its–as John Goodman and others often point out. Of course none of these right-wingers, nor “sensible”centrist Dems like Tom Daschle are prepared to say the correct thing. Abolish Medicaid and fold it into the universal health insurance program that the ACA (sort of) is. Or better yet put everyone into one central pool and have them all buying into a central exchange–proposed in the House version of the ACA but skewered in the Senate.

When Projects Fail, Should We Fault the Technology?

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By JOSEPH KVEDAR, MD

Last weekend, I saw the film “Up In The Air.”  Ok, so I am a few months behind in my movie viewing.  That is what the Netflix lifestyle does for you.  There is an interesting connected health analogy running through the film and I want to explore it with you in this post.

George Clooney plays the lead character and he spends a lot of time on airplanes.  His company outsources corporate downsizing and his job is to travel the country showing up at a firm to give the bad news to the employees that are being let go.  A much younger woman, who is up and coming at his company, comes up with the brilliant idea of communicating to each individual losing his/her job by videoconference (in the movie, it looks quite a bit like Skype).  The idea is to save on travel costs by having folks like Clooney communicate by video all over the world without leaving their desks.

We first watch Clooney’s character object to the idea.  He believes the idea will never work, claiming that there is a fine art to firing people and you can’t do it over the Internet.  We then watch them perform pilot tests (they are on site at a company being downsized, but do the firings from a different room via video).  In the end, it does not work.   The last scene of the movie is about him being told he must get back on an airplane and travel to a site to practice his craft.  Video just doesn’t cut it when you are getting fired.

Those of you who have been part of connected health program adoption will see the obvious parallels.Continue reading…

Near Chicago next week? Meet Todd Park!

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If you’re near or in Chicago next Weds (April 27) and you care about health data, applications or innovation, we highly recommend that you get to a Community Forum on the Health Data Initiative. The formal invite & details follow–Matthew Holt

James M. Galloway, MD, Acting HHS Regional Director and Regional Health Administrator, Region V invites you to a community dialogue hosted in Chicago on the Health Data Initiative with Todd Park, HHS Chief Technology Officer.  Todd Park joined HHS as Chief Technology Officer in August 2009. In this role, he is responsible for helping HHS leadership harness the power of data, technology, and innovation to improve the health and welfare of the nation.

One of his priority projects, on behalf of Secretary Sebelius, is the Community Health Data Initiative.  The Community Health Data Initiative is a public-private collaboration among federal, state, local and private organizations, that aims to make indicators of health available to a broad array of users.  Health indicators represent data from populations or groups of individuals that can be used to reflect health trends or differences in health status, cost, quality, and health system performance.

This is an opportunity for public health officials, businesses, academic institutions, providers, hospitals, health plans, and advocates to learn more about the Community Health Data Initiative, in particular, on the use of health and health care data to improve performance.  More information on the initiative can be found at http://www.hhs.gov/open/datasets/communityhealthdata.html.

We hope that you can join us in a community dialogue with Todd Park!

When: Wednesday, April 27th from 2 – 4 p.m.

Where: The MidAmerica Club (inside the Aon Building)
200 E. Randolph, 80th Floor
Chicago, IL 60601

Why: You can help improve the health of our nation and the reach of this program in our community.

RSVP: Space is limited. Please RSVP for this free event by Friday, April 22nd to Ms. April Dublin at ap**********@*hs.gov or 312-353-1385

Trump wants Canadian health care?

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He may be the new darling of the tea-party, and he may be obsessed with Obama’s birthplace, but the putative leading dark horse outsider for the Republican nomination Donald Trump apparently prefers socialized medicine! Here’s what a conservative blog reports him writing in 2000: “We must have universal healthcare,” wrote Trump. “I’m a conservative on most issues but a liberal on this one. We should not hear so many stories of families ruined by healthcare expenses…..We need, as a nation, to reexamine the single-payer plan, as many individual states are doing.” I wonder how keen the Tea Partiers will be when they find out about that–even though of course for the vast majority of the Tea Party faithful Canadian-style single payer would be a much better financial deal than what they have now. And yes for you liberal wonks, I know Canada doesn’t have socialized medicine, but I don’t think the average Tea Partier could explain why!

Does America Want Apple or Android for Health Care?

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BY DAVIS LIU, MD

The future direction of American health care is unclear.  Certainly the cost trend as it exists is unsustainable with health care costs being a major concern of the private sector, the government, and individuals.  How does the nation manage costs while ensuring high quality medical care, access, and service?  Proposals include increasing competition among insurers, providers, and hospitals to drive down prices or giving more financial responsibility to patients via higher deductibles and co-pays with the belief that they will demand price transparency, shop around for the best price, and as a result slow health care costs.

What if both ideas are wrong?

While it is possible these plans might work, I cannot help but notice the similarities in the challenges for patients in navigating the health care system and consumers figuring out how to purchase and use technology.  Walk into your neighborhood electronics store.   Individuals are overwhelmed with the number of product choices, manufacturers, differences in technical specifications and features.  In the majority of situations, consumers are unsure of what they are purchasing.  They want something that just works, whether surfing the internet, making home movies, or being connected with loved ones.  The gap in knowledge between an expert and a consumer is great and often unintentional and unapparent.

Within the technology world, there are two groups of thought.  The first group offers technology in a closed system, like Apple, where the focus has been on just making things work.  There are a limited number of product types and designs.  For example, its current smartphone, the iPhone 4 comes in only two types.  Aside from the base memory of 16 GB or 32 GB and two different prices, the phones are otherwise identical in features with the same apps, cameras, and ability to record video.  Although the specifications are available for anyone to see, the focus is rarely on the technical elements of the products themselves and more on what they can do for you.  Walk into any Apple retail store and the products are situated by function.   Staff ask not how much computing horsepower, storage space, or CPU speed one needs, but what one plans on using the smartphone or computer for.Continue reading…

Why Direct is a Hit and PCAST is an Outcast

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By VINCE KURAITIS

Regular readers know that I find Professor Clay Christen’s theory of disruptive innovation to be a useful lens to explain industry evolution. Let’s look at two recent health IT initiatives and see why one is working and the other is stalled.

Characterizing the Direct Project — why it’s working:

  1. A low-end industry disruption. The Direct Project takes transactions that are routine but inefficient — fax, telephone, mail exchanges between health care providers — and specifies standardized, Internet based technologies to conduct them electronically.
  2. Incremental change — a few specified transactions.
  3. Bottom up — ONC hired a capable project manager (Arien Malec) who choreographed a small team of volunteers working under short deadlines.
  4. Implementing “better, faster, cheaper” technology on the fly (i.e., Internet transactions replace fax, phone).
  5. Under the radar — invoking little response from incumbents. Direct was seen as focusing on transactions that were peripheral to the core EHR.Continue reading…

The messy TEDMED divorce

By Matthew Holt

Yesterday I got a fun mass email–reprinted here at Medgadget–from Richard Saul Wurman. He founded TED, and later lost control of it to Chris Anderson who has stewarded it to being a giant among conferences. Then he founded TEDMED which ran once in the early 2000s and after Mark Hodosh approached him they restarted it together in 2009.  Now I’m not one for paying $4,000 to go to a conference but luckily RWJF did it for me and I went in 2010. It’s great fun, as you might expect, but pretty elitist and (warning: rival conference organizer envy alert ahead!) I don’t think it did much to advance the conversation on the core issues of improving health (and yes I think Health 20 does…). On the other hand it’s not TEDMED’s stated intent to do that, much as the RWJF crowd wanted into. Instead it’s about showcasing advances in medicine — which we all know is in general unrelated to health.

But yesterday it got fun. Hodosh sold the company to Jay Walker (a major & very good presenter at the last TEDMED) and Saul Wurman sent an email out blasting him & Walker and telling the price–$16m with $9m more to come! So Hodosh sold out and at that price who the hell can blame him!

But why did Walker pay that much? Eyeballing the crowd TEDMED had 500-ish attendees. Assuming even 400 paid the $4K rack rate (for $1.6m) and that sponsors kicked in another $2m, we’re only talking about a $4m revenue business. 4-6 times revenues is a nice number indeed!

And Saul Wurman is critical of Walker & Hodosh for wanting to make it even more elite like Davos–and in his email he links to a NYTimes article which says that it costs $200k  to get into Davos. Is there an appetite for that level of pricing in medical care? We’ll see!

I guess the smaller question is, will TEDMED sans Saul Wurman lose any credibility? His departure from TED didn’t exactly hurt it, although I’m sure Walker and Hodosh would rather it hadn’t happened this way.

My guess is that so long as the branding relationship with the main TED is rocksolid. TEDMED will be fine & I guess we’ll just have to wait to find out if Walker will sit on the stage next to Hodosh like Saul Wurman through every presentation–which I thought was the oddest part of the whole conference.

THCB Live: Microsoft

A few weeks back at HIMSS Matthew Holt caught up with Microsoft Health Solutions’ Sean Nolan (Chief Architect) and Nate McLemore (VP, Business Development) to chat about the technology and business of NHIN Direct, HealthVault and much more.

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