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Ponzi Schemes

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By JOHN GOODMAN

Jack Lew is lucky he isn’t in prison. Were he representing a private pension fund and if he made the sort of statements he made in USA Today the other day, he might well be sharing a cell with Bernie Madoff.

So who is Jack Lew? And what did he say?

Lew is the Director of the federal Office of Management and Budget. About Social Security, he wrote: “Taxes are placed in a trust fund dedicated to paying benefits owed to current and future beneficiaries. When more taxes are collected than are needed to pay benefits, funds are converted to Treasury bonds — backed with the full faith and credit of the U.S. government.”  As a result of these investments, the Social Security trust fund will be able “to pay full benefits for the next 26 years.”  Not only is this preposterous, Charles Krauthammer called it a “breathtaking fraud.”

Before dissecting Lew, let’s consider why Bernie Madoff is in the hoosegow. Madoff told investors he was investing their funds in real assets, when in fact he was not. He secretly used their funds for personal consumption and to pay off other investors. Either figuratively or imaginatively, Madoff wrote IOUs to himself, all backed by the full faith and credit of Bernie Madoff. Maybe in the beginning he fully intended to pay off. But that’s beside the point. Inducing people to give you money with this sort of lie is criminal fraud. It’s against the law.

Like most government-sponsored retirement programs in the world today, our Social Security system is pay-as-you-go. All payroll tax revenues are spent — the very minute, the very hour, the very day they are received by the U.S. Treasury. Most of these revenues are spent on benefits for current retirees. Any additional amount is spent in other ways.

But there is no funding of future benefits. No money is being stashed away in bank vaults. No investments are made in real assets.Continue reading…

Why CMIOs Matter, and Why We Hired One

By JONATHAN BUSH

On Monday morning, April 4, we were proud to announce that Dr. Todd Rothenhaus has come onboard here at athenahealth to serve in the role of chief medical information officer, or CMIO. It’s a new position and we’re excited he’s joined us. Among many other tasks he’ll take on, he’ll be working on various product development and physician advocacy initiatives.

So now that we’ve got one on the payroll…you might ask: what exactly is a CMIO? And why do we now have one at athenahealth?

I have always known, at a gut level, that from a sales perspective, CMIOs are more important for us to engage with early in the sales process than a traditional CIO (no offense Halamka, I still wanna be friends). In fact, we became major sponsors of CMIO magazine long before I truly appreciated the role of a CMIO!

The CMIO is almost always a doctor, but a doctor in an executive position responsible for managing the health information in a medical organization. They lead implementation of EMR and other health information technology systems. And it seems there is a Lorax element to most. Remember that Dr. Seuss favorite? Well, in the way that the Lorax speaks for the trees, the CMIOs I know speak for the other docs in their organization where management of information is concerned.Continue reading…

The evolution of THCB

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It’s been a couple of months since we moved THCB to WordPress and added the channels you see at the top. As you may have noticed there have been some teething troubles, and for all its power WordPress does have some problems. We’re still working on fixing the right hand columns. However, we’re able to do some things that we couldn’t before–including this little mini-blog microbrew that allows me (Matthew) to write little pieces that I like without having to write enough for a whole post. WordPress also does much better on spam trapping;I literally just went through 1,000 spam comments and only 3 were false positives. If youve had problems posting comments try taking OUT any links (that tends to trigger the spam filter).

But overall you can expect more and better from THCB in the coming weeks…and we’ll be keeping you updated.

Video Collage: KP Center for Total Health

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By MATTHEW HOLT

This week I spent quite a bit of time at the very new and very fancy Kaiser Permanente Center for Total Health in Washington DC. It’s next door to a very large medical office building  (110+ docs) in which KP is showcasing its current integrated care model, and how far its come in its mid-Atlantic region. The Center is  a pretty fascinating place–part tech and idea showcase and part meeting room. Certainly no other health care organization that I’m aware of has spent so much on a place designed to stimulate the imagination and enhance conversation–under the nose of the folks on Capitol Hill. I won’t get into here whether this is how money should be spent in health care but on balance I’m a  fan. (FD KP is a sponsor of the Health 2.0 Conference I co-run).  Instead I want to try to give you a feel for the place, and why it fits their vision and what it’s trying to demonstrate.

I took a tour with some colleague journo/blogger types led by the always expressive Robbie Pearl (CEO of the Permanente Groups in N Cal and now DC too–the airlines thank him!) and with Phil Fasano, CIO of the whole organization. Robbie is not shy in voicing his opinions (as you’ll see) and Phil occasionally trots out the voice of caution to reel in Robbie’s vision a tad. It was great fun.

What was also fun was the cocktail party at the grand opening. There I met three of my favorite DC-based ladies in health: Deven McGraw, Regina Holliday & Cindy Throop. So we’ll start with that fun video, and then there’s a whole lot more from the tour of the center after the jump. All these videos are pretty short.

After that fun and games, lets head to the tour. This is a series of videos of me and a few others testing out the displays, and listening to Pearl &  Fasano, as well as asking them a couple of pointed questions.

But I’ll take the tour in order….after a quick thanks to Holly Potter, Danielle Cass, Ravi Poorsina & center boss Julie Norris who with a ton of their colleagues worked their butts off keeping hundreds of visitors informed and entertained.

First up, Robbie Pearl on the current state of the KP.org health record and why we shouldn’t have to put up with less; what he called the 19th century state of medicine. And I can assure that is on display in my wife’s OBGYN office every time I visit.Continue reading…

Time for Toto to Pull the Curtain Away from Patient-Centered Medical Homes

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By AL LEWIS

Patient-Centered Medical Homes in statewide populations have unstoppable momentum and major constituencies in support of them, so valid analysis of their outcomes is probably as futile as it will be unwelcome.  However, the math speaks for itself, at least in the mother of all statewide medical homes, North Carolina Medicaid’s Community Care Access Model.

I write this after having analyzed the actual data from this project’s outcomes report, rather than the stated conclusion of the report, a conclusion that continues to be cited in support of the many states considering or implementing medical home models for their Medicaid populations.

The conclusion makes North Carolina looks like a huge win for PCMH:   $300-million in reported savings.  However, readers should have (but largely didn’t) observe a number of curiosities about the data in support of that conclusion:

(1)    Every element of resource use declined.  People have to be getting their care from somewhere, but inpatient, ER, outpatient, physician, drug, and other expenses somehow all declined vs. trend.

(2)    The decline in physician practice expense is especially counterintuitive:  Why are the doctors so supportive if they are working harder but making less money?

(3)    Even though somehow savings were shown in physician expense, per capita doctor visits did indeed increase.   More concerning was that specialist visits –which are supposed to decline in a PCMH model – also increased.

(4)    Inpatient expense fell 47%.  This was achieved despite the fact that all the AHRQ’s “Ambulatory Care –Sensitive Conditions”  total to about 20% of admissions in most populations.

(5)    The evaluators (William M. Mercer) are on record as saying that “choice [emphasis mine] of trend has a large impact on estimates of financial savings.”  Perhaps it is possible that Mercer, having given themselves this latitude, “chose” a trend that would make the study look good.

Those observations merely suggest that the study was done wrong.    But one other “finding” invalidates the entire study:  the 54% reduction in spending on babies under one year of age, accounting for the majority of the entire $300-milllion in spending.   (Any nontrivial savings whatsoever in this category should have raised eyebrows since PCMH is mostly about managing chronically ill patients.)   The components of spending in that category include physician expense, which should rise since doctors get paid more to be more accessible, and drug expense, which should rise for the same reason.  This means that the entire 54% savings across the category must be concentrated in neonatal expense.   Since neonatal expense is about half of total spending in the age category, it would have to decline by a mathematically impossible 100%+ in order for the category to average a 54% reduction.Continue reading…

Why We Still Kill Patients

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By MICHAEL MILLENSONMillenson_122k_3

A recent front-page article [1] in the New York Times conveyed grim news about patient safety. The first large-scale study [2] of hospital safety in a decade concluded that care has not gotten significantly safer since the Institute of Medicine’s 1999 estimate [3] of up to 98,000 preventable deaths and 1 million preventable injuries annually.

What for me struck a particularly jarring note was not just the absence of improvement, but the reluctance of the health care leaders interviewed to speak candidly about why progress has been so slow. Instead, they offered nostrums about the need to “do more” or opined that “openness” or better “coordination” would somehow turn the tide.

But tucked in the actual study’s conclusions section, between bland boilerplate about “further study” and a “refocusing of resources,” some carefully worded candor cautiously peeked through: “[T]he absence of large-scale improvement is not evidence that current efforts to improve safety are futile,” wrote Christopher Landrigan and colleagues in the Nov. 25 New England Journal of Medicine. “On the contrary, data have shown that focused efforts to reduce discrete harms, such as nosocomial infections and surgical complications, can significantly improve safety.”

In plain language, we know how to prevent many of these patient deaths, but we don’t. That makes, “Why?” a lot tougher question.

Continue reading…

A Case for Self Insuring Small Business

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By MICHAEL TURPIN

Image via Wikipedia

During the course of 2009, an alarming trend line was broken. For the first time ever, more employers under 50 employees were not offering medical insurance to employees than those who continued to provide employer sponsored healthcare.

Unfortunately, achieving affordability is often a zero sum game and the current system often fails the weakest and most disenfranchised of its stakeholders.  While the burden of spiraling healthcare costs has effected virtually every employer, the weight of cost increases has been borne disproportionately by individuals and smaller employers (1-250 employees).  The opaque science of risk pooling, cost shifting and risk selection has as much to do with unacceptable increases as  poor consumerism, over treatment and inefficiency. As we march toward insurance exchanges and pooled purchasing for employers in 2014, we will continue to witness a game of pass the parcel leaving smaller employers holding the bag.

Healthcare cost shifting begins at the highest levels with federal and state governments routinely cost shifting to the private sector by serially under-reimbursing specialists and hospitals for the cost of their services. Doctors and hospitals, in turn, shift cost to the private sector charging higher fees for services to make up for underfunded Medicare and Medicaid rates. Health systems have consolidated along with multi-specialty medical groups gaining critical bargaining power that results in higher contracted rate increases negotiated with insurers.  Insurers, attempting to keep rising medical trends down, must exact concessions from less well leveraged providers such as community based hospitals and primary care doctors. The result is an Darwinian landscape where only the large survive.

As core medical trends hover between 7%-8%, insurer insured book of business medical trends have climbed into and remain in double digits. Larger employers remain more immune from peanut butter spread book of business trends due to their own unique claim credibility and in many instances, due to the simple act of self insurance.  Lack of size and actuarial credibility leaves smaller employers and individuals to be underwritten within pools of risk — pools that continue to pass on the rising costs of care at an alarming rate.  To add insult to injury, as states and the Federal government become increasingly larger medical payers (already representing over 50% of all medical spend in the US), cost shifting will only accelerate in the private sector resulting in higher medical trends impacting smaller employer pools.Continue reading…

Why ACOs Won’t Work

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By ROBERT LASZEWSKI

First, I think Accountable Care Organizations (ACOs) are a great idea. Just like I thought HMOs were a good idea in 1988 and I thought IPAs were a good idea in 1994.

The whole notion of making providers accountable for balancing cost, medical necessity, appropriateness of care, and quality just has to be the answer.

But here’s the problem with ACOs: They are a tool in a big tool box of care and cost management tools but, like all of the other tools over the years like HMOs and IPAs, they won’t be used as they were intended because everybody—providers and insurers—can make more money in the existing so far limitless fee-for-service system.

I see the $2.5 trillion American health care system as a giant health care industrial complex. It just grows on itself and sucks in more and more money. Why not? The bigger it gets the more money we give it.

How do you make it efficient? You change the game. You can’t let it any longer make money just getting bigger. The new game has to be one that only pays out a profit for results—better care for a budget the country can live with. There are lots of tools available to do that. ACOs, capitated HMOs, IPAs, disease management, enormous data mines, Electronic Patient Data Systems, and so on.

But, here’s the rub. There isn’t a lot of incentive for payers and providers to do more than talk about these things and actually make these tools work. Right now they can just make lots more money off the fee-for-service system. They demand more money and employers and government and consumers are willing to just dump more money into the system. Sure they complain about it but they just keep doing it.Continue reading…

The Kaisingers link up

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A while ago at an IOM meeting I mis-spoke and called Geisinger, “Kaisinger” and it kinda sounded right. Well now those two Epic users with another similar Epic user (Group Health) have teamed up with Mayo (home grown IT) and InterMountain (3M + homegrown + GE) to share patient data.  Now it hasn’t happened yet — this is the announcement of what is to come (although KP is inter-operating with the VA in San Diego). But they’re going to use NHIN standards. My understanding is that they’re going to start with moving data using CCD (a subset of the records) and then move to access full patient data via common medical identifiers. Of course while this is great news, the chances of a typical California Kaiser patient showing up in rural Pennsylvania isn’t that high. But if they can do it across the country, why can’t they and others do it across the street? In other words resolve what Jonathan Bush calls the Paper Aeroplane method of interoperability. After all that type of random showing up–even for Kaiser patients in a Sutter run ER–is a big deal. Let’s hope this announcement is a big spur, and allows others to join.

More EMRs for all

Today’s been a big day in Health IT. First Kaiser Permanente has opened a very flashy Center for Total Health in DC. I took a tour today and lots of it is focused on the use of and extension of their Epic-based medical record (including adding lots of applications to that platform). But it’s open in DC in order to show the DC crowd what can be done. Meanwhile if you don’t have $6 billion lying around to put in a medical record, perhaps spending nothing may be a better option. And today free EMR “vendor” Practice Fusion got $23m in venture funding which will help them give away a whole more EMRs which will soon have a whole lot more applications attached to that EMR.

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