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The Greater Fool

In the last four decades, we have witnessed a series of investment "bubbles" that have all collapsed. It seems that there is no end to the number of people with cash who will be intoxicated by a good story line, even when there is little substance to back it up. All of these stories depend on the capital markets to bolster the price of investments, counting on the "greater fool" theory: There is always someone who will take on a bad investment at just the wrong time, providing a good return to those who are lucky enough to escape before the crash.

In the early 1990s, ENRON was entering the market with a new electricity trading division. A business partner of mine was asked by one of the largest government pension funds to evaluate a proposal to invest $250 million in the start-up. He came to me a few weeks later, saying that he was having trouble evaluating the deal. They could not give a substantive answer to the basic questions: How will each transaction make money? What will be your competitive advantage in this business? What do you expect your market share to be? When he would ask the ENRON guys for a business plan, their answer was, "We did it in natural gas. We can do it in electricity. Trust us."

My friend advised the pension fund not to invest. It did so anyway, apparently because of personal relationships between the fund managers and people at ENRON. As we now know, the fiction behind ENRON's financial plan eventually led to its collapse.

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Health Care Reform in the U.K. and U.S

“England and America are two great nations separated by a common language.”
-attributed to both Winston Churchill and George Bernard Shaw

In 1965 I spent the summer of my third year in medical school at the General Practice Teaching Unit of the Royal Infirmary in Edinburgh, Scotland because I wanted to learn more about the National Health Service (NHS). My impression then was that both the U.K. and U.S. medical care systems were evolving toward the same end result from very different directions. (1) That viewpoint has been reaffirmed by recent events. Both countries have embarked this past year on significant health care reform. Both countries are seeking to reduce costs, improve quality, become more patient-centered, and invest in health information technology (HIT). In both countries the majority of patients are highly satisfied with the NHS or Medicare and are vigilant about not giving up any of its benefits.

Both health care reform acts are being criticized for being too timid, or too bold, or too incremental, or too radical. The U.K. plan is being attacked by some as a disastrous turn toward privatization while the U.S. plan is “another step toward socialism”, i.e. very little change in the tenor since 1965. Vocal U.K. critics on the left decry the proposed move away from regulation (NHS) toward competition and market-place economics while the vocal U.S. critics on the right warn against more regulation and movement away from reliance on competition and market-place forces.

Increased Primary Care Support
The basic foundation of the NHS has always been General Practice physicians (GPs) who have no hospital privileges and refer all patients needing hospitalization to full-time hospital specialists (Consultants). (2) In 1965, and in 1996,  such a separation of outpatient and inpatient medical practice was threatening to community physicians in the U.S. (3) Today it is difficult to recruit primary care physicians (and some specialists) to a community unless the hospital has hospitalists to care for inpatients. The community-based internist in U.S. is now more like the GP in U.K. then ever before, and that is not a bad thing.

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Shaw Got It Right

George Bernard Shaw wrote The Doctor's Dilemma, Preface on Doctors in 1909. It is fun to read some excerpts:

It is not the fault of our doctors that the medical service of the community, as at present provided for, is a murderous absurdity. That any sane nation, having observed that you could provide for the supply of bread by giving bakers a pecuniary interest in baking for you, should go on to give a surgeon a pecuniary interest in cutting off your leg, is enough to make one despair of political humanity. But that is precisely what we have done. And the more appalling the mutilation, the more the mutilator is paid. He who corrects the ingrowing toe-nail receives a few shillings: he who cuts your inside out receives hundreds of guineas, except when he does it to a poor person for practice.

Scandalized voices murmur that these operations are necessary. They may be. It may also be necessary to hang a man or pull down a house. But we take good care not to make the hangman and the housebreaker the judges of that. If we did, no man's neck would be safe and no man's house stable. But we do make the doctor the judge… I cannot knock my shins severely without forcing on some surgeon the difficult question, "Could I not make a better use of a pocketful of guineas than this man is making of his leg? Could he not write as well—or even better—on one leg than on two?"

Why doctors do not differ

The truth is, there would never be any public agreement among doctors if they did not agree to agree on the main point of the doctor being always in the right. Yet the two guinea man never thinks that the five shilling man is right: if he did, he would be understood as confessing to an overcharge of one pound seventeen shillings; and on the same ground the five shilling man cannot encourage the notion that the owner of the sixpenny surgery round the corner is quite up to his mark. Thus even the layman has to be taught that infallibility is not quite infallible, because there are two qualities of it to be had at two prices.

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It Hurts To A Point

She sat straight up, gripping the arms of her chair as if by releasing them she might tumble forward on to the floor. “I’m tired of hurting,” were her first words to me as I entered the room. I barely recognized the person I’d seen occasionally over the last two years. She was only 32–years old but now she carried herself as if she were an octogenarian, missing only the rolling walker. “I hurt all over,” she continued. “I can’t sleep. I can barely get around at work; they even sent me home once. I’m exhausted but sleep doesn’t help. I have to do something or I could lose my job.” With that she began to cry softly, struggling to wipe away tears.

Her history came spilling out. Pain in her back, shoulders arms and upper leg muscles. Rest gave her little relief. Her sleep was fitful; if she was able to sleep more than five hours it seemed miraculous. She awoke with pain that started as she climbed out of bed and lasted all day. She tried taking Tylenol, ibuprofen, Aleve, and aspirin, first in separate small doses then in combination. All these drugs seemed to do was upset her stomach and diminish what little appetite she could muster. Consequently, she lost weight; down ten pounds since her last visit six months ago.

Her disturbed sleep pattern, accompanied by tender points of pain in different regions of the body both above and below the waist fit the diagnosis of fibromyalgia. Medicine is just now coming to terms with this disease that has become the most common cause of muscle pain in women ages 20 to 55. These patients can have numbness, tingling or burning sensations in the arms, legs or both. Not surprisingly they develop mood disorders—difficulty concentrating sometimes even frank, severe depression. Some patients with fibromyalgia also complain of chest pain or develop alternating diarrhea with constipation, what we innocently call ‘irritable‘ bowel syndrome. On close questioning she volunteered she had many of these problems.

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ACOs and Antitrust

Beyond the legal challenges, a major new hurdle is emerging for the health care reform law. Recent studies show that the major players in the health care marketplace – insurers, hospitals and physician practices – are consolidating, which increases the likelihood they will collude on prices charged to employers and to consumers and defeat cost control measures in the law.

Government officials are already grappling with the issue as they move to implement one of the signature cost control elements of reform – the formation of Accountable Care Organizations (ACOs). Conceived as a delivery system alternative to health maintenance organizations, ACOs are supposed to achieve greater coordination of care by linking together physician practices and hospitals, and will be financially rewarded if they improve quality while lowering costs.

The rules for ACOs, which are being written now, won’t go into effect until next year and will only apply to the Medicare market. While the Centers for Medicare and Medicaid Services (CMS) is likely to endorse several different payment models, the law calls for sharing savings when the Medicare payments for beneficiaries covered by the ACO fall below recent regional trends.

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2011 Predictions: MU Goes Tactical, ACO Strategic

In the Healthcare IT (HIT) market, 2010 was the year of meaningful use (MU). Healthcare organizations (HCOs) of all sizes developed plans, began making IT modifications and began adopting the technology they needed to meet Stage One MU requirements and subsequently receive incentive payments, some of which began being disbursed in late 2010. As we move into 2011, we will continue to see an extreme amount of activity and turmoil in the HIT market with the biggest elephant in the room being what will actually happen to the healthcare reform bill that was passed at the beginning of 2010.

Against this backdrop, we once again have prepared our annual top ten (actually we have 11 for after all it is 2011) predictions for 2011 which are as follows:

1) MU Initiatives Move to Tactical. Meaningful use is no longer of great concern to the executive suite, well except for maybe the CIO and his counterpart, CMIO. It has moved to the tactical implementation stage for enterprises insuring that systems are in place, clinicians trained and MU requirements met to reap incentive payments.

2) C-Suite Strategy Focuses on New Payment Models. Despite the turmoil swirling around healthcare reform, one thing that is unlikely to change is the move to bundled payment models and the migration to Accountable Care Organizations (ACOs). The train has already left the station on this one and this train does not have reverse. The repercussions of these new payment models have the potential to make or break a HCO and the C-suite knows this thus are focusing all of their attention on what is the most appropriate strategy for their organization. Strategy service firms such as CSC, Dell, Deloitte, PWC, etc. are going to make out like bandits.

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HIT Trends Summary for January 2011

EHR vendor performance and project ROI.  KLAS, a health IT product and vendor rating service based on client satisfaction, reported its annual Best in KLAS awards.  For ambulatory EHR systems Epic, eClinicalWorks, Greenway and e-MDs lead their categories by physician practice size, from largest to smallest.  Epic also leads for acute care organizations > 200 beds.  McKesson is best for smaller organizations.  Siemens is most improved.  And there was some interesting cost analysis by CDW, a hardware distributer, which shows us that the biggest expense in an EHR project is potential lost physician revenue.  First year hardware, software and service costs average only 12%, with the rest, $101,250 resulting from physicians seeing fewer patients. Smarter projects can likely do a lot to address this.

Analytic models help demystify the HIT environment.  The government’s Meaningful Use model was updated with its ideas for Stage 2 (2013) and Stage 3 (2015).  Requirements are increased in this stage.  For example, e-prescribing has to touch 40% of patients in Stage 1.  This increases to 50% in Stage 2 and 80% in Stage 3.  The optional measures from Stage 1 become core, for example, formulary checking.  And there are new requirements including chart notes, online patient messaging and a longitudinal care plan. 

PricewaterhouseCoopers (PwC) maps the three stages of meaningful use to three stages of accountable care.  Stage 1 is planning for the ACO; Stage 2 is participating in the ACO; and Stage 3 is performing in the ACO.  John Glaser, CEO at Siemens Health, proposes a model of eight critical IT functions needed to thrive in an accountable care world.  These include patient tracking, decision support, registries, care collaboration tools, event messaging, PHRs, HIEs and analytics.  Glaser sees the ACO provisions in the Affordable Care Act more significant to HIT than the meaningful use regulation itself.

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Why Aren’t The Uninsured Protesting In The Streets Like The Egyptians?

Maybe the uninsured could learn something from Egyptians and the Arab street. At a time when landmark health reform granting most of the uninsured access to medical care for the first time in their lives is being seriously threatened, protests by the uninsured themselves are nowhere to be seen.

In 2009, a staggering 51 million Americans from every walk of life and every corner of the nation had no health insurance. The Urban Institute estimates that 400 of them die each week due to lack of access to care. However, instead of pouring into the streets to protest when an activist judge calls the health reform law unconstitutional or conservative ideologues threaten to cut off funding, the uninsured leave the loudest push-back to (well-insured) political partisans.

This quiescence on a basic human right to care contrasts sharply not only with those braving tear gas and truncheons in Cairo. In this country, merely mentioning gun control fuels a firestorm of protest by firearms supporters. Gay marriage has mobilized liberals and libertarians alike over the “freedom to marry.” The children of undocumented immigrants have dared arrest and deportation to plead publically for the right to become American citizens.

More than one in six Americans is now uninsured. Where are they? The few exceptions to this rule show how much their faces and voices and names are missed. At a hearing by Sen. Tom Coburn (R-OK) in 2009, a sobbing, middle-aged woman confessed she couldn’t afford care for her brain-injured husband. Coburn, a physician, glibly responded that “the idea that government is the solution to our problems…is very inaccurate.” The partisan Republican crowd applauded, in an exchange captured by CNN, but the reaction of ordinary Americans was far more negative.

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Direct Project Pilots Announced

Today David Blumenthal, Aneesh Chopra and other government and private sector worthies somehow held a press conference in DC despite the big freeze. It was to announce the first successful use of The Direct Project. Formerly called NHIN Direct, the idea behind The Direct Project is that providers–especially those outside of the large systems that are plugged into the perpetually emerging HIEs, can send secure messages containing patient information to each other and to patients. Imagine you're moving from New York to San Diego–this way your records could be sent securely and electronically essentially as an email attachment from one doc to another. If this works it is, in the Vice-President's words, a Big F–ing Deal; it will mean that doctors and patients can routinely exchange information that today is communicated in one tech CEO's words only by paper aeroplane. So today on THCB we're printing a very detailed article by two of the vendor representatives who've been working behind the scenes to make this happen.

Direct Project Implementations Take Flight

The Direct Project has taken off, with the first-in-the-nation production use of the Direct Project for secure direct clinical messaging. Arien Malec, ONC’s Direct Project Coordinator, announced today that pilots in Minnesota and Rhode Island are now live with the Direct Project:

• VisionShare has enabled Hennepin County Medical Center to send immunization information to the Minnesota Department of Health. Testing of immunization (or syndromic surveillance) communication to a public health agency is a requirement for Meaningful Use incentives.
• Rhode Island Quality Institute has implemented provider-to-provider health information exchange supporting Meaningful Use objectives with Dr. Al Puerini and members of the Rhode Island Primary Care Physicians Corporation.

And innovative and high-value pilot projects in New York, Tennessee and California are scheduled to go live later this month. (Much more information about this below the fold)

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