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How to save $40 billion in health care costs

Aug 18, 2010• 39

By JANE SARASOHN-KAHN

Electronic health records (EHRs) broaden access to patient data and provide the platform for pushing evidence-based decision support to clinicians at the point-of-care. This promotes optimal care for patients, reduces medical errors, optimizes the use of labor, reduces duplication of tests, and by the way, improves patient outcomes. When done in aggregate across all health providers, a team from McKinsey estimates that $40 billion of costs could be saved in the U.S. health system.

Reforming hospitals with IT investment in the McKinsey Quarterly talks about the American Reinvestment and Recovery Act’s (ARRA) $20+ billion worth of stimulus funding under the HITECH Act and estimates that 80% of existing hospital IT applications will be affected by the regulation. Hospitals will be spending about $120 billion to meet the adoption and meaningful use provisions of the Act. This equates to $80,000 to $100,000 per hospital bed. ARRA incentive payments will cover roughly 20% of this cash outlay, meaning that $60-80K won’t to covered.

But McKinsey says, “Hold on!” There are ways to recoup the spending gap between HITECH incentives and cash-out-of-the-hospitals-budget. McKinsey’s research calculates that optimizing labor, reducing adverse drug events and duplicate tests, and adopting revenue cycle management can help the average hospital save $25,000 to $44,000 per bed each year. That gets to the $40 billion in annual savings when multiplied across all hospital beds in the U.S.Continue reading…

Aneesh Chopra talking Health IT and innovation, SF 12 noon today

Aug 18, 2010• 1

By Matthew Holt

Today at 12 noon PST Aneesh Chopra, Federal CTO will be at the Commonwealth Club in San Francisco talking about health care and health care IT. Indu and I saw him last night talking about technology before a big crowd at the Silicon Valley Computer History Museum.

In today’s talk he’s going to be focused exclusively on health care, which means he won’t have to dodge the question on Net Neutrality that he got last night. And even better, if you don’t have a ticket yet you can get one free thanks to the California Health Care Foundation,

I’ve seen Aneesh talk several times. Last night was particularly good in that he really responded well in the Q&A session. Plus he gave several shout-outs to the Health 2.0 Developer Challenge even if he made Indu embarrassed,

So if you care at all about health care and IT, you should come to the Commonwealth Club in downtown San Francisco today. And as an added bonus the entire health 2.0 team down to the Norwegian interns will be there – except for Lizzie who is up at the Health 2.0 NorthWest Chapter Kick off meeting.

One Day in the Life of a Meaningful User

Aug 17, 2010• 58

By MARGALIT GUR-ARIE

All the laws have been passed and all the final rulings have been published. In the spirit of the times, you went out and got yourself an EHR. You did your due diligence and sat through many hours of vendor demonstrations. In the end they all started to blend together, so you talked to friends and colleagues and accepted the Hospital’s offer to pay a big chunk of your EHR costs if you picked the one they wanted you to pick.

Your biller quit in disgust, but other than that the implementation was uneventful and the Hospital folks helped a lot. After several hiccups, your Medicare payments are coming in regularly now and your office is adjusting well to the new software. The documentation templates leave a lot to be desired, but you type well and when you find some free time you may take a stab at customizing them a bit. Here and there you run into bugs and a couple of times the EHR was unavailable for a good two to three hours. Not sure exactly why. Maybe it was the Internet that was unavailable.

Anyway, if all goes according to plan, you will be retiring in 10 years and your much younger partner will be bringing in someone who is probably in Medical School right now. Everything seems under control. But today is different…

Today is January 2nd, 2011 and you are driving to work. Today has to be meaningfully different and your first patient is waiting in Exam Room 1.Continue reading…

The Other Medicare Report

Aug 17, 2010• 22

By JOHN GOODMAN, PhD

The release of this year’s Medicare Trustees report was unprecedented. As noted in previous posts here and at my blog here and here, Medicare’s chief actuary not only refused to sign off on it, he disowned it — encouraging readers to ignore it and focus instead on an alternative report, prepared by the office of the Medicare actuaries.

So what’s the difference in the two reports? It all relates to the health reform bill that passed last spring. The formal trustees report shows health reform dramatically reducing future Medicare spending. In fact, it is so dramatic that even the White House seems reluctant to talk about it — perhaps because it’s prima facie unbelievable.

Consider this: In 2009, the trustees reported that (looking indefinitely into the future) Medicare had an unfunded liability of $89 trillion. This year, the trustees report that number has fallen by more than half to $36.6 trillion. If the numbers are to be believed, health reform has already saved us $53 trillion — a sum more than three times greater than our entire gross domestic product!

RWJF’s Stephen Downs on a New Model for the Foundation – and the Health 2.0 Developer Challenge

Aug 17, 2010

Last week, we sat down with Steve Downs, Assistant Vice President, Health Group, Robert Wood Johnson Foundation to discuss the 3 New Challenges they’ve announced for the Health 2.0 Developer Challenge. Steve explains RWJF’s current areas of focus in health and how they are testing the Developer Challenge as a novel process to source and spur innovation.

Interview with Steve Downs, RWJF

From building real apps based on the Project Health Design PHR prototypes (in partnership with CHCF) to using County Health Rankings to build interactive tools for decision-making (in partnership with U. of Wisconsin) to working with the Markle Foundation and VA/CMS on the Blue Button initiative, RWJF has given the Health 2.0 innovator community lots of raw material and inspiration to work with.

And within just a couple of days, 5 Teams have already signed up to compete. For more on RWJF’sChallenges and to get involved with the Health 2.0 Developer Challenge, go to www.health2challenge.org.

Diversinet: a backbone for unplatforms?

Aug 17, 2010• 3

By Matthew Holt

Unplatforms is the term I’ve been using to describe the multitude of devices that people are using to collect and receive information. And also to cover the different channels they are using often on the same device (e.g. text, voice and web on one smart phone). Application developers are having to come up with strategies for connecting with people and moving and integrating their data in a world of multiple unplatforms, Diversinet has been focusing on creating a turnkey system for moving health data securely to patients–here’s a demo you can play around with to see how it works. It might be one solution for health care organizations to deal with all those unplatforms over which they need to reach consumers.

The company has recently changed its business strategy–it was working with a subsidiary of a Penn Blues plan to distribute its services, but following a protracted legal dispute, it’s now going direct to health care plans and providers who want to move data between multiple devices, and has hired McKesson veteran Mark Trigsted to run its new health care group. First customer is Minnesota integrated systems HealthPartners, with a pilot for pregnant women underway already. I spoke with Diversinet’s SVP of sales Jay Couse to find out more about the technology and the business strategy.

Interview with Jay Couse, Diversinet

Privacy and Security of Patient Records: The Lesson of the Weakest Link

Aug 16, 2010• 1

By DAID HARLOW

The Queen of Soul famously wailed about being a link in a chain of fools. Today’s lead story in the Boston Globe tells us about another sort of link in the chain — the weakest link in the chain of custody of patient records. In brief, a pathology billing service bought out by another service apparently dumped all records more that a year old in a town dump; a Globe photographer taking out his own trash noticed that the paper records (which he was looking at because he thought they ought to be recycled rather than dumped) had identifiable patient data and represented at least four hospitals from across Eastern Massachusetts. Clearly, these records ought to have been shredded or otherwise destroyed before disposal. Assuming they had some airtight contracts in place, the hospitals involved may well be looking to the seller of the billing service in this case to reimburse them for costs of:

identifying the patients involved in this data breach
notifying affected patients of the breach
providing credit monitoring services to affected patients
any damages incurred by patients
any fines incurred by the hospitals

Under the HITECH Act’s “Son of HIPAA” rules, the hospitals could be on the hook to the federales for up to $1.5 million in fines each as a result of this incident, and the state AG could get in on the action as well, filing suit on behalf of the affected Massachusetts residents and seeking to ensue that proper procedures are in place. There may also be a violation of the state data security law here as well. Massachusetts has a particularly stringent data security law on the books that took effect within the past year, and not all affected businesses have come into compliance. The AG may be on the prowl for a few high-profile cases, like this one, in which to levy substantial fines and convince the laggards that compliance would be more than worth their while.

The natural question to ask, given the facts of this case, is: What Would a Meaningful User Do?

Can Health 2.0 Fix Clinical Trials?

Aug 16, 2010• 6

By MATTHEW HOLT

Saturday’s New York Times portends more trouble for big Pharma. The headline is wrapped up in an examination of foreign corrupt practices, but the bigger issue is that clinical trials have hidden serious adverse events. The recent allegations that GSK hid data about heart attacks from an Avandia trial conducted abroad highlight the reality that over the last 20 years or so it’s been very hard to recruit patients for clinical trials in the US. It’s expensive to find patients, and the numbers of patients available near centers has not proved enough. The answer has been to go to places with lots of people and lower costs, like India.

One obvious consequence is that few of the significant advantages of Internet connectivity and patient community which have been developing in recent years have been adopted as part of these pre- or post market trials. Several online communities–notably PatientsLikeMe–have been running their own studies but they have typically been observational studies and haven’t had much acceptance from Pharma or regulators.

Ingenix buys Axolotl (with minor Update)

Aug 16, 2010• 4

By Matthew Holt

Ingenix, the arms dealer that’s been supplying all sides in the health care information war for the past decade or so, built itself up by buying lots of little companies in the data analytics space. Now it’s repeating the effort in the Health Information tools space. First it bought Caretracker (actually the company may have had a different name when it bought it, but that’s the name now). It’s a Web-based EMR for smaller practices (a sector with lots of Federal dollars attached). Then it bought Picis, a company that offers software that runs ORs, EDs and other high acuity inpatient sites (another recipient of lots of Medicare dollars).

Today it bought Axolotl, one of the vendors that’s biggest in the emerging (and constantly confusing) Health Information Exchange marketplace. Yet another place that lots of Federal dollars via ONC are going.

You’re probably noticing a pattern by now…

Ingenix itself of course is owned by United Health Group, although its CEO Andy Slavitt will be at pains to tell you that United also just happens to own a health insurer or two, and that Ingenix is not the subsidiary of a health insurer. Of course, Congress doesn’t always agree…

Normally I’d do lots of in-depth analysis about this story, but I’m for now just rushing to for once beat HIStalk to the punch!

UPDATE: Inga at HISTalk won’t truck with my “I beat her” comment and notes that she posted the following tweet before me (even if I got my post up on THCB before her or MrHISTalk posted on HISTalk!)

ngaHIStalk 1:09pm via Facebook

Rumor from two good sources: Ingenix/UnitedHealth Group will announce its acquisition of Axolotl after the market…http://fb.me/ECtaUXRc

boltyboy 2:56pm via TweetDeck

Ingenix (UHG) getting even more expansive in HIT, buys HIE vendor Axolotl

The Federal Reserve Wants to Rebuild Main Street

Aug 16, 2010• 9

By DAVID ERICKSON, Federal Reserve Bank of San Francisco and JAMES S. MARKS, Robert Wood Johnson Foundation

We all have a vision of the “Main Street” we would like to live near – tree-lined, friendly and safe. But our “Main Streets” are in disrepair. Across the country, they lack sidewalks, parks, well-stocked grocery stores with fresh food, healthy homes and apartments, and convenient public transportation. And it turns out, these things add up to a lot more than just an unpleasant place to live – they can have a major impact on our health.

There has been much in the news about the costs of medical care and our current and future economic competitiveness because of those costs. But little has been done as a nation to see if we can reduce the amount of disease we have to treat.

On Main Street in America, a woman with diabetes – perhaps one who is newly insured under health reform – will see her doctor, who after telling her what medications and tests she needs, will tell her to improve her diet and be more physically active. But what if she returns home, to a neighborhood that makes following the doctor’s advice nearly impossible because there is no supermarket with fresh food like in Detroit, where there are only 5 grocery stores for a city of 139 sq. miles?