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Above the Fold

Interview with Al Waxman, Psilos Group

Aug 24, 2009

Al Waxman is a healthcare entrepreneur who these days runs the Psilos Group, a venture firm that invests in health care services, health care IT and device and instrumentation companies. Among their better known investments are Active Health Management, Health Hero Network and Definity Health–now all acquired by publicly traded companies. This is a wide ranging conversation about Al’s investment philosophy, his desire to get VCs more involved in health care, his mistrust of politicians and where he thinks health care technology is headed. Here’s the interview.

Al will also be on a panel at Health 2.0 on October 6-7 talking about whether Health 2.0 can make health care more affordable.

Not Just Personal Responsibility

Aug 23, 2009• 12

By RAHUL PARIKH

Off and on during the current health reform debate, politicians, leaders and pundits have raised the issue personal responsibility. For instance, take these comments from the John Mackey, the CEO of Whole Foods:

“…many of our health-care problems are self-inflicted: two-thirds of Americans are now overweight and one-third are obese. Most of the diseases that kill us and account for about 70% of all health-care spending—heart disease, cancer, stroke, diabetes and obesity—are mostly preventable through proper diet, exercise, not smoking, minimal alcohol consumption and other healthy lifestyle choices.”

That is a refrain many of us who think and discuss American medicine are used to hearing. In fact, I wrote an article over a year ago in Salon emphasizing the role of individuals in taking care of their own health. That being said, though, I think (especially after having read my readers’ comments about that piece) the view doesn’t take into account the socio-economic factors that pressure many Americans into chronic illness.

Let’s look at obesity as an example that illustrates this. Almost one-third of adults and children are obese, a problem that costs us $100 billion dollars a year. In California, where I live, our State Controller estimates that “the economic cost to California of adults who are obese, overweight and physically inactive is equivalent to more than a third of the state’s total budget.”

Those are the facts, and as Mackey so obviously says, a proper diet and exercise can help to prevent obesity. But for many, that’s not so easy.

To illustrate what I mean, consider the following experiment: a while ago, I decided to take a trip to the grocery store with $40. I spent half of that money on fresh, healthy foods and the other half on processed foods. I took my grocery bags home and counted up the calories per dollar that I spent on both types of foods. For the healthier choices, I got 140 Calories per dollar; for the processed foods, I got 370 Calories per dollar.

That little experiment has real-world implications when you think about middle class families, with two (or one or zero given our current unemployment numbers) working parents, trying to make ends meet. Even people living paycheck to paycheck know what food choices are good for them. But if you’re one of the millions of families just scraping by, popping a couple of DiGiorno pizzas in the over for dinner is cheap and calorie-laden enough to soothe your hunger pangs. It also leaves one less battle to fight with your kids between getting them to finish their schoolwork and getting them ready for bed.

Add the consequences of my little experiment to some other factors, like the lack of access to fresh foods in poorer communities (Mr. Mackey, do you have any stores in low-income areas?), or a lack of safe places to get out and exercise, and you can see that prevention has as much to do with class, income, and communities as it does with personal responsibility.

Dr. Rahul Parikh is a Pediatrician in the San Francisco Bay Area and a frequent contributor to Salon.com and THCB. Dr. Parikh practices with the Walnut Creek Medical Center and Kasier Permanente.

Commentology: Thoughts on the Death of Primary Care

Aug 22, 2009• 34

Vance Harris MD writes:

We are our own worst enemies, as we have allowed insurance companies and Medicare to set the value of our services. Clearly those values they impose have nothing to do with our contribution to the health of our patients or the cost savings we bring about.

Case in point:

How many dozens of chest pain patients have I seen in the last month who I didn’t order an EKG, get a consult, set up nuclear imaging or send for a cath? Only I have the advantage of knowing just how anxious most of these patients are and that they have had the same symptoms time and again over the last 20 years. After a pointed history and exam, I am more than willing to make the call that 27 hours of chest pain is most likely not angina in nature. When I take the responsibility on my shoulders I am saving the system tens of thousands of dollars. Most of these patients present to my office directly and are worked into a busy day pushing me even deeper into that mire of tardiness for which I will be chastised by at least 6 patients before the end of the day. Most of those who scold me are retired and have more free time in a day than I get in a month. My reward for working these people in and making a call that puts me at some risk is at most $75 if I count the less than $25 I get paid for being able to read an EKG without sending it off to be interpreted by a cardiologist. My incentive pay for saving thousands of dollars on each patient for 1-2 days in the hospital, stress treadmill and cardiologist referral is $75. Now there is motivation on a busy day to not send someone to the ER.

How many times has an anxious patient come in, almost demanding an endoscopy, who I examined, after taking a good history, and then decided to treat for 3-4 weeks before making the referral? Few of these patients are happy with me after the visit, no matter how many times I explain that it is reasonable to treat their reflux symptoms for several weeks before considering endoscopy. This delay in referral has lead to many a tense moment in the last 20 years. Cost savings to the system is again thousands of dollars each and every time I do this. I am willing to make the call and go with the treatment first before getting the scope. My reward is about $55 from Medicare and the Big Blues.

How many low back pain patients have come to the office in agony knowing that there has to be something serious to cause this kind of pain? Again a good history and a directed exam allows me to reassure the patient that there is nothing we need to operate on and that the risk of missing anything in this setting is low. This takes a lot of time to explain as I teach them why they don’t need, and better yet, why they don’t want to get an MRI at this point. If someone else ordered the MRI guess who gets to explain the significance of bulging disks and narrowed foramen to an alarmed patient? Setting realistic expectations on recovery and avoiding needless imaging that rarely helps, in the acute setting of a normal exam, saves the system thousands of dollars again. My reward is another $55 if I am lucky.

How many times does a good shoulder exam allow me not to order an MRI giving the patient time to heal and recover before imaging racks up another couple of thousand dollars followed by orthopedic referral for a shoulder that doesn’t need surgery? Another $55 will shower down on me at the end of the day when I send off the bill for that exam.

How many basal cell and squamous cell cancers have I discovered while examining some ones shoulder or abdomen or even a sore throat? How many of those was I stupid enough to remove the same day, only to find out that I would be paid for only one procedure and it would always be the least expensive of the two? How many appeals have been successful to Medicare when I performed the service and was denied payment?

How many diabetics do I struggle with, trying to get them to take better care of themselves? How many hours have I spent with teenage diabetics who will not check their blood sugars and forget half of their insulin doses? I have spent hundreds of hours dealing with them and their families trying to effect changes that will someday allow them to get their disease under control. I do this because the only Endocrinologist in the county will not see pediatric diabetics. I can’t say that I blame him as the time spent seems like a total waste. That is, until one day they open their eyes and want to take care of themselves. My reward for years of struggle and years of 30 minute visits trying to get them to take responsibility for their health is a few hundred dollars at best. The savings to society for my hard work and never give up attitude is in the tens of thousands of dollars.

I continue on in my 22nd year giving advice and services to 30 plus patients each and every day. Having me in the system has resulted in savings in the hundreds of thousands of dollars each and every year. My financial incentive to hang in there and work hard is the following. Twenty years ago I made about twice as much as I do now. This year I will make less as it seems even more of the claims are being reviewed while payment sits in someone else’s account drawing interest.

I have always served my fellowman out of a sense of love and compassion and for those reasons I went into medicine. I have been richly rewarded by my patients over the decades as they appreciate my judgment and skills. Isn’t it a shame that after all this time and with skills honed by decades of experience, I can barely afford to work as a physician? Taxes will be collected, no pass for the working physician, not like the Goldman Sacks guys and their buddies with the 9 billion in bonuses given last year after the 58 billion in funds we gave them.

My parting words next year will be good luck having PA’s provide the safety net with their 2 years of training. Good luck getting newly trained physicians to take over once they see my salary. Good luck having internists in your community with only 1% of medical students going into Internal Medicine. Good luck recruiting the primary care specialists when you are short 70,000 now and 1/3 plan on retirement within 3 years.

If there is any irony in this at all, it is that I will find myself in the same boat as I struggle to find a doctor to take care of me. Now that is ironic. Anyone know who is taking new patients in California?

Vance Harris, MD

Why Standards Matter (1): The True Meaning of Interoperability

Aug 22, 2009

By DAVID C. KIBBE and BRIAN KLEPPER

Americans are generally skeptical of words that otherwise intelligent and articulate people can’t pronounce. “Interoperability,” like nu-cu-lar, is one of these. After a while, these words can take on a mystique all their own.But interoperability is a hugely important word in the context of today’s ongoing debate about the use of EHR technology by physicians, hospitals, and patients too. The federal government is going to provide billions of dollars to encourage today’s fragmented health care providers to convert from mostly paper to mostly computerized information systems. It is critically important for these systems to talk with one another. We want health data to flow between and among these systems and to be, well, interoperable. And it isn’t now.

So how can this word be so difficult to put into action? Here’s a clue: a lot of people are confused about its meaning.Continue reading…

Neither Quick Nor Easy

Aug 22, 2009• 10

By THOMAS L. GREANEY

The idea of establishing regional cooperatives, advanced as an alternative to President Obama’s public plan option, has attracted attention as a means of assuring that health reform legislation contains some means to improve competition among health plans around the nation. But the proposal, which may have superficial appeal as a “middle ground” between a public plan option and an unchecked private market, is ill-equipped to fix the key problems a public plan would address. In addition, recent experience teaches that timely and effective entry by such plans is unlikely.

The first issue is whether a cooperative, organized by consumers or other groups, can effectively deal with the shortcomings of the existing delivery system and insurance market. Thus far, the proposal advanced by Senator Conrad is pretty sketchy, but are grounds for skepticism. A central reason for having government sponsored plans is to allow the efficiencies of Medicare’s well-established administrative structure and innovative payment experiments to carry over to the private sector. Coops provide no such advantage. A second advantage of public plans is that they would likely achieve some bargaining leverage by virtue of their probable role as insurer for people representing higher risks whom private insurers find some methods to avoid. Hospitals and physicians will be hard pressed to bypass such a significant presence in the market and the public plan can thereby exert market-wide pressure to keep provider and pharmaceutical costs down. Whether co-ops will be willing to undertake the role of covering such individuals or able to sponsor innovative delivery systems to treat them is far from certain.

In any event, it is hard to envision numerous regional coops gathering the necessary data, experience and reputation to serve as a benchmark or counterweight to dominant hospitals and provider groups across the country. Further, there is a serious question regarding the independence and mission of coops. It is a mistake to assume that nonprofit entities will necessarily work to the advantage of the public. Unfortunately, our experience with nonprofit hospitals and HMOs suggest that they can easily be persuaded to play along with other providers and may not always vigorously pursue their charitable mission. Keeping cooperatives’ eye on the ball would require close attention to the control and governance of such entities.

The second objection is based on timing and practical considerations. There is ample evidence from our experience with health insurance markets that developing effective coop-sponsored plans will not come easily or quickly. It is clear that new entrants into health insurance markets face a host of obstacles. The prevalence and magnitude of entry barriers is evidenced by the dominance and profitability of existing insurance plans. One or a handful of companies dominate most health insurance markets around the country and these firms have enjoyed consistent and robust profits. Economic theory would suggest that such profit opportunities should have invited entry by rivals eager to capture some of the profits available in those markets.

Additional proof of the obstacles to entry are found in the investigations by insurance commissioners into proposed mergers in their states. In Pennsylvania for example, the proposed merger of Highmark and Independence Blue Cross would have combined the dominant insurers in two large distinct geographic regions of the state. Evidence provided to the State indicated that numerous attempts by regional and national firms such as Aetna and Coventry to enter both markets had proved unsuccessful over the years. Expert studies suggested that a variety of factors including brand loyalty, difficulties in securing physician and hospital network contracts, regulatory and information gathering costs, and obstacles created by the contracting practices of incumbent providers, thwarted entry. Newly formed coops needing to acquire expertise and develop networks will surely face enormous difficulties penetrating markets.

Professor Greaney’s is a nationally recognized expert on health care law and the Chester A. Myers Professor of Law and the Director, Center for Health Law Studies, St. Louis University School of Law. Thomas Greaney has spent the last two decades examining the evolution of the health care industry. He is also a frequent contributor at Health Reform Watch where this post first appeared. His recent testimony to the Senate on “Competition in the Health Care Marketplace” may be found here.

The opposite of that bridge to nowhere

Aug 21, 2009• 26

By MICHAEL PAINTER MPainter

An elderly family member recently received a devastating cancer diagnosis. She gets her care in California from a team of health professionals in a large integrated delivery system. We’re supposed to be reassured that her care team is working together in seamless accountability–dedicated solely to the best possible outcomes for her, right? Unfortunately, that’s not entirely the case. She, of course, has a primary physician and a surgeon. She had a hospitalist who managed her inpatient post-operative complications. She has a number of oncologists. Guess what? None of these five or six physicians were communicating with each other about her care until family members prompted them to do so. She didn’t really have much, if any, choice in selecting her specialists. She had minimal, if any, information about the performance of the various professionals she suddenly needed.

JSK & Joe DeLuca on KQED

Aug 21, 2009• 1

By MATTHEW HOLT

One of the best local talk shows anywhere is Michael Krasny’s Forum on 88.5 KQED, San Francisco’s establishment NPR station (SF of course has a rebel NPR station KALW which has had me on a couple of times but I’m too scruffy for KQED!).

At 10 am PST Forum has a show about health IT which has Robbie Pearle from the Permanente group and 2/3 of my old HIO project team at IFTF, Joe DeLuca and Jane Sarasohn-Kahn.

You can listen in here

Science Is Leading Us to More Answers, but It’s Also Misleading Us

Aug 20, 2009• 6

By DAVID SHAYWITZ

Be careful what you wish for. That is the unexpected lesson of the past decade of biomedical research, which has been characterized by an overwhelming abundance of interesting things to study and powerful ways to study them. A pioneer of this era, MIT geneticist Eric Lander, speaks eloquently of the “global view of biology,” meaning that scientists now have extraordinary tools to study not only individual genes, but also multiple genes at the same time. Rather than immediately investing all their resources in a few favorite genes (the traditional approach), modern researchers first can survey thousands of initial candidates, then identify and ultimately direct their attention to the most important players and pivotal networks.But we are increasingly discovering that this global perspective comes at an unexpectedly steep price: We’re making a lot more mistakes. Or, at least, we seem to be having a lot of trouble picking out the rare, meaningful signal from the deafening noise in the background.

Health Care Reform: What do People Really Want?

Aug 20, 2009• 101

By HUMPHREY TAYLOR

Humphrey Taylor is Chairman of The Harris Poll. Prior to joining Harris, Taylor worked in Britain where he conducted all of the private political polling for the Conservative Party and was a close adviser to Prime Minister Edward Heath in the 1970 campaign and subsequently to Margaret Thatcher.

What do people really think about health care reform? When political issues are difficult and complicated, published polls sometimes confuse rather than enlighten the debate. And health care reform is fiendishly complicated, with many different issues and many different proposals for addressing them. No wonder that the debate is generating more heat than light. This is surely one of the times when political leaders should lead rather than follow public opinion. As Winston Churchill once said, “The problem with politicians who keep their ear too close to the ground is that it is difficult to look up to them in that ungainly posture.”

While policy makers have to address the details of the proposed policies, most people do not. They know what they want, or don’t want, but have only a very limited understanding of which policies will actually achieve their aims. They are often strongly influenced by political rhetoric that varies from the accurate to the simplistic to the completely false. Many different words and phrases are used to describe different policies. It is unreasonable to expect the public to understand the details of the proposed reforms or how they work in practice.

However, if you study all the polls, as opposed to cherry picking them as many politicians do, a clear picture of public opinion emerges:Continue reading…