The Answer For Lower Healthcare Costs Is...

...Customer Service.

From the New York Times: Seattle's Iora Primary Care is a new model of primary care, seeking national scale and venture capital funding.  Though the ambition may be outsize, the concepts are not new. Daily team huddles. Health coaches. Taking satisfaction surveys seriously and mining results for actionable insights. Employer and payer partnerships. Pay-for-performance not volumes. Loose-tight operations (wellness options are "loose" - i.e. varying from site to

site, while EHR alignment is "tight" and non-negotiable.)

According to the article:

"...small change(s) can make a big difference in a patient’s health — what good is the perfect drug if the patient can’t swallow it? — but the extra-mile work it took to get there can be a challenge for the typical primary care practice in the United States. Harried by busy schedules and paid on a piecework model, many doctors rush from visit to visit, avoid phone calls and emails that don’t generate payments, and often fail to address the complex social issues that hamper people’s health.

"This misalignment of financial incentives is a huge problem for patients, who often can’t get the care they need. But it’s also a big economic problem. The United States has the costliest health care system in the world, even as many patients suffer from preventable illnesses and die younger than their peers in other countries. The system is so full of inefficiencies that Americans are often sicker even as everyone — patients, insurers, the government — ends up spending more money on care.

"Iora thinks it may be able to solve both problems and make money doing so. Its business model is meant to keep patients...out of the hospital by improving service while earning a dividend on the expensive care it was able to avoid."

Still, despite the intuitive appeal and some preliminary research, hard data on results are scant:

"Iora has little published research on the cost savings it has achieved for its partners. The company’s small size makes it hard to produce data with statistical significance. Asked about current evidence of the model’s success, the company provided numbers about one of its sites, where researchers have compared Iora patients with similar patients elsewhere: Total spending was down 12 percent, with hospitalizations down 37 percent, compared with the control group. That may have been a practice with healthy patients, like Dartmouth, or one of the higher-risk patient groups; an Iora spokeswoman said she could not say which practice it was because of a confidentiality agreement with the sponsor.

"Many of the basic elements of the Iora primary care approach — longer hours, more support staff and additional per patient funding — have been tried in other settings, especially in so-called patient-centered medical homes. So far, the results for those types of practices have not been promising. Few have shown real reductions in spending or in the frequency of patients entering hospitals.

Many healthcare organizations are chasing the same vision, betting that all the "We Love Customers" talk will finally start to put some results on the bottom line.  As a healthcare strategist AND an occasional patient, let's hope they're right and the data begin to show it.

1:55 PM

Is There An App for Patient Engagement?

No, says Steve Wilkins, MPH, writing at KevinMD.com. 

Physicians, hospitals and other providers are being misled by  industry pundits claiming that more health information technology (as in EMRs, PHRs, smartphone apps, and web portals) is the key to greater patient engagement.   It’s not.

Part of the misunderstanding concerning the role of HIT comes from how the discussion about patient engagement is being framed.  According to the pundits, patient engagement is the physician or hospital’s responsibility.  And like everything else these days, we can fix it if we just throw more technology at the problem. Can anyone say Stage 2 Meaningful Use requirements?

[...]

 The role of physicians, hospitals and other providers is not so much one of needing to engage patients in their care.  Rather, providers need to “be more engaging” to patients who are already actively engaged in their health.

Take the simple act of a trip to the doctor’s office.  Before a person shows up at the doctor’s office they have to 1) have a reason or need (symptoms, a concern, chronic condition), 2) believe that the need or reason merits seeing the doctor vs. taking care of it at home themselves – this generally implies cognition and doing research, i.e., talking with friends, going on line, etc., 3) make the appointment (by calling or going online), 4) show up for the appointment, and 5) think about what they want to say to the doctor.  The point here is that by definition, people who show up for a doctor’s appointment are already engaged.

Read the whole thing, here.

6:03 PM

NFP Hospitals Hit the Wall

Have nonprofit healthcare providers' improvement efforts hit a wall?  Standard & Poor's Rating Services seems to think so, in this story (via Reuters.)   From the story:

"Adding to pressures, inpatient volumes are dropping.

"With pending budget sequestration at the federal level, health reform implementation, and continuing pressure on state budgets, we believe the next several years will be difficult for most providers," said S&P. "Furthermore, we believe that the improvements of the past several years may be reaching their limit and thus will not be able to keep pace with longer-term revenue pressures, especially in light of weaker volumes."

"S&P says more rating downgrades are possible for not-for-profit healthcare systems over the next two years. It noted that the proportion of systems with positive or stable outlooks is shrinking, which "supports our opinion the multiyear trend of improved financial ratios is unlikely to continue."

Sooner or later providers, notoriously risk adverse, will be forced to admit that cautious incrementalism is little more than death by a thousand cuts - a slow death, but death nevertheless.

Many see salvation in mergers and/or acquisition.  Putting a bunch of soon-to-be-crummy balance sheets together doesn't make the collective any less crummy.  And, usually, the consultants, lawyers and integration costs eat up the first 5 years of savings from any so-called "synergies."

Many see salvation in shiny new buildings with private rooms and in-lobby waterfalls.  Few will find the new business volumes to justify more balance sheet leverage (see "crummy" - above.)

And many see salvation in massive IT investments- Big Data, EMRs, portals, etc.  I hope they're right.  I fear they're not, but it'll take five years to really know how soundly these systems were reviewed, acquired and implemented.  Sitting here it's easy to predict more failures than successes.

In the meantime, under either fee for service or risk-based reimbursement, a "low delivered cost" position looks better and better.  It's the only strategy offering a possibility of success regardless of scenario.  But here providers have been far too timid, scrabbling in the dirt for a few percentage points of margin improvement instead of challenging themselves to find 30%, 40%, even 50% savings on an episode of care.

They're not going to achieve that by cutting the marketing budget (again) or designing buildings offering more of the same.

No, it won't happen until providers finally do hit that wall.  Maybe then they'll realize that the only path to survival requires getting radical about lots of things -  including ditching that leadership box in which they find themselves.

(Photo credit: Magdalena Gmur, Creative Commons)

3:11 PM

NEJM: Escaping the EHR Trap

From the New England Journal of Medicine:  "Escaping the EHR Trap — The Future of Health IT."

Authors Kenneth D. Mandl, M.D., M.P.H., and Isaac S. Kohane, M.D., Ph.D. offer a devastating critique of health IT's current state:

Even as consumer IT — word-processing programs, search engines, social networks, e-mail systems, mobile phones and apps, music players, gaming platforms — has become deeply integrated into the fabric of modern life, physicians find themselves locked into pre–Internet-era electronic health records (EHRs) that aspire to provide complete and specialized environments for diverse tasks.


We believe that EHR vendors propagate the myth that health IT is qualitatively different from industrial and consumer products in order to protect their prices and market share and block new entrants. In reality, diverse functionality needn't reside within single EHR systems, and there's a clear path toward better, safer, cheaper, and nimbler tools for managing health care's complex tasks.

7:34 AM

5 Reasons Your Healthcare Integration Strategy Is Going To Fail

From Eliot Muir, iNTERFACEWARE, Special to ZDNet:

" I hate being the bearer of bad news, but I can tell you, with 100 percent certainty, that your integration strategy is going to fail. That’s the good news. The bad news is that when your strategy fails, there will be a start-up with only a handful of employees and even less money waiting in the wings to take over your market share. I am not trying to paint a gloomy picture; I am just sharing hardcore facts upfront.
...

" ...healthcare organizations looking to inoculate themselves from integration failure should follow a few common-sense, tried and true rules: develop a clear strategy up front, keep current with technology, leverage the cloud, be flexible about standards and always look at the opportunity costs inherent in custom development."
[Read more...]

3:00 PM

Doctors vs. Algorithms?

Do We Need Doctors or Algorithms, asks Vinod Khosla.  The answer may surprise those of you spending your days worrying about an impending physician shortage.

"Eventually, we won’t need the average doctor and will have much better and cheaper care for 90-99% of our medical needs. We will still need to leverage the top 10 or 20% of doctors (at least for the next two decades) to help that bionic software get better at diagnosis. So a world mostly without doctors (at least average ones) is not only not reasonable, but also more likely than not. There will be exceptions, and plenty of stories around these exceptions, but what I am talking about will most likely be the rule and doctors may be the exception rather than the other way around.

...

"What is important to realize is how medical education and the medical profession will change toward the better as a result of these trends. The vision I am proposing here, though, is one in which those decades of learning and experience are used where they actually matter. We consider doctors some of the most learned people in our society. We should aim to use their time and knowledge in the most efficient manner possible. And everybody should have access to the skills of the very best ones instead of only having access to the average doctor. And the not so “Dr. House’ doctors will help us with better patient skills, bedside manners, empathy, advice and caring, and they will have more time for that too. If computers can drive cars and deal with all the knowledge in jeopardy, surely their next to next to next…generation can do diagnosis, treatment and teaching in these far less uncertain domains and with a lot more data. Further the equalizing impact of both electronic doctors and teaching environments has hugely positive social implications. Besides, who wants to be treated by an “average” doctor? And who does not want to be an empowered patient?"

In just a few paragraphs, Khosla defines healthcare's future. Though I happen to agree, what I find somewhat depressing is that hospitals will sit, wait and have it done TO them, missing out entirely on the future's new, exciting value streams. Missing the opportunity to participate, to benefit and to re-envision the hospital as something beyond a massive, expensive and now-empty acute care cathedral.

Because if algorithms replace doctors, will doctors (and patients) still need hospitals?   Read the whole thing.

7:19 AM

Which Is More Important: A Certified EMR or a Productivity-Improving EMR?

Aren't they the same thing?  No, says Paul Roemer, alerting us to this fun fact: "EHR certification inspectors will be dropping in on hospitals like UN inspectors looking for WMDs, only they’ll be slightly less congenial."

2:22 PM

JAMA: How to improve patient safety with your EHR? Add natural-language and free-text processing algorithms.  In short, think Google, not billing codes.

[Read more...]

9:57 AM

Walmart to Become the Healthcare IT Punching Bag?

At "Wal-Mart to market Electronic Medical Records? Has Medicine Gone Bananas?" I noted the entry of Walmart into the healthcare IT fray.

As I observed here in early 2005, HIT is a field where angels fear to tread. Or should fear to tread.

Walmart is not exactly popular in numerous circles, so let me state I buy from them (most recently my Acer Netbook, clothing and various Christmas gifts) and am neutral on most of the issues that create the opposition. My father ran a business, after all.

However, he at least stuck to his core expertise, pharmacy. Walmart is trying to market EMR's, a product far beyond their core competencies. The HIT market and "ecosystem" is also far beyond their competencies, and it's not hard to predict they are going to have a rapid and quite unpleasant learning experience about the dark corners of this industry.

Felix Fulmer, a correspondent with longstanding expertise in academic and pharmaceutical research environments conveyed to me the following observations about this arrangement:

Deficient as its products often are, the HIT industry was built up by entrepreneurs over many years and by much hard work. They are now being challenged by a very large and very powerful entity. The entry of Walmart into EMR represents a tremendous threat to the HIT industry status quo.

This initiative is likely to help doctors and patients at the very least by reducing the cost of EMR (even if not improving the performance), putting downward price pressure on the entire industry. It is also likely to change the marketing and consulting practices in the HIT industry as well, driving wages down among other factors.

If successful, Walmart's initiative could in fact cause the extinction of the current monopolistic and parasitical HIT establishment. [In my estimate, a 33% - 50% reduction in companies, revenues and personnel in three or four years would not be an unreasonable figure - not that I would be sad to see some of them go - ed.]

Mr. Fulmer continues:

The HIT industry must realize this and, based on Walmart's history of capturing other markets and putting smaller competitors out of business, the captains of this industry must be quaking in their boots. These entrepreneurs will fiercely act to defend their territory, using every trick in the book [knowing the industry as well as I do, I cannot fail to agree with that assessment - ed.]

Walmart is going to be severely punished. The pushback from the HIT establishment will likely consist of three phases: subversion, obstruction, and agitation for litigation (in a collusive manner) to challenge the newcomer. There will be technical, administrative and political angles.

The first phase, subversion, will be the establishment's attempt to try to keep the Walmart arrangement from happening. It may occur through the press and through political means. Antitrust complaints, and a negative campaign of badmouthing and panning may occur. It will be insinuated or stated that Walmart doesn't have the required expertise, that they don't know what they're doing, among other claims to discredit, diminish and minimize the initiative.

The second phase will likely be obstruction. HIT products Walmart will carry will be sabotaged by other vendors in terms of passive aggressive measures to complicate or prevent data interoperability. There may be issues such as constant "breakdowns" of interfaces, inexplicable technical glitches blamed on Walmart and its supplier, of course. Walmart's HIT products and services will be scrutinized under a microscope and deficiencies highlighted through the media and printed competitive materials.

There may also be attempts to intimidate and misdirect physicians not to go with this product through the medical leadership, through back room paid sponsorship of "influential thought leaders" (as in pharma), through "detail people" (e.g., sales reps as in pharma) and other means. Hospital administrations and CIO's may also be influenced by various means to steer physicians away from this offering, perhaps to the level of marginalizing users or refusing to support this product.

Finally, there will be litigation, especially regarding the inevitable medical errors that occur when this technology is pushed into small town physicians offices unused to technology of this complexity. Walmart may be shocked to find the "learned intermediary" principle suddenly and mysteriously not be applied. Why would this be a surprise, considering their immensely deep pockets and the disdain of the the left-leaning, anti-big business judiciary system?

Mr. Fulmer concludes with this thought:

Walmart may think of their entry into the HIT marketplace as a great business plan, but their executives may need to partake of their own medical clinics to deal with the stress the HIT industry pushback will cause.

-- SS

11:32 AM