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

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

This May Hurt A Little Bit: Entrepreneurs Can Fix Health Care

Washington Business Journal WBJ BizBeat:  "Former Kaiser CEO:  Entrepreneurs can fix health care."

"Entrepreneurs — not the government and surely not established industry players — will be the ones who ultimately fix the deeply flawed American health care system, said Dr. David Lawrence, the retired CEO of Kaiser Permanente."

“The problem with incumbent medical care systems is, they don’t change,” Lawrence said. “What they tend to do is capture the innovation, the entrepreneurial activity, and either slow it or they transform it to what their needs will be, and they often bastardize what are very, very important innovations.”

Lawrence predicted pain as the system evolves.

“To do these well is going to require disrupting traditional medical relationships with patients, it’s going to require disrupting sources of income for the traditional medical care system, and it’s going to require disrupting the relationship of the consumer to the medical care system," he said.

Lawrence's six areas of entrepreneurial opportunity:  triage, navigation, chronic illness, preventative health care, wellness management and end-of-life care.

The re-making of health care has already begun. Hospital executives, at least those with the slightest curiosity, should be terrified by the energetic entrepreneurs focused on the idea that many (most?) hospital admissions are properly viewed as defects somewhere else in the system.

Fix the defects...cut off admissions...add value...save costs...keep the value.  Repay VC funders.  Repeat. 

Many successful business plans have been built on less.

12:33 PM