Next Things First


Reform: Finally, Some Discussion of the Real Issues by Rob Coppedge

In light of all the distraction recently generated by discussions of health care IT (and even, cue the smoke machines, Health 2.0), I was very pleased to find Senator Tom Coburn, MD, and Regina Herzlinger’s piece in the Huffington Post.

In a week that for many of us has been dominated by reading the “wouldn’t-it-be-cool-ifs” of messenger bag-carrying technology evangelists, it was refreshing to see a call for a much needed national debate around the *real issues* facing the health care system.

With little fanfare, Congressional leaders may be near to agreeing on the most sweeping expansion of government in a generation – the de-facto takeover of the health insurance market by the government. Congressional Democrats are already icing the champagne. When the President’s “Medicare for all” plan is coupled with the budget, which contains a “down payment” of $634 billion over the next decade for health care, government-run health care may be inevitable.

All sides in this debate acknowledge that the U.S. has long needed easier access to health insurance. This need has gained urgency for the many Americans who are fearful of losing their employer-sponsored insurance in the midst of a recession. Unfortunately, the President’s plan will not only endanger the U.S. economy, but millions of patients as well.

They make clear that the issue here is cost containment. Or, perhaps better, that solving the “access” issue without controlling costs may be politically expedient but is a recipe for disaster.

The fundamental problem is that the President and congressional leaders lack realistic plans to control the health care costs that are already crippling U.S. global competitiveness. As a percentage of GDP, our businesses spend roughly 70 percent more on health care than competitors in other developed nations, yet we hardly receive 70 percent more in real value.

We talk a lot about cost containment – and in the world of health care venture capital, some of the most exciting investment opportunities address just this set of issues. But translating these decidedly market-focused ideas into terms that are politically palatable is difficult. Denying reimbursement for treatments, no matter their relative value or efficacy, has interest groups rushing to mount the barricades. However, as Coburn and Herzlinger point out, there is a risk of even greater hazard if we don’t engage the cost containment challenge now:

In the end, the Democrats’ health care reform will require drastic rationing… Consider Canadian patients, who may wait a year or longer to get radiation therapy. Or ask one of the nearly 1.8 million Britons who are waiting to get into a hospital or have an outpatient procedure. Or talk to the German breast cancer patients who are 52 percent more likely to die from the disease than Americans.

Concerns about rationing and patient outcomes are not demagoguery. How else can a government control costs in the real world? Many experts, including the Congressional Budget Office, dismiss as wishful thinking the Democrats’ claims of achieving efficiencies through bureaucrats’ dazzling implementation of information technology and other technocratic tools.

And this is where the real world collides with the health care technology bandwagon. It goes without saying that health care lags behind in the implementation of back office and administrative information technology. And certainly this is due in some part to all the factors that are debated regularly in the blogosphere. However, it is also due to the basic fact that there has been little ROI for physicians implementing these technologies.

I worry that we are just further confusing the issue. As my colleague Alan Buffington points out:

Isn’t it interesting that no matter how many times they are corrected, politicians and media folk refuse to distinguish between health care and health insurance.  Failing to make this distinction is what causes the problems discussed in the article.

If you watch the blogs, Twitter or CNN, you will have proof that the problem Alan points out is deep and widespread. The problem with health care is that it is “hard” – complex, path dependent, interlocking, huge, with substantial ethical and moral considerations. For most people (especially politicians),  this is way too much.

Posted by RobC

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Rubbernecking: Watching the Critique of Health 2.0 Get Personal by Rob Coppedge
April 28, 2009, 4:33 pm
Filed under: health 2.0 | Tags:

So, while it has taken all of our collective restraint to remain silent about the growing fury and froth in the Health 2.0 “space,” we have to point our readers to John Chilmark’s spot-on critique of the Health 2.0 Conference and the fast-bubbling brouhaha in Chilmark’s comments section. Click here to watch as a reasonable debate takes a turn for the nasty.

Full disclosure: We didn’t attend the Health 2.0 conference – but thanks to Twitter I feel like I lived through it five times over. Of course, by all accounts, there were some very interesting things to come out of the event. But for those outside the echo chamber, it is difficult to identify the value amidst the hype. Hence, I appreciated Chilmark’s comments and believe that the challenge is to bake the features and functions of Health 2.0 into the reality of the practice of medicine and the health care delivery system.

Posted by RobC

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innovateHealth Agenda has been Posted by Rob Coppedge
April 28, 2009, 4:03 pm
Filed under: innovateHealth, seattle market | Tags: ,

Just a quick FYI that the agenda for the innovateHealth Capital Meets Innovation Summit (May 12 in Seattle) has just been posted. You can find it here…

From what we can tell, the turnout looks incredible – we have health care industry types, entrepreneurs and investors coming from all over the country (and some – it seems – from Europe) to join the conversation and see what’s cooking in the Pacific Northwest’s health care cluster.

You can click through to register for the event on innovateHealth’s blog.

Posted by RobC

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News about InnovateHealth; Call for Entrepreneur-Presenters by Rob Coppedge
April 24, 2009, 8:32 am
Filed under: innovateHealth | Tags:

ih_logoWe are off and running with innovateHealth’s first Capital Meets Innovation Summit here in Seattle on May 12. All the details are on the innovateHealth blog – but we have copied some of the important information below. Hope we can see many of you there next month.

Also, the organizers have issued a call for entrepreneur-presenterssee the details here. Any story about raising capital, not raising capital, or adjusting to the new venture capital world order would be welcomed and encouraged. Stories of survival and success. …

Capital Meets Innovation Summit

Tuesday, May 12, 2009
8:00 a.m. – 12:00 p.m.
Davis Wright Tremaine
1201 Third Avenue, Suite 2200
Seattle, WA 98101
(206) 622-3150

Davis Wright Tremaine, iMedExchange, Clarity Health and Faultline Ventures invite you to attend the innovateHealth inaugural Summit. This program will highlight successful strategies being used by health care entrepreneurs from the Pacific Northwest to access capital and build their businesses during “droughts” in the traditional funding markets. In addition, the Summit will feature an opportunity to introduce investors from across the country to the next generation of technology-enabled health care services companies clustered here.

To view the full agenda and register, please CLICK HERE.

Posted by RobC

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Remembering Rick Carlson – In His Own Words by Rob Coppedge
April 23, 2009, 11:30 pm
Filed under: health policy | Tags: ,

Today in Seattle, the memory of health care thought leader and industry veteran Rick Carlson was celebrated by a room full of friends, family and colleagues. Around the room, Rick’s family had posted quotes from his articles and books – which served as both a testament to Rick’s talent as a thinker and writer and as a virtual history of health care reform efforts.

I appreciate Rick’s son Josh allowing us to share these excerpts. They are important now as we remember Rick – and perhaps even more so as we prepare for a yet another vigorous  health care debate.

“Well over half of those who seek physicians’ services do not have medical disorders. Rather they are afflicted by disorders of the spirit bred by the suffering and anguish that accompany life.….. [M]edicine has fostered a profoundly dependent public which searches for cures that do not exist.” The End of Medicine. Pg 26-27.

”Should all (technological) improvements be considered health care and thus covered by existing (insurance) plans – full speed ahead and damn the premiums?” The Terrible Gift. Pg 235. 2003.

“If someday we want to think seriously about subjugating medicine to the needs of society, there are basically three roads we can take. First, we can decide not to… Alternatively, we can ask government to level the playing field a la Scandinavia. … There is a third possible road: we can — and most likely we will — jury-rig a hybrid combining some of the pros and cons of each of the first two models.” The Terrible Gift. Pgs 231-233. 2003.

“The emergence of molecular control technologies raises a truly Darwinian question of survival for much of the human race. Perhaps Americans can plan safe and worthy use of biotech medicine only after we confront our true place in the world and learn to see ourselves as others see us. Until then, trusting our secret agencies with the keys to life could be the worst policy decision since Montezuma showed Cortez the Gold Room.” The Terrible Gift. Pg 223. 2003.

“Genomics will force us to decide what we are willing to pay for health care, in costs both financial and social. Because of its size and power, our health care system might be compared to a mighty river. As therapeutic medicine expands and an entirely new currents of upgrade medicine improve human endowments and performance, that stream could overflow its banks and inundate all other aspects of life.” The Terrible Gift. Pg xii. 2003.

“To a degree, the rise of personal genomics markets, generally, is an outgrowth of rising consumer activism in health care under the rubric of ‘consumer-directed health care.’ The policy objective is to increase the consumer’s investment of time, commitment to health living, and most of all money, into the health care system…. The long term expectation (hope?) is that an educated, motivated consumer with ‘skin-in-the-game’ will be more parsimonious in the use of scarce health care resources.” Personal Genomics: public policy at the frontier of consumer markets in health care. Pg 1. 2009.

“The personal genomics market leaders deny that they are just selling ‘curiosity’ to the affluent and worried well, arguing that individuals fortified with personalized data will be motivated to address and minimize controllable risk factors and hence prevent or at least slow the onset or progression of chronic disease. This is a provocative and promising premise, and may be right, but to date we have very little evidence to support it, acknowledging at the same time that we haven’t had enough experience with highly personalized risk information to know the likely answer.” Personal Genomics: public policy at the frontier of consumer markets in health care. Pg 2. 2009.

“..genetic discrimination can be practiced by communities, and social systems, not just by employers and insurance companies, though its forms are different….And, finally, it is now being appreciated that much of our accumulating genetic information could lead us down one of the slipperiest of slopes if it becomes the fodder for engineering human perfection.” Personal Genomics: public policy at the frontier of consumer markets in health care. Pg 5. 2009.

“In my view, the choice to develop a system to delivery medical care through nearly exclusive allocation of resources for that purpose, was made for political, social and economic reasons rather than for therapeutic ones.” Western Journal of Medicine. Pg 466. 1979.

“Holistic thinking, as an epistemological notion, requires that human beings be perceived as whole persons made up of physiological, emotional, intellectual and spiritual dimensions that dynamically interact, and that any approach to improving the health of human beings, either individually or in groups, requires placing them in a larger and richer context than does traditional medicine.” Western Journal of Medicine. Pg 468. 1979.

“In health care, genomics technologies are disruptive yet potentially cost-effective because they enable primary prevention, the antidote to runaway costs and declining productivity. The challenges to integration are great, however, and many bioethical and social-policy implications are alarming. …we must debate genomics vigorously if we are to act wisely. Public policy must lead.” Journal of Health Politics, Policy and Law. Pg 39. 2008.

“ [genomics] is aikido, not Special Forces. Genomics taps the body’s wisdom by immersing itself in the ebb and flow of the body’s information system – the genome – rather than by looking only to extirpate the results of molecules gone bad by providing a patch and then leaving us ignorant of the proximate cause…. We are not born healthy and made sick; rather we are born predisposed to certain conditions, characteristics, strengths, and limitations.” Journal of Health Politics, Policy and Law. Pg 42. 2008.

“As genomics metastasizes, every business model for every health care sector will be affected, some profoundly.” Journal of Health Politics, Policy and Law. Pg 43. 2008.

“[HMOs’] initial cost-cutting success – achieved with an axe, not a scalpel – led the way to the hedgerows of the vilified managed care cost-control systems that followed.” Journal of Health Politics, Policy and Law. Pg 46. 2008.

“Lots of money will always be made in health care – we just need to give those who make markets reasons to make the ones that would improve our public’s health.” Journal of Health Politics, Policy and Law. Pg 48. 2008.

“In the 1950’s, when the Salk vaccine displaced the crude technology of the Iron Lung, science writers and the popular press loudly proclaimed the arrival of a golden age of modern medicine, a medicine that would systematically eradicate the lengthy and gory list of human maladies. That age proved to be more tin than gold. ..This must necessarily chasten any prediction about the future of medicine.” Public Health Genomics. Pg 180. 2009.

“Our private health insurance model is a hybrid of economic ruthlessness and utilitarian social policy…. through which we are made to take care of each other though abstractly, because the benefits we don’t need go to meet the needs of others we don’t know.” Public Health Genomics. Pg 182. 2009.

“There is a real peril that lowbrow theories wrapped in tendentious and oily slogans will get the public’s ear and gain even footing with scientific proof as worthy of belief.” Health Affairs. Pg W-5-467. 2005.

“Real reform is not on the agenda. There is no money for real reform because we spend it all on medicine.” Healthcare Forum Journal. Pg 18. 1993.

“Policy initiatives are being tossed around like obscenities at a hockey game…” Healthcare Forum Journal. Pg 18. 1993.

“Perversely, since job creation is the central goal of this new administration, reforming the medical care system by cutting costs may just be the worst thing to do…. No tooling up is required. Just let the tides loose. Medical care can and will encroach like the worst weeds in your prized front lawn.” Healthcare Forum Journal. Pg 21. 1993.

“Here are my suggestions for initiating real reform:

  1. Explode the physicians’ worm’s-eye view

  2. Dismantle the replicating engine

  3. Discipline the spoiled child

  4. Turn the reward system upside down

  5. Honor the consumer

  6. Admit that we can’t afford it anymore

  7. Get rid of the insurance industry

  8. Force medicine to be a science

  9. Advocate health aging”

Healthcare Forum Journal. Pgs. 18-26. 1993.

Posted by RobC

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The Week in Numbers by charlottegee
April 17, 2009, 8:57 am
Filed under: week in numbers | Tags: ,

Installment #15:

RUSS CUCINA, 37, lives a double life. For two months of the year, he practices internal medicine, treating patients at the UCSF Medical Center in San Francisco. The rest of the year, he helps the hospital develop its electronic medical records and other data systems.

A year ago, she switched her 3,000 patients from paper charts to electronic health records, a core feature of most plans for healing the nation’s ailing health system. Now, working with computers and printouts, her staff of part-time nurses and shared front-office workers has more time to help her meet the needs of patients. “I’ll never go back to the old system,” said Dr. Brull, 37, who runs a solo practice in Plainville, Kan.

According to the survey, 64 percent of the CIOs say it’s impossible to balance the demand for health information technology with the need to cut costs, and half of the CIOs who preside over hospitals with at least 500 beds say federal funding is “crucial” to the implementation of EHRs.

The survey found that while only 9% of consumers surveyed have an electronic personal health record, 42% of respondents are interested in creating an online PHR that connects to their physicians.

Express Scripts Inc., one of the country’s largest pharmacy-benefits managers, said it saw prices rise more than 10% to 15% between the 2008 first quarter and this year’s first quarter.

New figures indicate drug reps don’t get in the door to see a doctor on 13% of their visits.

The American Medical Association launched a Twitter profile on April 1 as a way to keep physicians informed on important issues.

Only 40 venture capital firms in the U.S. raised money in the first quarter, the lowest level in six years. That was nearly half the number of firms raising money in the first quarter of 2008 and nearly 15 percent fewer than firms raising money in the final quarter of last year. Fundraising for venture capital firms nationwide came in at $4.3 billion.

EB Brands is voluntarily recalling fitness balls after receiving 47 reports of balls “unexpectedly bursting, including reports of a fracture, and multiple bruises.” (Yikes. I used to sit on one of these in my cubicle. An unexpected bursting would have been quite embarrassing.)

Posted by CharlotteGee

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Health Innovation in the Northwest … Buzz Is Building by charlottegee
April 14, 2009, 7:34 am
Filed under: innovateHealth, seattle market, start-ups | Tags: , ,

This week, Dave Chase’s Seattle P-I blog, Seattle Startup Buzz, highlighted the health care innovation taking place in the Pacific Northwest:

It’s clear there is an innovation revolution taking place around the health care industry. The need for transformation is huge given the size of the market (16% of GDP and relentlessly growing). I worked in Healthcare I.T. in the 80’s and 90’s and always described it the industry as a paradox. On the one hand, it was at the cutting edge when it came to medical technology but was in the dark ages when it came to information technology. …

The Northwest is quietly staking a claim to leadership in this new innovation economy… and it makes sense. The region is home to some of the most successful software companies on the planet and we also have an extremely vibrant health care ecosystem with significant stakeholders like Swedish, Virgina Mason, Fred Hutch the UW and many others. Combine these elements and what you get is the makings of a first-tier health care innovation environment that will very likely produce the next great companies from the Northwest and could very well become difference makers in the US and even worldwide health care marketplaces.

Recognition of this potential is exactly what spurred Davis Wright Tremaine and a group of health care entrepreneurs to launch innovateHealth…a recently formed organization connecting innovators in the region and creating access inward and outward with potential clients, government leaders, capital resources and more. The folks behind the group are Rob Coppedge of Faultline Ventures, Peter Gelpi of Clarity Health Services, Tobin Arthur of iMedExchange, Joe Whitford and Stuart Campbell both of Davis Wright Tremaine.

We’re thrilled about the building “buzz” around the many innovative health care companies in the area and look forward to more.

More on innovateHealth: innovateHealth // Supporting Health Care Innovators in the Pacific Northwest

Posted by CharlotteGee