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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NY Times “Bits” Blog: Health Care Industry Moves Slowly Onto the Internet by charlottegee
April 6, 2009, 8:12 am
Filed under: electronic medical records, health it | Tags:

From the New York Times’ “Bits” blog: Health Care Industry Moves Slowly Onto the Internet. (Sounds a bit like an Onion headline, no?)

The health care industry, a well-known laggard in information technology, is where most of corporate America was a decade or more ago in adopting Internet-style computing. There are innovators, intriguing experiments and lots of interest, but the technology hasn’t yet gone mainstream.

Still, the direction is now clear, and only the pace of the shift is in question. The Obama administration’s plan to spend $19 billion to hasten the adoption of electronic health records that can share data across networks — “interoperable,” in techspeak — will only give more impetus to the shift toward Internet-style computing. And there is plenty of evidence of the emerging transition being demonstrated and announced this week at the health information technology’s big annual conference and trade show in Chicago, sponsored by the Healthcare Information and Management Systems Society, or HIMSS.

One good example of the trend is a joint project, announced on Sunday, between the Centers for Disease Control and Prevention and GE Healthcare. The project will deliver individually tailored public health alerts to electronic health records in doctors’ offices. The goal, for example, is to have an alert pop up on a physician’s screen that a certain patient, based on location, age and perhaps occupation, might be at risk for an influenza outbreak that is nearing a certain community or for contracting a food-borne illness.

More interesting (to me, anyway) than the actual post are the reader comments, many from doctors about the now-ubiquitous EMR. For example, the first comment concludes: “These public health alerts are in theory, great, but in practicality, the pop ups will only work if GE and the CDC have invented holograms that pop up out of their paper charts.”

(Curious: I wonder how many EMR booths there are at HIMSS? I should go count.)

Posted by CharlotteGee



Everyday Low Prices? More Views on the Wal-Mart EMR News by charlottegee
April 1, 2009, 12:23 pm
Filed under: electronic medical records, health it | Tags: , ,

We wanted to pass along another viewpoint on the Wal-Mart EMR news, this one from Don Fornes at Software Advice. He’s got a nice post up: Wal-Mart + eClinicalWorks Electronic Medical Records | An Odd Couple with Good Intentions.

The Wal-Mart / eClinicalWorks (eCW) partnership to sell electronic medical records (EMR) software in Sam’s Club strikes us as an odd couple. While we think eCW will benefit from this marketing coup, we don’t see the relationship lasting over the long term. Certainly, the intent is good: simplify a traditionally complex and expensive purchase by distributing through a low-cost distribution channel. … However, we don’t think EMR software presents the same economies of scale that Wal-Mart relies on to deliver “everyday low prices.” Wal-Mart can sell a wide range of products at low prices because they negotiate massive bulk purchases, run dramatically efficient logistics and efficiently manage inventory….

Furthermore, we do see some very real sales and services challenges arising from this partnership. Simply put: sophisticated, $25,000 EMR systems don’t sell themselves. Get a Wal-Mart “greeter” involved and things could get ugly. Wal-Mart has already stumbled a bit trying to support the relatively complex sale of iPhones. EMRs are a far more complex sale. My mind goes to the horribly awkward image of a brilliant, yet intolerant, cardiologist interrogating a greeter about eCW functionality. The mismatch of intellect and clinical expertise could be incendiary. …

We don’t expect this partnership to be a failure. Instead, we think it will accelerate eCW’s already impressive growth and position in the market. The awareness generated by the relationship will be well worth it for eCW. As for Wal-Mart, we expect them to realize sooner rather than later that they can make more money elsewhere. They’ll give this program a year or so, and then put something a little more traditional on the shelves.

Posted by CharlotteGee



Wal-Mart to Sell EMRs (Wait … What?) by charlottegee
March 11, 2009, 2:34 pm
Filed under: electronic medical records, health it | Tags: , ,

“We’re a high-volume, low-cost company,” said Marcus Osborne, senior director for health care business development at Wal-Mart. “And I would argue that mentality is sorely lacking in the health care industry.”

According to the New York Times, Wal-Mart “is striding into the market for electronic health records:”

The company plans to team its Sam’s Club division with Dell for computers and eClinicalWorks, a fast-growing private company, for software. Wal-Mart says its package deal of hardware, software, installation, maintenance and training will make the technology more accessible and affordable, undercutting rival health information technology suppliers by as much as half. … The Sam’s Club offering, to be made available this spring, will be under $25,000 for the first physician in a practice, and about $10,000 for each additional doctor. After the installation and training, continuing annual costs for maintenance and support will be $4,000 to $6,500 a year, the company estimates. Wal-Mart says it had explored the opportunity in health information technology long before the presidential election. About 200,000 health care providers, mostly doctors, are among Sam Club’s 47 million members. And the company’s research showed the technology was becoming less costly and interest was rising among small physician practices, according to Todd Matherly, vice president for health and wellness at Sam’s Club.walmart

The Wall Street Journal Health Blog adds: “Wal-Mart has been getting more deeply involved in health care in recent years, drawing a lot of attention for its $4 generic-drug program. It has improved its image in health after drawing criticism for offering stingy health benefits.”

And from Chilmark Research’s blog:

Wal-Mart/Sam’s Club has no credibility, no brand, no nothing in the technology solutions market. Hell, they don’t even have a Geek Squad. … if it were our money, we would go with an HIT specific solution provider who has a few years under their belt installing, training and servicing fellow physicians. Wal-Mart brings none of that to the HITECH gold rush.

What do you think?

A. Wal-Mart: A Study in Cool (Health Care Innovation)
B. Wal-Mart, WTF?
C. Whatever, Wal-Mart. We need to go back to the drawing board and completely rethink HIT before it gets out of hand. (One doctor close to us asks: Where’s the “Apple of EHRs”?)

Posted by CharlotteGee



Overheard: Health Affairs and HIT (Take Two Aspirin and Tweet Me in the Morning…) by charlottegee
March 10, 2009, 5:54 pm
Filed under: consumer engagement, health it, innovation | Tags: ,

If you haven’t heard, Health Affairs has devoted a chunk of its March/April 2009 edition to “stimulating health IT.” Today Health Affairs held a briefing on health IT, featuring a whole slew of experts, and the event was covered live on Twitter. One of the articles in this latest edition, and of course much of today’s discussion, touched on Web 2.0 in health care: “How Twitter, Facebook, And Other Social Media Are Reshaping Health Care.”

One observer: “The fact that Health Affairs – the leading health services journal – is spending ink on this stuff now is a big deal.”

And in a recent conversation, we overheard a leading NYC-area orthopedic surgeon say:

[Health Affairs is a] great journal and hell-bent on meaningful reform and innovation. Their writers are wonderful and insightful – and wouldn’t waste their readers’ time if they didn’t believe this is the next wave. Now you can no longer poke fun at me as I “tweet”… or engage. Patients get it, the “well”: public gets it, the press is starting to catch on…. but most docs are woefully ignorant of the changes taking place. I tried to gather support through the medical executive committee to put together a platform so the docs at [hospital name] can be*available* to their patient base… and you would have thought I asked each and every member of the committee to pose nude. They think that only teenagers are using this technology. We still have a ways to go… There are few companies that enable the physicians to adopt this type of wide-reaching and wide-ranging communications platform and docs still feel they simply don’t need to engage consumers like this….yet.

Posted by CharlotteGee



Wielding Technology’s Wonders by charlottegee
January 22, 2009, 8:57 am
Filed under: health it, health policy | Tags: ,

Google “Obama and health care” and be prepared to wade through link after link, opinion after opinion. During the excitement surrounding Tuesday’s activities, many in the health care world listened intently to the President’s speech, all ears for health care mentions. The Wall Street Journal’s Health Blog highlights the two:

———-

We, focused as ever, listened for any tidbits about health care and heard two. First, there was an acknowledgment of the expense of health care in a long list of woes the nation now faces.

That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

Later, in keeping with Obama’s seemingly ceaseless message of hope, health came up again as the president talked about how the U.S. can “lay a new foundation for growth.”

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act – not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology’s wonders to raise health care’s quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do.

—–

People are appropriately a-buzz with the prospect of money being poured into renewed focus on health information technology. Many are for it, saying the time is now and let’s get moving–yesterday!; many are against it, arguing that there are plenty of other (better) ways to help the system; many say that it sounds good on paper and over the speakers, but you’d better have a pretty smart checklist in place before making any moves.

After the speech, Virginia Postrel and Shannon Brownlee had an online conversation, posted on The Atlantic, about the intricate nature of the health care system–touching on issues ranging from interoperability to EMRs to innovation in medicine. Shannon notes:

What’s interesting is the fact that the federal gov’t has to get involved in stimulating EMRs in the first place. I can’t think of another major industry that has not decided to invest in computerized records. Why not health care? Because you don’t get rewarded for doing a better job of caring for patients, or doing it more economically, two things that EMRs could help providers do.

Wherever you fall on health care reform, 2009 is sure to be an interesting show. Set the DVR.

Posted by CharlotteGee



The Big Push for Healthcare IT … Economic + Political Perspectives (From Howard Luks) by charlottegee
December 15, 2008, 10:57 am
Filed under: economy, health it, health policy | Tags: , ,

During a speech last week in DC in front of the Department of Health and Human Services Health Policy Forum (with nearly 50 of America’s thought leaders on disruptive healthcare), Ben Sasser, the Assistant Secretary of Health, commented that the projections for Medicare Part A funding were wrong. The Department figured out last week that Part A funding will be bankrupt prior to the end of Obama’s second term!! And solvency of Medicare will not be the only healthcare (HC) issue this administration will need to tackle.

President-elect Obama, Senator Baucus and others are crafting numerous initiatives they plan to bring forward early during the new administration’s first term. Most of these initiatives are geared toward *reforming* the healthcare system. There are innumerable issues that need to be addressed under the auspices of HC reform. Access, quality, efficiency, diminishing medical errors, minimizing duplication, waste and affordability are *simply* a few of the issues the administration will need to contend with.

It appears the incoming Obama HC team believes, right or wrong, that a big push into HC IT infrastructure will pose as the spark toward adoption of more widespread reform. There are both economic and political reasons why it makes sense to tack the IT spend onto the current stimulus package under consideration.

From an economic perspective, a big push into HC IT will result in jobs being added to the only sector of the economy that has demonstrated job growth over the last two quarters. Heading into 2009, job growth is going to slow in the HC sector as federal and state Medicaid funding is severely cut during the next round of budget cuts. (Consider: In New York State, Governor Patterson’s staff already has informed hospitals to plan for their worst nightmare.)

Combined with the tightening of the credits markets, hospitals are going to be hard pressed to offer services to the poor, uninsured and under-insured. “No margin, no service” will become the rule of the hospital landscape in 2009. Both the credit markets and financial issues will most certainly impact the ability of hospitals to pursue large capital intensive IT initiatives.

The AMA news recently reported that “Despite changes to federal rules that allow hospitals to donate health IT to physicians, studies show neither hospitals nor physicians are jumping at the opportunity.” No doubt, the cuts in state funding, the increase in the uninsured, and thus the increased financial stress on hospitals that offer services to the uninsured, will make it impossible for hospitals to spend money on IT without government assistance.

Therefore, *if* the incoming administration *believes* that a HC IT initiative is necessary as a stimulus for job creation and broader HC reform, the timing for tacking on a HC IT initiative as part of the current stimulus package is perfect.

From a political perspective, tacking on a HC IT spend to the current economic stimulus package will virtually assure its passage. The Democrats are working very hard to get a *comprehensive* stimulus package ready for President-elect Obama’s signature within a few weeks of entering office. All indications point to the fact that the monetary figure will be enormous — but many economists believe that deficit (Depressionary) spending and contemporary New Deal programs are *necessary* if we are to avoid a significant deepening of the current recession. That theory will give proponents of a HC IT initiative the ammunition necessary to obtain the necessary support for a 5-year, $50-billion IT package.

Perhaps most important: After the passage of an enormous stimulus package, it will be difficult for the new administration to obtain support of an exceptionally expensive comprehensive healthcare reform package — strictly based upon the cost of such an effort. By taking the $50 billion IT spend (and SCHIP spending) out of the HC Reform package, the overall cost of healthcare reform will *appear* lower … and perhaps more palatable to fiscally conservative members of Congress.

Bottom line? Healthcare IT is estimated to be at least a $50 billion industry in the United States. Anybody who chooses not to participate could be giving up a potentially large amount of revenue.

Submitted by Howard J Luks, MD