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