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



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

A Physician’s Reaction to the New York Times’ EMR Story (From Howard Luks) by charlottegee

The NY Times ran another piece* on the potential benefits of an EMR platform. I’m not sure who was *behind the story*… but I disagree with a number of the statements and premises of their article.

I have blogged about this topic often enough … here, here and here.

I am not against technology. As a doctor, I am against  *shouldering the burden* and *paying a fortune* for technology that will probably not enable my patients, will not materially affect my business, and as currently designed will not reform health care or the practice of medicine. EMRs, as currently available today, are in their infancy. They are, for the most part, very poorly engineered, very expensive, and do not allow me to share patient data with hospitals, RHIOs, etc.

(image from California Physician)

(image from California Physician)

Physician innovators should have taken the lead on EMRs … but we didn’t. We should have been involved at all levels of the platform’s build-out, but we weren’t.

Who benefits MOST from an EMR, and the sharing of knowledge, tests and procedural data … ? *Nope* … it’s not the patient … but the managed care industry!!! *If* technology such as an EMR platform decreases the number of duplicated procedures, the managed care industry’s profits rise. *If* they need fewer FTEs to handle electronic claims, their profits rise.

Do you think they will decrease their premiums if their costs go down???? Nope. Look at the airline industry. Gas/fuel are at four-year lows … yet we are still paying a fuel surcharge!

So, if the MCOs are going to benefit the most …WHY SHOULD THE DOCS, many of whom are already operating on a very fine margin, SHOULDER THE ECONOMIC BURDEN of purchasing, rolling out and maintaining an EMR system that most relevant research shows they probably will not like in the first place????

“This requires the usual leap of faith that knowledge will yield good things — better care, doing things smarter and, yes, saving money in the long run.”*

Leap of faith??? I’m not jumping out of a plane and relying on a parachute opening. Design a platform I like, align the interests/economic burden of those who prosper from the IT expenditure, make it economically feasible, make the systems inter-operable, the data actionable and computable and I will be the first one to sign up.

“We have to restructure our medical culture,” he said. “We have to promote a culture that believes in the evidence and is trained in analyzing the evidence. It’s the only long-run answer to the challenges we face in health care — evidence-based medicine.”*

This has nothing to do with evidence-based medicine (EBM). Whenever possible, I have been practicing EBM for years. The problem is that we do not have enough evidence. Without interoperability, currently available EMR platforms will not lead to a plethora of EBM data.

There has to be a better way … another reason why the Obama administration needs to fund the health care venture capital sector to allow for disruptive innovation in a space clearly in need of a new way of thinking.

In addition, this clearly points to the need for physician thought leaders to be actively involved in the innovation process.

Submitted by Howard J Luks, MD

Venture Capitalist to Run the SBA by Rob Coppedge
December 19, 2008, 12:51 pm
Filed under: politics, start-ups | Tags: , ,

For those who aren’t following the Obama Administration Cabinet Appointment Ticker, the story is out that a venture capitalist will be appointed SBA Administrator.  In the context of all our recent posts on the challenges facing small businesses, this could be a good sign that the new Administration is going to try to stimulate the early stage market.  The Sun is out again and we are trying to find good news to report.

Mills is a venture capitalist and a founding partner of the New York-based equity firm Solera Capital. She has been an adviser to Maine Gov. John Baldacci on economic matters. She’s also president of the MMP Group in Brunswick.

Posted by RobC

Running on Empty by Rob Coppedge

The snow storm that has left Seattle immobilized (the schools were closed a day *before* the storm, just for good measure) has created the perfect  cold, wintry environment to read the just released National Venture Capital Association survey.  It confirms the icy predictions we’ve been making over the past month – things do not look good for start ups and early stage companies in 2009. In fact, for those that will need the capital markets, things look quite bad.

Respected Seattle business journalist John Cook comments on the NVCA report:

I’ve been informally conducting my own survey of VCs, lawyers and entrepreneurs around town.  The message I am hearing is not pretty, with one VC saying that nearly everyone is hunkered down. Long-time tech entrepreneurs such as The Cobalt Group’s John Holt and Jobster’s Jeff Seely have told me recently that it is about the worst economic environment they have seen.

The general feeling is that the capital markets may be shut for another 12 to 18 months, meaning that startup companies will have to learn to exist on the fumes of their previous venture rounds or get to profitability sooner than anticipated.

Running on fumes… Wow. I made the mistake of using that line with several start up CEOs recently and they almost took my head off. “What do you think we’ve been doing?” “We don’t have any fumes left… we ran out in the third quarter”.

A 70s Flashback for Start Ups

Running on Empty: A 70s Flashback for Start Ups

Without access to capital many of these early stage companies won’t make it to the next gas pump. Unfortunately, with news like this NVCA survey and  Coller’s Global LP Barometer, it doesn’t sound like the capital markets are going to show any sympathy.

Sure, there may be bigger problems out there.  But when billions of dollars are spent to bail out industries that  need to shed jobs, it is troubling to see the innovation and job creation engine of our economy seriously threatened by a lack of relatively small amounts of capital (mere rounding errors to the Treasury’s bailout accountants).

Posted by RobC

Obama Watch: Update on Daschle’s Team (from David Kreiss) by Rob Coppedge
December 11, 2008, 11:46 am
Filed under: health policy | Tags: , ,

Here’s the first of Senator Daschle’s crew to be named – From today’s NYT:

“Jeanne Lambrew, who helped Daschle write a book about health care reform, will serve as deputy director of the new White House office. She also worked on health policy at the White House during the Clinton administration and currently serves as a senior fellow at the Center for American Progress, a liberal think tank… Leaders of health advocacy groups have described Lambrew as one of Daschle’s most trusted advisers on health issues. She will oversee planning efforts.”

(For the full text of Obama’s nomination click here.)

Posted by David Kreiss – among many  things, former Special Assistant to the Administrator of CMS

A Glimpse at Where We Could Be Heading… by Rob Coppedge

The Center for American Progress, Obama transition team chairman John Podesta’s think tank, has just released a blue print for health care reform (The Health Care Delivery System: A Blueprint for Reform).

The book’s goal is clear – even stated right up front:

This book offers recommendations and path¬ways to systematically promote quality, efficiency, patient-centeredness, and other salient characteristics of a high-performing health system. The blueprint it lays out is a vision of how different parts of the system should be structured and how they should function. Even more specifically, it proposes policies that the next administration and Congress could enact over the next five years to improve our health system.

Since the people involved in creating this report are almost certain to end up in (or in close orbit around) the new Administration – and since every sign suggests that health care “reform” is going to be top of Obama’s list of priorities – this is an essential read for people in the industry.

We would love to hear your thoughts:  from the perspective of health care’s importance to economic recovery to its role in the decline of American manufacturing; from the fiscal impossibility of continuing growth in spending to the moral imperative of taking care of our older and sicker populations.  The ways that the public and private sector work together to “reform”  and “change” the system will create a range of opportunities for innovators and have the potential to impact America’s social and economic well-being for generations to come.

Posted by RobC