8 Things CFOs Must Know About Health Reform

Whether a Chief Financial Officer is running the fiscal operations of a hospital system, an insurance company or a company that simply employs individuals with health coverage, the decision-making process for sustainability is changing at a rapid pace. However, after years of hearing about reformation in the health system, broad, sweeping and revolutionary changes are finally happening. Major shifts are also occurring in the population, as well as technological advances that will disrupt the entire premise of a four-walled institution for care and the very model we use for health delivery.

Health care in the US is a business – a multi-billion dollar business – and understanding the financial implications of health reform will make or break every CFO. Knowing that health access, demand, quality and payment changes are inevitable there is an immediate need for CFOs across the ecosystems to embrace and plan for transformation.

1. You have too many beds.
   While many hospital leaders won’t accept this at face value due to lengthy wait times, surgical demands and desire to shift beds, the truth is there are too many beds in a lot of hospitals. Between transferals to the outpatient setting and telemedicine, the need for expensive inpatient beds is declining. Additionally, hospital leadership are increasingly finding that they face problems with state authorities when they apply to move beds. Most recently at the University of Chicago, where 338 beds were being used for a 304-person utilization pattern, the state rejected a University application to move surgical beds.
2. Food, housing and transportation of patients is your problem.
   As Americans begin to define and attempt to tackle community and population-based care, the access individuals have to quality food, affordable housing and efficient transit matter.  No one living in a food desert will have the same health outcomes as someone living next door to a Whole Foods, just as an individual with a new car will always be more consistent in making appointments and picking up prescriptions than someone who has to access three public transit buses for the same activities. Real patient engagement and activation begins with understanding the environment of each patient.
3. Your patient demographics are shifting, and so too should your leaderships. As the US continues to brown, hospital leadership must be representative of the population to understand and meet need. At a recent Modern Healthcare Top 25 Minority Executives session, an awardee remarked that the United States is now a country of minorities, and “our leadership as minorities is our future for health outcomes.” With this in mind, it is inevitable and paramount to success that the leadership of any organization resembles and represents those it serves, so it makes the financial investments and decisions that influence the community.
4. More bodies in beds will never work again.
   Value-based purchasing means that a warm body in a bed not only drives costs higher for the payer, but that the longer a patient remains in the hospital – or the more often they return – the more penalties that accrue. Therefore, the goal should not be for more bodies, but for cost-effective bodies. Depending on the community serviced, this can mean desire for more Masters Athletes, specialized services or elective services. Additionally, as we shift to a world where technology enables more clinical procedures and recovery to be done in the outpatient setting, or at home, and expensive inpatient procedures decrease in volume and reimbursements, hoping to fill beds is futile.
5. Alignment with physicians is nonnegotiable.
   No leader can effectively attain a goal without buy in from those who carry out the work.  However, it is important to be aware that “physician alignment” is a term that causes almost all physicians to turn and walk the other direction out of fear that this indicates buying their autonomy and dictating their day-to-day, moment-to-moment ability to practice. According to Healthcare Financial News the implications of physician behavior are so important in 2014 that more revenue than ever will be spent recruiting physicians who see the world the same way you do, which is not very different from how corporation CFOs think about their employee hires.
6. As consumers take on more and more pay responsibility, unexpected payment shifts will keep occurring.
   Many experts estimate that defined contribution, health insurance exchanges and the growing individual health insurance market means that patients will become more informed about spending their health care dollars, and therefore, more unwilling to spend. The future of reimbursements and pricing strategies is presently a puzzle wrapped in an enigma because of extreme uncertainty. However, it is general knowledge that Medicare and Medicaid reimbursements are going to continue decreasing, with the American Hospital Association and Moody’s already estimating an, “unequivocally negative” outlook for hospitals on the reimbursement fronts.
7. Technology and data utilization can save you money.
   While the learning curve with new technology can be excruciating and the meaningful utilization of collected information seems daunting, everything from workflow to health activities and employee/patient engagement can be monitored – and altered in real time – using new technology. Moreover, the more information that is known today, the better predictive analytics and behavioral change that can be made tomorrow. However, as the amount of technology available to leadership continues to grow exponentially, the purchasing of new tech will be a balancing act between what is a passing fad versus what is sustainable and transferable.
8. Your EHR is going to cost you. Big time.
   Now this seems obvious to most hospital CFOs, as they have already seen the initial price tags that come with implementing a “holistic” electronic system. However, the most costly elements may not yet be realized. As mergers and acquisitions continue, technology advances and EHR capabilities increase, the need to refresh systems will continue.  At present there is not one system that meets end-to-end patient or provider needs, leaving the ecosystem open for further disruption, which inherently includes more interoperability, more upgrades, more plugins and more costs.

 

Health Insurance Benefits – Can You Have It Your Way?

As the percentage of large employers that consider a shift to defined contribution and/or private exchange increases, the number of options – and flexibility in those options – must also increase. Consideration for those options rose last year from 14% to 18% among large employers (500+ employees). Further, those who are considering the move to a private exchange want to because of their desire to offer more and better plan options, as well as realize cost-savings. Shifting to the defined contribution framework allows employers to moderate their subsidies to employees, and employees to make better trade-offs among plan options. Additionally, by increasing choices, defined contribution makes it easier for employers to integrate their health incentive and wellness programs by layering them “on top” of the defined contribution.

With this economic opportunity in the market, it is imperative that health plans and enrollment become more tailored to individual and company needs, in addition to the one-size-fits-all solutions of the past and present.

Private health exchanges, according to bswift, like their new Springboard Marketplace, could be the platform to give consumers that greater choice and increase individual decision-making. Given that most large employers who are considering a defined contribution will remain self-insured, bswift is taking a calculated gamble that employers will continue to invest in cost management solutions such as incentives, wellness programs, consumerism as opposed to simply shifting costs to employees under the “fix it and forget it” cost sharing approach suggested by some competitors.

Customize Your Cart

The Springboard Marketplace that bswift has created has the online functionality healthcare.gov could only have dreamed of, and the choice construction of a grocery store.  In fact, the terminology the company uses alludes to “Stocking the Shelves” with your benefit choices and “Shopping” for your ideal group of benefits. This is all done through the interactive benefits advisor, Emma, who walks employees through an online step-by-step process to fill their cart with health care options.

For those aware of bswift’s background as a tech company it may not be a surprise that the software and services offered are aimed at streamlining a very sophisticated system, and making the user experience easy. And for those that know the company’s Executive Director of Exchange Solutions Brad Wolfsen, the shopping experience and ease of transition into a new set of consumer options will easily resonate. Mr. Wolfsen, before joining the team, built and led Safeway’s wellness and retail strategy programs, and was the President of Safeway Health.

According to Mr. Wolfsen, the real benefit he sees to bswift’s products are that they, “allow employers to focus on equity for employees and shift to a retail view on providing health benefits.”  Or, as the Society for Human Resource Management labels it, From Parenting To Partnering.

New Plans Equal New Decisions

With a growing demand for health benefit options that resemble a choose your own adventure book, but with a set amount of money to spend, the development of software must also be functional for employers and employees. The Springboard Marketplace has been constructed so that functionality can simply be turned on and off, so that choices are simplified. Additionally, since there is not a standard approach to benefit choices and many legacy systems that have to be revamped due to mergers, acquisitions and partnerships, greater automation for employers means less paperwork for HR departments. By making workflow, reporting and administrative work more efficient through automation, cost-savings increase even further.

“The best and brightest clients are currently driving what is in the bswift system now,” says Mr. Wolfsen. “As we move towards expanding the suite of benefit options and meeting compliance standards, we are also investing in the shoppers experience.”

He, along with his colleagues at bswift, believe that their tech company is nimble in ways that others are not, and that with the help of their platform and Emma, more and more employers will begin the migration to defined contribution and private exchanges. If true, that growing shift could redefine how health benefit decision-making is done by employees in the future.

 

The Most Interesting Man Revolutionizing The Health World

He wrote his first world-renowned book at the age of 26. On weekends he recites love poems (ghazals) on Voice of America. He casually – and humbly – references his more than 70 patents that range from aging wine to chewing gum to bioreactors to air scrubbing systems at his infamous Chicago wine parties. And his mustache rules his twitter feed. In 2013 he was awarded the Star of Distinction, the highest civil award by the Government of Pakistan, for his inventions that are making significant impact in developing countries. He has written over 50 books, well over 100 research papers, and hundreds more articles in the field of science, philosophy, rhetoric, poetry and religion, drawing thousands of hits per day on his blog. Dr. Sarfaraz Niazi might just be the most interesting man in the world, but he is certainly the most interesting man pursuing biosimilars in the United States.

Throughout his career his driving principle has been to make things simpler. He did this while at Abbott Labs, as a former tenured professor at the University of Illinois at Chicago (UIC), in developing countries, and presently in his independent career at Therapeutic Proteins International, LLC (TPI) where he is working on biosimilars – or “copies” of current biologic pharmaceuticals that are about to lose their patents. Although only 17 biosimilars have been approved to date worldwide, though none in US, Dr. Niazi and TPI have nine in the pipeline to transform the entire market.   According to photographer Steve Huff, Dr. Niazi is, “An amazing man, in fact the most interesting man in the world!”

Flexibility Is Key To Innovation

When asked his advice to other inventors in a recent interview, Dr. Niazi explained his philosophy that, “You should never get enamored by your thoughts. If the idea does not solve a problem or move the quality of life farther, there are many more things to be invented.” With that mentality, he is filing two products this year alone, similar to Amgen Inc.’s $6 billion molecule white blood count product, due to its expiring patent in the cancer market. Next year, the two molecules he plans to take to market are similar to AbbVie’s expiring $12 billion product Humira.

With movement like that, it’s no wonder Dr. Niazi claims that the U.S. Food and Drug Administration (FDA) is his “friend.”Nevertheless, he notes extreme complications with the rolling submission model, which can cost up to $4 million per submission in fees alone. Additionally, the four levels of the FDA’s “analytical similarity” benchmarking can be troublesome if one has a new biologic entity. This benchmarking, however, allows scientists and the FDA to work together in a predictable, step-wise fashion to move products to market quickly that have fingerprint-like similarity to existing US-licensed biologic products.

Dr. Niazi’s strategy is to create an analytical and clinical equivalent to biologics with expiring patents, which is preferred even over a Phase 3 clinical trial. By doing this, the cost of production is reduced drastically and the speed of development increases by 2-3 times. Dr. Niazi estimates an overall reduction in production costs for his biosimilars of up to 50% or higher compared to market competitors.

By being flexible, his products are proving to be bio-revolutionary.

Can The United States Catch Up?

Additionally, thanks to the Affordable Care Act (ACA), a shorter licensing path for lower-cost versions of cell-derived drugs is now possible, giving inventors like Dr. Niazi another pathway for approval and distribution.

While he claims that the ACA will not reduce health costs, he does believe that independent shocks to the health market will. By this, he believes that making biosimilars easier, faster, cheaper and better translates directly into his mission of making all things simpler. Further, cost-effectiveness in the US and European Union (EU) can directly convert into worldwide distribution and scalability that is safe.

Although a friend of the FDA, Dr. Niazi is not hesitant to note the tough decisions US-based companies face to stay in the states. Having FDA approval carries weight around the world, but the financial and regulatory burden can be great for inventors and business owners. In contrast, he asserts that the EU has moved ahead of the rest of the world, with the most established and advanced regulatory framework for the authorization and marketing of biosimilars, which has since been adopted by the World Health Organization (WHO).

Additionally, Dr. Niazi says that it is difficult to raise money in the US. Venture capitalists and corporate investors are less likely to take risk and have notoriously poor track records with the health sector

Investing In The Windy City

In 2003, the TPI founder committed that his work and company would stay in Chicago.  He believed that from creation to manufacturing and testing to going to market, that TPI would excel in the Midwest due to Chicago’s health care ecosystem, experts and manufacturers.

Through a focus on creating “generic equivalents,” Dr. Niazi is proving that TPI can be wildly successful in the Midwest, and further, that in the same way generics revolutionized how people access pharmaceuticals, biosimilars can revolutionize the way those around the world access lifesaving treatments.

As his biosimilars enter the market with FDA approval, the ability of Dr. Niazi to impact the entire health sector grows because his biosimilars can be substituted for its reference product without provider or patient intervention. However, the FDA has not yet finalized these guidelines, and only 17 biosimilars have been approved internationally to date, of which none are by the FDA.

Ultimately, with numerous billion-dollar biologics coming off patent over the next six years, and the exorbitant cost for specialty drugs, the nine biosimilars TPI has in the pipeline stand to make a huge impact in the health sector. While Dr. Niazi could be doing many interesting things these days as an international man of mystery, he has devoted his research, time and energy to bringing high quality, cost-effective treatments to the US, and beyond. So long as he maintains his wine parties and poetry readings, its certain no one will complain.

 

Our Purple Prada Haze

Brad Wright, Our Dear Leader, wrote a wonderful piece yesterday discussing the price of health care, using designer brands as examples.  This caught my eye, of course, because I am as much a sucker for a $250 wallet that says “Burberry” on it as the next guy. ( Or a $1000 pair of shoes by Manolo, or a $100 T shirt by James Perse, or…  What was I saying?)  In the course of research I’m doing for a project on the career choice between nursing and medicine I have done some reading on how we make choices in general.  One of these books, Predictably Irrational, by Dan Ariely, has a chapter titled “The Power of Price” which discusses some of the same issues Dr. Wright wrote about.  So, with Brad’s permission, I’d like to examine the psychological impact of price a little further.

Let’s start with placebos, as Mr. Ariely does.  When I was a new nurse I had an elderly patient who refused to go to sleep without pharmaceutical assistance.  After indulging him with chloral hydrate for a couple of weeks (this was the 1990s), the deleterious side effects of giving this medication to elderly patients became apparent and his team decided to discontinue the sleeping pills.  We nurses bore the brunt of this decision, as usually happens.  One night, after the 16th call for sleeping pills from this gentleman, I got fed up and brought him a Tylenol.  The patient took the pill and slept all night.  It wasn’t the action of a specific medication that helped him sleep, but the act of taking a pill he expected to make him sleep.

Many of the financial decisions we make are based on this placebo effect, which runs on advertising, essentially.  Instead of feeling better because we expect to, we pay more because we expect the more expensive option to be better.  As Brad said, we expect an expensive wallet to be of better quality than a cheap one, because we equate price and quality.  That this relationship does not necessarily exist has little bearing on our choices.  I bought a shirt for a couple hundred bucks from The Row, and another shirt almost exactly the same from Ann Taylor Loft.  Both shirts got holes in them.  In the case of the expensive shirt I assumed this was what it was supposed to do – the “distressed” look, maybe.  The other, cheaper shirt I assumed was just poor quality.  We do the same thing with healthcare spending.  If it costs a lot and has a brand name, it must be better.  If the pharmacy gives a patient the generic and the medication doesn’t work, it’s because the pills themselves are no good.  If the patient then gets the brand-name version of the exact same drug, there’s a good chance it will work better because she expects it to work better.

Mr. Ariely and some colleagues actually ran an experiment very much like my little attempt to help a man sleep.  They gave a bunch of people a painful sensation, then gave them a drug with a fancy name that the subjects were told was an innovative new painkiller, then gave the subjects the painful stimulus again.  The subjects felt less pain the second time, even though the drug was really just a vitamin C tablet.  But here’s the interesting thing.  When the subjects were told the painkiller was expensive, they were twice a likely to experience pain relief than if they were told the drug was cheap.  As Mr Ariely says, “Price can change the experience”.

Now, in healthcare most of the time the consumer, i.e the patient, doesn’t know the price of the pill or treatment or test he’s getting.  Nor does he necessarily care because he’s not paying for it.  So patients use surrogate markers of price.  Say I’m presented with two wallets and asked to choose one.  I’m told I can get either wallet for free.  One is soft brown leather with lots of pockets.  The other has a lower quality leather and no pockets but has “Dior” emblazoned on it.  According to Ariely’s research, and personal experience, most people will choose the Dior wallet, assuming it is of better quality.  Patients do this with healthcare resources all the time.  They go to Brigham and Women’s instead of Milton Hospital because Brigham is famous and has an Harvard affiliation.  A patient wants an MD anesthesiologist instead of a CRNA because the person with the more expensive education must be better.  Another has back pain and gets both a CT and an MRI, which makes her feel good that she’s getting such high quality care, two imaging tests being better than one.  The actual quality of the care might be exactly the same, and the outcomes may be the same, but the expectations change the experience.  This is why it’s so hard to cut wasteful spending.

 

Let The Witch Hunt Begin

Well, the cat is out of the bag now.  All this time we’ve been told that Internal Medicine is a dying art, you can’t make a living at it, payments to physicians are too low, etc.  Now the New York Times is telling me that Internal Medicine is fifth on the list of best-paid doctors!  How can this be?

Here’s what has happened: Medicare has released the names and specialties of all the doctors it has paid in 2012.   That’s a lot of data.  It’s, well, Big Data.  It’s data on two things: 1) doctors; 2) money.  The healthcare reform debate in a nutshell.  So this will likely get a lot of press.  I haven’t seen the actual numbers yet, and I’m told it will take many weeks to go through all of it.  Since nobody pays me to write, I’ll have to keep my day job, and thus will have to leave the number crunching to others.

Thankfully, the New York Times has come to my rescue. (http://www.nytimes.com/2014/04/09/business/sliver-of-medicare-doctors-get-big-share-of-payouts.html?hp&_r=0).  According to the NYT, 880,000 practitioners and 77 billion dollars are covered in the report.  Twenty-five percent of that 77 billion seems to have gone to two percent of doctors: those in opthalmology, oncology, and cardiology.  Internal medicine is right behind, wouldn’t you know.  The article actually has a chart that they named “The best-paid 2 percent of doctors”.  Yep.  Those family doctors are really raking it in.

The paper singles out a specific opthalmology procedure as a prominent, and, it implies, therefore suspect, reason for big payouts.  In fact, the paper had to be asked (nicely) not to release the names of the actual doctors with the highest billing records, or to contact them, until all the data is released to the public.  I suspect a couple of eye-doctors are going to have a really bad day today.  The opthalmology data is a good illustration of how Big Data can be Limited Data.  And how it can be interpreted a number of ways.  The NYT is implying that because eye doctors’ billing is so high, and so much higher than other specialties, there must be some something criminal going on.  Either eye doctors are committing fraud, or they are doing unnecessary procedures, or they are using drugs that are too expensive.  The doctors must be wrong.

But the data doesn’t say that at all.  All it says it that Medicare, which sets it’s reimbursement rates at levels mandated by Congress, not doctors, pays more money to treat people with eye diseases than it does other diseases.  That’s it.  It says nothing about a doctor’s practice at all.  Nothing.

Let’s take a couple of examples.  Opthalmology is a sub-specialized field.  A doctor who does cataracts doesn’t do Lasik, or he does Lasik but he doesn’t handle macular degeneration, etc.  A lot of specialties are getting like this.  Now, say a few doctors have specialized in this one procedure the NYT is all upset about.  Other doctors send their patients to these guys.  All of their practices becomes doing this procedure.  Because it’s their specialty.  So they bill Medicare for the procedure.  Medicare pays out what it decided to pay for this procedure.  How is this the doctor’s fault?  (By the way, funny story.  There’s a Lasik advertisement on the internet page with this article.)

Another example.  Say you are an oncologist.  You treat a lot of blood cancers, leukemia and such.  Other doctors send you their patients if they have leukemia.  There are a lot of types of leukemia, many of which are very expensive to treat and some which actually become chronic.  You bill Medicare for your treatments.  Medicare pays back what it decided to pay for these treatments.  It costs a lot to treat leukemia.  That’s what the data says.  That’s all it says.  It says nothing about quality of care, patient population, number of patients, or disease complexity.  It says nothing about variability in office visit time or the level of co-existing disease in a specific doctor’s patient population.

I am all for transparency.  I think having this data out there is fine, as long as we understand what we are getting.  And I’m not sure we do.  Specific doctors are going to be targeted for a lot of scrutiny because of this report.  Maybe they deserve to, maybe they don’t.  Fraud and over-treatment do exist.  But this data is far from telling the whole story.

 

 

Is there an app for that?

If you ever get access to the inner sanctum of a doctor’s office, besides the dirty scrubs on the floor, the shaving kit on the windowsill, and the remains of Chinese take-out from last week perched on top of the printer, you might notice a rank of post-it’s on a wall somewhere with a bewildering array of numbers and dots.   It’s always post-its or some other disposable but never-disposed-of scrap paper tacked to the walls.  Those numbers are the diseases your doctors most commonly sees.  In numeric form.  These are called ICD-9 codes.  They allow all billing, essentially.  If what you have doesn’t have an ICD-9 code, you aren’t sick, you’re imagining it, go away, no one is going to get paid to see you.

Here’s something I came across while poking around at Health Wonk Review, which will be hosted, by the way, by our own Brad Wright on March 13th.  Did you know that this October we’ll be getting a new ICD?  No, not an implantable cardiac defibrillator, though some of us may need one of those after we see the size of the Tenth Edition of the International Classification of Diseases.  Sarah Kliff, a blogger for the Washington Post, tells us that while ICD-9 had 14,000 codes, ICD-10 has 68,000.  So, that’s better.  It’s more, you know, numbers.

One of the reasons for the new edition, and the one proponents will tout, is actually a good one. The ICD-9 can’t expand anymore.  There are no more qualifiers you can add to, say, Pneumonia NOS (not otherwise specified).  The basic diseases have generally been divided by research and innovation into sub-categories based on new microscopic findings, genetic testing, etc.  So it’s more specific.  It’s also going to be great for moldy researchers and poverty-stricken grad students.  Data-mining will be much more fun and informative.  You can look up, for instance, how many doctors billed for the ICD-10 code “bitten by large turkey” presumably with a modifier if it was a wild turkey.

We doctors are understandably wary of this new edition, and not just because we’ll have to get bigger offices to accommodate all the post-its we’ll have to add to the walls.  You see, it’s generally the doctor who generates the code, at least initially.  So it’s more work for us.  Nothing new there.  Most new policies and procedures produce more work for doctors and, even more often, for nurses.  But the work increase is greatest for the medical coders.  The US has over 186,000 medical coders.  That’s 186,000 people who work in the medical field doing absolutely nothing that has anything to do with the actual care of people.  Looks like there will be more soon.  Wonderful job opportunities out there college graduates!

The AMA, which is of course against implementation of ICD-10, estimates it could cost $50,000 to $8 million dollars for doctors offices to transition, and it would cost a lot of time as the billers would have to slow down until they learned the new codes.  Plus there will be more coders.  So, not cheap.  Now, a major RAND Corporation study in 2004 estimated the potential benefits of switching to ICD-10 outweighed the costs by as much as $4.5 billion.  But isn’t it the RAND corp people who said EMR was going to save the health care industry so much money?

So the new ICD codes are not money-saving.  They’re not time-saving.  They make zero impact on patient care, either in quality or in quantity.  They do have the advantage of being more specific and generating better tracking and research data.  But what is the mantra for healthcare reform?  “Lower Cost, Higher Quality”?

 

Global Study Finds Majority Believe Traditional Hospitals Will Be Obsolete In The Near Future

A global study was released at the new year by the Intel Corporation indicating that around the world people’s health care wants and needs are principally focused on technology and personalization. The “Intel Health Innovation Barometer” found a consistent theme: customized care. At the intersection of health, care and technology, communities around the world consistently said they wanted to see their biological makeup and individual behaviors used to make receiving care more effective and efficient. This unsurprisingly was described by people through means such as telehealth, mobile health and the sharing of health information in real time. However, surprising methods of care were also common themes throughout the world such as ingestible monitoring systems and care that involves no utilization of hospitals.

Eric Dishman, Intel Fellow and Global General Manager of Health & Life Sciences at the company says the findings indicate that, “workflow, policy and culturally focused care are the most important ways we can improve health care.” Making care convenient, universally available and efficient through technological innovation is seen as more promising around the world than increasing the number of physicians or funding more academic research.

According to Senator Ron Wyden (D-Oregon), “People always talk about disruptors in terms of various kinds of practices in the American economy,” but “there’s nobody who’s done more disruption for the right reason than Eric Dishman.” With that kind of support to understand and advance the health care system, the Intel Health Innovation Barometer was conducted online by Penn Schoen Berland in Brazil, China, France, India, Indonesia, Italy, Japan and the United States. It was conducted among a representative sample of 12,000 adults aged 18 and older with a margin of error of +/- 0.89 percentage points.

Surprising Findings:

–       Traditional hospitals, according to 57% of people, will be obsolete in the future

–       Majority of people (84%) would be willing to share their personal health information to advance and lower costs in the health care system

–       More than 70% of people are receptive to using toilet sensors, prescription bottle sensors and swallowed health monitors

–       72% of those surveyed would be willing to see a doctor via video conference for non-urgent appointments

–       66% of people say they would prefer a care regimen that is designed specifically for them based on their genetic profile or biology

–       More than half of people (53%) would trust a test they personally administered as much or more than if that same test was performed by a doctor

–       About 30% of people would trust themselves to perform their own ultrasound

While wearable monitoring devices are commonly accepted in the US, global readiness for ingestible and sensory systems far exceeds that of Americans.  Acceptance of non-hospital care is also more appealing to those living outside the US. In remote areas of India, for example, extremely high percentages of people said that there is no need for traditional hospitalization.

Although in the US, a growing desire to care for the elderly at home gives hope to Eric Dishman that there could soon come a day that hospitals are obsolete. He cites changes in care seeking behaviors, policy and payment reform as incentives to move away from traditional hospitalization care. “The moment you signal pay for performance, people start thinking about how we misuse hospitals every single day,” says Dishman. That misuse of hospitalizations, and lack of formal hospitals in other countries, contributes greatly to the number of individuals worldwide who think the archaic system is not sustainable in the future.

Emerging Technologies For Innovation

Intel has been doing qualitative and quantitative research around the health care industry for many years. To date, the Intel Barometer is the most extensive survey it has conducted, and did reveal shifts in people’s increased desire to have access to emerging personal technology tools to become more active members of their care team.

Specifically, the Intel R&D teams are using ideology like Dishman’s to seek clarity and recognition of health advancements that unburden people from having to travel to a health care provider. “Care must occur at the home as the default model,” says Dishman. “It was also interesting,” he says of the survey, “to see people in emerging markets such as Brazil, China and India trusted themselves to use health monitoring technologies more than those in more technologically advanced economies like Japan and the United States.

Intel’s team of ethnographers used research in more than 1,000 homes and more than 250 hospitals across 20 countries to better understand the everyday lives of people, including those receiving and giving care.

The technologies that Intel’s survey received novel feedback on include items such as wearable and ingestible monitoring systems. While these hi-tech possibilities are new to all markets, the potential benefits could be felt across the entire health care arena as more thorough and patient-centered data is collected, driven by patient approval and demand.

Eric Dishman’s Personal Mission

In his pursuit of better health care technologies and home health care, Eric Dishman has been driven primarily from his in depth involvement with the health care system. As a student at the University of North Carolina, Dishman was told that he had months to live due to a rare kidney disease. Over twenty years later he has received a new kidney from a colleague at Intel thanks to sequencing his genes and finding that his diagnosis had been wrong his entire life.

Further, his grandmother’s progression of Alzheimer’s Disease drove his pursuit of innovation to keep her safe in her own home.  He found that keeping her health and dignity was a group effort. According to him, “Improving health care is a team effort, including patients and their families. Intel’s research shows that when people see benefits for them and their wider community, they are open to sharing sensitive information in an anonymous way.”

His approach seems to be gaining support based on the Health Innovation Barometer, which found that a higher percentage of people (47%) were willing to share their personal health records than their phone records (38%) or banking records (30%) to aid innovation.

If Dishman and Intel have their way, the new survey will move them to the head of the class by proving to health care leaders around the globe that massive disruption to the health care system is possible and supported by the large community. Smart devices that can connect patients and care givers in their home can lead to all kinds of health and policy change. Payment reform, independence and equal access might all be possible in the near future if individuals around the world are willing to use their own bodies and surroundings to educate and innovate the larger system.

 

Massachusetts Wins the Prize for Most Expensive Healthcare

It has recently been brought to the attention of the good citizens of Massachusetts that we spend more than anybody else on healthcare.  According to the Massachusetts Health Policy Commission report published recently, Massachusetts spends 16.6% of it’s economy on healthcare, as opposed to the national average of 15%.  The expense is in both higher utilization and higher prices.  It is across all payer types.  The most cost is associated with hospital care and long-term care/home health care.  The report goes on for many pages with reference to lots of charts and graphs.  I cannot pretend to understand all of it, and I defer to Dr. Paul Levy, who knows a lot more about this sort of thing than I do, in a post he recently wrote for The Health Care Blog (http://thehealthcareblog.com/blog/2014/01/09/the-data-are-wrong-our-patients-are-sicker/).  The best I might be able to do is to de-code some of the language in the Executive Summary.  To wit:

1. “Significant trends are occurring in the provider and payer market. For providers, the delivery system is growing increasingly concentrated in several large systems, with a larger proportion of discharges occurring from major teaching hospitals and hospitals in their system.”

Partners and Caregroup, along with a couple of for-profits, have eaten up pretty much all the formerly-independent hospital systems and physician practices.  While this means they can negotiate more effectively with vendors, it does not mean that potential cost savings gets passed on to anybody below the CEOs.

2. “…many provider organizations seek to re-orient care delivery around patient-centered, accountable care models, though significant challenges such as misaligned payment incentives, persistent barriers to behavioral health integration, and limited data and resources remain.”

This is nice-speak for “A lot of groups are moving toward accountable care organizations, without any real evidence that care in this model is better or that it’s any cheaper.”

3. “In addition, public and commercial payers are increasingly developing alternative payment methods that aim to alter supply-side incentives. However, there are significant challenges in implementation, including wide variation in these types of contracts covering Massachusetts providers, both within and across payers, as budget levels, risk adjustments, and other terms are negotiated.”

Everybody has a different deal.  Everything can be negotiated.

4. “The operating expenses that hospitals incur for inpatient care differ by thousands of dollars per discharge, even after adjusting for regional wages and the complexity of care provided. Some hospitals deliver high-quality care with lower operating expenses, while many higher-expense hospitals achieve lower quality performance.  Operating expenses are driven in part by market dynamics. Hospitals that are able to negotiate high commercial rates have high operating expenses and cover losses they may experience on public payer business with income from their higher commercial revenue, while hospitals with more limited revenue must maintain lower expenses.”

Operating expenses make no sense.  There is no consistency.  Going to a big fancy hospital with a big fancy name does not mean the care you get will be better, but it will likely be more expensive because the fancy hospital also has things that make a lot of money, like imaging machines and advanced non-invasive procedures.

5. “An estimated 21 to 39 percent ($14.7 to $26.9 billion in 2012) of health care expenditures in Massachusetts could be considered wasteful.”

No translation needed.  I could give you a hundred examples of waste right now, but anecdotal evidence is not data.  Massachusetts HPC has the data.

6. “Persistently high-cost patients – those who remain high-cost over multiple years – are easier to identify for care improvement and better health outcomes. These patients represent 29 percent of high-cost patients and make up 15 to 20 percent of Medicare and commercial spending in Massachusetts. Interventions that have been shown to improve the efficiency of care for high-cost patients include: prevention of conditions that often lead to expensive health crises; process and operational improvements that reduce the cost of episodes that are common among high-cost patients; and care management resources to support patients to manage their care more effectively and better coordinate care for patients across multiple provider settings.”

We know who the highest cost patients are and if we had better ways of encouraging prevention, managing diseases so they don’t get out of hand, and helping people take care of themselves in the community, we’d spend less.  Maybe.

So there you go!  Maybe these things can be addressed, maybe they can’t.  In the meantime, save your pennies, Massachusetts residents.  You’re gonna need them.

 

Mental Health Loses Funding As Government Continues Shutdown

In the months leading up to World Mental Health Day, DC has been shaken by a series of violent events that ended with innocent lives lost and our country’s mental health services called into question. During this same time period, Washington, DC has been consumed by a government shutdown, with lawmakers and policymakers trying to determine how to rein in our country’s financial burdens and overspending. Unfortunately, as federal and state governments look to cut budgets at every turn, mental and behavioral health services are often on the chopping block first. Financial cuts, compounded with US stigma often applied to mental health troubles and disparate access to services across the county, mean that those who need services most are often those left without proper care.

August though October brought DC into the spotlight for many reasons, the saddest of which is the violence that was covered by mass media as two shootings occurred. In one case, Aaron Alexis, a 34-year-old, perpetrated a mass shooting that left 12 people dead, in Washington’s Navy Yard. Previous to the shooting, it was reported that Mr. Alexis was treated at the VA for mental health issues including sleep disorders and paranoia, but had not lost clearance.

Miriam Carey, also 34, reportedly had an unhealthy obsession with the White House when she drove her car into the White House gates and led police on a chase around DC before being killed. Although she had no reported psychosis or supposed violent intent, it was noted in the months leading up to the incident she believed that the President had beenstalking her and might have suffered from postpartum depression. When killed by authorities on Pennsylvania Avenue, she had her 18-month-old child in the car.

Budget Cuts

Although societal stigma and knowledge of where to access behavioral and mental services are often barriers to care, budget cuts continue to make seeking care more difficult. Whether this be through decreases in available services, lack of providers due to poor reimbursements or less preventative actions in communities, the impact of mental health funding shortages is great. According to the National Alliance on Mental Illness, “increasingly, emergency rooms, homeless shelters and jails are struggling with the effects of people falling through the cracks due to lack of needed mental health services and supports.”

In the last five years, significant budget cuts have befallen mental health programs and services. From 2009 to 2011, states cut mental health budgets by a combined $4 billion- the largest single combined reduction to mental health spending since de-institutionalization in the 1970s. In Chicago alone, state budget cuts combined with reductions in county and city mental health services led to shutting six of the city’s 12 mental health clinics. These closures, along with other public and private center closures in Chicago, have eliminated vitally needed services, especially on the south and west sides where they are indispensable.

Threats of sequestration in 2013 had a significant impact on people’s ability to access mental health services and programs, including children’s mental health services, suicide prevention programs, homeless outreach programs, substance abuse treatment programs, housing and employment assistance, health research, and virtually every type of public mental health support. The Substance Abuse and Mental Health Services Administration(SAMHSA) claimed it alone would be cutting $168 million from its 2013 spending, including areduction of $83.1 million in grants for substance abuse treatment programs.

Consequences

Despite the need to balance budget and make all health care services more efficient, many argue that society has better long-term outcomes if more federal and state dollars are allocated to mental and behavioral health care. This includes preventative services as well as mental health testing and treatment.

Because individuals with untreated mental illness often find themselves in emergency rooms, homeless shelters and prisons, the societal cost of prevention and treatment may be exponentially less than funding those other outlets and catchment areas. This is especially true in the case of children, who face cycling in and out of the system throughout their lives if left untreated.

These costs can be exceptionally large over the lifetime given that the National Institute of Mental Health (NIMH) estimates that two-thirds of children with lifetime mental health problems never receive treatment. This takes substantial emotional and financial tolls on individuals and families, as well as the broader society. However, programs that address the mental health needs and provide services for youth show better outcomes in health and education that carry over the lifetime. For example, in the University of Chicago’s Crime Lab, therapy is being used to curb youth violence, especially amongst those with behavioral and mental health care needs.

Additionally staining on the mental health care system is that during times of recession and budget cuts the caseload for mental health actually increases. It has been estimated that during this most recent recession, the caseload of community mental health services alone has increased almost 50 percent. This increase has most notably been seen in the Native American community, where suicide prevention is an essential part of the cultural health care demands.

Everyone Benefits

The NIMH contends that one in 17 people suffer from a “seriously debilitating mental illness,” we as a society are accountable for ensuring that those in need have resources for care. Not only does access to quality mental and behavioral health care ensure that individuals are being properly treated, but that America as a whole saves money and resources caring for those in need in other, more expensive settings. It may further prevent violent acts like those in DC from happing.

On this World Mental Health day think about the ways in which access to and support of mental and behavioral health care can be improved in your community.

 

President Obama Fails To Explain Tech Glitches And Solutions In ACA Speech

Monday at 11:30am EST, President Obama spoke in the Rose Garden about the recent troubles with health insurance exchange enrollment and websites. With a team of young people standing behind him and Janice Baker at his side, the first person in the state of Delaware to successfully enroll in the exchange, President Obama said he was speaking to every American wanting to get affordable health insurance. He claimed that in the last three weeks, despite the horrific technological problems with the websites, that “half a million consumers across the country have submitted application through federal and state marketplaces.” He further touted that the “federal site alone has been visited 20,000,000 times” in the last three weeks. Unfortunately for those American’s who are really interested in signing up on the exchange sites, he glossed over the depth and breadth of the current troubles, giving a speech that sounded more like a State of the Union address with small-business examples and reading letters written to the White House.

President Obama also alleged that no one wants to see the exchange sites improve more than the federal government, noting that, “the website has been to slow, and people have been getting stuck during the process.” He also said that it is the mission of the administration to make them “more better,” with visible cringing from the audience, but claimed failures were due to response rates. He said the public response was “overwhelming, which has aggravated the underlying problems.”

However, he failed to go any further to explain what those other underlying problems were or when specifically they will be fixed. He did say that while HHS and contractors such as CGI Federal are working out the “kinks,” American’s should be patient. He claimed that “if the product is good, [American people] are willing to be patient,” suggesting that there will not be a delay for the individual mandate.

Nevertheless, he followed this by assuring the public that unlike Black Friday sales, the insurance plans will not run out like purchasing a new PlayStation – adding to the list of items the administration has compared exchange sites to, including iPhones and travel websites.

Despite his promises of improvements and putting the “best and brightest” on the job, CNN and other sites have insisted that the inherent technological and platform problems with Healthcare.gov will not be resolved anytime soon. This begs the question, that if the federal government is now searching for the best and brightest to correct the estimated 5,000-5,000,000+ lines of coding that need to be fixed on the federal site alone, who was working on the original platforms?

As he continued his speech, the President reminded the American public that although the websites for enrollment are not as, “quick, consistent or efficient as we want,” that the exchange sites are far more than “just a website.” He noted that many pieces of the Affordable Care Act (ACA) are already in place and being utilized by millions of Americans. He addressed pre-existing conditions, youth under the age of 26 and several other provisions that are already being rolled out by federal law, and the successes they have seen there.

He noted more examples of ACA triumph in Oregon, where he maintained that the exchange, “has cut the number of uninsured people by 10% in three week,” which is about “56,000 more Americans” with health insurance coverage.

During the speech, President Obama also tried to clarify the exchanges or marketplaces by describing them to the public as becoming part of a “big group plan… that bargains on your behalf for the best deal in health care.” He said that by doing so, insurance companies have created new products and options that strengthen market forces, leading to better deals.

He went on to say that without a doubt, “prices have come down,” further claiming that “when you add the next tax credits (those not yet implemented)… then the prices come down even further.”

The President rounded out his talk by noting the Republican party’s opposition to the ACA and how willing they were to “shut down the global economy” to fight against the ACA. A move, he claimed, that shows just how unwilling Republicans are to negotiate on legislation intended to, “free families from the pervasive fear that one illness one injury will cost you everything.”

While that may be the goal of the Affordable Care Act, the underlying technological and coding problems may prove to make that impossible.