Neupert On Health

The Way Forward

pnblog — Tue, 09 Feb 2010 17:42:00 GMT

This week's question for the Washington Post Health Care Rx blog was:

In a Feb. 2 conference call, House Speaker Nancy Pelosi talked about starting small. She indicated she wants the House to vote on elements of health-care reform, such as repeal of McCarran-Ferguson Act, which exempts insurance companies from antitrust laws. Is this a smart strategy or just political show?

My response, The Way Forward, below:

It seems like this is more of a move to revive the momentum for larger health reform. The Senate can't pass a repeal of McCarran-Ferguson and in the grand scheme of things, it's hard to see what the practical implication of this would be on improving health outcomes, increasing access, or slowing skyrocketing costs.

While some may think that the Massachusetts election has caused health-care reform to grind to a halt, I think we need to treat this as an opportunity to take stock of what we've learned and what we want reform to achieve. At the end of the day, citizens are the ones responsible for their health - they make decisions every day that affect their own health and can increase costs to the entire health system. Reform has to be about empowering consumers to understand and take charge of their health and we need a system that will allow that to happen.

A thoughtful commentary on a path forward is the Wyden-Bennett Healthy Americans Act. It is, by definition, bipartisan and takes a big step forward by separating health insurance from employment, which will guarantee that individuals will not lose their insurance even if they change or lose their jobs. Most importantly, it will encourage new innovation in the health insurance industry. The bill provides some solid thinking and solutions to improve outcomes by focusing on prevention, wellness and disease management, and tying accountability and incentives appropriately.

By creating a system driven by innovation with consumers at the center (versus providers) we can move forward with meaningful change.

Health Reform -- Fixing the Core Problem or Just Symptoms?

pnblog — Tue, 29 Dec 2009 05:02:00 GMT

The health reform debate has passed another milestone, but the question I keep getting asked by friends and family is whether the proposed legislation will actually improve our health delivery system. I want to be optimistic, but I’m skeptical that the kind of comprehensive change we need to truly reform the system will happen.

As I talk to so many folks across the country (and around the world), I find that most agree on one thing -- our current system is ‘broken’, and it can and should get better. But when it comes to getting to a deeper understanding and discussion of the details -- the core problems, the choices for change, the costs and impact of these changes, and so on, folks just aren’t getting a very clear picture from the MSM. Often what’s highlighted is the political drama versus the real issues, the real story.

I don’t claim to fully understand the actual legislation or even to comprehend the hysterical politics that seem to surround the conversation. But I do know that the central question people want and need answered is HOW to make the system better. As a business guy, when I try to solve a problem, I focus on understanding the ‘root cause’ to make sure I’m fixing the core problem and not just a symptom or secondary effect. And I think we’ve got to do the same when it comes to solving ‘health’.

Everyone (citizens and politicians) wants more and better ‘health’ -- a better health delivery system, more prevention, more therapies to cure complex diseases like cancer, more and better doctors and the like. And we all recognize that more ‘health’ is not free. The current system has lots of waste and inefficiencies. If we could figure out how to remove these from the system, we would get more ‘health’ for the same amount of money. This is clearly very hard, from both a legislative perspective (why neither bill really tackles it) and from a practical implementation perspective. But it needs to be done, and after we get it done, we then have to figure out how to invest the dollars to provide more ‘health’. Alas, more health insurance does not necessarily turn into more ‘health’.

Practially, there are several fundamental questions we need to answer. First and foremost, what framework or system of rules, incentives, relationships, markets etc. will lead to more ‘health’ for Americans over time? Should we as a society, provide healthcare (unlimited?) to all citizens? And then, how should we finance this new economic liability? What role do individuals play in being responsible for their own health -- in terms of paying for it, being accountable for healthy or risky behaviors and consuming health delivery resources?

It is hard to be a market oriented capitalist today, particularly in the health debate. Everyone loves to hate the insurance profiteers, the bad drug companies and the greedy medical device companies. The public seems to easily forget that economic growth and the principles that support economic growth are the reasons that we can even have a conversation about providing subsidies for the less fortunate.

Ten years from today, we could have a society with a GDP of $16 trillion or one of say $17 trillion (the actual numbers don’t matter). In the scenario of higher economic growth, where society has created $1 trillion more dollars of GDP, we could make a choice to consume/finance more ‘health’ than if we were to have a smaller GDP. Given the inevitable pressures on the health care system -- an increasing proportion of the population over 50 and people living longer -- as a society we know we would like to be able to afford more ‘health’ not less. Just raising taxes alone without creating more wealth might patch things in the short run but not in the long run. One illustrative example is the Medicare system -- which is projected to go bankrupt in a few years, even after increasing taxes to support it. There are really only three approaches to preventing it from going bankrupt; cut benefits, grow GDP faster, and improve value (more ‘health’ for the same dollars).

To have a meaningful debate about ‘health reform’, we’ve got to consider the overall context of the principles leading to economic growth and the core questions raised about rules, roles and incentives in the health delivery system. Creating substantive legislation in a democracy is messy. But for a democracy to thrive, it needs an informed and engaged public, a transparent legislative process and stakeholders who are willing and able to advocate without fear of being penalized.

From what I can read and learn -- in this critical debate and time – it seems like we may be failing in all three areas.

The Top Ten Medical Advances of the Decade. What’s Wrong with the Picture?

pnblog — Fri, 18 Dec 2009 19:55:00 GMT

Sometimes it’s fun to peruse year-end lists—best shows, best moments, best songs, best presidential gaffes, best viral videos, and the list goes on…. which gets even longer with the end of decade or the century.

In this spirit, ABC News just ran a story about the ‘top ten’ medical advances of the decade, which I found very interesting. They reached out to more than 800 specialists for their suggestions, and those suggestions were sent to the American Association for the History of Medicine, which narrowed down the list to the medical advances this decade that have had the MOST IMPACT.

Here they are:

1. Human Genome Discoveries Reach the Bedside

2. Doctors and Patients Harness Information Technology (moving away from pad and paper)

3. Anti-Smoking Laws and Campaigns Reduce Public Smoking

4. Heart Disease Deaths Drop by 40 Percent

5. Stem Cell Research: Laboratory Breakthroughs and Some Clinical Advances

6. Targeted Therapies for Cancer Expand with New Drugs

7. Combination Drug Therapy Extends HIV Survival

8. Minimally Invasive Techniques Revolutionize Surgery

9. Study Finds Heart, Cancer Risk with Hormone Replacement Therapy

10. Scientists Peer Into Mind with Functional MRI

The list is a great reminder about how big an impact knowledge can have in improving life – sometimes through science, sometimes through changes in policy and sometimes through applications of technology. From the perspective of other industries or aspects of life, it’s hard to believe that doctors and patients harnessing the power of Information Technology—moving away from pad and paper—makes the top ten list. It’s pretty ironic with all the amazing medical advances that our health delivery system is so far behind….but it really highlights just how much opportunity there is for us to improve it.

It’s my first wish for the new year that #2 isn’t on the list in the next decade – that we see something about the impact of information technology on the whole system—in the form of improved health outcomes and efficiency gains. My second wish is that we continue to see dramatic innovation in knowledge (science, technology, policy) improving life here and in the rest of the world.

The right solution for the ‘population’ may be the wrong solution for the ‘individual’

pnblog — Fri, 11 Dec 2009 21:04:00 GMT

This week's question for the Washington Post Health Care Rx blog was:

What does the debate over mammography screening teach us about the challenges in moving to evidence-based medicine in a revamped health system?

The debate truly highlights how much work is yet to be done to build a health-delivery system that generates enough accurate data so that we can truly 'know' the evidence! More importantly, however, it underscores two fundamental issues impacting broader health care reform:

1. The USPSTF made a recommendation for an 'overall population' vs. an 'individual' choice for a doctor and patient. The funny thing about statistics is that they're about percentage risks for a population, but individuals have different genetic profiles/risks, and attitudes and priorities around health. There is no one right answer for everyone. If the health sector were more market-oriented like other industries (people have different 401k investment plans, different savings rates and the like) and not driven by health insurance companies or the government making determinations about what is 'right', consumers would explore the information available and make their own choices with their physicians.

2. Insurance should address catastrophic events, not every day expenses. Yet people expect insurance to cover every doctor's visit, test and treatment, which is economically inefficient and establishes the wrong incentives for providers and consumers. People should pay for routine care -- doctor's visits, mammograms, routine medicines -- and only tap into health insurance when they need to cover major, unpredictable issues. If people were in charge of paying themselves, they would be more engaged in their health and understand how their choices impact themselves and others. Differentiating major medical coverage from full health coverage would reduce the incentive for some to over-consume health resources. This would enable more innovation in insurance and health delivery and make health care more affordable for all.

Evidence-based medicine is the 'brass ring' for health-care reform. Medicine is going to continue to evolve and improve, and we need the right system in place to ensure that individuals have the information they need to make informed choices about their care to drive the best outcomes for their health.

Reform Health Care by Re-empowering Consumers

pnblog — Tue, 24 Nov 2009 14:20:00 GMT

For my latest thoughts on consumer engagement and its relation to health care reform, please see my contribution to the Harvard Business Review Conversation Starter blog.

The Six Billion Pound Challenge -- How a Focus on Driving Outcomes can Improve Health Faster and Better than Legislation

pnblog — Wed, 11 Nov 2009 02:30:00 GMT

I commend the administration for shining the light on the need to improve health in America! While I want to be optimistic about change, I’m skeptical about how much real improvement we will really see under the guise of healthcare reform. Like I’ve noted before, the national conversation we are having -- which bill will pass, a public option or not, an abortion amendment or not, which party is winning -- is just the wrong conversation. Imagine if we were to take all the TV time, print space, blogs, and so on, consumed by the political debate and use it to advance an audacious goal like improving the state of our health! Imagine what we could accomplish with a big sustainable campaign across schools, employers, state governments and the media -- just imagine!

Today’s reality is that more than 75 percent of America’s healthcare costs stem from six chronic diseases. About 133 million Americans -- nearly one in two adults -- live with at least one chronic illness -- and the numbers are forecasted to grow unless we do something differently. Realistically, the only way to maintain some fiscal responsibility under any reform scheme is to address the controllable elements of chronic diseases.

What if we were to focus on a couple of conditions like obesity and diabetes? Two-thirds of American adults are obese or overweight, leading to chronic diseases like diabetes, heart disease and other conditions. Currently, obesity alone costs the health system $147 billion a year! What’s more, obesity is one of the biggest risk factors for developing the six chronic diseases that drive the majority of direct and indirect costs to our system, including diabetes ($218 billion), cardiovascular disease and stroke ($437.5 billion). Not to mention childhood obesity with equally alarming statistics (one in six children are obese), the most alarming of which is that children who are obese have a 70% chance of being obese as adults. Yet, obesity is completely within our control to manage/prevent.

According to CDC, the average American adult (age 20 and 74) is 5’6 ¾”, weighs 177.65 pounds and has a BMI of 28 (Note: an adult who has a BMI between 25 and 29.9 is considered overweight and an adult who has a BMI of 30 or higher is considered obese). To achieve a BMI of 24, America needs to lose 29 pounds per person. With the U.S. adult population at 205,639,360, that means 5,963,541,440 pounds…almost six billion pounds.

If we were to collectively lose this weight, we would have a direct impact on obesity and as a result, diabetes and other conditions. Healthier diet and exercise are things we can immediately start doing -- without legislation. Not to sound trite, but losing weight can be the “quick fix” for our health problems and rising costs. Obese individuals incur an 42% more in medical expenditures -- about $4,800 for per person per year -- compared with normal weight individuals, who incur an average of about $3,400 in such expenses. And little things matter -- for example, walking half an hour a day, five days a week cuts the incidence of diabetes by 40%. Think of the impact we could have on costs and the economy!

I know losing weight is hard work, but letting the growing waistlines of America continue unchecked will only doom us to continue the cycle of out-of-control healthcare spending. While I’m not sure I agree with Japan’s approach to legalizing waistlines, it does seem to have an impact. If we can send a man to the moon, create 200 different versions of yellow sticky notes and other wonders of the modern world, we can figure out how to lose a few billion pounds!

And it should all start with a public education campaign. Even though this is fundamentally marketing, it does belong in the domain of government action. It doesn’t take much to create a great ad campaign, viral marketing and so on. Look at the popularity of shows like the Biggest Loser -- now there’s a whole line of products and services. There have been a lot of one-off “celebrities” championing the cause of weight loss -- Mike Huckabee, Valerie Bertinelli, and others. But these have been isolated. Imagine if the government organized a group of great marketing companies -- Nike, Apple, Proctor and Gamble -- and got them together to create a campaign about obesity and health -- and involve popular sports heros or celebrities -- in a sustained way over a period of time. I’d bet there’d be some impact. Another great example of something that could easily and inexpensively be rolled out to schools nationally is the preventative childhood obesity program driven by the Columbus Research Foundation. These folks thought deeply about how to influence middle school students, and developed a program focused on education around diet/nutrition and exercise -- including a virtual cross-country competitive walk (students used pedometers connected to the Internet via HealthVault to track their progress). Ten middle schools were involved with nearly 1000 participants.

Real reform in healthcare isn’t solely the responsibility of government. It’s about individual responsibility and how we, as consumers, embrace our part of the current situation. I hope that reform will include changes to the payment system to enable and reinforce changes in behavior and stimulate innovation, but we don’t need to rely only on legislation to make things better. We can all individually start making better choices.

I understand that neither 'health reform' nor legislation are easy. As many have noted, whatever legislation passes will not include a 'silver bullet solution' to either goal 'bending the cost curve' or improving the value we get for our healthcare spend. Simple things can make a difference. By taking more responsibility for our own actions, we can impact the healthcare costs of our nation.

New delivery models will solve the cost crisis

pnblog — Wed, 28 Oct 2009 15:03:00 GMT

This week's question for the Washington Post Health Care Rx blog was:

Has Congress done enough to constrain long-term, health care spending growth? What cost containment strategies would you advocate pursuing?

My response, New delivery models will solve the cost crisis, below:

I was again reminded at last week's Partner's Connected Health Conference about how much potential there is for innovation in health - for industry transformation. The session titles speak for themselves:

Wireless Tech and Patient Self-Management: Opportunities, Applications, and Barriers
Get Your House Smart: Aging in Place, At Home, Aided by Technology
The Emerging Use of Videogames for Health: Innovations, Impacts, and Issues
Mobile Health: Leapfrog technology for the developing world?
And the list goes on...

What this showed me is that there are many innovations starting to happen with promising implications for tomorrow's health care system. To get there, we need less focus on the costs of today's system, and more on enabling a new delivery model for the future. We, as consumers, manage the rest of our lives from our phones or our PCs - our finances, our travel, our shopping. When we want to make any purchase or investment, we have all kinds of services we can leverage to get informed and act. Every industry that touches our lives has been transformed - complex, expensive products and services once only available to few are now accessible and affordable to the masses and provided by those (people or even software) with far less training.

In health, if we continue to 'do it' the way we always have, costs will continue to skyrocket. Not to mention that our current delivery model simply won't be able to keep up with the advances in medicine - think about a world of personalized medicine (we're on the cusp of some amazing things). Today's delivery model just isn't set up to handle the amount of personalized data, decisions and so on.

We can see pointers to the future -- virtual care from American Well, new delivery channels such as Minute Clinic, patient self-serve at Kaiser-Permanente, personal health management platforms like HealthVault and Google Health. We're seeing an influx of investment into health start-ups focused on making treatments or healthcare information more cost-effective and accessible to patients. But we haven't yet seen widespread change or adoption.

Why? Congress has carved into stone our current system, but this traditional 'fee-for-service' model just isn't flexible and won't enable the kind of innovation required.

We need Congress to create a new framework that drives value, rewards experimentation and enables innovation. This is what will transform health and ultimately drive costs down.

Learning from Singapore and Switzerland

pnblog — Fri, 23 Oct 2009 17:59:00 GMT

So this week’s question from the Washington Post RX Blog was:

Which country has the best health-care system and why? Can the U.S. follow its model?

My response -- Learning from Singapore, Switzerland -- is below.

To realize the goals of providing increased access while maintaining fiscal responsibility, we have to dramatically change how we 'do health' today -- whether we're doctors, hospitals, or consumers.

Health is complicated no matter where you go in the world, and there are different challenges in every country. There is no 'best' system anywhere, but there are best practices from around the world worth exploring. Two immediately come to mind:

Singapore's system has characteristics that reflect what we'd expect to see in our own system - personal responsibility, competition and choice. Working people are obliged to put money into a personal savings account for out-of-pocket expenses. The money remains completely in each person's control; each decides how to spend it. And there's choice -- at the Raffles Hospital, one can choose a $1,438 luxury suite with a 24-hour nurse and other amenities OR a $99 a night dormitory room with the six other beds. Procedures cost the same, and are transparent (Publication of the cost of hospital procedures is mandatory, turning the purchase of a hip replacement into something similar to buying a pair of shoes), but there's choice. Contrast this to our system where it's difficult to even get a price in advance, let alone make choices.

Switzerland's system also offers interesting models for consideration -- universal access, individual choice from an array of private insurance options, and a higher level of personal accountability (shared costs by individuals). All citizens are required to buy health insurance and private insurers are required to offer coverage to everyone - regardless of age or any previous medical conditions. Insurers offer a basic package on a not-for-profit basis, and supplemental packages on a for-profit basis that consumers can choose for things like home care, alternative medicine, and so on. Competition is basically about price and service. For those who can't afford the basic package, the government offers direct cash subsidies. In addition, the system provides incentives for consumers to avoid unnecessary treatments by requiring them to share some costs at a higher level than in the U.S. It's not perfect, but it is customer-driven.

In a democratic nation where capitalism flourishes, personal accountability and choice ought to be at the heart of the system.

Please feel free to comment with your own thoughts – I’d like to hear from you.

Personal Accountability

pnblog — Tue, 13 Oct 2009 21:44:00 GMT

So this week’s question from the Washington Post RX Blog was:

The Senate Finance Committee passed a bill containing its version of the health-care overhaul. Are you satisfied with this bill? What does it miss?

My response is below.

There's a long road ahead for health-care reform -- five bills to be merged and countless hours of debate still to come. A lot could change over the course of the next few months, and the content of the final reform bill is likely to vary from any of these individual bills. The question we need to keep asking ourselves is whether reform will drive the kind of wholesale transformation needed for the industry and consumers -- the kind we've seen in banking, travel and other service industries. Ten years ago, we wouldn't have imagined that people would do so many things themselves. Technology and business model innovation enabled new types of services -- putting consumers in charge, dramatically changing engagement and economics. Imagine the possibilities for new services in health.

Taking this into account, what's needed is a new 'health delivery' framework that drives value, rewards experimentation, puts consumers in charge, and enables innovation--essentially changing the attitudes, beliefs, and behaviors of everyone involved in health delivery. We all have to be prepared to work together in different ways.

We have an opportunity now to move the traditional healthcare business model in a new direction:

Shifting the value of healthcare from treating people when they are sick to finding ways to keep them well (allowing physicians to focus on and be accountable for outcomes vs. volume)

Transferring the management of routine diagnosis and treatment from highly-skilled professionals to newer, more efficient/convenient, and cost-effective delivery methods like minute clinic, self-serve, nurse practitioners -- so doctors can focus on using their skills in the most effective way possible (allowing physicians, health systems, and 'new entrants' to be accountable for value and innovation)

Encouraging consumers to make better lifestyle choices. We need to help them engage in their health differently, be wiser purchasers, and understand the trade-offs involved.

At the end of the day, the ultimate success of health-care reform will depend as much on how we will work together and change our behaviors as on the legislation ultimately passed by Congress and signed by President Obama. I applaud the administration for shining the light on health care as it has never been done before.

Reflecting on the healthcare system while waiting at the hospital for a loved one

pnblog — Wed, 30 Sep 2009 03:12:00 GMT

Often when we talk about healthcare reform, it can be a rather abstract discussion -- you watch some tv show with ‘experts’ reflecting on some 20 page bill or hashing through the merits of a public insurance option. Last week, however, all the intellectual and abstract ideas were brought into something very personal for me and my family.

My wife had a Hysterectomy, and I spent three days at Swedish hospital in Seattle caring for her. With all the waiting time, it was hard not to reflect on the experience and think about it in the context of health reform. I’m happy to say that my wife is now recovering on schedule, and she’s given me permission to share the story and my insights.

Once she had decided surgery was her best option, we became even more avid information seekers; we shopped for the procedure with the best outcomes and then the surgeon with the most experience and best quality results for this procedure. The best available counsel we found was for a Robot-Assisted Hysterectomy because there was less risk, less pain and faster recovery times vs. the alternatives. We didn’t have to shop for ‘price’ (thanks to Microsoft’s benefit plan, but that is a different future post)…but even if that were the case, we probably would have chosen a more ‘expensive’ option if it meant less risk and more productive days -- getting back to normal life as quickly as possible.

We all know that surgery can be pretty scary. Throughout the experience, everyone from the doctor’s office to the staff at Swedish helped to make the experience a positive one, allaying any fears and making us feel comfortable and confident. We often forget that healthcare is truly a people business. In just three days – the number of different people we dealt with was amazing -- five docs, seven nurses plus the ancillary folks (lab techs, transport and other helpers). They all took time to connect with our emotions while doing their jobs.

Swedish is leveraging technology to improve their systems. You see it throughout the organization, starting in the lobby, with signs advertising the hospital’s new EMR system. During the course of our stay, when there was time I asked various staff members about their experience with the new EMR, and they were positive about the system because they had all the information in one place. While a common complaint was that the data entry took them more time, they felt overall it made them more productive and effective.

This highlights that we need to remember that technology is a means to an end. It is NOT the introduction of technology that will make a difference, but rather how leadership leverages the right technology to make a difference…in both quality results and economic outcomes.

I also saw a real focus on patient safety, starting with the pre-op processes. Each member of the care team carefully checked her arm band, her chart and asked several specific questions to be sure she was getting the right action. For us, the repetition became frustrating, but if this process were to improve patient safety, then it would be worth it. Despite the technology investments, the core safety process was in the human factors.

After the surgery was completed, she spent two days recovering in the hospital. This was a day longer than originally planned due to very low blood pressure and a declining hematocrit. While I used the guest Wi-Fi for work and email, it was even more critical for answering key questions about her condition, the trade-offs, the next steps – which helped me to get some context and understanding to a) engage more thoughtfully with the care team about questions/choices and b) assure my wife about what was going on during the long time periods when neither doctor or nurse was around. I think hospitals should consider leveraging their video and wireless infrastructure more effectively for patient specific education and connecting with their care teams. This is potentially a big opportunity for improved patient compliance and care team coordination.

Because the low blood pressure persisted, I called her primary care physician to get her baseline BP. If we had stored this information in HealthVault, I wouldn’t have had to make the call – I would have just been able to look it up. Furthermore, I would have preferred to have gotten her discharge information automatically transferred to HealthVault. We were given paper copies. This should be easier.

So, what’s the moral of this story?

· We can’t lose sight of innovation and there’s a risk that could happen if the government were to become the primary funder of health.

· Technology is a means to an end, but we have a long way to go to figure out how to use it smartly.

· We can’t lose sight of how important the personal aspect of healthcare is. The emotional support and human caring delivered by the care team was the critical component of our overall satisfaction.

This experience reinforced for me that a ‘healthy’ health ecosystem requires consumer choice -- it is a critical component to the effective functioning of markets and innovation. We made the decision to ‘save time/hassle’ vs. saving dollars as we do in other aspects of our lives. This really drove home for me that the debate about ‘rising health care costs’ doesn’t really account for improved patient outcomes in terms of fewer lost days of work/productive living. I am all for comparative effectiveness of various options and knowing what things cost, but it needs to include patient values -- like less pain and getting back to normal faster -- or it may lead to bad unintended consequences. I am more concerned than ever that increased government financing of health will ultimately lead to fewer consumer choices and will stifle future innovation with tangible economic benefits.

I haven’t received the multiple confusing bills and outrageous line items of detail from the hospital stay yet. Nonetheless, when it comes to getting a quality outcome from an advanced surgical procedure, I prefer the current U.S. health system with all its flaws to the alternative future of less consumer choice and innovation.

Empowering Consumers

pnblog — Sat, 26 Sep 2009 20:48:00 GMT

So this week’s question from the Washington Post RX Blog was:

In the Baucus bill, insurers would pay a tax on the value above $8,000 for an individual policy and $21,000 for a family plan. What do you think of Sen. Baucus' proposal to impose a 35 percent tax on "Cadillac" health insurance plans?

My response is below.

We should have faith in consumers to make the right choices for their health -- only then will we reduce costs, expand coverage and drive value.

The motivation driving this tax is that health insurance plans (Cadillac or not) are another form of compensation -- something your employer provides for you with pre-tax dollars versus your paying yourself with after-tax dollars. The employer's ability to use pre-tax dollars creates a misalignment. Rather than tax a small percent of plans, it would seem better to correct the core problem. Until consumers are educated and empowered about how their health-care dollars -- both pre-tax and post-tax -- are spent, real reform won't happen.

One of the big snags in reform conversations is the idea that employment and health insurance are inextricably linked. Health insurance should be portable so that it can be taken from one job to the next and will cover you when you're temporarily unemployed. Labor mobility is one of the underlying strengths of the U.S. economic system, and health benefits connected to employment unnecessarily weakens labor mobility.

Moreover, the concept of health insurance should be more focused on 'major medical' needs like other insurance where you pay into a system to prepare for a catastrophe. But the norm of the current system is first dollar coverage which pays for every routine procedure. The fact that employers can use pre-tax dollars and ostensibly provide greater benefits for each dollar spent has led to this situation. This has driven up total health costs through misaligned incentives, extra administrative costs and limited provider innovation (e.g. packaging of services to meet routine needs). If there were a consumer-driven market, consumers would understand how their dollars are spent and there would be a more innovative insurance market.

The Wyden-Bennett Act provides this foundation. Consumers would receive cash from their employers equivalent to what the employer spends on health insurance. They'd have the option to buy the insurance they considered most appropriate, based upon need and determined by behaviors, through a health insurance exchange, which would be regulated by the government and encourage insurers to compete for their business.

Consumers make health choices every day, so why shouldn't they decide the coverage they need and the amount they will pay for it? People don't need the government to help them pick their car insurance.

Let's give people the right information to make the right decisions.

In the Health Reform Recipe, the Missing Ingredient Is the Consumer

pnblog — Wed, 16 Sep 2009 01:28:00 GMT

So this week’s question from the Washington Post RX Blog was:

What's Your Take On Obama's Speech? What did you think of President Barack Obama's Sept. 9 speech to a joint session of Congress? Was it effective? Did it "move the needle?"

My response is below.

I applaud the administration for shining a bright light on health reform. The government -- as buyer, regulator and leader -- must be a part of any solution. The political calculus has created a real sense of urgency to do something about this complex system which touches everyone and accounts for one sixth of our economy. The consequence however, through a lack of transparency and understanding, has reduced the public dialogue to be between "public insurance options" vs. "death panels." Framing the debate this way and consuming available public attention on "wedge" issues won't lead to a sustainable future system.

My attendance at an Institute of Medicine workshop this week in the midst of the buzz about the speech served as a stark reminder about the depth and breadth of the hard problems:

• Access (too many uninsured)
• Costs (growing faster than inflation)
• Demographics (aging populations driving up systemic costs)
• Quality (not enough -- as measured by comparative outcomes, disparity in care geographically)
• Worsening health (people dying because of a lack of focus on improving the care delivery process).

I was struck by the number of smart, passionate people representing the major stakeholders working together to drive change. Veterans of the process recognize that change is imperative but hard -- because the details matter. We are in this predicament because incentives, tax policies, government reimbursement schemes and increasing specialization and capability of medicine have led us here.

The president delivered an inspirational speech, laying out basic principles: everyone should have access, nobody with insurance will have to change it and cost growth must be slowed. Voters know there is no free lunch, and health is no different.

We can't achieve reform without educating the public. A sustainable system is not as simple as providing more access. Consumers are ultimately responsible for their health and their daily choices cost the system. We need to help them engage in their health differently, be wiser purchasers, and understand trade-offs. As long as they believe the price of care is their co-pay and continue to engage as they have, there won't be sustainable reform.

There are best practices at organizations like Geisinger that have re-invented care delivery and consumer engagement models. These leaders will tell you that success is about aligning incentives, understanding the details and making trade-offs.

The difficult work of figuring out the details and making hard choices is still ahead.

Three Simple Truths

pnblog — Wed, 26 Aug 2009 22:20:00 GMT

So this week’s question from the Washington Post RX Blog was:

Recent polls show declining support for President Obama's handling of the health-care issue. What should he do to get the effort back on track?

My response is below.

Today's debate is mired in details about the wrong topics, chiefly public insurance options and the best government bureaucracy to determine what gets reimbursed. To drive the unprecedented reform vital to our country's future, we must up-level the conversation and focus on real reform: analyzing the system holistically and figuring out how health care can be delivered in better ways to improve outcomes and value. The challenge is how to leverage market-based solutions while dealing with the unique properties of health, such as the moral imperative to provide for the under-privileged.

Much of the justification driving reform has been economic, yet the debate has been politically focused, obfuscating the economic issues rather than illuminating them. The result? A missed opportunity to educate citizens on the fundamental issues and frame a public conversation about the choices that will bring change.

To refocus, we should acknowledge three simple truths:

Healthcare isn't free. A recent Los Angeles Times editorial highlights a clinic offering free health care that turned people away because too many showed up. The editorial suggests mandating charity care by doctors as part of the solution. Unlimited health care will be paid for by all tax payers either directly or indirectly. Free goods are always over-used as evidenced by the classic example of The Tragedy of the Commons.
Reform and innovation are inseparable. The history of industry transformation has shown us that change and ultimately better value aren't possible without innovation. We need Congress to change today's rules to enable health service delivery innovation, allowing new entrants, solutions, business models and types of care delivery.
Change is a function of our willingness to change. As consumers, we have to be more accountable for and sensitive to the care we're using. Providers and insurers have to engage with consumers differently and offer new products/services that focus on outcomes and offer real value. The system that governs has to provide the right incentives to drive the right behaviors.

There are pointers in the right direction -- the Healthy Americans Act provides solid thinking about improving outcomes by focusing on prevention, wellness and disease management, and tying accountability and incentives appropriately. In the words of Sen. Ron Wyden (D-Ore.) -- "passing a reform bill that doesn't really reform the health care system is just about as wrong as not passing any bill at all."

Individuals and Personal Responsibility May Be the Tipping Point in Health Reform

pnblog — Thu, 13 Aug 2009 05:16:00 GMT

The latest turn in the healthcare debate is the increasingly sensational coverage of town halls happening across the country. While they’re described as rancorous and sometimes violent, I’m pleased to see my fellow Americans so passionate and involved in one of our country’s biggest long-term challenges. For most of us, we think of health care personally -- it’s about my relationship with my doctor or my insurance company -- versus considering the system as a whole.

But this dynamic seems to be changing. There are a number of forces -- the media and current political agenda, technology trends, the economy -- converging on Main Street that are pushing people to get educated and more engaged in Congress’ proposed changes than they ever have before. Our sensational media machine is in full swing highlighting healthcare across every communications vehicle available 24/7. Technology’s influence over other industries has created consumer expectations for more convenience and value from healthcare. And the downturn in the economy has forced many to face the stark realities of healthcare tied to employment. So perhaps out of all this turmoil will come something good -- people coming together around the cause of improving the healthcare for today and tomorrow.

What many fail to understand is that the personal connection people have with their own healthcare is the very core we need address in order to make some of the greatest changes to the system. People make choices every day that impact their health – and the system as a whole. The diabetic who decides to not follow the course of action prescribed by his doctor costs the system. This is evidenced by two studies I read this week. The first is from the CDC, which states something we all know – that by losing weight, not smoking, getting exercise and sticking to a good diet, we will dramatically lower the risk of chronic diseases, such as diabetes and heart disease. Imagine the impact we could have on the system given that 70% of current costs stem from six chronic disease states.

The second from PricewaterhouseCoopers highlights some stark realities:

About half of surveyed individuals indicate their current lifestyle was less than healthy
90 percent said they would become active in improving their health if they were diagnosed with a chronic illness, which is obviously too late
Disease management programs are rarely used -- employers report than less than 15 percent of eligible patients participate in the programs
25 percent of surveyed individuals are not more involved in their healthcare because they don't know where to go for good information
15 percent aren't more involved because they aren't interested
25 percent of people in poor health are not involved in their healthcare and treatment choices

The juxtaposition of these two studies really brings to light for me how much our reform efforts need to focus on our citizens -- educating them and involving them in the health system in very different ways than they have been in the past. For the health system to work for all, economic incentives and costs need to be aligned with consumer behaviors and choices. We can’t continue to support the diabetic’s decision to make poor choices and drain the system for all of us. There have to be some consequences for actions. If something’s free, I think we all know that there is a strong possibility that people will not appreciate its value. We can look to many examples of this over time.

While we can argue that patients absolutely need to step up and do more for themselves (and their children), we also have to acknowledge that our system hasn’t been designed to support them. We have a provider-centric system, not a patient-centric one. Today, the average time a physician spends with a patient is 18.7 minutes. There isn’t a lot of room in 18.7 minutes for much “education.” In Maggie Mahar’s new documentary, one physician describes how he’d love to spend time with the diabetic educating him on how he needs to get involved, but he gets paid more to do procedures.

“We are paid to do things to patients,” said one doctor. “We are not paid to talk to them.”

In addition to patients needing to take more responsibility for their own health, our government needs to set up (or get out of the way) a new framework that will enable "healthy" markets to develop new value chains to deliver services like education, motivation, etc. at lower costs than high-cost professionals. We need highly educated physicians focused on the right things -- like diagnoses, solving major health crises, etc. If we look at chronic care today, much of it is about helping patients stick to a particular course of action prescribed their physician. But today’s chronic care "business model" is based on physician and hospital care -- acute care. A totally different type of "business model" or offering is required to keep people well. We’ve already seen innovation like this in other health related-areas like veterinary medicine, dentistry, and cosmetic surgery where consumers have taken more control of their on-going care.

The decisions we make today will impact generations to come -- financially, socially, and medically. We have an opportunity to come together, influence our elected officials and shift the debate in Washington to drive real change.

Lessons from Medicare and Medicaid

pnblog — Fri, 07 Aug 2009 07:34:00 GMT

So this week’s question from the Washington Post RX Blog was:

Do you think that a government-sponsored health insurance option is needed to help control rising costs and "keep insurers honest," as President Obama says?

My response is now live: Lessons from Medicare and Medicaid.

My main points:

· How will another government-managed option be better at building a health system that works for the 21st Century than the one we already have (Medicare and Medicaid)?

· While these programs began with admiral goals and are politically popular, in reality, over the past 40 years, they have done little to control costs or drive innovation.

· What's needed is a new framework to drive innovation, better value, improved outcomes and increased access.

Please feel free to comment with your own thoughts on the public option.