Neupert On Health : health delivery

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.

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.

Health Care Needs New Rules to Enable Innovation and Reward Experimentation

pnblog — Wed, 29 Jul 2009 03:00:00 GMT

(cross-posted on Microsoft on the Issues)

Technology is playing a major role in helping bring healthcare into the 21^st century. Many of us have seen it first hand in treatment from our doctors, from MRI scans to laser surgery.

But these clinical advancements represent only a small piece of what technology can do to transform health care. The power of technology lies in the potential to transform the rest of the health care system, enabling new ways of working and communicating, new economics and new business models. As consumers, we’ve experienced how technology impacts nearly every other area of our lives -- how we manage our financials, travel, communicate, shop and so on -- with more self-service, more control, more convenience and ultimately better value for what we spend.

Similar business innovation and consumer engagement has been slow to reach health care, where many physicians still opt for a pen-and-paper over a computer to maintain patient histories and chronicle treatments. Patients continue to navigate frustrating and hard-to-understand medical and insurance organizations, physicians don’t always talk to one another about care and medical errors, waste and duplication drain the system of resources.

Today, we are finally seeing the first signs of systemic change in health care. This change was clearly highlighted with the President’s recent visit to the Cleveland Clinic, which has leveraged technology to improve efficiency and health outcomes and give patients an active role in their health decisions. But the Cleveland Clinic is just one example. There are other health care institutions -- the Marshfield Clinic, Kaiser Permanente, the Mayo Clinic -- whose leaders have embraced technology to improve efficiency and quality while reducing costs. And newer players are showcasing the possibilities brought by innovation, including virtual care from American Well and new delivery channels like Minute Clinic.

But we haven’t yet seen widespread change. The rules governing health care simply haven't allowed this to happen. Congress created rules that have in fact stifled innovation (e.g. Medicare) by reinforcing volume over value -- reimbursing on a per-procedure basis rather than on the number of patients who remain healthy year over year. Now Congress needs to look to the organizations that have used technology to create a new health care reality -- such as the Cleveland Clinic -- and develop a new framework that drives value, rewards experimentation and enables innovation. Only then will we realize the policy goals of increasing access to health care while maintaining fiscal responsibility.

Reform efforts should focus on enabling the kind of transformation that Clay Christenson describes in his book "The Innovator's Prescription". He describes how almost every other industry has been transformed -- complex, expensive products and services once only affordable to the wealthy have become accessible to the "masses" and provided by those with far less training.

As I described in my post this week on the Washington Post’s Health Care Rx blog, real change requires:

Figuring out what works (and what doesn't)
Enabling supply-side innovation
Letting consumers do some of the work that expensive health-care professionals shouldn't be doing anymore

With our ailing economy and worsening health, it’s imperative Congress act quickly and tear down the barriers that exist to enabling innovation.

A New Place for Health Care Policy Debate

pnblog — Wed, 22 Jul 2009 20:34:00 GMT

About a month or so ago, the Washington Post launched their new Health Care Rx blog, and I was asked to participate as a panelist. Every Monday, questions are sent out, and a variety of “experts” from across the health care industry respond. It provides a great snapshot of the many different perspectives that exist.

This week’s question:

The Blue Dog Coalition worries the health bill in the House does not address fundamental cost drivers in the system. Is it possible to rein in costs in the current system? How?

My response is now live: It's Not About Costs, It's About Enabling Transformation

My main points -- real change requires:

Figuring out what works (and what doesn't)
Enabling supply-side innovation
Letting consumers do some of the work that expensive health-care professionals shouldn't be doing anymore

To read the full post, click here. Please feel free to comment with your own thoughts on how to rein in costs in the current health care system.

And you can see my responses to previous questions:

Who Pays for Whose Heath Care? [Posted July 14]

The political debate is often framed around covering the uninsured. At the heart of this is the supposition that health care is a moral obligation -- that everyone has a "right" to it. But it's difficult to separate the moral from the economic because there is no other "liberty" that requires payment.

Defusing the Health Care Bomb [Posted June 16]

The "big red wire" that needs to be clipped first is the fee-for-service payment system driven by the government today through Medicare reimbursement decisions. Until that's addressed, the ticking bomb won't be stopped.

Diagnosing and Treating the Health Non-System [Posted June 7]

We do not currently have a health system at all: it is a health non-system.

If you want to follow the conversation, you can add the Health Care Rx blog to your RSS reader here: http://views.washingtonpost.com/healthcarerx/atom.xml, and I will be posting summaries of my responses on this blog.

The willingness to succeed is only exceeded by the willingness to prepare

pnblog — Fri, 19 Jun 2009 06:24:00 GMT

After many long months of discussion and debate, the first draft of Meaningful Use has come out. I’m optimistic about what I see -- what’s been laid out seems to focus on driving real outcomes improvement in the health care system.

It’s important that we keep this in mind -- that we’re not just trying to implement technology. We’re trying to improve the performance of the health system. And our willingness to succeed should only be exceeded by our willingness to prepare, and as part of that preparation, we must ensure that flexibility, scalability, and interoperability are inherent traits in the system. Why? Because, health is fundamentally data-driven. Nobody -- physicians, consumers, hospitals, insurance companies, governments -- can make good decisions without good data.

So driving data liquidity -- that is the ability for data to flow throughout the system -- has to be the critical focus. For years, we’ve been building systems in a “top-down” way to reach information, but what we need to do is build from the information up. One thing Carol Diamond said at a Health Affairs event that I attended with her really struck me -- the idea of bringing the question to the data -- leaving the data where it is and bringing the question/problem/issue to it. For a long time, what we did as an industry was use expensive research grants and complex tools to cull and compile data that was intended to answer one specific question, and by the time we’d sorted through the data enough to answer that question, it was either out of date or ten other, more pressing questions had popped up in the meantime. What we need is a system that unlocks all of the data that exists already in the health care sphere, and allows it to flow between silos so that when questions arise, we can bring those questions to the data for quick, evidence based answers -- rather than the other way around.

Given this, as discussions/refinements continue around meaningful use, I believe it’s critical for the following to be a part of the final definition:

· We can’t just capture data, it must be available in “real-time” in order make the right decisions and improve outcomes -- whether we’re talking about patients or populations.

· We have to enable data to become liquid -- specifically, doing this by separating data from applications. This is one of the recommendations from a study by the National Research Council of the National Academies that takes a look at what types of computational technology and investments are best for improving health outcomes. Let the excuse not be that the data is trapped in systems that we built, that we have to wait for standards.

· We’ve got to give consumers access to their data -- not just in static form -- but empower them with an electronic copy so they can easily share it, use it, add to it–creating a lifelong health data asset.

· We should accelerate the objective of having PHR access to EHR data to the 2011 Objectives and Measures. There is no need to wait until 2015. These technologies are available today and will bring real, sustainable benefits, not just for consumers, but for the overall health care system.

· We must ensure that we do not have an overly-prescriptive certification regime that focuses on certifying features and functions every-other-year. This will produce the unintended consequence of stifling innovation. Software vendors will be forced to develop towards a certified feature list rather than look for new and better ways to improve clinical processes and health outcomes,

The foundation of success is based upon data liquidity, and so it must be central to our thinking as we prepare for the future.

And the debate rages on…about access…

pnblog — Wed, 10 Jun 2009 05:01:00 GMT

I think we’d all agree that the healthcare debate continues to intensify. Many say it has entered a new stage as conversations move to proposals -- with Senate Democrats recommending a bill that will amplify the debate even more -- to decide if the US will adopt universal coverage.

Access seems to have replaced change as the word of the day. Everyone seems to be focused on it -- including Peter Orszag and Virginia Postrel. There’s no doubt that access is important -- but addressing access prior to reengineering the system is like adding passengers to a sinking ship. And in this case, the ship is going down in a sea of red -- the growing debt that will be incurred.

What we really need to do is what I highlighted in my contribution to the Washington Post’s new Daily Dose Panel Blog, Diagnosing and Treating the Health Non-System.

It’s not just about access. There are multiple symptoms and ailments that interact with one another. The three principal "diseases" are:

· Access (too many uninsured people)

· Value (too much spending for the health results delivered)

· Ignorance (at every level - who really pays for health, misaligned incentives, true costs, quality measures, transparency and more)

The most important to fix is value -- how do we improve health outcomes for the same or lower economic cost? Why is this most important? Everyone acknowledges that health spending is already in an economic crisis -- both in the near term and certainly in the long term (Medicare's unfunded liability exceeds $36 trillion!). Even if everyone in the country woke up tomorrow morning with health insurance coverage, it still would not address the hard economic truth -- we must get more value, as measured by better health outcomes, for every dollar we spend on health. The recent article in the New Yorker illustrates this particularly well.

The whole operating framework surrounding the health delivery system requires re-engineering to realize value. We need a system that supports and rewards innovation in health around new drugs, new devices or new procedures. Today, this innovation happens on a small scale, at times producing great results. But what we need is broad-scale innovation around health delivery for chronic disease management (which accounts for 70% or more of total spending) as well as prevention and wellness.

The reason this innovation and re-engineering isn't happening right now in the delivery of health services is because of the inflexibility in the payment system and misaligned incentives -- largely the result of Medicare rules and regulations driven by Congress today.

Each of us pays for health care (taxes, lower incomes, cash) whether we realize it or not, but as consumers, we’re rarely informed and engaged with our own health. We can’t get the basic data we need to make the right daily decisions.

I believe that Congress must focus on building an operating framework of rules and regulations that aligns physician and hospital payment with health outcomes and encourages innovation on how best to deliver it. This is evidenced by an amazing statistic I read this week. In June 2008, the Congressional Budget Office estimated that up to one-third of 2006 spending – roughly $700 billon or nearly 5% of our GDP – did not improve health outcomes. And we want to add more people into this system?

Navigating through the noise to find the signal

pnblog — Wed, 13 May 2009 06:04:00 GMT

I don't know about you -- but trying to keep track of and make sense of the company announcements, the many awareness events designed by politicians and the folks hoping to influence the policy makers, the work being done by folks at HHS and the Hill to create new rules and policies and the press and punditry all commenting on all these activities -- makes my head feel like it is going to explode!

Just look at the past two weeks. IBM said they were going to finance $2B of HIT spend to enable health systems to bridge the 'donut hole' in the stimulus package, complementing their earlier announcements this year of health ‘innovations’ through their partnership with Google and Continua. GE followed with an announcement of $6B of investment, financing and 'innovations' that will lead to even more billions of savings in the U.S. health sector...and they will help underserved health markets globally at the same time! At a White House event this past Monday, a group of health industry stakeholders promised trillions in future savings by restraining price increases and 'doing better’. And Tuesday, there was another White House event on health -- featuring the role of employers. Cecily Hall, a colleague of mine at Microsoft, attended and explained some of Microsoft's innovative health benefits around clinically driven weight loss and mobile medicine. I don't know how many billions of savings this event will lead to -- since I'm still on yet another plane, but given I have a 'healthy imagination' -- I am confident the projected savings will be significant.

The choices we make about the future of our health system matter a lot for the future welfare of our country -- so I hope we have an informed and fact based debate that goes beyond the sound bite outline that seems to be shaping up in both the media and the political arena. Health touches everyone. We have all been to the doctor and had our own or extended family based experiences, and so we all have our opinions about what works and what is broken in our healthcare system. Consequently there is a lot of 'noise' about both the challenges and the ways to fix the healthcare system -- some that ignore basic laws of economics.

For whatever reason -- a generation of employer sponsored health insurance, government programs, no checkout lines in the doctor’s office – has caused people to make a fundamental mistake, to think of health care as something 'unique' and to suspend the principles of economics when they conceptualize and think about the problem. The price of healthcare is not your co-pay...no matter what the public perception is. Providing universal insurance and covering everyone will not fix the health system by itself...and in fact may exacerbate critical flaws that exist. No matter HOW it is funded (cash at checkout, employer payroll costs or taxes); individuals are paying for their health care...just like they are paying for their retirement income or car insurance. There is no economic free lunch here -- that a government run, single payer system or other construct makes it either free or creates 'more healthcare' for folks to consume. It doesn't. Yes, the societal question of income re-distribution remains (namely am I paying for my health care AND your health care or just mine). But we should not confuse how to organize a sixth of our economy around income re-distribution goals...think of how clear, fair and effective our income tax system is.

Educating the public around the principles that health is an economic good and that individuals are indeed paying for their own health care, albeit in hidden ways, would go a long way to improving the probabilities for a more efficient, intelligent health system coming out of the reform debate.

If we acknowledge that health, that is the delivery of health care services and the prevention of illness, are economic activities -- then we can ask the question about what is the best way to organize that economic activity to create value -- value for producers (doctors, hospitals), value for consumers (patients, employers, payers), and value for society (more quality life years). It is not a zero sum game. In most of our economy, we expect market mechanisms -- things like prices, product or service innovations, or profits -- to allocate resources, improve productivity, lower costs and improve quality over time. In health, many of these important factors are constrained or hidden given the structure of the payment system and the role of the government in setting the rules of the game.

In applying the principles of economics to the health reform debate, it is important to be consistent and not selective. There are many stakeholders in the dialog who believe that the problems are the result of for-profit companies (insurance, pharma) and that non-profits and government are a priori better (better use of resources and results). This perspective is simply wrong and not supportable with an analysis of the facts. Participants are optimizing given the rules/framework they understand -- and here the government is setting the rules (taxes, reimbursement, CMS) and must take accountability for the consequences -- intended and unintended just like in the housing boom and financial crisis. One of the really hard challenges in health is measuring the right outcomes/results. Does pay for performance mean the physician ‘checked all the boxes’ for documentation or that we got more health for a given set of inputs? In the end, not-for-profits are economic actors too -- no margin, no mission -- they have to pay market prices for inputs and charge market/regulated prices for outputs. They raise money in the capital markets (debt) and mostly try to optimize like for-profit enterprises.

Today's health system in the U.S. is a regulated system....and it many ways it doesn't work so well...but perhaps better than our 'facts' acknowledge. Everyone acknowledges that we need to get more 'value' out of the resources we have put into providing health care. Everyone acknowledges that there is no 'silver bullet' or no easy fix to the multiple challenges that exist in delivering and paying for health. Nearly everyone acknowledges that 'cash based' segments of the health system (cosmetic surgery, corrective eye surgery, dentistry, veterinary) have done a better job innovating and delivering better quality and lower costs than the more heavily regulated segments of the system. Unlike other industries -- a lot of the challenge in health is we don't know enough -- about disease, about what treatments really work, about what to do when -- and so on. Consequently, we need a system and framework that allows and incents systematic learning and improvement, discovery of new diagnostics and therapeutics and the best systems to deliver them.

So let's have a real conversation about how to build a framework for a health system that works.

History Doesn’t Have to Repeat Itself

pnblog — Fri, 01 May 2009 23:17:00 GMT

(cross-posted on Microsoft on the Issues)

My family and I just got back from a vacation in Mexico, so the news that’s on everyone’s mind—the spread of H1N1 Influenza A—is weighing even more heavily on me. With the media hype machine driving minute by minute coverage, it’s hard not to think about devastating epidemics and pandemics of the past—typhoid fever, smallpox, bubonic plague, cholera, Spanish Flu, typhus, tuberculosis, malaria, HIV/AIDs—illnesses that spread uncontrollably and killed millions.

While we should be concerned, we should also remember just how far we’ve come in facing these challenges. Today, the Internet, blogs, instant messaging, and other technologies can disseminate information about new threats and new medical knowledge faster than ever before. Technology gives us the opportunity to face these crises better than we have in the past.

Yet we still have a long way to go. The identification of threats and the transmission of basic information remains a fundamental challenge. News of the recent outbreak broke on April 24^th—18 days after public health officials started investigating unusual cases of respiratory illness in Mexico. Eighteen days doesn’t sound like a long time, but in the world of infectious diseases, it can be the different between life and death. According to The Rapid Syndrome Validation Project, a delay of even one day in detecting certain diseases like smallpox could mean the "…difference between the loss and salvage of as much as 90 percent of an exposed population.” I think we all can agree that we can do better than 18 days.

And now as the disease progresses, do we have the right information platforms in place to enable front line workers and public health folks to gather, transmit, analyze data, and ultimately act? We have a highly fragmented health system in the US, and it is much more complex when you look globally, where we have language barriers and in many regions, no infrastructure in place. Since SARS and the anthrax attacks, there have been a lot of pilot projects and investment in infrastructure – but perhaps not yet enough. More importantly, I believe that a “separate” infrastructure for public health (or the buzz word ‘bio-surveillance’) isn’t the best approach because systems that aren’t used every day are never up to date. Just look at the challenges and barriers to the CDC’s BioSense National Program—a program with admirable goals, but limited results in terms of hospitals actually reporting data. A better approach is to have flexible enterprise data systems that allow for the re-use and re-purposing of data quickly and easily, because these are the types of systems that enable us to prepare and respond to these by definition unknowable future issues.

I do what I do because I believe that technology, if employed correctly, can be a transformative force. It can act as a key enabler to improve surveillance, diagnosis, treatment monitoring and prevention. The people on the front lines managing this crisis are doing an incredible job, under intense pressure. I have to say how impressed I am with the professionalism and commitment of these public health officials—internationally and in the US. I’m proud of the work that Microsoft is doing to support them –working closely with local and international authorities to provide technologies and products to support the effort to combat this threat. One example is the work the Internet Explorer team has done to enable people to put Centers for Disease Control health tips and news updates at the top of their browsers through a new swine flu “Web slice” for Internet Explorer 8, now available at www.ieaddons.com.

We have great people. Great technology exists from Microsoft and many other companies. The threats aren’t going away. Time to build a platform to ‘really’ deal with them.

Before you finalize your Health IT shopping list

pnblog — Mon, 12 Jan 2009 17:23:18 GMT

The mad dash for health reform continues in earnest as stakeholders from all parts of the health ecosystem work to inform, engage and encourage the incoming Administration. The need for reform is obvious and the dialog is positive -- I continue to worry that 'soundbite solutions' will get in the way of a serious discussion of principles, desired outcomes and alternatives to achieve a good return on investment on 'change.'

As a business guy -- one that has worked on startup initiatives over most of my life -- I tried to put into context what it means to invest an 'incremental $50B' in health IT. It sounds like a lot of money -- something on the order of $83k per practicing physician -- we ought to be able to do something spectacular for that kind of money.

There is a new study out by the National Research Council of the National Academies that takes a look at what types of computational technology and investments are best for improving health outcomes. I recommend folks read it (full disclosure I was both interviewed and a reviewer). Many folks I talk with in the computer science industry recognize the huge benefits that will be gained in medicine and health outcomes with thoughtful investments in information technology. Many (myself included) are technology optimists and believe that information technology will ultimately disrupt and transform health delivery.

But to achieve this transformation -- we have to acknowledge the reality of the institutions and systems currently in place; we have to invest in the new kinds of architectures and IT systems that will deliver real value over time. This report is bi-partisan and a timely reminder of key principles by experts -- one that I hope informs the health reform spending debate before folks finish their HIT shopping list and count too much on electronic health records as a simplistic cure-all.

The study acknowledges the need for comprehensive patient data, empowerment of consumers/families with personal health information and for flexibility in systems design to enable new advances in biology to be integrated effectively -- among many other principles.

Here are a few of the topline recommendations (pages S-9 and S-10) from the report I chose to highlight because they are so important and often get lost in the 'soundbite solutions' debate:

incentivize clinical performance gains rather than the acquisition of IT, per se
encourage initiatives to empower iterative process improvement and small-scale optimization
develop the necessary data infrastructure for health care improvement by aggregating data regarding people, processes, and outcomes from all sources.
insists that vendors supply IT that permits the separation of data from applications and facilitates data transfers to and from other non-vendor applications in sharable and generally useful formats

If the country is going to invest $50B in incremental health IT -- we all want it to be invested wisely. The question is; what will generate the most benefit and how can we accomplish it? We should be building an asset with this investment - and the asset is not an application per se -- but a health data asset that can be used to improve both individual outcomes and the performance of the institutions and the system overall. Individuals should be encouraged to create and manage their health data asset and to learn how to share it to achieve better outcomes and interactions with the health delivery system. Similarly - health enterprises should invest in building and sharing health data assets that enable them to have a culture of process improvement over time.

Diverse real world problems

pnblog — Mon, 11 Aug 2008 08:00:08 GMT

Last week, we hosted around 20 physicians from one of our Amalga early adopters for a two day, two-way conversation around what the most important challenges in health delivery are and how software can help address them. It was a very instructive conversation -- from which I learned a lot and met some talented, accomplished and interesting individuals.

Part of our objective was to imagine a future where software technology enabled new types of workflows and an extended delivery network beyond the hospital. There was a lot of energy and discussion about the shape of such a future (increase the focus on prevention - inside the hospital and as a core to the delivery network goals). As the discussion went on there was spirited debate about where to start, how to measure and how to pick goals that would really be transformational.

I am not prepared to go into the details of the conversation here -- but there were a few non-proprietary insights for me -- that are worth sharing:

First -- I have a much deeper understanding of the diversity of perspective, understanding and challenges -- of the various specialities and practice groups within a large delivery system. Given this beginning point -- and other factors such as physician model -- I appreciate the need for (and challenge) of leadership to enable change to really happen.

Next the dynamics of an "enterprise" health system seems more like a conglomerate than a traditional product focused enterprise -- even though they are serving a common customer and market. This makes goal setting, prioritization of metrics for performance and resource allocation much harder -- if you want to drive to a common vision.

We started the session listening to Dr. David Pryor from Ascension Health. Pryor described how Ascension set themselves an audacious 5 year goal (zero preventable medical errors) and then went about a series of process improvements to get there. It was fascinating to listen to him describe the steps, the challenges, what worked and most impressively the results they achieved in a relatively short timeframe in multiple different institutions. It truly is a remarkable story -- and given the organizational comments above -- even more impressive. It is great that he was willing to share their best practices openly.

All health delivery organizations face big challenges on multiple fronts. Everyone knows, that quality (outcomes) needs to improve and would reap large economic and social benefits. And clearly -- as Ascension has demonstrated - real progress is possible. In a truly competitive sector -- like banking -- the advancements of the certain organizations would ripple reasonably quickly through the sector (improve or lose share). This dynamic doesn't appear to be at work in the health sector. So it is going to be up to the leaders of our health delivery institutions -- to set audacious goals and drive to achieve them.