Wednesday, May 6, 2015

In Memoriam FFS

On April 16, 2015, President Obama signed into law H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), effectively sentencing Fee for Service (FFS) to death. The best explanation for how FFS is destroying the nation comes from Charles Munger, vice-chairman of Berkshire Hathaway and ad-hoc health luminary, who is equating what American doctors do, to raising rattlesnakes so they can collect the bounty for dead rattlers offered by the government in an effort to combat a growing snake problem. Based on this, and other equally compelling insights, FFS was found responsible for willful destruction of our great nation.

A few months before Congress delivered its coup de grâce to the FFS system, the Secretary of Health and Human Services, explained to the elite group of NEJM paying customers, how “30% of Medicare payments should be tied to quality or value through alternative payment models by 2016 (50% by 2018)”. Other than transforming traditional Medicare into a vintage 1990s HMO, the Secretary intends to make sure that “the same new alternative payment models and payment reforms are broadly adopted by a critical mass of payers”, effectively transitioning the entire country into managed care. Just like that.

By faith, and faith alone, embrace, believing where we cannot prove

The first MACRA option for physicians to get their little Medicare bonuses is to participate in an alternative payment model (APM), where doctors behave like miniature insurance companies, and provide care based on sound actuarial principles. Somewhere, somehow, someone figured out that fragmenting insurance pools into tiny groups of insureds provides better “value to consumers” than having large and diverse insurance pools. The same architects of health care improvement, decided that having each accountable care organization (ACO) purchase, implement and manage separate instances of  hugely sophisticated and very expensive actuarial (a.k.a. analytics or population management) software is another great way to add “value to consumers”. 

The latest word about APM results comes from a research study sponsored by the American Medical Association, conducted by the RAND Corporation and published prior to the passage of the FFS killing legislation. To make a long and fascinating story short, and I highly recommend that you read this report, here are the key findings:
  • APMs did not substantially change how physicians delivered face-to-face patient care
  • APMs increased the overall quantity and intensity of physician work because of growing patient volume expectations and ongoing pressure for physicians to practice at the “top of license”
  • Physicians in practice leadership positions were optimistic and enthusiastic about APMs
  • Physicians not in leadership positions expressed apprehension with APMs (and resignation), because of additional burdens they did not believe would improve patient care
  • APMs caused practices to merge, become affiliated with or become owned by hospitals, to enable capital investments in computers and data infrastructure, to better negotiate with health plans and to mitigate fear
  • APMs had negligible effects on the aggregate income of individual physicians, since financial incentives were not passed through to physicians
  • The greatest financial incentive facing nearly all physicians in APMs  was to increase “productivity” as measured by revenues or relative value units (RVUs)
In summary, it seems that APMs are well positioned to change absolutely nothing, with the possible exceptions of increased prices for medical services due to consolidation and the massive burnout of doctors, while providing a steady source of government and health plan “incentives” to pay for more computers and more administrators.

A brand new study of 32 Pioneer ACOs, published this month in NEJM, calculates that on average the ACOs generated 1.2% savings, approximately $120 per member per year, in 2012, with no substantial changes to “quality” as measured by mammography screenings and lab testing frequency. Another, even newer study of the same 32 Pioneer ACOs, paid for by CMS and published in JAMA, found that the same 32 Pioneer ACOs generated approximately $427 per member per year savings, in 2012, with slight improvements in patients perception of their experience. The JAMA study looked at 2013 as well, and found a sharp drop in savings to just $135 per member per year.

Both studies acknowledge two glaring limitations. First, Pioneer ACOs were handpicked by CMS to be those organizations most likely to be successful from the get go. Second, these savings, or rather differentials in growth of expenditures, do not account for costs to set up and run an ACO. The more flattering JAMA study estimates $385 million in savings over the two years period for 32 Pioneer ACOs. This translates into an average $6 million savings per ACO per year. A separate report from the National Association of ACOs, estimates ACO costs in year one, ranging from $300,000 for a small ACO up to $6,700,000 for larger ones. The Pioneer ACOs in the JAMA study were rather large, with over 20,000 lives per ACO on average. Note that these costs do not include the costs to Medicare to run and administer the ACO programs. Put it all together, and this is starting to look more like robbing patients and doctors to pay for, you guessed it, more computers and more administrators.

The second option to get your MACRA incentives is the Merit-Based Incentive Payment System (MIPS). The structure of the MIPS is a monumental tour de force in micro management, petty vindictiveness and accounting, that combines all current Medicare initiatives (i.e. PQRS, value-based payment modifiers, meaningful use, and practice improvements) into one monster program designed to push all doctors into risk assuming APMs. If you are a glutton for punishment, you can read the English language translation, provided by the Ways and Means Committee. The only certainty here is that implementing this temporary payment scheme is going to cost taxpayers, directly and mostly indirectly, more than the amount of incentives slated for payment to physicians, with practically all additional expenditures to flow, yet again, to more computers and more administrators.

But FFS will rise, on stepping-stones of its dead self, to higher things

Whereas paying doctors a fixed fee for each service is considered an unholy abomination, paying Walgreens, Walmart, CVS, Teladoc, American Well, and the like, a fixed fee for each service is considered a Culture of Health. In a new and groundbreaking report sponsored and published by the esteemed Robert Wood Johnson Foundation (RWJF), a bunch of business consultants are making recommendations to the big box retail clinics industry on how to enhance their value proposition and “become a much more powerful enabler of a Culture of Health”.  Recommendations range from steadily increasing complexity of services provided by non-physicians in retail settings, to include chronic care management, and health care for children (casually dismissing recommendations from the American Academy of Pediatrics), to bundling and upselling “health” foods to patients.

Since telehealth is hotter than molten lava nowadays, the report includes analysis of the incredible cheapness of telehealth services “at retail clinics and beyond”. Before proceeding to recommendations about lobbying state legislators and public payers to allow and pay for unfettered access to telehealth services, the RWJF report is informing us that “the most common diagnoses made during telehealth visits are sinusitis, cold, flu, pertussis, and urinary tract infections—conditions also frequently treated at retail clinics”[emphasis added]. This bit was copied and pasted from an equally insightful marketing piece for the telehealth industry written by an expert actuary. It took major effort to restrain my urge to call the White House and ask the President to declare a national state of emergency and shut down every port of entry into the continental United States.

Just the facts ma’am

One would hope that the decision to eliminate FFS for doctors was based on something other than rattlesnake fables and whooping cough pandemics. One would also hope that decision makers observed and learned from, or at the very least considered, health systems of other wealthy nations that are supposedly better and cheaper. One would be wrong. According to the latest Commonwealth Fund international report on health care systems, it seems that many of those enlightened and cheap nations pay doctors mostly with FFS, some exclusively so, especially Germany, the economic powerhouse of the European Union. For some reason FFS seems to have no devilish toxic effects outside the international borders of the United States.

(click image to enlarge)
You may be tempted to blame the misunderstanding on clueless bureaucrats, accountants and bean counters who don’t understand patient care. You would be wrong again. Bureaucrats understand numbers. They understand financial and operational charts and tables, better than doctors do. The reason FFS is being killed off in America is not so we can achieve better results at lower costs as other developed countries have consistently done. FFS for physicians, and only for physicians, is being eliminated so we can roll out the cheapest possible substitute to medical care, and frankly dear doctor, with all due respect, you're in the way.

Tuesday, April 14, 2015

Value-based Interoperability: Less is more

Interoperability in health care is all the rage now. After publishing a ten year interoperability plan, which according to the Federal Trade Commission (FTC) is well position to protect us from wanton market competition and heretic innovations, the Office of the National Coordinator for Health Information Technology (ONC) published the obligatory J'accuse report on information blocking, chockfull of vague anecdotal innuendos and not much else. Nowadays, every health care conversation with every expert, every representative, every lobbyist and every stakeholder, is bound to turn to the lamentable lack of interoperability, which is single handedly responsible for killing people, escalating costs of care, physician burnout, poverty, inequality, disparities, and whatever else seems inadequate in our Babylonian health care system. 

When you ask the people genuinely upset at this utter lack of interoperability, what exactly they feel is lacking, the answer is invariably that EHRs should be able to talk to each other, and there is no excuse in this 21st iCentury for such massive failure in communications. The whole thing needs to be rebooted, it seems. After pouring tens of billions of dollars into building the infrastructure for interoperability, we are discovering to our dismay that those pesky EHRs are basically antisocial and are totally incapable or unwilling to engage in interoperability. The suggested solutions range from beating the EHRs into submission to just throwing the whole lackluster lot out and starting fresh to the tune of hundreds of billions of dollars more. When it comes to sacred interoperability, money is not an object. It’s about saving lives.

As the HIMSS15 extravaganza is getting under way, and every EHR vendor flush with cash from the Meaningful Use bonanza is preparing to take its unusable product to the next level, machine interoperability is shaping up to be the belle of the ball. A simple minded person may be tempted to wonder why people who, for decades, manufactured and sold EHRs that don’t talk to each other, are all of a sudden possessed by interoperability fever. The answer is deceptively simple. After exhausting the artificially created market for EHRs, these powerful captains of industry figured out that extracting rents for machine interoperability is the next big thing.

The initial pocket change comes from selling machine interoperability to their current bewildered (or stupefied) clients, and to less fortunate EHR vendors. But the eventual windfall will not come from the health care delivery system or the hapless patients caught in its web. How much do you think access to a national and hopefully global network of just-in-time medical and personal data is worth to, say, a pharmaceutical company giant? How about life insurance, auto insurance, mortgage, agribusiness, cosmetics, homeland security, retail, transportation? Google built an empire by piecing together disjointed bits of personal data flowing through its electronic spider webs. What do you think can be built by combining everything Google knows with everything your doctor knows and everything you know about yourself?

Machine interoperability is not about patient care in the here and now. Interoperability is not about ensuring that all clinicians have the information they need to treat their patients, or that patients have all the information they need to properly care for themselves. Interoperability is about enriching a set of interoperability infrastructure and service providers and about electronic surveillance of both doctors and their patients. Machine interoperability is about control, power and boatloads of hard cash.

For example, if you are hospitalized, it makes sense that your primary care doctor should know that you are (not in the past tense), and when you are discharged, he or she should be appraised of what transpired during your hospital stay. In the old days, before the advent of hospitalists, this could be assumed. Today, thanks to more efficient division of labor, not so much. If the government was genuinely concerned about smooth transitions of care, it would mandate that upon discharge, hospitals must provide all pertinent information to the primary care doctor, and the patient, by any means necessary. If this meant that a piece of paper is stapled to the patient’s robe, and that the hospital employs an army of delivery drones for the purpose, so be it. Eventually, hospitals, which are big businesses, would come up with the most cost effective and efficient way to be compliant with the law.

That’s not how things currently work or how they are envisioned to work. Discharge summaries have a mandated format of structured data elements, complete with metadata, based on government approved standards that change with frightening regularity. Furthermore, to satisfy regulations, the summaries must be generated and transmitted electronically from one “certified” EHR to another, allowing for a host of intermediaries to access and collect said data or at the very least its metadata. Consulting with the PCP by phone for an hour doesn’t count. Sending the information from a non-certified software package doesn’t count. Printing and sending over information by special courier doesn’t even begin to count. Attempting to build a device that streams the information as it happens directly into the PCP medical record will get you excommunicated or burned at the stake.

If you refer a patient to cardiology service, and in a misguided senior moment decide to pick up the phone and talk to the cardiologist at length about this patient, it doesn’t count. If the cardiologist pens a concise and beautiful letter to you after she sees your patient, thanking you for the referral and summarizing her impressions and plan of care in proper English, it doesn’t count. The only thing that counts is a lengthy clinical summary containing all the sanctioned data elements sent from you to the cardiologist, copied in its entirety and returned from the cardiologist to you, hopefully with some indication about what happened during the consult. Having your EHRs talk to each other this way is considered interoperability. Whether you actually read the interoperated information is irrelevant. As long as the contents are captured by the network for other uses, it’s all good.

But wait, there is more. If you practice, say, in St. Louis, Missouri and work for a huge health system or somehow managed to string together a machine interoperable network with the twenty or so specialists you use on a regular basis and the four hospitals where you have admitting privileges, that’s not good enough. Nothing is good enough unless any research lab in Hopewell, New Jersey or Bangalore, India can discover you on the (inter)national interoperability network and request data about a patient you may have treated five years ago, and nothing will be good enough unless any app store developer in Cupertino, California can discover your patient and subsequently obtain her medical data once she downloads a free diet app from iTunes.

Are you “just” a patient eager to be “engaged” in your own care? Picking a doctor who will spend two hours with you listening carefully and explaining things you don’t understand, and who will give you his cellphone number in case you have more questions, doesn’t count. Getting a team of physicians together on a conference call to brainstorm about your mom’s options, doesn’t count. Building a long term relationship with your pediatrician and having her come see your sick kid at home because your car is in the shop and your toddler can’t keep any food down, and now the baby won’t stop crying, doesn’t even register on the interoperability radar. Nothing counts unless you log into a website or an app, accept the cookies, the tracking beacons, the small print, and then click on some buttons to verify that you are a “Never smoker”, or to peruse machine generated visit notes that even your doctors don’t read anymore.

Perhaps machine interoperability on a national scale is a wonderful thing, but so is having arugula in every fridge. There is absolutely no evidence that either one will improve health and/or reduce the price of care. Every dollar spent on national machine interoperability is a dollar that was previously used, or could be used, to provide medical care. Where did we find the moral fortitude to demand that people experience adverse outcomes at least three times before letting them have a slightly more expensive pill, while spending billions of dollars to incentivize the purchase of unproven and often failing technologies? If we are supposed to be parsimonious in our use of health care resources, if we are supposed to choose wisely in all other areas, where is the comparative effectiveness research showing that expensive machine interoperability on a grandiose global scale provides more value than cheaper and simpler localized or human mediated communications?
  • Add one doctor visit for every Medicare beneficiary for the next 8 years
  • Give primary care a 20% raise for the next 4 years
  • Double the number of residencies for the next 3 years
  • Educate 60,000 new primary care doctors from scratch
  • Buy an iPhone glucose monitor for every diabetic patient and an iPhone BP monitor for every hypertensive patient (no, I'm not a "technophobe")
  • Put a brand new playground, a gym teacher and a home economics teacher in every elementary school in the U.S.
  • End homelessness in America
These are some of the things we could do with the billions of dollars spent on machine interoperability. Which has more value for our collective health? How did health care become a fully owned subsidiary of the computer industry? Who authorized this unholy acquisition and how much were those brokers paid? Have we forfeited our right to choose, or even know, how endless fortunes are steadily interoperating out of our treasury and into the hands of global technology firms? Publishing fuzzy ten year plans on obscure websites, so the Technorati can tweak them, doesn’t count. Publishing thousands of pages of regulations in the federal register, so interest groups can preview the fruits of their labor, doesn’t count either. Raiding public coffers to please friends and family and to curry political favors is hardly a disruptive innovation, so let’s just call it what it is.

Saturday, April 11, 2015

The Primary Care Journey from Tomatoes to Ketchup

According to OECD data, Americans see doctors less frequently than people in any developed nation. We are hospitalized less frequently and we stay in the hospital less time than citizens of other nations. The vast majority of Americans, more than any other nation, describe themselves as healthy, and America has the largest percentage of young people in its population. So why is health care in America so much more expensive than it is in all those other developed countries? In the US, we spend more than twice as much as the nearest nation on administrative activities (over $200 billion per year). We also pay a lot more for each hospital stay, in spite of it being shorter. We pay orders of magnitude more for each imaging test and we are paying a hefty price for medications we probably shouldn’t be taking. All of these things amount to one major difference between America and the (largely socialist) developed nations: our unit pricing for medical services is completely out of whack.

Ignoring simple math, the government of the United States in cahoots with insurance companies, and a host of other global business interests, is hell bent on having Americans use even less medical services than the modest amounts they are currently using. This may be medically questionable, but one could see how overall health care expenditures could be reduced, if and only if, unit prices were held constant. To the certain dismay of every fourth grader learning how to multiply big numbers, the government is simultaneously encouraging unprecedented increases in unit prices.

By promulgating a flurry of complex regulations, the government is eliminating all small and lean medical facilities in favor of large quasi monopolistic entities able and willing to raise unit prices at will. On an individual business level these health care conglomerates are also seeing healthy increases in service volumes, driven by mass destruction of their competitors. Higher unit prices coupled with higher volume is a sure recipe for higher profits, even when discounting for extra costs of compliance with regulations, and decreased utilization on a personal patient level. Health insurers couldn’t care less about the allocation between volume and unit price, as long as total expenditures remain the same, or the increase is covered by taxpayer largesse and/or individual out of pocket responsibilities.

The net result is that when you buy fewer tomatoes, but you buy them all at the one mega store, and pay twice as much for each tomato, you get less tomatoes and the mega store gets more money. Since greed has no boundaries, maybe we can substitute ketchup for your tomatoes? Herein lays the value in value-based utilization of medical services, or tomatoes, because bait and switch is an honorable and time tested business model. There is however a minor problem. What if the cashier refuses to cooperate and walks out? This of course is what thwarted value-based extraction of wealth in the nineties. Somehow, things seem different now. People are becoming increasingly convinced that ketchup is just a more convenient form of tomatoes, while doctors are increasingly willing to peddle Heinz and none more so than primary care physicians.

Direct Primary Care

At one time all care was direct and most care was primary care. You called the doctor, he came to your house, did whatever he did, and before he left you gave him some sort of payment for his services, directly from your hand to his hand. If you had nothing to give, you went without, or relied on the doctor’s charitable nature, if he had one. Later on, you obtained health insurance, and you could send the receipt from your doctor to your insurer, and the insurer would reimburse you for all or part of the money you paid your doctor. Today, you sign a form to reassign your health insurance reimbursement to your doctor and let the two of them duke it out over proper reimbursements. A few decades ago, representatives of all doctors got together and recommended to the government, the largest health insurance payer in the country, that primary care work is essentially worthless. The government and all other insurers agreed.

A few disenchanted primary care doctors decided to bypass this unfair (to them) system and opened little concierge practices, where they charged what they believed their services are worth and where the patients paid directly to the physician owner. Just like an expert cupcake maker does not open a little bakery store to solve world hunger problems, these concierge docs never presumed that what they do is a solution for the national health care fiasco. They are small business owners who want to make a decent living by doing something they love doing, and are presumably very good at.

As is usually the case, some people figured out how to monetize this disenchantment with the system. Today, the direct primary care (DPC) moniker has been hijacked by a more ambitious business proposition. Establishments calling themselves DPC today are usually founded by entrepreneurial primary care physicians with the explicit goal of creating national chains of primary care clinics where practicing doctors are employees or franchise managers, like Starbucks or McDonald’s. DPC chains charge subscription fees hovering around $1,000 per patient per year regardless of utilization. This is significantly more than a primary care physician is paid by the typical mix of insurance plans. In return for the higher unit price, DPC chains promise to provide superior services, better doctors, higher availability, longer visits, and a host of ancillary benefits ranging from Skype visits to personal trainers (Tomatoes).

The DPC chains were never intended to be truly direct pay practices, but they did purport to offer doctors who were too frightened to hang out their own shingle, another way to practice medicine free of micromanaging insurers. That didn’t last long, because most health care money (public and private) is controlled by health plans, and because venture capital is not in the habit of forgoing its obscene and customary returns on investment. Hence, these venture capital funded DPC chains are actively seeking and some already have contracts with the same evil health insurance companies their employed physicians were trying to avoid. The directness of this model, which was tenuous from the get go, is now practically nonexistent.

Since the entire DPC terminology is headed straight down the drain, Todd Hixon, founder and managing partner at New Atlantic Ventures is suggesting a much more accurate definition of this model of primary care: “Population Management Primary Care (PMPC), a new business model based on retainer plus value-based payments to manage a set of customers”. First, “independent payers (health plans, large employers, managed care organizations) will want to work with strong Population Management Primary Care companies to manage their members to good health at affordable cost”. Second, “PMPC providers will need to integrate with retail medicine providers, and also integrate with virtual medicine providers, or become partly virtual themselves”, so they can “equal” the lower pricing of these “other primary care providers” for delivering “low-acuity care more efficiently” (Ketchup).

At this point there is not even a sliver of daylight between the old HMO doctor and the brave new PMPC doctor. No worries though, America, because Mr. Hixon, who is actively investing in PMPC companies, is assuring us that “the comfortable, simple primary care of Marcus Welby, MD is long gone, but if Dr. Welby came back and took a look at what is happening, he might like what he sees”. Or he might just hang himself from the first available chandelier.

Friday, April 3, 2015

Fixing Health Care: Rockefeller Style

Health care in America is a perfect example of the Pareto principle, because 80% of our gargantuan expenditures on health care are due to only 20% of us who are very sick, elderly, disabled and vulnerable in many other ways. If we genuinely wished to reduce health care expenditures, common sense dictates that we would leave the 80% alone and zero in on those 20%, trying to care for them better than we currently do, and hopefully as their health improves, we would see a spectacular bang for our buck, not to mention the moral gratification of having helped our neighbor, because there but for the grace of God go we all. 

I have a better idea. Following the tried and true philosophy of John D. Rockefeller, why not turn the health care disaster into an opportunity to create the magnificent Standard Oil of our times? The 20% of people, who burn through 80% of our $3 trillion of health care money, are known as high-utilizers, frequent-flyers, hot-spotters, train-wrecks, million-dollar-babies, and all sorts of other terms indicative of receiving highly complex medical treatments, many times with minimal odds of getting better. Although, there is practically no way for us to partake in this messy frequent-flyer market, what if we could shrink its size and simultaneously expand the much nicer healthy market?

What if we could blow the Pareto principle to smithereens and reduce medical spending on the sick from 80% to say 50%? That would free almost $1 trillion dollars per year, just waiting to be disruptively innovated into our accounts receivable, by selling something to the 80% that need little to no professional medical care. Keep in mind that the nation is only expecting to slow the growth of health care expenditures, or to “bend the curve”, not to actually reduce the amount of money it spends on health care. The $3 trillion will be there year after year for us to enjoy. We just need to come up with a smarter allocation of resources.

Unfortunately, it looks like other innovative folks are having the same epiphany, so we will have to share the bounty and engage in some serious team work. The two pronged approach consists of prying the money out of the clenched fists of doctors who provide medical services to the 20%, and of using a few non-practicing physicians to legitimize increased reallocation of expenses to the 80%. In other words, we move from a sick care system to a health system, while delegating the care portion to involuntary labor performed by the sick 20% who have the most skin in the game. I think old John D. would be proud.

The first order of business is to obtain support from the government because although we are not a socialist country, the government controls and regulates most of our $3 trillion play money. Check. The second step is to put those high spenders on a budget without seeming heartless or criminal. The best way to do that is to budget indirectly. Instead of going to each sick person and telling them that we will not spend more than say, $100,000 on you this year, we make their doctor an offer she can’t refuse. Here is $100, 000 dollars for this particular frequent-flyer. If it ends up costing more, it comes out of your paycheck. If it ends up costing less, you get a cool sticker.

Doctors went to medical school, not business school, so we may get that deer in the headlights look when we make our offer, which is where our opportunity begins to emerge. We are business people and we know how to budget and allocate resources, so we can share with you methodologies that worked for the banks, for Toyota, for Starbucks, for the Cheesecake Factory and myriad other successful businesses. And we can share technology tools to make you successful, doctor. Of course, this is America, and we need to be successful too, so there is a fee for this cache of wisdom and intelligent software. Not to worry though, we’ll show you how to factor it into your allotted $100,000 and spread it over your entire client population. It’s not like it’s coming out of your pocket, you know.

Team work means that we have to keep hospital systems happy too. Many of them are heavily invested in all sorts of construction projects and machinery. If we cap the spending on the most lucrative 20%, hospitals will fight us tooth and nail, and unlike little doctors, these guys are no deer in our headlights, so we need to think outside the box. To get the best hospitals to join our winning team, we promise to obliterate the competition and funnel all customers to a handful of centers of excellence, while at the same time we allow them to raise unit prices per service. The net result for each team player is that revenues go up slightly, while profits go up significantly, as volume of expensive services drops like a rock. And in return for our innovative counseling and enabling tools, we take a piece of that action as well.

Finally, we take stock of our capabilities to identify stuff we can sell for approximately $1 trillion per year to please the 80% who are basically healthy. We know how to do social media, mobile apps, targeted marketing, data processing, telecommunications and retail. Our go to market plan is crystallizing before our eyes. Social health, mobile health, health surveillance, health data, telehealth, Apple Health, CVS Health, Google Health, basically we just slap health before or after our existing line of products. Not a word about sickness because the 80% want to be healthy, and we are selling health. If we get lucky, even the 20% may be persuaded to see the value of curative hope in a cell phone.

For the sake of completeness our plan should explore the largely historical bumps in the road, such as the Food and Drug Administration (FDA) and its antiquated insistence on regulating medical things. That was fine and dandy for the sick market, but in the innovative health market, everybody is already healthy so efficacy and safety are misplaced notions for wellness vaporware. To solidify our clinical standing, we should come up with some clinically sounding products as well, and impress upon the healthy 80% that every self-respecting billionaire is already using these health enhancing things on a regular basis, whether it’s Tim Cook who can’t live without his new watch, or Mark Cuban who can’t go more than three months without self-inflicted bloodwork (or a little free publicity on Twitter).

This does sound like taking candy from a baby, because it is. Traditional health care did not behave much like a market, but health is a classic consumer market and we are the champs when it comes to selling cheap stuff to consumers, or selling consumers to manufacturers of cheap stuff. The now discretionary $1 trillion is just the beginning, you see. The half trillion or so, previously spent on the healthy 80% is also up for grabs, because we don’t need doctors to sell that stuff. And once we get our foot in the door, we can chip away at the remaining $1.5 trillion wasted on the sick as well. To whet your appetite, here’s a billion dollar idea to leverage community resources: nudge the chronically unemployed to provide free care to the chronically ill, in the comfort of their artificially intelligent homes.

Monday, March 23, 2015

Putting Meaningful Use 3 in Context

On March 20, 2015 the stars aligned to produce four simultaneous events that will never again coincide during the life of human civilization. The first three, the vernal equinox, a total solar eclipse and a new supermoon, were brought to us by the stars themselves, and the fourth one was thrown out there by the government. The regulations for Meaningful Use Stage 3 were finally published. Meaningful use of electronic health records (EHR) was presented to us back in 2009 as part of a stimulus bill to help the crashed economy and to improve the quality and affordability of health care services for all Americans. The program is administered by the Centers for Medicare and Medicaid Services (CMS) and implemented by the Office of the National Coordinator for Health Information Technology (ONC).

In its first stage, the meaningful use program delivered billions of dollars to technology companies that specialize in manufacturing EHR software, and ensured that clinicians of all types are no longer wasting time and resources on individual flesh and blood patients, but instead are meticulously collecting computable data for the sharing economy. This preliminary phase saw an order of magnitude increase in the number of small EHR companies and public/private, not-for-profit, certification and accreditation enterprises, along with a sharp decrease in the number of small medical practices. The second phase of the program, weeded out most new entrants into the EHR software market, solidifying the gains for large technology vendors. Physicians became disenchanted, lost interest and lost joy in their profession. Participation in the program plummeted posing a real threat to desired outcomes. Not to worry though, there is enacted regulation and legislation pending to crack a bigger and better whip on dissenters.

The brand new third phase of the meaningful use program sports a “keep your eyes on the prize” attitude and is forging ahead towards the finish line, bravely oblivious to the difficulties experienced in previous stages. Of course, six years into the program, one would expect to see some results indicating that all this money we are spending is moving the needle towards meeting the stated “do no evil” targets. There are no such preliminary results, and we are told that it is too soon to ask, because we won’t be able to see real improvements until the entire program, which is getting bigger and more expensive with each passing day, is completed. In the meantime, we are advised to entertain ourselves with an interminable stream of roadmaps, peppered with gaudy infographics supported by toddler level cartoonish videos, and continue to pay our taxes, leaving the thinking and planning to smarter people.

I will not waste your time with point by point analysis of the new meaningful use regulations, because I am certain the “industry” will produce the customary collateral, and because it is basically more of the same. If you have no idea what meaningful use is, you can stop reading now and go enjoy your last moments of blissful existence. For the rest of us, let’s just highlight a few tidbits that seem particularly helpful to practicing physicians.

Patient Engagement

If you had difficulties meeting the stage 2 quota of patients who view, download or transmit their medical information, the stage 3 regulations offer some relief. Just like you need not see, examine or treat real patients any longer, and can instead virtually analyze their computerized profiles, actual patients themselves need not engage with you electronically anymore. Instead you can provide something called an application programming interface (API) to your EHR, so a piece of software can extract information from your EHR on behalf of your patients, while bolstering the sharing economy.
There is nothing more engaging than having your colonoscopy reminder and eventual results pop up in your iTunes. Apple could presumably use anybody’s Apple ID to obtain medical records from any health care facility once one agrees to Apple’s terms of service, which nobody reads and which could contain informed consent to such health promoting activities. Since no EHR vendor is going to supply you with a thousand APIs, or agree to support connections from hundreds of little vendors, Apple is a likely candidate, and so are a handful of other very large sharing platforms.

Quid pro Quo

Just so you don’t feel left out of the sharing economy loop, meaningful use stage 3 requires that you accept data generated by your patients (sometimes unbeknownst to them) into your EHR. Of course Apple Health comes to mind again, but maybe other wearable snooping device manufacturers could be accommodated as well, at least in the initial stages. Since in the future, you will need to treat patients electronically without actually touching the person whose name (or number) is on that record, it will be very useful to open your EHR and see two years of hourly vitals monitoring graphs, before you initiate your next Skype session.

Practice Policies

Meaningful use stage 3 is adding a host of structured and codified data elements that you will need to collect and record. To that end, you should consider updating your policies as follows:
  • Require each patient to provide an updated resume at least once a year, because you need to continuously collect and update work history, including positions held, and financial information.
  • In collaboration with your attorney, create a crosswalk based on State laws and meaningful use regulations regarding what you must ask or are barred from asking your patients. For example, in some states you are not allowed to ask about guns in the domicile, and for meaningful use you must inquire how often your patient goes to church, and whether he or she is a homosexual (regardless of your specialty). It’s a fine balance and you don’t want to break any laws.

Practice Simplifications

In return for a bit more administrative work, meaningful use is opening a path for you to unload some of the clinical burden to technology vendors. You will need to subscribe to certified clinical decision support services that will gently integrate into your workflow, guide your thinking in an unobtrusive manner and record your actions in the background. For example, you would be able to avail yourself of automatically created order sets issued to your patients, based on their recorded symptoms and measurements (precision medicine starts here). This should save you time which could be better spent on examining Fitbit streams or analyzing curriculum vitae documentation.  

Safety and Stability

Whereas the preceding points are of interest to end users of EHR products, the government in its infinite and supreme technical wisdom has come up with 431 pages of dicta for software developers ranging from how to think about software development to how to market their products, down to proper capitalization of common words such as Health vs. health. If you were entertaining the titillating notion that the EHR market would eventually transcend its growing pains and come up with some cool stuff that will make you actually want to use software in your practice, rest assured that the government is protecting you from such folly.


If you are a brilliant young entrepreneur thinking of putting together a small team of dedicated and knowledgeable buddies to build a really good and useful software product for doctors, forget about it. The 431 pages published by ONC are the highest barrier ever erected to entry into a market, with the possible exception of the market for weapons of mass destruction. If you are already up to your eyeballs in health IT, perhaps have been there for a long time, but are a small and agile development shop, your days are numbered. The ONC regulations are designed to bankrupt small technology vendors, just like CMS regulations are designed to bankrupt small practices. Innovation in health care technology is as dead as a door knob.

The meaningful use regulations have been written by and at the behest of global technology firms, both EHR and general tech, employing a novel form of lobbying, which uses current and future corporate/government employees, board officers and grant-dependent academics, with a list of conflicts of interests as impressive as I am sure their credentials are, to act as volunteer advisory groups to government agencies. There is plenty more in the new meaningful use rules and regulations, but there really is very little point in analyzing this stuff, because there is absolutely nothing you can do to change it. It is however heartwarming to see that Qualcomm, “an American global semiconductor company that designs and markets wireless telecommunications products and services”, representing the future of health care, is “beyond pleased and finally vindicated”. Hope you are too….

Monday, March 2, 2015

Obamacare Cheesy Poofs

One of the most revolting pleasures in life is to read learned opinions and in-depth analyses of consumers’ behavior written by beautiful people clad in designer clothing, dining at eclectic chic trattorias or enjoying the occasional canapé under crystal candelabra at their favorite charity gala. These wondrous creatures, having pored over a few disjointed numbers selectively allowed to escape from our struggle with health care, are informing us that there are good news worth celebrating at tonight’s black tie fundraiser event.  If you happen to be one of the uninvited or just invisible for all practical purposes except exploitation, you are welcome to go ahead and break out a can of Bud Light and a new bag of store brand Cheesy Poofs for the occasion.

Obamacare is working better than anyone dared to hope. Following the astounding news that some 30 million people have Obamacare, we are now told that the way we buy Obamacare insurance on the public exchanges is good news for the canapé people. Why? Because we are finally exhibiting typical shopping behavior in health care, which is what consumers ought to do, and which has been shown to reduce prices of things in every other consumer market. Typical shopping behavior means that consumers have no brand loyalty, and no long term commitments to anything. Instead, “price sensitive” consumers (“poor” is not a term used in polite company) are in a constant frenzy to find the cheapest product available, regardless of quality, utility, or benefit to themselves or society. 

It turns out that about one third of Obamacare exchange shoppers switched to new insurance plans this season. Nobody knows what they switched to or why they switched, but that’s not important right now. The good news is that they switched. Switching between the typical narrow network health insurance plans sold on the Obamacare exchanges, means that consumers switched their doctors and sometimes hospitals. It means that medical care is viewed as a commodity, like Cheesy Poofs. One brand is as good as the other, and the dollar store brand is the best. That’s how the free market works, except under the candelabra.

The entire notion of having your own doctor is pitifully presumptuous. How many of us have our own lawyer or accountant? Warren Buffet certainly does, but the rest of us do just fine with episodic roadside legal and financial services, and Internet do-it-yourself tools and advice. For the very poor who become afflicted with severe legal problems, an attorney usually paid minimum wage or nothing at all, will be provided by the state. No separate safety net exists for financial trouble, but debtor prisons are flourishing. Expecting medicine to remain different is a sign of old age, failure to innovate, and deteriorating mental capacities.

Personal services are not scalable, and scalability is the number one prerequisite for productization and marketability, and scalability is predicated on repeatability. A transaction defined by having two people in a room interacting behind closed doors is neither scalable nor repeatable. Once we capture the events in that previously private room, and digitize them into structured data routines, we can abstract a repeatable process definition. To make it scalable, we need to discard the parts that don’t have universal applicability. The result is a good enough product that can be used by most people most of the time, like TurboTax or making your last will and testament online. Oh, and one more thing. To encourage shopping for the cheapest venue, unencumbered by misguided brand loyalties, we need to eliminate any and all switching costs. In health care, we call it interoperability.

Continuity of care is redefined as the existence of a digital dossier called health record, not medical record, and this is a crucial difference, because health is a continuous thing from birth to death, while medical may be episodic and vulnerable to branding attempts. The existence of a public lifetime health record obviates the need for fuzzy interpersonal logic. Any interchangeable resource, human or electronic, can pick up where the previous resource left off. This brings us one step closer to Cheesy Poofs or electronics, where the actual product manufacturer is not the same as the brand name on the box, although once in a while a recognizable brand may be used for advertising (Intel inside) of an otherwise generic product (your laptop) to bestow an aura of quality for those who prefer to think of themselves as connoisseurs.

Health care, as we all love to point out at regular intervals, is different. Before we can plunge health care delivery into retail mode, we must transition health insurance to a retail paradigm. The vast majority of Americans became accustomed to health insurance as a job benefit, like paid vacation days. Often the only decision one had to make was between the crappy HMO plan and the slightly more expensive PPO plan offered by their employer. Nobody read the prospectus because the choice was exquisitely simple: can I go to any doctor I want, or do I have restrictions? Since at most businesses, the CEO (and the CEO family) had to use the same plans offered to employees, everybody was confident that their interests were well represented. We should have known that this was too good to last.

Obamacare is creating a retail market for health insurance. Essentially, the inefficient, unaffordable individual health insurance market model is to be propped up by government subsidies, while its unsustainable and inequitable methodology is copied over to the orders of magnitude larger employer sector. When the transition is complete, health insurance will no longer be a job benefit. Instead, a fixed value voucher will be given out by employers to be applied by employees towards health insurance purchases. Since salaries will not be affected by this change and since the voucher value will be trending to zero over time, most Americans will be forced to shop not just for insurance, but for everything insurance used to buy.

Retail medicine makes perfect sense to the canapé nibblers under the candelabra, because Isabella, the undocumented au pair, is very happy shopping at Walmart for all her health care needs, and she comes from a good upper class home in Venezuela. One can only imagine the entertaining spectacle offered by millions of little consumers scurrying ever each way, like so many rodents on a burning ship, holding on tight to their worthless little vouchers, desperately trying to find a way to pay for medicine. Help is on the way though. Transparency, you see, is the missing ingredient in this newly liberated market. Every Cheesy Poofs bag has a clear list of ingredients, starting with cornmeal, oil and salt, and ending with yellow coloring, and a big huge table of “nutrition facts”. This has been shown to work well for Cheesy Poofs and it is now being applied to health extortion bags, as well as boxes of health providers.

In a moving show of solidarity, the glitterati themselves are participating in this disruptive “sharing economy” because they all use Uber. Uber is replacement for taxis, and if the closest you ever came to paying for a private ride was on your high school prom night, that’s okay, because taxis are disproportionately used by rich people. Cheesy Poofs guzzlers take the bus or drive themselves. Uber for health care has been the wet dream of many entrepreneurs and their two bit consultants. In this “sharing economy”, lots of jobless hungry people provide on-demand unskilled services to more fortunate patrons, and then “share” their fare with a $41 billion global corporation. This business model is several thousand years old and it used to be called pimping in the prostitution field.

The Uberization of health care will require turning the same tricks used in the taxi industry, or the hotel industry, to neutralize licensure requirements for offering a service, any service. The eradication of credentialed expertise, goes by the name of democratization, because discrimination based on one’s education, training and expertise should be abolished in an enlightened society where only pigs can be more equal. Health care is a harder nut to crack though, because of the unfairly large differential between a licensed doctor and all other potential providers of this service, and because licensed physicians are selfishly unwilling to “share”. The good news is that some doctors are starting to come around, and the indisputable success of Obamacare is showing that health care consumer products need not contain real doctors, just like your satisfying bag of Cheesy Poofs contains no real cheese. It’s a miracle of sorts….. Bud Light is still beer. Cheers.

Tuesday, February 24, 2015

The Starbucks Method for Primary Care

Whether you like it or not health care financing is transitioning from payment for discrete services to global payment for value. Whether you agree with this trend, or comprehend its meaning, if it has one, is largely irrelevant in the short term. The government of the United States, the Chamber of Commerce, both political parties, all health care stakeholders, and even your own medical associations are fervently supporting, and actively promoting, paying you for value instead of work.

Value is defined by a set of statistical metrics calculated across the spectrum of services you provide, and some that you don’t. So for example, if Starbucks were to be paid for value, they would get say, $2 for a venti latte, plus a fluctuating amount based on the average temperature of their lattes, the ratio of espresso to milk, the percent of air in the foam, the time from door to latte, etc., over a representative period of say 90 days in year one and maybe 12 months in subsequent years. To enable latte valuation, all espresso machines would be fitted with special monitors interfaced to local cash registers and to centralized centers of value. The exact value-based bonus would be calculated by analyzing the statistical distribution of metrics across all coffee shops in the country, adjusted for regional and demographic variation of their clients.

If Howard Schultz would be notified tomorrow morning of a transition to value-based payment for coffee, he would most likely protest loudly, but at the same time he would find a way to get $10 for his lattes while the coffee debates are raging across the nation. And so would every independent coffee shop still in existence. Health care is of course much more complicated than making espresso drinks, but the principle is the same. Unless you find a way to keep your doors open during bad times, you will not be around to enjoy the fruits of your efforts to bring about the good times. Assuming you wish to continue selling coffee, there are two (legal) options to consider: sell fake lattes for less than $2, like they have in every self-respecting gas station, or do what Howard Schultz would do in a similar situation.

The Howard Schultz option for independent primary care could be summarized as the answer to the following question: what do I need to do in my practice, so that I can collect enough revenue to continue providing the excellent care my patients are accustomed to? Below are some suggestions that may allow you to do just that. You could look at these suggestions as encouragement to sell your soul to the devil, or you could look at them as an optimal way for creating enough breathing room for you, and your patients, until common sense prevails. If you are tempted to dismiss this, in view of the recent (partial) success of grassroots efforts to beat back the ABIM MOC, please keep in mind that by and large those who fought ABIM were board certified physicians in good standing. Fighting for a good cause does not mean that you first have to commit financial and professional suicide.

Beginning on January 1st, 2015, Medicare will be paying physicians for chronic care management (CCM) services, if and only if, a certified EHR is used in the practice. This is the first time Medicare is tying payment for a CPT code, to the use of specific technology, and it may very well be a harbinger of things to come. Medicare is essentially stating that unless you buy and use a government certified EHR (not just any EHR), it will refuse to pay you for any work (other than face to face visits) that you do for your chronically ill patients. It is fascinating to note that Medicare acknowledges that certified EHRs cannot help much with CCM services, and you may need other software products for this purpose. Nevertheless you must also purchase a certified EHR.

On February 12th, 2015 the Center for Medicare & Medicaid Innovation Center (CMMI) has announced a new payment model for cancer care, the Oncology Care Model (OCM), modeled after the CCM, but paying four times as much to oncology practices only. The OCM is going to enter pilot phase in 2016, and chances are it will be elevated to an official CPT code shortly thereafter.  Taking the CCM one step further, the oncology care management fee will be paid exclusively to practices that attest to currently mandated meaningful use levels (Stage 2 for now), although meaningful use has practically nothing to do with oncology care.

It is not implausible to assume that these are just the first steps in making collection and dissemination of clinical data, along with kickbacks to the tech and certification industry, a condition for practicing medicine. If you think you can somehow “escape” these mandates by dropping public insurance plans, you should note that the OCM pilot mandates participation of commercial insurance plans in this form of payment. Unlike the puny meaningful use incentives/penalties, both CCM and OCM fees can add up to large amounts of recurring revenues for a complex set of services. If you don’t have a certified EHR, your choices are to either continue performing these services for free, or cease to provide them altogether. Strangely enough, nobody seems to question the legality of such scheme.

Bottom Line

Go ahead and get yourself a (cheap) certified EHR, and use it sparingly if you so desire. Make sure you know how to get all the data out of the EHR, because chances are you will want to dump it when things get better. Keep in mind that even under the best case scenario, technology will not improve overnight. It takes several years to build (or refurbish) a good EHR, and EHR vendors are now operating within a regulatory pay for performance mentality, i.e. studying for the (certification) test and cheating to survive. Even if Medicare drops its ill-conceived meaningful use program tomorrow, it will take time to return to a competitive culture of excellence and customer service, yielding beneficial technology tools for your practice.

It is not likely that value-based payment models will disappear, or be reconfigured to measure benefits to your patients, because there are hundreds of billions of dollars in shareholders profits, and fabulous round trips to Davos, riding on this one simple innovation. It is equally unlikely that physician payments will grow in the near future, and there is every reason to assume that payments will decline sharply, as the system adjusts itself to serving increasing numbers of underinsured poor people. It will be very important for you to strike an optimal balance between keeping your costs down, and increasing your value-based revenues.

Finally, for those insisting that their practice is doing just fine without all this unsolicited advice, this may be so for now. And for a few fortunate physicians, it may be so for long enough to reach comfortable retirement. Perhaps a handful more would be able to extricate themselves from this mess by catering exclusively to the few that need not concern themselves with costs of anything.  Everybody else should find a way to collect $10 for their lattes.