A Proposal for Disruptive Regulation of EHRs

The latest salvo in the interoperability and information-blocking debate comes from two academic experts in the field of informatics, and was recently published in JAMIA. In the brief article, Sittig and Wright are endeavoring to describe the prerequisites for classifying an EHR as “open” or interoperable. I believe the term “open” is a much better fit here, and if the EHR software happens to come from a business dependent on revenues, as opposed to grant funding from the government, bankrupt may be a more accurate description. Since innovation in the EHR market seems to lack any disruptive effects, perhaps a bit of disruptive regulation would help push everything over the edge.

Although the article seems to be just another shot at Epic, the currently #1 EHR in the country, which is privately owned and run by a woman (a seemingly irritating anomaly in the EHR world), it does have some interesting points worth exploring. The authors propose five overlapping use cases to describe functionality that is important to five stakeholder groups: clinicians, researchers, administrators, software developers and lastly, patients. Let’s look at each one in more detail (pay attention, since we’ll have a quiz at the end), and keep in mind that these requirements are meant to be enforced on all EHRs, including the relatively cheap little one you have in your office.

Use case 1: Extract

The first use case states that a client facility should be able to extract patient records from an EHR, while maintaining granularity of structured data, with the goal of creating “a new secondary-use database”  for internal purposes, or most likely for research. To enable the client to extract data and migrate it to a different database structure, the EHR vendor is required to provide the client with its “data dictionary”. A data dictionary is a detailed description of the EHR database schema, all its tables, views, data types, what the data means, how it connects to other tables, constraints, references, packages, procedures, and a whole lot more.

For the less technically inclined among us, the database structure, or the model, of a serious transactional software application is its heart and soul. The user interface, which is what you as a user see every day, is secondary and easily changed. Chances are that if you used the same EHR for a few years, you have witnessed such changes multiple times. You can certainly build a horrific user interface on top of an excellent model, but you can never build a great user experience on top of a lousy data model. The database structure is not written in stone either, but changes to the model entail excruciating effort and huge expenditures. The data dictionary, if done well, is both description and recipe for recreating the entire application, and as such it is the main portion of a vendor’s intellectual property.

Data dictionaries are usually provided to large clients that host their EHR onsite, and are mostly used to build interfaces with other systems. As health insurers continue to dump risk on health systems, database extractions are increasingly being used for other purposes as well. In the ambulatory market, data dictionaries are not usually shared with customers, since small practices have little to no ability to do independent software development. If your EHR is hosted in some cloud, in truly multi-tenant software as a service (i.e. data from multiple customers is stored in one database structure), you will not get any dictionary and you will never be allowed to access the vendor database, and rightfully so. The best you can hope for in this case is a data dump from your vendor.   

Use case 2: Transmit

This use case is a slightly expanded version of the current Meaningful Use requirement to generate and transmit clinical information in standard format (e.g. C-CDA) to another clinical facility or to an external personal health record (PHR). The goal here is to facilitate referrals or other transitions of care, and to prop up third party PHRs that nobody is interested in using.

Use case 3: Exchange

Here EHRs are required to be available 24/7 to accept programmatic requests from other EHRs for patient records. I am not sure what the significance of 24/7 is in this context, but basically the EHR should be able to respond to ad-hoc queries from any other EHR, locate the requested records, if any, and return a standard based response to the requestor. This use case is supposed to facilitate EHR agnostic community-wide health-information exchange, presumably (and strangely) without using a health information exchange (HIE) entity as mediator. Another peculiarity is the completely superfluous demand that the responding EHR should make its data dictionary available to all querying EHRs, which boils down to publishing the whole thing online, or on demand, for all competing (and aspiring) EHR vendors to enjoy, and to further democratize the hacking industry.

Use case 4: Move

This use case is intended to reduce costs of switching EHR vendors, while ensuring that all data in the old EHR, including metadata and transactional histories are transferred to the new system. To better understand this noble requirement, let’s look at how easily a health system can switch banks. If an organization uses say, US Bank for ten years, and then wishes to transition their accounts, to say, Bank of America, US Bank will first provide its complete data dictionary to the switching organization to be shared with Bank of America developers. Then US Bank will provide an extract of all financial data, including historical transactions and all metadata (e.g., timestamps, source, and authors) so everything is migrated and preserved in the Bank of America system. Other than the logos, the organization would not see any difference really, and this will all be done for little to no cost to the switching health system. If this has not been your experience, then you should call the banks and complain.

Use case 5: Embed

The fifth and last use case is about application programming interfaces (APIs) on steroids, and it enables health systems to develop new EHR features or functionality and seamlessly incorporate those into the EHR. This implies full access to read, edit and delete database content, as well as ability to augment database structures, while the original EHR is expected to incorporate these changes automatically into its basic services such as security and privacy. Essentially, an EHR should become a development platform with functionality exceeding that of the best operating systems out there. For example, if an EHR lacks the ability to collect and process PHQ-9 data, an institution could develop such functionality independently, while the EHR will be expected to incorporate the functionality in its own workflows, screens, decision support, and HIPAA protections, practically out of the box.

Putting all five use cases together and using a tortured way to come up with an acronym, the authors dubbed their framework for defining an open and interoperable EHR, EXTREME, and extreme it is. The framework is written from the point of view of a large health system dealing with a large EHR vendor, and understandably so, since this seems to be the authors’ natural habitat. Applying this framework to the hundreds of EHRs and EHR modules that have been certified by the government to date will ensure that this big business habitat is the only model left standing. There is a cost to transitioning a software package from being a product or a service, to being a development platform. That cost is beyond the reach of most existing EHR companies. For the remaining few, the cost will eventually be passed down to current customers, as was the case with all government mandates imposed on EHRs. Small practices and small hospitals, already struggling to stay afloat, will be dealt the final coup de grâce.

The authors state that this upheaval is necessary “if we are to realize the enormous potential of an EHR- enabled health care system”. Six years and billions of dollars since we embarked on this journey and all we can come up with is some elusive “potential” that will certainly materialize if only we could spend a little more money, and if only we could drive a few more people out of this business, and only if we take the necessary next step, which we are told is to dismantle “the myriad socio-legal barriers to widespread health information exchange”, which is newspeak for removing any and all remaining privacy and informed consent protections for individuals, whether they like it or not. The truth is that we have no research, no proof and no reason to believe that the mythical “potential” even exists, let alone that the bigger-is-better, top-down model of health surveillance is best suited to unlock this “potential”.

I have to confess here that I have no idea what an open and interoperable EHR is. I also don’t know what a high usability EHR looks like. I do however know what a good EHR is, not a perfect one, but a good enough EHR. Just like any other piece of software, from Microsoft Office to Oracle Financials, a good EHR is one that people choose to purchase. If other people think there are better ways, then by all means, they should build amazing new software and fairly compete in the EHR market, instead of engaging in armchair quarterbacking of rules and regulations to advance theoretical concepts that captured neither market interest nor customer dollars on their own merit.

Quiz Question: Of the 5 stakeholders listed at the top, which one is absent, from all EXTREME use cases? Answer: The patient. Even in the tangential use case where data may be transmitted to a PHR, the patient is a passive entity, while the “organization” decides when, if and what to transmit. At some point, the few patient advocates who have not yet been thoroughly corrupted by the deluge of cash and fame, will have to come to terms with the grim realization that everything done and said nowadays is not intended to benefit the people, and health care is no longer an exception.

How to Use CPT 99490 for Healing the Sick

The Medscape Physician Compensation Report puts primary care physicians at the bottom of the heap, with a median earning of less than $200,000 per year in 2014. What if the largest insurer of older Americans took those numbers to heart and decided to give primary care a pay raise of 25%, in recognition of and better support for the hard work involved in caring for the very old and the very sick? This is the general idea behind the brand new Chronic Care Management (CCM) fee introduced by Medicare on January 1st 2015. Three cheers for Medicare!

Unfortunately, Medicare structured its fees based on the now prevailing assumption that all doctors are charlatans, and hence every penny paid to them must be justified by at least one thousand pages of legal size, single spaced, dated and notarized documentation, or the electronic equivalent thereof. Furthermore, as is customary in our nation’s capital, every law or regulation that may be beneficial to the public, comes adorned with a wealth of gifts for special interests, which often render the original intent null and void for all practical purposes. The CCM is no different.

Medicare could have settled on a simple capitation fee for chronic care to provide payment for currently uncompensated care management and to expand such services to patients who can benefit from additional attention. By piling on reams of preconditions and micro-specifications, Medicare all but ensured that none of the money it plans to spend on CCM will actually benefit chronically ill patients. Complex regulatory frameworks benefit those who provide services to alleviate administrative complexity, in this case computer and software vendors, and garden variety consultants turned experts at chronic care management practically overnight. However, with a little bit of ingenuity, you can get and keep some of the CCM money, and with a bit more effort, actually use it to help the sick, if you are so inclined.

What you need to know

The first and most important thing you need to know is that if something sounds too good to be true, it usually is. The bogus CCM calculators you see on vendor websites, advertising that you can make a quarter million dollars per year in CCM fees are completely false, unless of course you are willing to fraudulently bill Medicare for CCM services, and even then, the projected revenues are overstated. Medicare will pay you approximately $40 per month for at least 20 minutes of non-face-to-face care management activities performed by clinical staff (including MAs) for patients with at least two severe chronic conditions. The fee is subject to standard copays and deductibles, and the service requires informed consent from the patient, above and beyond the general consent for treatment that you already have on file. CCM fees are for traditional Medicare patients only, and only if you bill under the Medicare Physician Fee Schedule (community health centers and rural health clinics are currently excluded).

Unless you are a geriatrician chances are that you will not have 491 traditional Medicare patients with two or more chronic conditions that “place the patient at significant risk of death, acute exacerbation, decompensation or functional decline”, and even if you do, many will be under the management of one or more specialists. Specialists can also bill for CCM, and only one physician can bill in any given month. From whatever number of patients you come up with, you should subtract those who will not consent to such nebulous service. Then you have to account for the copays you will not be able to collect, and the months when those presumably very sick individuals are discharged from a hospital, and you bill the much higher transitional care management (TCM) codes instead.

Bottom line is that if you get an extra $60,000 per year in Medicare CCM fees, you should consider yourself very lucky. To obtain this revenue, you will have to incur additional expenses. A good chunk of those expenses will be sunk costs if you are routinely managing your sickest patients pretty well. The added expenses involve mostly tracking time and billing, both of which can be optimized with a bit of Yankee ingenuity. You should be able to keep approximately $45,000 per year, if you have 150 consenting patients who fit the CCM requirements (or $300 per patient per year).

What you need to have

You need not attest to meaningful use, but you must have (and use) a meaningful use certified EHR. This is just a small gift to the tech industry. You must have a care plan for each patient that your staff (and your staff only) can access online at all times. You must provide these very sick patients with a way to access you or on-call staff (a person, not a machine) 24/7. You should have a reasonably accessible schedule for in person appointments, such as same-day availability. Although, Medicare does not specifically mention this, it would be very helpful if you were able to establish good channels of communications with hospitals, specialists, home-care agencies and long term care facilities. You will also need a good amount of patience and a sense of humor, but you will not need more expensive technology (e.g. population management, analytics, etc.).

What you need to do

I am certain that as you read this, you can come up with ten or twenty patients who fit the Medicare criteria, off the top of your head. That’s as good a place to start as any.

1. Make a list of CCM candidates. Keep it small, particularly if you have minimal staff and if the patients are very sick. You could select by disease type, or better yet pick patients for whom you already provide significant amounts of uncompensated care between visits. Use this group as your pilot experiment.
2. Schedule appointments with each one and obtain consent for CCM from as many as possible. Update, or formally create a care plan for each one. Hand them a copy (paper is fine), and place a copy in your Internet accessible EHR. Make sure that whoever takes call after hours has access to the EHR from home.
3. Now comes the hard part. You need to track the time you or your staff spends interacting with each patient, or on behalf of each patient, each month (office visits excluded). You could simply use a paper timesheet, or you could find a way to use your EHR. Here is an idea that even the dumbest EHR can accommodate. Start a visit note for each patient on the 1st of each month. Leave it open and keep adding a brief note to it (including amount of time spent), each time you or your staff do something for the patient. Add the pertinent ICD codes and the CCM CPT and sign all the notes at the end of the month. Your biller can take it from there. Revise and tweak your process to make it as efficient as possible. This is why you should start small and grow the program over time.
4. Twenty minutes is not a lot of time. One call with the patient (or caregiver) may just fill the entire allotted time. Other activities that are beneficial and can be counted are, talking to specialists, obtaining and reviewing consult notes and test results, arranging referrals, coordinating with home-care, reconciling medications and pretty much everything you usually do for these patients.
5. Run your little pilot for a few months and see where it takes you. You have nothing to lose, and may end up pleasantly surprised.

What you should not do

Billing Medicare for CPT 99490 is cumbersome, but it is not as difficult as you are deliberately being led to believe. The Medicare CCM regulations were written in a way that allows, and encourages, outsourcing of services to third party vendors. The “market” responded with a wealth of fancy semiautomatic software products purporting to manage chronically ill patients remotely through interactive apps and “clinical” reviews of collected data. The going prices for these “services” are approximately what Medicare pays you, minus the copay, and you still have to do the actual billing. It’s a horrendously bad deal from a financial perspective, but it’s an even worse deal from an ethical perspective.

You should not outsource the management of your most complex and most vulnerable patients. You should not allow yourself to be used as a conduit for diverting Medicare funds to technology companies. Signing up a frail 85 year old gentleman with heart disease and Alzheimer’s for a monitored iPhone app, may meet the Medicare CCM regulations, but most certainly does not meet the clinical definition of care management. Chronic care management is not a $17 billion market. It is the ethical practice of continuous, comprehensive and compassionate medicine. If you outsource that, you might as well outsource your professional license and your very own soul.

Telemedicine – The Greatest Innovation since Sliced Bread

Did you know that you are a “telemedicine provider”? No? I can’t blame you for not knowing, but you are, and always have been. Well, maybe not always, but certainly since Alexander Graham Bell invented the telephone. Better yet, you provide free telemedicine services. Here is an idea: on the home page of your practice website, you should add a big huge flashing banner saying “Free Telemedicine Services!” Still hesitating because you are not using fancy monitors when you take calls from patients? First, telemedicine does not necessarily imply multimedia, but if you want to be sure, just turn on FaceTime on your iPhone and ask your patient to do the same. Much better… Look at you now, providing the latest and greatest telemedicine service like a pro, for free.

But wait a minute; didn’t the largest private insurer in the country just announce that it will begin paying for telemedicine services? Yes and no. UnitedHealthcare will pay for telemedicine encounters provided through a handful of telemedicine companies that are privately owned and venture capital backed corporations. UnitedHealthcare will be paying you squat for taking calls from your own patients, even if you do it on your spiffy iPhone 6, and even if you turn FaceTime on. However, if you sign up with Doctor On Demand, or American Well, to provide clinical advice on the iPhone to complete strangers, and fork over a portion of the proceeds to the corporation, UnitedHealthcare will pay you as well. 

This may be the most wonderful incentive for physicians to toss any remaining continuity of care considerations out the window. After all, why should you spend all your days seeing one distraught patient after another, with or without “good” insurance, who may show up or may not, and who may pay you for your service or may not, when you can just sit in your office, and shoot the breeze with perfectly healthy people, each getting precisely 15 minutes face time, after they swipe their credit card to ensure that you get paid for every second of that time? Perhaps it would be wise for you to cut your regular panel down, get rid of those patients who trouble you the most, let the others see your assistant, and practice in-person medicine as a hobby, to keep your skills up and to add a little variety to your new electronic career.

In its announcement UnitedHealthcare cites the mythical 45,000 physician shortage, particularly in rural areas, as the impetus for providing telemedicine services to its members. Having board certified and experienced physicians cater to a constant stream of colds, sinus infections, allergies and tummy aches, all of which are recommended to be delegated to non-physicians working at the “top of their license” in traditional practice, is somehow supposed to alleviate this shortage. Providing a means for urban and out of state physicians to compete with country docs, for credit-card carrying worried-well, is envisioned to improve the disparities in access to quality medical care in rural America.

Why then is UnitedHealthcare (and other private insurers as well), encouraging further fragmentation of primary care and massive waste of physician time? “The cost of a video-based virtual visit is less than $50 and provides significant savings when compared to costs for similar minor medical needs treated at a doctor’s office ($80), urgent care facility ($160) or emergency room ($650)”. And that’s all the myopic reasoning we need. Getting $50 for an easy 15 minutes (or less) session and subtracting the corporate share, a physician may end up with approximately $140 per hour and no overhead. It’s pretty good if you are moonlighting, but less so if you sit in your fully staffed office fiddling with your iPhone in the middle of the day. If you do this type of work full time, which is pretty much what people do in retail clinics, or call-a-nurse type of services, do you still consider yourself a doctor? Just wondering……

That may soon be a moot question though, because the “promise of telemedicine” is being fulfilled as we speak. First Opinion, a venture-capital backed company, is taking telemedicine to where no doctor has gone before. First Opinion is bringing back the “intimacy” of “meaningful relationships” to health care by deploying an offshore cadre of exclusively female “certified doctors” who will respond to your text messages as often as you wish, day or night, free of charge. You must solemnly swear that “you will not attempt to learn the identities and/or locations of the “Drs.””, who may or may not be “who they claim to be”, and of course First Opinion is taking absolutely no responsibility for “the quality, reliability, timing, legality, integrity, authenticity, accuracy, appropriateness” of its strictly non-medical telemedicine.

If this particular flavor of telesnakeoil sounds like a petty aberration that will most certainly be shut down, you need to know that this particular business model is the spitting image of the decades old disruptive innovations that swept other science, technology, engineering and math (STEM) fields. It starts with the fabrication and propagation of stories about shortages of qualified workers and how high wages are bankrupting the industry.  It then proceeds to the offshoring of and the importation of temporary foreign workers for “low skilled” functions that Americans supposedly have no interest in performing (think primary care). Before you know it, the President is bemoaning the STEM shortages in the State of the Union, and global corporations are forcing the passage of legislation to encourage a steady supply of cheap STEM labor. In the meantime, STEM wages are stagnating and most STEM graduates are forced to look for jobs in other fields.

The S in STEM stands for science. Physicians are STEM workers. And the billionaire funded Partnership for a New American Economy, which is aggressively campaigning for increased temporary worker visas, has physicians and nurses squarely in its crosshairs. Sending medical work overseas and importing cheap physician labor from developed countries is not going to be as easy as it was in the tech industry, not because our doctors are the best of the best (our engineers used to be the best too – quality is not the point here), but because of existing regulatory hurdles tying the practice of medicine to a geographical area which is smaller than planet Earth. Once State by State medical licensure requirements are removed with active support from shortsighted physician organizations, the (oh, so expensive) residency requirement will be next on the chopping block, and the transformation will be complete.

In a last ditch effort to stem the tide of physician nullification, the Texas Medical Board (TMB) is trying to put a modest stake in the ground by ruling that physicians can only provide telemedicine services to patients with whom they have a preexisting in-person relationship, or if another clinician is present at the patient’s location. This rule permits basically all modalities of useful telemedicine services, except the “one-and-done” type of remote encounter, where a minor ailment is diagnosed based on hearsay and, most importantly, antibiotics are diligently prescribed. I did not see any massive support for the TMB from physician organizations. Instead the TMB was slapped with a lawsuit from Teladoc, a telemedicine service provider, getting ready to go public and arguing that by enforcing a standard of care, the medical board is interfering with Teladoc’s God-given right to make lots of money.

Telemedicine, you see, is the greatest innovation since sliced bread, and it is going to do for America’s health exactly what its predecessor did. You don’t need to be a “futurist” to see where this is going. The TMB will most likely lose its case in courts stacked with corporate lackeys. Next, the unregulated interstate commerce in telemedicine will further accelerate the exodus of physicians (and hospitals) from rural and working-class areas, which is a good thing for telemedicine vendors. Finally, the best paid middle class profession will be “globalized” to places where “doctors” work for less than American minimum wages, and we will all be conditioned to crave and consume deadly amounts of convenient and nearly free iPhone medicine.

You may be tempted to blame the public for its quest for cheapness and convenience, or for its inability to value a relationship with a trusted physician. You may be increasingly frustrated by the starstruck media and its unquestioning worship of all things originating from Silicon Valley, and you may be disheartened by corrupt government acting on behalf of billionaire thugs to swindle the populace. But where are our doctors? Not the offshore avatars, and not the ones submitting themselves to $40 peepshow sessions, but the overwhelming majority of American physicians, still anchored in their communities and still practicing ethical medicine, one patient at a time. Where are you guys?

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.

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.

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.

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.