Friday, October 16, 2009

Health Care Reform Lite: The Sky is NOT Falling, People!

By J.D. Kleinke

Also available on The Health Care Blog at

“The only constant in health care is change.” It’s one of those shop-worn things you hear too often on health care’s rubber-chicken circuit; and not only is it not true, but it is exactly untrue.

The only constant in health care that I’ve actually witnessed, since I was first sentenced to the industry in 1989, is well - every fundamental thing about health care. Oh, and constant anxiety about change that never actually happens.

If you think I am overstating the case, let’s nostalgia-trip back to 1989 for a moment. We had a dysfunctional, third-party-payer, fee-for-service system that everyone hated, and everyone figured out how to navigate to their own enrichment. Hospitals merged, marketed themselves, made money, claimed not to be making money (except to Wall Street), added wings, and flew to the skies. Doctors worked mostly in small practices, embraced technologies they could bill for, resisted those they couldn’t, and found ways to game the system. Health insurers made lots of happytalk, generally walked in the opposite direction, raged against the inefficiency and disingenuousness of providers, and printed money, while Kaiser and a few other mutant plans did their own thing. Drug companies discovered miracle drugs, me-too drugs, and junk drugs, marketed all of them with equal fervor, and also printed money. Employers made speeches, shook their fists, and set up several dozens coalitions to fix "the problem." The Medicare Trust Fund was a decade away from insolvency; the Boomers were coming; Medicaid programs were grossly underfunded; medical malpractice was bankrupting the system; costs were “skyrocketing” along with the ranks of the uninsured; and life went on.

Of course, there is one thing different in 2009: everybody gets to carp about it on Facebook.

So too health care reform. When the “journalists” at Fox News, the red-faced demagogues in Congress, and the alarmists in your organization are done ranting about “ObamaCare” and the sky falling, understand that the essence of the health care bill(s) moving forward today is one very simple thing: a violent endorsement of the status quo, paid for with an artfully diffused redistribution costing on annualized basis less than 4 percent of the system’s annual $2.2 trillion haul.

Under the plan that looks most likely to pass after some classic Capitol Hill 3 a.m. horse-trading - this time between the grumpy far left and poll-sitting centrists on both sides of the aisle - health care “reform” will involve little of substance beyond the (1) a long overdue jamming of 46 million people currently outside the system into that system, and (2) an equally long overdue prohibition against health insurers kicking them back out. For the typical middle class taxpayer in denial of what could happen in 90 horrifically unlucky days at their job and within their bone marrow, i.e., the typical swing voter with coverage they might not be able to afford after simultaneously being fired and getting leukemia, #2 is worth the entire effort, and the reason any politician of calculation if not conscience should vote for the current plan.

But at the end of the legislative process, and as with the bitterly debated Medicare Drug Benefit in 2004, all we’re doing is expanding exactly what we have today for most Americans - to include (almost) all Americans. We’ll spread the economic pain around the system fairly evenly, via mandates, taxes and fees that will show up in new equilibrium prices for insurance, drugs, and devices. And the economics of finally putting everyone into the system – instead of waiting until they are on death’s door, a.k.a., the door to the emergency room - will more than offset the upfront costs of getting them there.

Best of all, that last bit of accounting - which lifts what everyone knows to be the worst economic and emotional drag on the entire system - has not been accounted for in the current plan’s financial scoring. Such accounting involves too multivariate a set of equations, too many interdependent factors, too many unknowables in the cost and epidemiology of unmanaged disease – and so the CBO had no way to consider the most profound part of the entire initiative. Meaning: the systemic economic effects of including everyone in the system are gravy. Billions of dollars worth of gravy, if you believe any of the estimates of what the “safety net” costs all of us every year via the madness of hospital-to-insurer-to-employer-to-us cross-subsidy.

My point about how the Medicare Drug Benefit has played out in the past five years bears repeating. When the “Part D” benefit was debated in Congress, the hysterics on the right screamed on cue about “government bureaucrats” in our medicine cabinets, an entitlement that will bankrupt the country, etc.; while the hysterics on the left carped about the evils of capitalism, the program’s outrageous use of money-making corporations to deliver products to people, etc. Out of that political sausage-grinder came a classically American public health care program of government funding and corporate delivery. The health plans, specialty drug plans, and PBMs that administer the program - and the drug companies that supply it - did not get everything they wanted, but they got enough to stay in business, make some money, and deliver long needed care to millions of people who previously couldn’t afford it. Yes, many of the plans did especially well thanks to Federal subsidies, included in the “Medicare Advantage” program to prove the efficiency of the private sector; but that was a bone to the right, not the left, to support the program, so we’ll ignore that pesky irony.

The Medicare Drug Benefit may be working no more perfectly than anything else in health care, but it is working just fine for millions of Americans who had too often been forced to choose between medicine and food, between certain death and slow starvation. Maybe that’s why so few on the right or the left have brought it up in the debate: its embodiment of political compromise and its programmatic success constitute enough actual empirical evidence to sully anyone’s ideological polemics.

Consider the Medicare Drug Benefit a perfect trial run for what we all should hope will pass into law in the next few months: health insurance market reform. It’s not true health care reform – this would apparently require an Act of God rather than an Act of Congress. But the bill(s) before Congress today will finally let the health care system function like something closer to an actual system, because the worst external perturbations to that system – the chronically uninsured, chronically sick, and chronically most expensive to care for – are finally included.

And if you are running a health care organization and worrying about the effects of “health care reform lite,” take note of what happened to those involved in the Medicare Drug Benefit: a few organizations failed miserably, some have profited mightily, and most have muddled through, figured out the rules of the new game, and are doing just fine. Just like most everyone in 1989.


J.D. Kleinke is a medical economist, author, and health information industry pioneer. He has been instrumental in the creation of four health care information organizations; served on several public and privately-held health care information company boards; and written about health care business policy for The Wall Street Journal. His work has also appeared in JAMA, Barron's, the British Medical Journal, Modern Healthcare, and numerous other publications. His books include Bleeding Edge: The Business of Health Care in the New Century (1998), Oxymorons: The Myth of a U.S. Health Care System (2001), and Catching Babies, a novel about the training of OB/GYNs, which will be published next year.

Monday, October 12, 2009

Nursing a Health 2.0 Hangover

So it’s the morning after the big Health 2.0 bash and the hangover is awful. My head is awash with flashing screens of medical alerts, rainbow-colored demos of virtual patients flitting from one personal health app to the next, and a blur of snappy, almost sneering answers to the same old questions about user adoption, ROI, and business models. I just spent two days getting high on health care’s highest high-concept, I can’t log into my own health plan’s portal to look up a simple eligibility thing, and it’s dull, gray cloudy morning in San Francisco.

Whither the 2.0 revolution you’ve been reading about all week? Was the blueprint unfurled before the cognoscenti by Matt Holt and the NorCal health care keiretsu? Was there an exhibitor booth handing out the magic bullets, along with the usual pens and mugs? Um - no.

Perhaps it’s my own perennial impatience with health care’s miserable status quo; perhaps it’s a sign of the inevitable coming of age for the 2.0 community, or space, or ecosystem, or whatever the corporate concept jockeys are calling a market this year. But at the risk of offending Matt and my other good friends in the keiretsu, this year’s conference felt for the first time oddly normative, almost reminiscent of other conferences like HIMSS and the World Health Congress, where Big New Health Care Ideas run headlong into The Great and Powerful Health Care Inertia Machine.

This year, 2.0 was the usual messy dialectic between e-fantasies deployable in “the cloud” and the deadening reality of who will buy, who will use, and who will pay for all this stuff back here on earth. As in years past, the conference pitted The Entrepreneurs against The Suits, with the indefatigable Adam Bosworth and Keas dancing on the tightrope strung between the two, with a useful-looking product and a credible sounding business model (the more mercenary features of which, I am guessing, are hidden somewhere below the surface of the demo). Not counting the ready-for-primetime Keas, its partner Quest Diagnostics, and the omnipresent and omnipatient folks at Microsoft, this year the establishment players at 2.0 seemed less willing than in years past to play straw man and/or nod enthusiastically at the magic tricks (depending on the choreography of the session) that define the art form. The Suits were there, in greater number than ever; but those on stage seemed far less willing than in years past to jump up and shout that yes, they and their entrenched organizations were indeed on board with all these wonderful ideas designed to make their organizations less relevant, less proprietary, and less in control of everything in health care.

In fact, many actually pushed back, some defiantly. And for a few very scary hours in the middle of day one of 2.0, it felt like The Suits were actually winning.

Maybe it was the order of things. The conference dedicated to technologies, tools and services emerging to support a health care system that actually engages and empowers patients opened up with a panel on “clinical groupware.” The discussion quickly de-morphed into a barely browser-based show-and-tell about what wired physicians are using in practice today, and the crowd grew oddly restive. And while I think he intended it as a statement about how often we have to pull back to jump forward, Stephen Sigal, a cardiologist on the panel, mentioned having to de-install his practice’s EMR, GE’s Centricity, for security reasons. (It was the first time I’d ever seen an entire conference audience lift their heads from their PDAs in perfect unison.)

Things went from oddly nervous to outright ugly in the next session, which empanelled several executives from various health plans to critique, aloud, various user applications, a scary mash-up of corporate sales presentation and American Idol.

Faced with the crisp and highly navigable health benefits manager tool from Intuit - one with concise drop-down menus explaining those geeky health benefits terms no one has ever really understood - Chris Ohman of Kaiser retorted that he would love to be able to provide that kind of helpful information to members, but the regulators would never allow it. Pesky regulators: always making it so hard for insurance companies to help people!

On the same panel, Mohan Nair - introduced as a “serial entrepreneur in health care information technology” but listed in the actual program as the Executive Vice President of Regence BlueCross BlueShield - let the crowd know that he had been at Regence “studying the problems of health care for the past six years and realized that the system is broken.” Hold the phone! He then threw a cold bucket of water on the panel’s spontaneous and important debate on the true cost impact of health 2.0 tools by stating, categorically, that none of the things designed to help people improve their behavior or lifestyles will reduce health costs. Really. (I guess all those Regence billboards in Portland last year about improving my behavior and lifestyle really were about risk-selection.)

With what little air remained in the room, Daniel Kogan of tiny HealthWorldWeb - like Nair, an entrepreneur with a day job - showed what the typical patient looking for a new provider on a health plan web site has to endure, then compared it to the same kind of search informed by actual knowledge of the patient’s wants and needs. The result was a narrowing of results from hundreds of physicians scattered willy-nilly across a market delivered by the health plan, to three physicians, all matched perfectly to the patient’s situation, delivered by the intelligent search.

Completely off the point but oddly on cue, Nair responded to Kogan’s throwdown by saying he was “tired of feeling demonized” by comments about health plans not being trusted. I would be tired of it too, if every time I opened up any credible research on the subject (cf. Markle/Connecting for Health, The Commonwealth Fund, Kaiser Family, et al., ad infinitum) I confronted the same perennial fact.

Nair’s remark inspired Fred Goldstein of U.S. Preventive Medicine to reveal that his company had seized upon that demonization with a marketing strategy not uncommon in the post-managed care era. “We realized that people don’t want to share with their health plan that they smoke, drink and hang out all night,” he said, “so we’re going direct to their employers.”

The conference’s opening morning 2.0 fantasy vs. 1.0 reality free-for-all ground to its inevitable, depressing halt when Ingrid Lindberg, “Customer Experience Officer” of Cigna - having announced earlier Cigna’s recent discovery that members were actually customers - wondered aloud how health 2.0 tools would ever gain market traction, given that “people spend 30 minutes picking their health insurance but four hours [a day] watching flat screen TVs.” Maybe it has something to do with the number of health insurance plans offered by Cigna’s actual predominant customer, i.e., large corporations, i.e., one to three choices of insurers - versus the 600+ choices, five or six of them pretty good, on my TV every day.

Luckily, the conference got back on the rails by lunchtime on the first day during some great hands-on creative tool-building exercises (which became fun team-building exercises), and stayed there for the duration. One manic and visionary entrepreneur after another explained how in the future, everything in health care will be digitized, our medical data will flow as freely as tap water (but never spill anywhere), and with all these nifty applications, no one will get sick, go to the hospital or die. More importantly, there were plenty of people with the wherewithal in the audience to fund, acquire, and/or execute on these bold visions. And the whole thing climaxed yesterday afternoon with a carnival-style presentation by several of the companies involved in the Health 2.0 Accelerator project. (“H2X,” as they call it and as far as I can tell, is an odd amalgam of personal health applications providers and infrastructure builders, who are working together to adopt data standards for information movement, e.g., CCR, and create a complex but seamless health information management experience for consumers across products and services in a sort of “co-opetition” (remember that 190s classic?) model.

Kudos to Marty Tenenbaum, founder of CommerceNet – an entrepreneur who no longer needs a day job - for conceptualizing, funding and mentoring this ambitious and interesting project. Because “acceleration” is the only thing health 2.0 needs at this point. Ideas, ambitious people, and gee-whizz technologies we got. And naysayers we got, as we saw on day one, many of whom occupy powerful positions within our health care “system.”

So maybe that’s the best cure for a health 2.0 hangover: the sobering perspective that this isn’t a party, there is a lot of hard and important work to do, and a real revolution in health care won’t be coming easy or fast. If the American polity defines systemic health reform as a few long overdue tweaks to the regulation of health insurance and a few billion in subsidies to people who consume ten times that in ER costs when their uninsured status boils over into medical catastrophe, then I suppose the whole health 2.0 movement really is moving at breakneck speed.

Back to work!

(cross-posted from The Health Care Blog -- Permalink)

Health 2.0 a-Go-Go: A Revolution By Any Other Name Would Smell as Sweet

During the standard what’re-you-doing-this-week segment of a Sunday
barbecue, I told a neighbor who works in the real world that I was
“going to the Health 2.0 Conference in San Francisco,” a sort of random
zeitgeist check on a phrase I use so often at work I don’t really
remember what it means.

"Don't know what the hell that is," he said, his jaw tightening. "But
I'm sure it'll be better than health 1.0. Anything would be better than
the mess we have now!”

Wow, I thought; he just set the world outdoor speed record for
eruption-of-health-care-anger - and in the midst of the Olympic season
for same.

My friend’s outburst was a weird if completely uninformed endorsement of
the Health 2.0 conference booting up at San Francisco’s Design Center
Concourse in the morning.

But in an era when smoldering resentment and
unvarnished rage have come to pass for political dissent (i.e., when a
simple proposal to clean up the worst messes in the health insurance
marketplace is decried as a “governmental takeover”), my left-leaning
neighbor is in accidental agreement with everyone - left or right – just
itching to CTRL-ALT-DELETE the entire health care system, for no more
intelligible reason than the whole thing sucks.

He also happens, if accidentally, to be very much in agreement with many
of us health care 2.0 types - left, right, or strawberry – flocking in
exponentially increasing numbers to the Health 2.0 Conference for three
years running. Forget the hype, the promise of orgiastic punditry, or
the funhouse atmosphere created by the event’s irrepressible creator and
THCB editor Matt Holt. Regardless of your politics or business agenda,
we are at Health 2.0 because we know that, as a society, economy, health
system, whatever – we can do better than health 1.0, should do better,
must do better.

So what exactly is health 2.0? Isn’t it really just a younger, hipper HIMSS?

Younger and hipper, maybe – because the entire point of labeling
something “2.0” is to stick out your tongue at 1.0, at your uncool
parents in stretchy jeans and Velcro shoes who, after decades of earnest
hard work, still couldn’t figure out how to computerize most of the US
health care system. “2.0” screams delineation, divergence, bye-bye. And
there seem to be as many ways of delineating “then from now” as there
are smart people, of all ages, putting serious work into solving health
care’s plethora of problems with 2.0-associated information
technologies, services and tools.

A good example is Phil Marshall of WebMD, who happened to be sitting
next to me on the airplane from Portland to San Francisco en route to
the conference. “1.0 was passive information,” he says, “2.0 engages the
patient.” Then he rattles off a long list of application and service
types that did not exist in the real world, let alone in health care, a
few years ago.

A technologist would say precisely the same thing, if in the language of
development languages and architectures that enable the same
connectivity or interactivity. A business strategist would also say the
same thing, albeit in the language of sustainable revenue models finally
emerging in the 2.0 world, after years of snappy slides and wishful
thinking. (Note to newcomers: perennial fundraising for ventures that
work perfectly in PowerPoint are not sustainable revenue models.)

But essentially Phil is spot-on: “health 2.0” means that the patient
gets to talk back. What the patient wants and needs finally matter. And
this belated revolution - from provider autocracy to patient autonomy,
from Doctor-as-High-Priest to shared provider/patient decision-making,
from bricks ‘n’ mortar medical delivery to cybercare - is bigger,
broader, and more profoundly de- and re-stabilizing to health care
organizations of all types than anything information technology could
ever bring to bear. Technology is the means to an end, despite what
decades of technologists have tried to convince the business
strategists, who in turn have tried to convince the investment
community. And so maybe, finally, the specific technologies associated
with health 2.0 are cheap enough and unobtrusive enough to get out of
the way, and let all of us focus on the point: what the patient wants
and needs.

Yes, for the next two days at Health 2.0, we will be gee-whizzing over a
mind-bending array of new applications, web services, platforms,
un-platforms, and devices - many of which actually work and are in use
today. And of course there will be lots of magic tricks, vaporware,
investor-type presentations that hinge on the missing “and then a
miracle happens” slide, and of course one demo that will explode, slowly
and spectacularly, in the hands of an erstwhile entrepreneur. But we
will also see feats of imagination in the hands of able people with
their feet in the ground, people building technologies that liberate
complex medical data from legacy systems, connect patients with
communities and clinical trials, throughput lab test-results from
primary care physician to specialist to surgeon and back again;
technologies that track outcomes, monitor progress, and send alerts to
providers, health plans, coaches and caregivers; and, when it’s all
prescribed and delivered – technologies for crashing the reimbursement
barricades erected back in the darkest ages of “managed care.” But these
technologies are the details of the 2.0 story, not the story itself.

The real story is the belated revolution of “modern” medicine. The
countless miracles and monstrosities generated in our lifetimes by
modern medicine is a hundred years old right about now, if you date its
beginning to the introduction of the first antibiotic. In the late 1980s
through the early part of the current decade, commercial managed care’s
unleashing of the toxic brew of economic power and engineering process
was supposed to be the “2.0-ing” of health care - the long overdue and
true modernization of classical modern medicine gone mad with greed,
money, inefficiency, and arrogance. That revolution was roundly rejected
not just by those targeted for the makeover, i.e., self-serving
fee-for-service providers, but by much of American society who, in a 1.0
world, had no say-so about any of it for years.

The “2.0-ing” of our health care system today - the one most obviously
associated with technology but driven by so many more economic and
cultural factors (e.g, health plan design, economic incentive
re-alignment, feminization of the physician workforce, the
democratization of information, you name it) - is radically different as
a cultural phenomenon. This time, it isn’t the health insurance
companies taking on an impervious, fee-for-service system; this time,
it’s us, the patients, the people. And thanks in part to managed care
and its introduction of often brutal methods for separating patients
from their providers, we have all learned - often with our own
co-payment dollars - precisely how much we value access, immediacy,
shock capacity, flexibility, convenience, and choice.

Once again, this has little to do with technology. People started
clamoring for the real health 2.0 revolution long before they became
“Facebook friends” with people they couldn’t stand in high school, and
still wouldn’t be able to stand if they actually had to see them again
every day. I expect that the bizarre and delicious delight that is the
Facebook phenomenon will get significant play at this year’s conference,
as it shows that notions of community inconceivable only a few years ago
are not only possible, and not only fringe, but are as re-defining as
the Internet itself in how we inhabit much of our lives. And so too it
goes in health care: we are NOT partying like it’s 1999, and thank God
for that. Technology and information, rather than money and process, are
making the belated and true health 2.0 revolution possible. But unlike
the last attempt at health care revolution, which showed up too often
dressed in the sheep’s clothing of managed care, this time most of us
actually want it.

Thanks to our technology-enabled experiences back in the real world, we
seem suddenly to have discovered that we cannot email our physicians.
And that we can’t get access to our own medical information. And that we
have to find a working fax machine to get a copy of something. Huh?
After two decades of smart people scratching their heads “why won’t docs
use EMRs? How can we get them to start using computers?” I think we
finally found a way: shame. Over the past two years, every physician I
have encountered, professionally and socially, who was finally buying
and installing their first EMR cited none of the usual homilies (e.g.,
reimbursement, quality, efficiency, modernization, etc.) for the
decision; rather, all reported being embarrassed that it took them so
long to get around to it.

Now we're really not partying like it’s 1999, when even the suggestion
to a physician friend that an EMR might worth thinking about would lead
to a tantrum or firstfight or worse. Apparently, enough politicians of
both stripes have finally made enough speeches about the subject; enough
colleagues, administrators, and people at health plans said it enough
times; and most importantly, enough patients looked at them funny when
they started writing down everything the nurse had written down five
minutes earlier, in the same “chart.”

Sometimes, the zeitgeist works just fine; sometimes it works well enough
to foment a real health care revolution.

Let the 2.0 show begin!

(cross-posted from The Health Care Blog -- Permalink)