Health for life

What happens when you mix health care entrepreneurship with the increasing role of remote connectivity? Thats what the Disease Management Care Blog thought when it talked to former disease management maven Chris Selecky about a new business venture called "Health Tech Hatch" (HTH).

HTH hasn’t gotten off the ground yet.  When it does later this summer, it’ll offer aspiring health tech entrepreneurs the real-world discipline and business savvy of industry veterans. The good news is that start-up costs for promising apps, devices or other cool technology innovations are lower than ever before, component "platforms" are readily available and venture capital interest in eHealth is growing exponentially. HTH pairs those ingredients with networking, intellectual capital, crowdsourcing, business planning, pilot programs and strategic advice that can make the difference between a shot at funding versus withering on the vine.

How can HTH make money?  Chris imagines via her company participating in any outside funding, sharing in the revenue from any future premium services, sponsorships, future consulting engagements and getting an equity stake. Yes, HTH has competition, but its niche is focused in health care, technology and the business of patient-consumer engagement.

This is further evidence, says the DMCB, of the rapid evolution of health care.  Just when we think we have population health management, the medical home, telehealth, the electronic health record, accountable care and health system "alignment" figured out, companies like HTH keep threatening to blow holes in our best laid plans using stuff like handheld devices and even greater levels of self care.

Revolutionary or evolutionary, the concept is intriguing.  Stay tuned!

"Stand up, bend over and let me see that itchy rash!"

In another lesson on how its clinical world is changing, the Disease Management Care Blog recently witnessed a "virtual" computer-based video patient-physician office visit. The patient seemed to like the convenience, while the physician reminded the skeptical DMCB that most of any medical diagnosis is based on the patient history, not the physician examination. 

It worked pretty well.  Whats more, the literature suggests that this is not all that new,  there are studies that suggest high levels of patient satisfaction and a surprising willingness to pay for the service out of pocket.  Time will tell on whether this leads to comparable clinical outcomes at an acceptable cost.

But what has struck the DMCB most of all was a business model "dichotomy."  Talk to most policymakers about virtual office visits and youll discover that it is being hailed as another advance in increasing consumer-patient access to cost-effective care.  In other words, persons living in Faraway Montana will be able to discuss their rash with the expert Dr. Windowchat anywhere in the world.  The DMCB thinks of this as the "enlightened" side of "telemedicine."

While that may have merit, when the DMCB googles "virtual office visits," it finds a decidedly contrary business model: busy and computer-savvy suburbanites with the kind of disposable income who can pay out-of-pocket for the convenience of not having to sit in a waiting room.  From a health insurance perspective, this is quite compelling, since it substitutes a lower level of service for a population that is prone to overutilization.  The DMCB knows the doctors like it better when the insurers arent involved in a high cash-flow yes-Ill-take-VISA transactional business.  This is the "real" side of telemedicine.

The DMCB suspects this is one of those innovations that offers something for everyone: increased access for those with not enough of it and "disruptive" technology for a health care industry still locked into expensive and labor intensive one-on-one doctor-patient visits.  From all points of view, this form of telemedicines future is very bright.

According to South Dakota researchers, the predator status of Tyrannosaurus rex can no longer be questioned. After finding one of its teeth embedded in the healed spine of a Hadrosaurus, paleontologists now believe T rex was a fearsome hunter, not an carrion munching opportunist. 

But, asks the Disease Management Care Blog, how do we really know that that Hadrosaurus wasnt  pretending to be dead when the T rex took its bite?  Alternatively, the Hadrosaurus could have been sleeping and only looked dead to a slow-witted and lazy T rex. 

Dino doubts, says the DMCB, remain.

Such is the level of skepticism that the DMCB is bringing to its reading of the recent CMS press release describing the initial results of the Pioneer ACO program.  CMS says "positive" and "promising." The DMCB says "problematic" wonders if, like the T rex dilemma, there isnt an alternative interpretation.

The DMCB explains.

Recall that the Pioneer ACO program is designed to test whether large integrated organizations can be successfully rewarded for reducing health care costs through a program of "shared savings."  Under the program, if the savings exceed a minimum threshold, CMS will remit a portion of the upside savings back to the participating organizations.

According to the press release, the health care costs for the 669,000 Medicare beneficiaries cared for by the 32 Pioneer ACO program providers grew only .3% versus .8% for a parallel group of "similar beneficiaries." 13 organizations exceeded the savings threshold, which will lead to Uncle Sam writing checks for $76 million in shared savings.

This front page article in The Wall Street Journal has more detail. It says 18 of the 32 reduced health care costs, which leads the DMCB to conclude that five otherwise "successful" participants did not cross the required savings threshold. Two participants lost money. That, in turn, suggests the remainder, or twelve, broke even.

Details on how each individual institution fared are not readily available.  According to WSJ, Bostons Partners Healthcare reduced Medicare claims expense by $14 million.  They will be rewarded with a shared savings check of $7 million. Wisconsins Bellin-ThedaCare will get "several million."

Good "win-win" news for the Pioneer organizations, CMS, Uncle Sam and U.S. taxpayers, right? A critical mass (40%) achieved millions in shared savings, which means proof of concept met and that a key part of Obamacare is successful, right?

"Not exactly," says the DMCB.

It figures 100% of the participating organizations had to each invest millions for personnel and other infrastructure to pursue the Medicare savings in the first place.  In other words, they were in the red before Pioneer even began.  That means that, in addition to the two participating organizations that lost money, the 12 that "broke even" as well as the 5 that did not make threshold also lost millions. 

Thats 19 losers or almost 60% of the participating organizations.

In addition, its possible that for some of the 13 "winners" that the shared savings awards wont  match their up-front multi-million dollar investment either.  Assuming thats true, its possible that as many as two thirds of the Pioneer organizations lost money. No wonder 9 of the participants have signaled a desire to exit the program.

The DMCBs dinosaur analogy may be apt.  Given a two out of three likelihood of losing millions in the first year of operations, ACOs may just be too big and complicated to survive in the current health care environment.  Nonetheless, the Pioneer program will continue and the DMCB will stay tuned for the Year 2 results.

In the meantime, the DMCB wishes CMS good luck in using these "positive" and "promising" results to expand the program anytime in the near - or distant - future.  

Small business points at its competitor

It wasnt until the Disease Management Care Blog had read this Jan. 30 Wall Street Journal opinion piece that it realized that its "nano" corporate" status was packed with such futuristic potential. According to the editorialist, American companies should follow the DMCBs lead and be "protean" by dropping old fashioned W-2 employees and substituting 1099 contract relationships.  That way, everyone - including a single person "nano" - can enjoy the upsides of being a corporation and stay below Obamacares 50 employee pay-or-play $2000 penalty threshold.

Since the DMCB formed its own corporation more than 5 years ago, it has certainly participated in "protean" business relationships. Once things get underway, the DMCB often discovers that of the many prominent organizations that it does business with really consist of a small core office populated by a few owner-founders, a single administrative aide and one or two payroll folks who oversee the outsourcing of everything else.  While the term "protean" is certainly novel, the DMCB thinks distributed, adaptable and organic business networks have been around for years.

But the WSJ editorial opens a window into an underappreciated consequence of Obamacare and the underlying assumptions of the central planners who run Washington DC.  The DMCB doesnt necessarily think its bad, but it sure is interesting.

Read on.

While the Affordable Care Act (ACA) was intended to link employment and health insurance, what it has really done is handed many small nimble interlocked businesses another leg-up against their large traditional mainframe competitors. For example, one colleague pointed out to the DMCB that "new" pharma companies are really marketing departments that outsource manufacturing that, in turn, outsources supply management that outsources I.T. that outsources its cloud services. Its the only way they can compete. 

The new economics of health insurance will only accelerate similar trends in other manufacturing and service sectors of the economy.  Toss in the ability of people and capital to move and work across borders and the picture becomes even more dynamic. And in the meantime, Washington DC continues to implement the ACA with a legacy of large companies buying comprehensive health insurance for its employees.

Little did anyone anticipate that the ACA would hamper the success of American big business.

Image from Wikipedia

The Disease Management Care Blog continues to be beguiled by Meghan McCain, and not just because she could be a good match for one of the DMCBs unmarried spawn. Ms. McCains career may hold some early lessons in the coming style of 21st century leadership.

Way off topic for the health industry-oriented DMCB? 

Not quite.  It explains below.

As the DMCB understands it, the very blond daughter of Arizona Senator John McCain has a reputation for a liberal style of nontraditional Republicanism. That, combined with her namesakes political and media connections, has undoubtedly (and perhaps unfairly) catapulted her into the national spotlight.  She could have faded away along with her dads presidential ambitions, but she now has a web-TV gig that is a curious mix of 50% reality show (e.g., the travails of hanging taxidermy), 50% social commentary (e.g., her generations lackadaisical views on privacy) and 50% chatty self-promotion.

Thats not the point.  What is the point is that 20th century old-fashioned (in politics, think Ronald Reagan or in business, Jack Welch) leadership skills were honed by decades of practice practice practice in the written word, public speaking and retail networking. Once they mastered that, their formidable communication skills helped propel these very talented men into their very successful careers.

We dont know where Ms. McCains career trajectory will take her, and its very possible that she could ultimately fade away. The DMCB bets not. While her current views and public persona can come across as naïve and unpolished, this young woman is likewise practicing practicing practicing to master a newly emerging 21st century style of leadership that will rely on the broadcast word, media savvy and web-based networking.  By the time she is in her 50s, decades of experience combined with her other skills on both sides of the lens could make turn a diamond in the rough into a formidable force in business or politics or both.

Which brings the DMCB back to the business and politics of health care.

This has important implications for health industry leadership, including population health management. Simply avoiding the social media is no longer a formula for success. Smart hospital administrators are also mastering blogging to mitigate threats. Bad moments captured on YouTube can make health industry leaders look bad.  Branding without Twitter is now like personal injury attorneys without contingency fees. Boards of Directors cant ignore the threat of adverse media relations like this in their enterprise risk management.

And who will be best positioned in the coming decades to lead health care companies through these challenges?  Smart CEOs and executives who have a deep familiarity with leveraging TV and social media - thanks to decades of personal experience -  to engage their constituents and customers to choose their products and services instead of their competitors.   And if they go into politics, theyll be leveraging the same social media skill-set to get voters choose their ideas and to vote for them.

You go gurl!

Image from Wikipedia