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.