HealthCamp San Diego 2011

 

Hot of the press! HealthCamp San Diego will be held in conjunction with the Health 2.0 Spring Fling on March 20th, 2011. Sponsored by Kaiser Permanente and the Rady School of Management.

For details, click here.

 

MIA? Not Really…

There is much happening in the whirlwind of health reform, and the granular transformation enabled by the passage of the Patient Protection and Affordable Care Act (PPACA). The theater in Washington notwithstanding and well as the growing storm of legal challenges to the insurance mandate leave much of the implementation path somewhat clouded.

Yet the ‘roll up your sleeves and make a difference’ crowd rather than whine and obstruct, are rather busy and focused on the granular transformational opportunites written into PPACA.

You will find some of the more interesting posts and updates from the proactive players at ACO Watch, and well as it’s sister podcast via ACO Watch: A Mid-Week Revew.

Three recent posts are well worth singling out, they include:

Jaan Didorov, MD, and publisher of the Disease Management Blog, on ‘No Faux ACO’s Here!’ A play witty on CMS Administrator Don Berwick’s earlier industry admonition, as well as ‘How To Get Independent Physicians Into an Accountable Care Organization‘, offers select insights and commentary of a mature IDN, absent the staff (or employed group)  model DNA typically associated with Mayo, and Kaiser Permanente ACO strains, but more of a private/voluntary medical staff model culture, over at Advocate Health Partners.

Also, check out ACOs and the Shared Savings Program; Some Common Misconceptions, by Reed Tinsley, CPA.

We welcome your comments and engagement!

Launch of ‘ACO Watch’

Welcome to ‘ACO Watch‘. With the first official ACO to be so anointed shortly by the regulatory apparatus in Washington, DC and/or Baltimore, we thought there might be a place to monitor, track, educate, inform and perhaps even entertain as we witness the ramp-up for the ACO indusry – staggered as it may be.

Opening post is pasted below:

Welcome to ‘ACO Watch’ – keeping a pulse on the race!

October 5th, 2010 § 1 Comment

With the March passage of the ‘Patient Protection and Affordable Care Act (PPACA), the ‘follow the money’ floodgates are once again opening for hospitals, physicians, integrated delivery systems, health plans, and consultants. This time, instead of migrating ‘HMO lite’ (neither staff nor group model) platforms into mainstream medicine via IPAs, we’re now talking about their ‘new and improved’ successors broadly cast as ‘Accountable Care Organizations aka ‘ACOs’.

Some call it ‘managed care 2.0′, while the more cynical among us envision it as the full employment act for consultants, and health care lawyers, shopping a not ready for prime time, if not fundamentally flawed ‘business model’.

Given the high level of interest in these ostensible quality promoting, while cost restraining entities, the staggered implementation timeline in general, the ACO January 1, 2012 fuse in particular, and the broad brush framework intentionally reflected in PPACA, we thought it a good idea to keep a pulse on the ramp up to the highly anticipated ‘go live’ date.

We welcome your interest and contributions to this conversation.

Please check out ACO Watch or updates, guest posts, news, conferences and webinars that may be useful to you!

The ‘Medical Aggregators’: Are We Entering Round Deux?

First a little historical context:

For those with a healthcare ‘event horizon’ slightly more seasoned than the current health reform and related social media data frames, you might remember the initial round of aggregation in medicine lead by disruptive nameplates such as MedPartners (now operating the PBM CareMark), PhyCor, FPA Medical Management, and their second or third tier physician practice management ‘me too’ copycats.

They all emerged from a robust round of venture capital backed industry determination tagged as ‘PPMC’s', i.e., physician practice management companies. These ‘aggregators’ were the darlings of Wall Street for a while, though with some exceptions, i.e., US Oncology (formerly Physician Reliance Network), most witnessed relatively short life spans, from IPO to unwinding in perhaps a 10 year run (see: MedPartners collapse and Aftermath).

Yet, despite the promise outlined in the offering prospectus’, why did these entities fail so miserably as the ‘white knight’ consolidators or aggregators of a multi-trillion dollar ‘cottage medical industry’? Their business model proferred essentially three core benefits:

1. Centralized, standardized and more efficient back office medical administrative management
2. Scale of market asset concentration and therefore increased sophistication and leverage (improved pricing) with third party payor negotiation, and downstream contract management; and
3. Serve as an ‘anchor play’ with respect to the broader design and implementation of rational though market based local delivery organization and financing, i.e., PPMC’s would harness and more effectively articulate a business culture among physicians that valued clinical integration, medical risk management, and ultimately the allocation of limited health care resources

At least this was the longer term expectation from a ‘win/win’, i.e., payor and provider perspective, of the more established players. Most however, in an effort to demonstrate value (i.e., earn their management fee) to their physician boards, focused on short term margin improvement (better rates, focus on more profitable services via improved payor mix, maximizing the contract revenue/recovery cycle, and reduced overhead, etc.), vs. the strategic focus of managing the risk (both quality and cost) of their local population (i.e., enrolled members).

So rather quickly the strategic basis of the PPMC appeal was subordinated to a short term focus (i.e., increasing net revenues) due to a rising chorus of claims that at its core the business model was merely a third party ponzi scheme which introduced another mouth to feed from an increasingly constrained health care supply chain.

Net/net, the PPMC industry flamed out big time and did not fulfill its ‘roll-up’ promise of the practice of medicine. Now many years later, we are at another tipping point. Witness the current round of promising vehicles with a similar vision of organizing physicians. These candidates include: hospital systems, health plans, integrated delivery systems, emerging ACOs, medical homes,  and even niche play organizers in the concierge, or direct practice space including SignatureMD, MDVIP, HealthAccess Rhode Island, CarePractice, Qliance, and HelloHealth, as well as the rapidly emerging series of retail pharmacy sponsored primary care clinics, e.g., CVS/CareMark Minute Clinic, etc.

Too many docs are unwilling to risk the capital of private practice, and instead are looking to hook-up with one or more of these institutional or VC backed entrepreneurial sponsors. Will they succeed where their predecessors failed? If so, why?

From my perspective, it will clearly depend on the business model chosen to enable competition of the right variety, and the degree to which the venture embraces, nurtures and expresses physician culture that values collaborative group practice. Top down, corporate strategies dependent upon an over worked and out gunned medical director or VP of medical affairs will miss the mark. The more likely way for these ventures to succeed is by ‘baking’ the culture from the ground up. In other words, ‘seed it and they will come’. One of my mentors (Ernest Holmes) once wrote long ago: ‘the soil can’t argue with the seed’. Lets nourish the soil first, then make sure we plant the seeds with the right constitution and vision.

Health Reform Summit: More Theater of the Absurd or Gettin’ it Done?

So where’s the ‘smart money’ on the likely net take away from the health reform summit, or as the more cynical would say ‘Obama health care photo-op’?

I suppose the prevailing sentiment would say hey it’s Washington, and therefore more theater with sound byte positioning for ‘ideologue base speak’ is the best we can expect. But might there be another way to frame this event, and its potential to yield one or more tangible deliverables for the health reform imperative?

As has been chronicled elsewhere, while Americans remain divided on key provisions of Senate and House approved bills, certain provisions are quite popular among majorities of Democrats, Independents and Republicans. When coupled with a national mood that is pretty fed up with finger pointing, and the relentless blame game, seasoned with recent revelations of obscene Anthem or Blue Cross individual health insurance premium rate increase requests in Michigan (56%) and California (39%), it just may be possible to hold these politicians accountable to the American people.

Lets face it, while its been a long and painful process to observe (especially the Senate Finance committee) or engage in, clearly the subject of the American health care delivery system, and its failing financing paradigm is a top of mind issue even for Joe Six-pack and those who might otherwise not give the subject the time of day.

So the time is now, ‘the whole world is watching’, and yes, failure is NOT an option. A bill must be signed that fully embraces the initial ‘Obama-care 101: The president’s 8 principles‘ or the more recently published  ‘Presidents Proposal for Health Reform‘.

For those of you who will not consume the health reform summit live, here is Ezra Klein’s ‘A Viewer’s Guide to Health Care Summit‘ courtesy of the Washington Post.

So Tweeps, lets get ‘er done!

Health Care Web Literacy with HealthTweep & Thought Leader @PhilBaumann

On Tuesday’s broadcast at 9 AM Pacific and 12 Noon Eastern, I will chat with Phil Baumann on our nascent yet rapidly emerging new media, aka ‘social’ industry. We will talk about a range of issues from web literacy to content building, promotion, branding and attempts at monetization.

For more information on Phil see his blog here; and Twitter page here. Phil is a witty, generous producer and insightful publisher of social media pieces; a sampling of which can be seen via:  140 Health Care Uses For Twitter, The World’s First Twitter Chat for Nurses: RNchat, and Google Is Watching You: Building Your Reputation on Google.

We invite your participation in the program via call in, chat or Tweetstream’s of @PhilBaumann or @2healthguru; the call in phone number is 347.539.5527.

Ed Bennett on Trends in Social Media for Hospitals & Health Care Organizations

Please join me for a conversation with Ed Bennett!

On the Wednesday, January 13th ‘Trends in Social Media for Hospitals and Health Care Organizations‘ broadcast I am pumped to chat with Ed Bennett of ‘Found In Cache: Social Media resources for health care professionals’ as well as his day job at the University of Maryland Medical System.

I affectionately refer to Ed (rumored to be a die hard Cowboy Junkies aficionado) as the Social Media for Hospitals ‘Oracle’ from Maryland. Ed is a leading voice, documentarian, and visionary change agent in the social media for health care organizations’ space. His tireless commitment to track, update, educate, share and vet emerging health care organizational participation in social media is a major contribution to the granular evolution of the space. Please join me in this conversation with Ed! You can call in with questions or active participation via 347.539.5527, or participate in the chat room;  or as many do, just lurk. All are welcome!

The program airs at 12 noon Eastern time, 9AM. If you can not make it live, it will archive here for rebroadcast or download. I like to subscribe to episodes and listen at my convenience via Google Reader. iTunes of other RSS feed burner.

w00t! ‘TEDMED Heads’ 2009 Descend on San Diego

And boldly ask:

Is the end of aging in sight?

The TEDMED conference agenda is jam packed with innovators in technology, education and design all focusing their considerable energies on the applications of genomics to real world problems in medicine including the ‘holy grail’ of extending human life, and reinventing the management, if not elimination, of disease.

TEDMED is an extension of the TED (Technology, Education & Design) Series founded by Richard Saul Wurman. Marc Hodosh is President of TEDMED, a conference he is re-launching right here in San Diego.

Previously Marc led the Archon X PRIZE for Genomics, a $10 million competition to inspire rapid and cost effective genome sequencing technology; which followed the highly successful $10 million Ansari Space X PRIZE.

With the publication of his first book in 1962 at the age of 26, Richard Saul Wurman, began the singular passion of his life: making information understandable. He chaired the International Design in Aspen in 1972, the first Federal Design Assembly in 1973, followed by the National AIA Convention in 1976, before creating and chairing TED conferences from 1984-2002.

Wurman created and chaired the TEDMED and eg2006 conferences. A B.A. and M.A. 1959 graduate with highest honors from the University of Pennsylvania, Mr. Wurman’s nearly half-century of achievements includes the publication of his best-selling book Information Anxiety and his award winning ACCESS Travel Guides.

To contextualize and perhaps frame the conference mindset, a key equation for ‘good health’ was outlined by Bill Davenhall, of ESRI, as follows:

Genetics + lifestyle + environment = risks

According to Alana B. Elias Kornfeld, of the HuffingtonPost: ‘Davenhall spoke about the missing piece to understanding personal health: the environment.’

For a summary of Day One at TEDMED 2009, see Kornfeld’s article TED MED 2009: The Missing Piece In Understanding Our Health.

Note: For the less fortunuate of us unable to attend this conference, you may follow the tweets, aka ‘digital footprint’ via many health tweeps participating in the event using the Twitter hashtag of #TEDMED.

Health Care ‘Texas Style’: A Model for the Nation?

In the aftermath of Atul Gawande’s landmark piece ‘The  Cost Conundrum‘ and the selective emergence of the ‘Mayo v. Mc Allen‘ mantra, I’ve been tweeting of late on the ‘irony’ of certain Texas health markets, particularly given the concentration of hospital assets in non profit health systems, and the timely question of whether such consolidations produce the ‘community benefits’ proffered by their leadership. The recently published Commonwealth Fund study ‘Aiming Higher: Results from a State Scorecard on Health System Performance, 2009‘ has supplied certain metrics to further contextualize the conversation.

First some background: I spent 13 years in the Lone Star state, initially advising a major national proprietary hospital management company’s implementation of its managed care strategy in the Houston market, followed by implementation physician networks for a 140,000 member global risk Medical Group, and finally managing payor and provider contracts for a joint venture ‘Super PHO’ affiliated with a dominant faith based hospital system in Dallas/Fort Worth.

Now mind you, everything in Texas is big – especially its delivery system players who have literally architected quite beautiful (and very expensive)  ’cathedrals of medicine’. Examples include: the Texas Medical Center (an NIH like cluster of some 12+ competing institutions), Memorial Hermann Health System, Baylor Health Care System and Texas Health Resources to name a few of the trophy properties. Yet, years after the roll out of the strategic plans of these health systems, and the fulfillment of their market share objectives, certain of the state’s health care indicators look quite grim when contrasted to other parts of the country.

One might wonder why? Afterall, the typical pre-merger or alliance argument in favor of consolidation, acquisition or market expansion, was typically framed as follows, it will:

· Improve quality

· Improve access

· Increase operating efficiencies; and

· Lower costs

Yet according to the Commonwealth Fund study, and now years after these consolidations, here’s how Texas ranks on key metrics of health status compared to all 50 states, and the District of Columbia.

· Overall: 46

· Access to care: 51

· Prevention & Treatment: 43

· Avoidable Hospital Use & Costs: 42

· Equality between rich and poor: 50

· Equality between non-Hispanic white and minority: 48

· Healthy lives: 21

· Children with medical and dental check-ups in past year: 40

· Adults with a regular doctor: 49

· Medicare reimbursements: 46

· Infant mortality: 19

· Breast-cancer deaths: 18

· Colorectal cancer deaths: 15

· Adults who smoke: 17

· Overweight or obese children: 32

Not exactly ‘best in class’. So why not ask, where is the ostensible and promised ‘community benefits’ and not just those codified in IRS code, to justify the tax exempt status for most of the entities above? How is this ‘return’ (to the community) being measured; (is it via Medicare or Medicaid ‘shortfalls‘, or charity and bad debt write-offs; or some tangible real world contribution); or is it even accurately measured? The IRS 990 filings are somewhat ‘fluid’ on the specific reporting of activities that count towards community benefit.

Most, if not all, of these institutions are primarily ‘non profit’ (with some affiliate JV exceptions) yet they are aggressively managed to generate a surplus of revenue over expenses; after all ‘no margin, no mission’. While they do not have stock holders or investors per se, they do have bonds that require adequate debt service coverage in order to maintain favorable credit ratings and competitive access to capital.

This is where the ’story’ for the consolidations and, for some, the unspoken truth of the matter emerge, IMO. While perhaps stated in the vision for some, most of the benefits of consolidation are to be found in the pricing leverage that comes from asset concentration. Hospitals want higher rates, and payors (health plans and insurance companies) can tell you how difficult it was, and likely remains today, to extract material discounts from these massive institutions given their scale and market dominance.

So the question remains open: have they delivered, or are they just plain ‘doin’ it wrong’? Is the promised value proposition a reality today for the Texas residents they purport to serve? Based on these, and other metrics, many would say no. Rather than more of these Texas sized giants, why not refocus the Lone Star state on their one home grown version of a ‘Mayo Clinic’ model domiciled in Temple, Texas aka ‘Scott and White‘.

In the next blog post, i’ll touch on the physician role in the Texas market, and the historical rise and fall of physician driven integrated delivery systems in particular.

Here’s how Texas ranked in key areas compared to all 50 states and the District of Columbia.

• Overall: 46

• Access to care: 51

• Prevention & Treatment: 43

• Avoidable Hospital Use & Costs: 42

• Equality between rich and poor: 50

• Equality between non-Hispanic white and minority: 48

• Healthy lives: 21

• Children with medical and dental check-ups in past year: 40

• Adults with a regular doctor: 49

• Medicare reimbursements: 46

• Infant mortality: 19

• Breast-cancer deaths: 18

• Colorectal cancer deaths: 15

• Adults who smoke: 17

• Overweight or obese children: 32

Towards a ‘Preferred Hospitals’ Manifesto

So what’s a ‘preferred hospital’ anyway?  A fair question, since ‘beauty’ is for the most part in the mind of the beholder!

Preferred Hospitals remains a conceptual ‘on the come’ value proposition at this point; but when I first thought of the idea, I had in mind structuring a network of participating hospitals and physicians directed primarily to the 47 million Americans without health insurance. The network’s ‘secret sauce’ consisted of providers who contractually committed to a substantially discounted (equivalent to the best or “most favored nation’s”) rates, otherwise extended to ‘wholesale buyers’, i.e., health plans, with the greatest group purchasing leverage.

In the economics of managed care, the more members a health plan trafficked in a specific market, the greater provider discounts they could expect. Most favored nations rates often equated to 50 cents on the dollar (or less!) , i.e., a 50% discount. Thus, the value proposition (to the uninsured) was twofold: (1) the contract rates would be actually honored, and therefore the member would receive a benefit in exchange for the modest dues paid vs. told ‘we don’t participate with that plan’; and (2) the provider’s rates would be adjusted to ‘fair value’ at least as determined by the entities with the greatest purchasing power in that market.

The great irony is hospitals and physicians too often (whether by design or not) reserve their ‘retail book’, i.e., billed charges, for the least able to bear the burden of charge based ‘sticker shock’. Many offer cash discounts as a courtesy in the +/- 25% range, but too often fail to present that option upfront before the downstream litany of collection calls.

At the time I originally entertained the idea, the discounted medical plan marketplace (DMPO) was populated with flimsy players, many of whom where exposed by the Georgetown University Study ‘Discount Medical Cards: Innovation or Illusion?‘ So it appeared this idea would have traction in the marketplace. While I enthusiastically jumped in, I found myself banging my head on the wall, over and over again. The value proposition seemed so apparent to me; especially linking the emerging growth of retainer, concierge or micropractices to a targeted and under-served market that contrary to popular wisdom was not a indigent demographic per se. Further, I reasoned (incorrectly I might add) that many of the forward thinking, and compassionate hospital systems (especially the one I worked for in DFW), forged under benefit of tax exemptions would proactively embrace a solution designed to reach an underserved market, and thus make a material deposit into the ‘community benefit’ bank. With IRS and the Congress on the non-profit hospital trail (i.e., Chuck Grassley, et al) looking into the veracity of 990 filiings, certainly these hospitals would see the light and embrace the greater good this model so obviously afforded; not!

None-the-less, I began to negotiate ‘upstream’ with several national PPO network managers, who in search of incremental revenues, and fighting ‘silent PPO allegations’, were electing to ‘rent’ and private label their networks in exchange for a per member, per month (PMPM) fee that ranged at that time between $3.50 – $4.00. Yet, as a start up with no membership, it became solely a cat and mouse affair. The PMPM basis was a function of the membership base which at that time was zero. From their perspective, it was a pure play ‘on the come’ business model, and good intentions not withstanding, we could not come to terms.

I also approached several colleagues, and friends in the personalized, retainer model, or concierge medicine market, and attempted to interest them in the business model. Most notably the Society for Innovative Medical Practice Design (SIMPD) was a logical partner or sponsor (I reasoned) to which I ‘pitched’ the idea, though to no avail. They were just not interested in ‘marketing” their nascent member panel at the time, nor reaching out to this underserved market per se.

Thus, no traction developed, and after much time soliticing support, and partner participation, I elected to back off of the business model.

So fast forward a few years and witness the ‘health reform 2.0 moment’ we’re all having. Revived thoughts have surfaced as to what and how a preferred hospitals network might be structured?

Here are a few ‘indicia’ of an emerging preferred hospitals manifesto:

• Commit to pricing, cost and quality transparency
• Adopt social media guidelines to engage and empower patient utilization of the hospital’s services (pre-admission, during and post discharge; especially follow-up concerns)
• Offer ‘members’ most favored nations’ rates via a credible discount medical plan(s)
• Waive where possible, or otherwise, defer collection of all upfront fees, copays, estimated co-insurance, and/or deductibles
• Participate in budget driven and consumer specific time payment programs (as determined by independent financial counselors) via auto-debit direct from the patient’s bank (interest free)

This is only a start. I welcome your thoughts.