A "HealthTweep" Pulse Check

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.

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.

In a June article in the NewYorker, surgeon and writer, Atul Gawande brought life to the landmark ’small area analysis’ work of team Darmouth, i.e., Wennberg, Fisher, et al. The Darmouth crew has been studying and documenting the widespread and unjustifiable variations of medical practice patterns by US geographic regions for quite some time.

Gawande’s genius insight was to put a timely face on this ‘value proposition inequity’, by comparing Medicare’s practice patterns and cost profiles from two demographically comparable Texas communities – El Paso and McAllen.

For historical context, this inexplicable and unjustifiable range of practice variance including cost profiles, is not news. I recall circa the 1986 timeframe when Deak Wooten, the then Director of Blue Cross of California’s ‘Prudent Buyer’ plan (an innovative PPO), under the stewardship of Leonard Schaeffer (pre Wellpoint roll-up, or better yet ‘Mashup’ of healthplans), presented the concept of ’small area analysis’, stressing the need to minimize variation both as a quality enhancing as well as cost savings ‘management initiative’. Yet, here we are today, some 20 plus years later, and the concept is only making its way into the American psyche as a result of the intense national debate we are witnessing relative to US health reform initiatives.

While Gawande brings the issue to main street, the bigger and perhaps more strategic question is nested in his narrative on ‘who will ascend to “anchor model” status in US medicine’, Mayo or McAllen? Few in the popular press or even healthcare sector seem to focus on the profound implications of even calling the question!

Worse yet, Gawande cautions:

“Something even more worrisome is going on as well. In the war over the culture of medicine—the war over whether our country’s anchor model will be Mayo or McAllen—the Mayo model is losing.”

This strikes me as an urgent call to action. Especially when considering, when Gawande refers to “Mayo”, he’s referring to that class of medicine as represented by Geisinger, Kaiser, Cleveland Clinic, Intermountain Health, and other group practice cultures that have spawned progressive integrated delivery system (IDS) network models; where ‘integrated’ means merging both direct care & financing platforms.

If the “Mayo’s” of the world fail, then there is no hope for a public/private market solution to the chronic ‘whack a mole’ phenomenon of US health care. The government will step in and put the private sector out of it’s collective misery – not a picture I favor!

In the ‘Twittersphere’ (aka micro-blogging) and blogosphere space we are witnessing increasing conversation into the nature and relevance of social media in general and its optimal application(s) in particular.

Just today we had some lively exchange in a Twitter ‘health care marketing‘ stream, using the #hcmktg hashtag.

As an affinity group primarily of marketeers, though not exclusively, the subtext of the questions generally focus on how can marketing, PR or communications specialists, better apply (i.e., ‘leverage’) this evolving technology in support of their institution’s mission? During these exchanges, we hear intermittent echoes of ROI, and other ‘metrics’ to measure performance, and therefore demonstrate value; particularly to the ‘C-suite” or usual suspect laggers to innovation.

The predominant interest seems to be how to perfect, deploy and manage a platform that essentially adds value to the individual facility or parent system in the aggregate. What might some of these dependent variables (or target outcomes) to measure be? In all likelihood, once we advance beyond image mindshare or service specific broadcasting, the likely ends include:

• improve payor mix
• maximize profitability
• steal share from competitor(s)
• position institution for proactive pursuit of defined or niche customer markets
• reduce re-admission rate (wait, who said that? actually no one yet)
• better integration with medical community
• reduce costs

Don’t get me wrong, I love these tweeps (at least most of them). They are my people, and I delight at being a member of the tribe in occasional good standing as measured by select indicia of ‘twitter love’. Yet, no where in the discussion is the the application of this technology to impact the dyfunctional, often bloated and patently un sustainable business models on which some of their very jobs depend.

Where is the active exploration and application of social media tools to “transform’ or ‘re-engineer” the tapestry of admitted failed business models that constitutute ‘mainstream’ US HealthCare?

If social media tools are not used in service of the purposeful transformation of ‘dsyfunctional’ healthcare delivery and financing paradigms, what value does it add? Absent a values based application of social media technologies, I will answer one the questions posed above: ‘Is Twitter A Fad’? in the affirmative. It will flame out of it’s own weight, and ‘look what I can do’ chatty irrelevance.

In future posts, I intend to craft a draft ‘manifesto’ and welcome your active participation and comment.

That Rick Scott can go anywhere near a boardroom of a healthcare concern is a troubling fact of life in America today.

His self righteous outrage, and positioning of seemingly on-point yet fundamentally sound byte “faux issues”, is perhaps more about attempts at “blogosphere echolalia” than material engagement of health reform facts.

IMJ, this man is both a crook and a scoundrel, who has demonstrated the virtual absence of either a conscience or ethics for the “commanding heights” to which is compulsively aspires; though whether he should enjoy this legal standing is another question.

My, my, we do indeed live in the the United States of “Amnesia” if this ilk of executive can effectively recycle himself into both the corporate board room, and tragically, the national psyche as well.

The vicious attack on the public and private health care domains during his insatiable quest to be the for profit industry’s “roll-up king”, still reverberate today. The “stench” of Columbia/HCA’s tactics remain a nuanced component of other health care concerns; with only the usual suspects being caught and prosecuted.

That this man can step into the limelight and be empowered to carry a banner for a cause for even a “nano” second of legitimacy strains the mind for credulity.

See:  http://bit.ly/fVO5K for well documented context, references and citations.

As has been well documented elsewhere, primarily by the oracle of social media adoption in the healthcare space, aka Ed Bennett, more institutional healthcare providers are putting a toe in the water whether via Twitter, FaceBook, YouTube or the fourth horse in the race, FriendFeed (though not tracked by Ed).

Most are lurking or “monitoring their brand” via select hashtags or semantic filters, or by following those active in the broad range of healthcare or wellness related issues. Others, and the vast majority in my experience, are primarily and sparsely “pushing content” from live surgical tweets to the press release “du jour”, i.e., our new cath lab or latest amenity addition.

Yet very few are participating at the level of engagement wherein “conversations are recognized as markets” per the Cluetrain Manifesto, in which the institution participates authentically with intent to establish and build a personal relationship with its followers or community.

Clearly hospitals and health systems are complex entities for which no one person can consistently speak both with authority and authenticity on behalf of the organization and still keep it “personal”.

By proxy prevailing institutional engagements in social media is typically conducted by a hospital or health system employee who may manage both a personal and institutional account, formally, informally or both.

In my view, the market leader aka “chancellor” in the medium of microblogging participation is @LeeAase of the Mayo Clinic, who also manages the @MayoClinic twitter account.

Lee is prolific in his educational content that is mostly directed to the internal constituency of Mayo, which is increasingly finding external interest in what Mayo is doing for their own institution’s consideration.

If you are a hospital, healthcare facility or parent system considering social media, please take the time to learn what is happening in the “Twittersphere”, and do pay attention to the evolving “agreements” of Twitter-etiquette.

As far as recommendations are concerned, here is a brief list of  ”do’s and “don’ts”:

Do:

1.  Open an account with Twitter, FaceBook, YouTube and FriendFeed, claim your name and protect your brand on these platforms (note: also recommend including uStream.tv or equivalent).

2.  Get started by following people active in the healthcare space.

3.  Study the market, read the ClueTrain Manifesto.

4.  Find a smart, insightful and motivated person to task master the social media cause internally.

5.  Do contribute to the tribe’s knowlege base; this is a young but rapidly evolving industry.

6.  Do consider participating in or sponsoring a “HealthCamp”; where the web 2.0 and health 2.0 conversation meets and thrives.

7.  Do  start tweeting!

Don’t:

1.  Do not open an account and push bursts of press releases, directly or via the many automated tools available, simply broadcasting your wares.

2.  Do not push content into the stream unless you are prepared to respond directly and in a timely manner. Twitter is about engagement not silence, whether intentional or accidental.

3.  Do not act like a silo separate from the community you serve. Be open to what your followers have to offer you, from user feedback to issues relating to cost, quality, access and other consumer experience concerns.

According Ed Bennett’s “found in cache” the the most visible and credible source momitoring the adoption of various social media platforms including the heavy hitters of Facebook, YouTube and Twitter; Twitter is now the number one platform for hospitals. 

As of March 29, 2009, the stats are:

• 128 on Twitter
• 126 on YouTube
• 82 on Facebook
• 23 Blogs

Of particular interest in the mix is the slope of Twitter penetration, which is to say in a “hyper growth” mode, consistent with Twitter’s impressive viral history. Yet, this is a phenomenon which is in the very early stages of tech transfer and user adoption.

According to the American Hospital Association (AHA) there are 5,708 registered hospitals in the US, which translates into a 2.2% Twitter share with 128 participating “Hospital Tweeps”. Clearly most hospitals, whether as entities or aligned individuals (ie., employees, consultants, vendors, docs, etc), have yet to entertain such participation.

As is historically the case, innovation in the institutional health care and/or the hospital space, is  often measured in geologic time. As institutions populated with and driven by complex “governance trees” that generally assure a slow decision making process, such an unknown and unproven new technology can only be greeted with deep skepticism and distrust. 

In the social, or perhaps more accuately termed, “new age media” space, characterized by it’s “real time”, open and unmanaged tag cloud generated buzz, potential adoption of the technology can only greeted with even more skepticism and distrust than usual. One might ask why?

I will venture to answer that question in the subject of the next blog post “Social/New Age Media: The Antithesis of Brand Control and the Advent of Hospital Silo De-construction?

In other words, can social or new age media technologies foster the accountability and transparency from hospitals that every regulated effort to date has failed to accomplish? Read the rest of this entry »