Posts Tagged ‘hospitals’
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.
Written by 2healthguru
February 10, 2011 at 9:11 PM
Posted in Uncategorized
Tagged with health, health 2.0, health systems, healthcampsandiego, healthcare, healthcare information technology, healthcareIT, HealthIT, healthreform, hospitals, Innovation, Kaiser Permanente, mhealth, Rady School of Management, Social Media, Transformation, twitter, web 2.0
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:
- Centralized, standardized and more efficient back office medical administrative management
- Scale of market asset concentration and therefore increased sophistication and leverage (improved pricing) with third party payor negotiation, and downstream contract management; and
- 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.
The Patient Protection and Affordable Care Act is now law, and the ‘devil is in the details’ scramble is on both inside and outside the beltway. The great divide seems to (disproportionately) line-up between the let’s roll up our sleeves and get ‘er done crowd, and the perhaps politically motivated ‘denial-ists’ hoping to successfully challenge the constitutionality of the law.
Via a separate post, I will address the ‘managed care 2.0’ nature of what we’ll likely witness as one who’s been on the ground, and frontline of change since the early 80s when the Health Care Financing Administration (HCFA) sported a placard for a little known office titled the office of ‘alternative delivery systems’, the then tiny shop in Baltimore that monitored the growth of HMOs and it’s California derivative, and soon to be dubbed ‘preferred provider organizations (PPOs). What followed is quite a storied path….
Meanwhile, let me call your attention to a timely piece of work offered by Paul Keckley and the health policy braintrust at Deloitte, titled: ‘Accountable Care Organizations: A new model for sustainable innovation‘. The title abstract is reprinted below, or you may download the full report via the site link above.
To understand how accountable care organizations (ACOs) might drive payment reform in the public and private health care sectors, this paper reviews the basic origins, definition and drivers of ACOs, and describes key features of proposed ACO initiatives, including the federal government’s proposed pilot program. In addition, using an assessment of ACO literature and Deloitte analysis, the paper profiles four structural approaches that are eligible for ACO status and puts forth seven key capabilities that are important considerations for ACO performance. Finally, this paper offers Deloitte’s perspective on the path forward and describes potential innovations that could increase ACO adoption.
These are complex and troubled times in medicine, and the health care industry at large, whether you consume, provide, pay, supply, sell or consult into or for the ‘whack-a-mole health care borg’. Given it’s insatiable and even rapacious share of GDP appetite, as well as its many implementation complexities, everyone, even the PPACA advocates and supporters, are mildly to significantly ‘nervous’ about what comes next: see Atul Gawande’s ‘Now What?’, or MoneyWatch.com Special Report: ‘What’s Next for Taxes?’ or even the proactive Patient Centered Medical Home (PCMH) and Healthcare Reform: Avoiding Drowning in an Ocean of Opportunity.
Most of us (with the exception of the rhetorical ‘repeal and replace…. ahem, I mean revise’…. or worse, the ‘frivolous‘ perhaps politically motivated State AG ‘sue em’ crowd) are into action focusing on the many pilot and demonstration opportunities now written into law. Note: for a deep dive and excellent summary of some of those opportunities, see Vince Kuraitus’ superb work (and I mean, with proper ‘fluff’ a consultant might charge $5,000 – $15,000 for these timely and laser focused insights), in ‘Pilots, Demonstrations & Innovation in the PPACA Healthcare Reform Legislation‘. Kuraitus pulls some of those ‘opportunities’ upfront, at least those impacting ‘e-care management’:
I count at least 5 pilot projects and 30 demos in the PPACA legislation.
Here are some of the pilots and demos that I believe will be of most interest to e-CareManagement readers. (A full listing of pilots & demos is shown at the bottom of the post).
Sec. 3023. National pilot program on payment bundling
Sec. 4202. Healthy aging, living well; evaluation of community-based prevention and wellness programs for Medicare beneficiaries
Sec. 4206. Demonstration project concerning individualized wellness plan
Sec. 10326. Pilot testing pay-for-performance programs for certain Medicare providers
Sec. 2704. Demonstration project to evaluate integrated care around a hospitalization
Sec. 2705. Medicaid global payment system demonstration project
Sec. 2706. Pediatric Accountable Care Organization demonstration project
Sec. 3024. Independence at home demonstration program
Sec. 3027. Extension of gainsharing demonstration
Sec. 2601. 5-year period for demonstration projects. (for dual eligiblebeneficiaries)
Sec. 3140. Medicare hospice concurrent care demonstration program.
Sec. 3510. Patient navigator program.
Sec. 4206. Demonstration project concerning individualized wellness plan.
So what is ‘disorganized medicine’ to do?
- Will we revisit the ‘circle the wagons’ days when Bill Hsiao proferred the landmark fair valuation system aka RBRVS, only to witness a special interest orgy demanding and even suing for re-balancing of certain procedural vs. cognitive events?
- Will we go the direction of certain specialty societies, or more broadly represented yet so-called ‘national’ physician organizations (one with 2 State chapters), who opposed health reform?
Or will medicine step up and lead? Can medicine lead? Afterall, we do know what works, we certainly know the root problem(s), so why all the internecine fighting so endemic to political medicine, and where are patients in this conversation?
For me, Jack Cochran, MD, CEO of the Kaiser Federation says it best on a recent panel at the National Governors Association starting at 01:24:00
lets step up, and in the conversation and represent what a different future could look like
or, paraphrased by me ‘stop whining and get busy.
So where will you put your focus? Will it be to demonstrate the financing and delivery system of the future? Or, continue the ‘echolalia’ of pessimism and Armageddon so rampant in this run up to change?
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‘.
So Tweeps, lets get ‘er done!
Some of the health reform conversation has focused on bundled payment as a ‘bite sized’ basis of implementing change in the ‘whack a mole’ resistent health care borg. In response to a question on a LinkedIn thread entitled ‘Changing the Health Care Payment System: First Step Toward Real Reform?’
Breaking the cycle of health care payments complexity and errors may be one way in which to stem the cost of moving to a consumer oriented health care system, which is one of the popular solutions discussed during the health care reform debate. This concept of consumerism in health care and payments for services may be provocative to many readers of this blog but the facts as they stand currently demonstrate clearly that we have to start reform somewhere and fast. The current legislative efforts have provided little in the way of support for what the American people have expressed they want in the way of a public option so perhaps as an industry we can begin to resolve some of the issues that will be explored in this discussion. It is a fact that when compared to other business sectors such as retail, health care revenue cycle management is difficult at best, fraught with paper and consists of very little standardization. This is clearly an area that is replete with opportunity to drive new business, create jobs, and leverage existing infrastructure investments all while creating better efficiencies and timelier payments for providers.
The purpose of starting this discussion is not to position the arguments within as the only area of focus for the health care debate just a good start, and all efforts in other areas should continue in tandem. Consider that the health care industry supports bad debt in excess of 60 billion, spends more than $7,000 per person and almost 2.3 trillion dollars by some estimates. Certainly, this would point to an area ready for innovation and change. There will not be a “quick fix” to address these challenges nor is the author suggesting that it is the universal remedy not to mention that many readers will disagree with the points offered in this post. In essence that is the real point of this effort is to start an open, honest dialogue addressing the issues surrounding the payment system in the US Health Care system lest we continue to get more of the same, less individuals insured, spiraling costs and no hope of stemming the tide and effecting change.
I opine below:
Excellent discussion! I will noodle some more after digesting the entire thread, plus comments. Yet, what comes up for me is the ‘C’ word. Underlying health reform whether from the bleeding edge of payment reform, or any other logical portal of entry, i.e., HIT, nothing succeeds absent the ‘cultural’ context to receive and embrace its adoption.
So why not start with ‘seeding’ the cultural antecedents to merge (both clinically and financially) all hospital based physicians (HBPs), less affectionately known in the health plan contracting domain as ‘RAPERs’, i.e., Radiology, Anesthesiology, Pathology, Emergency Room docs? This is a logical nexus for bundled payments and rather compelling from the patient’s perspective too.
The notion of bundled payment is potentially sexy. It encourages, if not drives, the consideration of collaboration (& the ostensible alignment of interests) to accept and administer global payment for professional medical services rendered; and theoretically is more efficient and cost effective. Yet, in 2010 there is neither the administrative capacity, nor (outside of IDNs of the Mayo variety) cultural capacity for HBPs to risk experimentation with the financial and clinical collaboration required to co-exist under a bundled payment paradigm. Yet, no where else in medicine is the argument so compelling for such integration, imj.
Clearly, the nature of the exclusive ‘franchise’ often afforded to HBPs in my view augurs in favor of such integration even absent the ‘quid pro quo’ group culture typically required for its successful implementation.
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.