Health Data: New Developments - New Opportunities?

The Federal government should take the initiative in consolidating the oversight of health data reporting standards, quality, and reporting standards. So says a HHS-funded report by the American Health Information Management Association.

The CEOs of Ford, GM, and Chrysler support HHS Secretary Mike Leavitt’s initiative for transparency and standardization in health data, and have committed to providing health data for their employees as part of the plan. The Big Three automakers are also backing a Michigan-based e-prescribing initiative.

There should soon be some interesting research, innovation, and business opportunities in mining and interpreting pooled, publicly-available health claims data.

Transhumanism: Tomorrow’s Healthcare Issues Today

This may seem far-out to you, but bear with me: it has near-term health business and policy implications that may not be obvious at first.

I’ve written a piece on the Huffington Post about the social and political implications of “transhumanism.” Transhumanists promote the radical transformation of the human body, including life extension and the merging of biology with computing technology. Transhumanists often also support parent’s rights to genetically re-engineer their children.

“Transhumanist” issues aren’t always far-future ones. Doctors in India, for example, are forbidden by law to tell an expectant mother whether she’s going to have a boy or a girl. That’s because abortions are common when a girl is expected. In a recent online poll at a transhumanist site, 94% of respondents objected to this law.

Why should healthcare professionals, business people, or policy makers be interested in the issues raised by transhumanism?

Healthcare professionals and practitioners will be affected, and sooner than you might think. There’s every reason to believe they’ll face some tricky ethical questions, probably in the next ten years, regarding the issues raised by transhumanists. They’ll hear about new life extension and anti-aging methodologies, and not all of them will be fringe science. But some will be untested, and risky.

“Concierge Medicine”: A Growth Industry?

In this age of managed care, and as discussions of healthcare reform heat up, one form of healthcare delivery is continuing to receive attention from investors and doctors: “concierge medicine,” which offers amenities in health delivery for high-paying elite customers. (Newsweek covered the phenomenon here.)

Doctors like the idea because they can avoid the frustrations and loss of income that come from dealing with insurance programs (private or public). The more popular a physician’s practice, the more attractive they will find “concierge medicine.” (There are descriptions of the concept from a doctor’s perspective here and here.)

From an investment point of view, the idea’s almost irresistible. Even if nothing changes politically, many of the well-to-do will pay to escape the grind of medical management - and to receive amenities like prompt appointments, less wait time in the office, and even house calls.

If reform does kick in, doctors who accept insurance will be even more burdened than before. That means longer wait times, less face time with the doctor, and other issues. And if single-payer care ever becomes reality, concierge medicine will explode.

Some policy advocates may have a problem with concierge medicine, since it exacerbates the two-tiered system. Still, many socialized medicine systems (like the U.K’s) allow private health plans. And for those doctors who have the clout, it’s a very attractive alternative to the paperwork, frustrations, and income reduction that comes with insurance.

It’s also one of the few reform-proof investment opportunities in healthcare delivery, which should attract venture capital.  This means that, like it or not, there is likely to be a future for concierge medicine.

Pay-For-Performance: Does It Work?

A study in this month’s New England Journal of Medicine will not end debate on the topic of performance incentives for healthcare. The Centers for Medicare and Medicaid Services conducted a pilot program (administered by nonprofit hospital consortium Premier, Inc.), and will shortly issue $8.7 million in incentive payments.

When correcting for all the relevant variables, hospitals enrolled in the incentive program only performed 2.6% to 4.1% better than nonparticipants, depending on the condition being evaluated.

(”Better” is defined, in this case, as closer adherence to a predefined set of treatment guidelines. This study did not address medical outcomes. In the old medical data analysis lingo, it addressed “process” rather than “structure” or “outcome.”)

The Wall Street Journal quotes one professor of medicine as saying the impact of the program was “very modest.” That may be generous. The New England Journal’s editor, Arnold Epstein M.D., suggests that the difference may be entirely attributable to the “selection effect” - that is, that the hospitals that enrolled did so because they believed they were already achieving the program’s goals. That’s a plausible explanation, and the topic deserves further study.

Obama Makes His First Speech on Healthcare: An Annotated Review

Barack Obama has made his first speech on the issue of healthcare, defining the problem as he sees it and deferring specifics until a later date. While keeping to generalities, he made some interesting statements that are likely to raise expectations for his final plan.

Here is most of the speech’s text, with my annotations and commentary:

“On this January morning of two thousand and seven, more than sixty years after President Truman first issued the call for national health insurance, we find ourselves in the midst of an historic moment on health care. From Maine to California, from business to labor, from Democrats to Republicans, the emergence of new and bold proposals from across the spectrum has effectively ended the debate over whether or not we should have universal health care in this country.”

Note: He doesn’t specify which proposals he considers “new and bold,” but presumably he’s referring to various state initiatives, proposals from insurers, and the business/labor coalition proposals - among others.

“Plans that tinker and halfway measures now belong to yesterday. The President’s latest proposal that does little to bring down cost or guarantee coverage falls into this category. There will be many others offered in the coming campaign, and I am working with experts to develop my own plan as we speak, but let’s make one thing clear right here, right now:”

He makes clear that he’s describing the President’s plan in that first sentence. But inquiring minds want to know: is he referring to Hillary Clinton, too?

“In the 2008 campaign, affordable, universal health care for every single American must not be a question of whether, it must be a question of how. We have the ideas, we have the resources, and we must find the will to pass a plan by the end of the next president’s first term.”

That’s a commitment: universal healthcare by 2012. I don’t understand Kevin Drum’s attack from the left. Kevin says “Maybe in a little while he’ll give a major speech in which he really does endorse universal healthcare rather than fiddling around the edges of the debate.” Actually, Obama’s endorsement of universal coverage seems unequivocal to me. The left would be better off focussing their concern on that word “affordable.” The definition of “affordable” is what’s creating division and resistance to the Schwarzenegger plan, and will be critical in the upcoming policy debates on the Federal level.

Bush “Health Plan” Is Really a Reallocation of Taxes

A preliminary review of the Bush “health plan” suggests that it’s not a plan in any real sense, nor is it a “tax break.” (Journalists are mischaracterizing it when they call it a “break”- they should study the details more carefully.)

Although not all the details have been released, the plan looks it simply shifts existing tax revenues and expenditures in order to meet some policy goals without reducing tax income for the Federal government. It may wind up leaving both liberals and conservatives unexcited.

While some of its goals appear to be market-based, fiscal conservatives may eventually be turned off by the fact that its unlikely to reduce the overall tax burden. And liberals will be unhappy with the way the financial burden is allocated.

Criticism, Praise for Schwarzenegger Plan

An analyst with the Reason Foundation has written a critique of the Schwarzenegger health plan in which she says that it’s “audacious, ambitious - and awful.” Shikha Dalmia, whose employer is described as a “free-market think tank” (does that mean libertarian?), argues that the plan criminalizes rather than helps the lower-income uninsured.

In this paragraph, Ms. Dalmia neatly summarizes why some critics feel the plan won’t work and will “criminalize” the poor:

These fines might still be much cheaper than buying insurance. In that case, many low-income families could opt to pay the fines or avoid filing taxes altogether — becoming tax fugitives — rather than buying health coverage. In effect, a program meant to help low-income people will tax them or turn them into criminals.

Ms. Dalmia suggests that California wait until the first year results are in for the Massachusetts plan in July. (I think that’s early; mandatory coverage only went into effect on January 1 in Massachusetts.)

Free Electronic Prescription Software Unveiled

Electronic prescription-writing software will be offered free to every doctor in the United States. The product, eRxNow, has been developed by a coalition of technology companies and healthcare businesses.

A conference was held on Tuesday to announce the product. Representatives of the participating companies spoke, as did Newt Gingrich and others. (Gingrich’s Center for Health Transformation has been active in medical IT issues.)

The product was developed by the National ePrescribing Patient Safety Initiative (NEPSI). Corporate sponsors include health insurers Wellpoint and Aetna, and tech companies such as Dell, Microsoft, Sprint, and Fujitsu.

Gingrich and other speakers emphasized the deaths and illnesses that are caused by improperly processed prescriptions, according to one account of the presentation. The president of physician software company Allscripts also acknowledged they hope this initiative will eventually create profitable business opportunities.

The unanswered question: Will doctors’ offices use this service? Presenters said that someone could learn to use the system in a half-hour - but will they? Medical office staff won’t take on a new routine task without encouragement from doctors. So, the success or failure of this initiative rests in large part on how seriously doctors take the initiative’s mission.

A number of health software products have failed because of these “soft” human factors. They, and not the technical issues, are the greatest challenges facing this initiative’s backers.

Primary Care IT: A Smart Health Sector Investment

After you spend some time in the healthcare IT area you get to see brilliant-sounding ideas come and go. I’ve seen some clear patterns emerge from the many software and tech projects I’ve watched fail, and the few I’ve watched succeed:

• The human factor is dominant: Any tech product that’s based on how doctors (or others) should behave, rather than how they actually do behave, will fail. If doctors don’t like to type when they’re asking a patient questions, don’t design a product that makes them type when they’re asking questions.
• Not only does there have to be a real need, there also has to be a perceived need. That represents two different challenges.
• Nothing makes a project more likely to succeed than working models for success with similar products.
• The micro-need the product meets - for instance, in a doctor’s examining room - should be matched by a macro-need in the health sector as a whole.

These principles suggest that backing IT products for primary care is one of the smartest moves healthcare investors can make right now. Here are a few reasons why:

• The US may be the home of tech innovation, but primary care doctors in this country and Canada lag behind their European counterparts in access to IT tools - for writing prescriptions, accessing electronic medical records (EMRs), ordering tests and receiving results, and other key functions. That’s problematic - and an opportunity.  Europe also provides successful working models.
• There is a political drive toward health care reform - and meaningful reform can’t take place without a renewed emphasis on primary care. Our country’s reported deficiency in preventive care is only one reflection of the need to upgrade primary care, and IT plays a key role in that process.
• Physicians want better technology as part of any overall health reform initiative. That was reaffirmed in a reform proposal put forward by a consortium of medical associations.
• The American Academy of Family Physicians is one of many groups supporting primary care IT initiatives - The AAFP’s TransforMED initiative includes online access to clinical data, and makes it possible to provide consultations online. Online consults are popular with patients and offer struggling family practice docs the chance to make more money (which reduces the incentive for physicians to enter specialty areas that can be less cost-effective for the health economy).
• Online collaboration tools can benefit primary docs and specialists. Systems like this one, which is designed to help physicians warn each other of potential problems with drug interactions, can require less development cost than some other types of health systems. (The problem with these systems is still the revenue model. They can be less expensive to develop than other large health IT systems, but charging for these systems has been a challenge. It might be better to seek grants and government funds, rather than risk going the WebMD roukte.)

The nationwide push for healthcare reform creates a favorable climate for investing in primary care IT. So does the fact that primary care docs need ways to maximize their income - coupled with the fact that increased use of primary care benefits the healthcare economy as a whole.

Think about it, investors.

Veterans’ Health Issues: Catastrophic and Brain Injuries

Reports suggest it will take a concerted effort to address the health problems confronting our nation’s soldiers as they return from war. Their problems parallel some of the issues facing our overall health system, but in a more acute form. One such issue is catastrophic injury, and another is the complex world of brain injury.

It’s well known that advances in battlefield medicine have saved the lives of many soldiers whose injuries would have been fatal in earlier wars. This means that many of them are returning home with extremely severe conditions such as traumatic brain injury (TBI) and polytrauma (multiple severe injuries).

The presence of so many catastrophic injuries, many of which will require expensive initial treatment and lifelong care, raises concerns about the ability of the Veterans’ Administration to fulfill its duties. This issue has been raised in at least one study, by Harvard’s Kennedy School of Government(1).

Catastrophic injuries are a significant public policy issue in the civilian population, too. Data analysis studies I’ve conducted in the past for private health payers have shown that severe injuries range from 1% to 5% of total injuries or illnesses, but from 30% to 50% of total costs. These findings are generally consistent with other published studies. This suggests that proper treatment, funding, and planning for catastrophic care is a critical and under-recognized issue in health care policy.

As for non-catastrophic brain injuries, 1700 soldiers have been treated for TBI. Yet studies have shown that most wounded soldiers being treated in the US for any type of wound also show signs of TBI. (Specific figures: 60% of treated soldiers at Walter Reed Hospital and 83% at National Naval Health Center in Bethesda, according to two separate studies.) There is therefore a possibility that some TBI cases have not been recognized, since some symptoms can be difficult to distinguish from psychological trauma.

The misdiagnosis of neurological injury and illness can lead to prolonged disability, extensive and costly treatment for the wrong conditions, and other complications. This means that research into these types of injuries has potential benefit both for individuals and for the overall healthcare system.

In a related story, the Defense Appropriations Act of 2007 originally including reduced the annual research funding for the Defense and Veterans Brain Injury Center from $14 million to $7 million. After an outcry from veterans’ groups and others, the funds were eventually restored by politicians on both sides of the aisle.

The numbers suggest that research on brain injury is good public policy, as well as a way to support American veterans.

(1) Bilmes, L, Stiglitz, J. The Economic Cost of the Iraq War: An Appraisal.