Have we been lulled to accept this as the typical patient relationship with healthcare?

Last month I attended the Microsoft Connected Health Conference in Bellevue, WA. It was an interesting conference because although there is close to $20B in ARRA stimulus dollars to be chased for electronic health records (EHRs) and health information exchange (HIE), “consumers” were on the tips of everyone’s tongues – they stole the show.  Everyone at the conference was talking about how patients needed to act more like consumers and providers and payers needed to treat patients more like consumers.  From hyperzealous entrepreneurs to entrenched Microsoft Research folks, “consumers in healthcare” was the topic on the tips of everyone’s tongue.

To me it seems all a bit funny and odd.  What does it even mean to be a consumer in healthcare?  Particularly, what is the difference between being a patient and being a consumer?  I think it has partly to do with how the “well” (AKA people who aren’t sick) interact with healthcare resources and to continue to be well. From healthy living and eating to tracking health information in a personal health record (PHR).  Taking control of your care and doing all that you can outside the care setting (hospital, practice, etc) seems to be an important aspect in transitioning from a patient to a consumer in healthcare.

I completely agree with the concept of utilizing consumer engagement techniques and practices to engage the well into keeping healthy.  From employing game mechanics (Nike+, rewards for consistent health monitoring, etc) to tracking healthy stats or improving an already healthy lifestyle should be encouraged at the consumer level. This includes thinking about how we as a population need to reconsider the foods we consume.  The overall goal for actual healthcare is to engage people more in their care – to both improve outcomes and to engage them on costs and potentially decrease costs.

Should patients act more like a consumer who's car shopping? What if we as patients were more aware of costs, benefits and risks?

However, another key part of being a consumer in healthcare is being aware of the cost of care.  Just like being a consumer at a car dealership, patients should be aware of the cost of the product they’re purchasing.  The only difference is that in healthcare patients have traditionally had costs paid for by insurance companies and therefore been aloof of what their care actually costs – both in terms of system resources and financially. Very few patients even do research prior to their care – some do, most despite the availability of vast knowledgebases on the web, few people take advantage of those resources as they do when making other large purchases.  How should taking more of a consumerist role affect care?  How can financial awareness in healthcare lead to better care, rather than the rationing of care? When was the last time you even looked at a medical bill or got a cost estimate for care prior to receiving that care?

We should already be encouraging patients to understand the cost of care.  However, one of the traditional roadblocks to making patients aware of costs is that it’s incredibly hard to get access to cost data.  Virtually everything else we consume has a transparent cost.  However, in healthcare there’s no real list of what certain types of care or procedures costs.  Except for those we have to pay for in cash, like cosmetic surgery.  As consumers we know more about what it costs to insert breast implants than we do about what a life-saving surgery (like an appendectomy) costs.  Costs are anything but transparent, and the odd thing to me is that insurance companies should be more open about cost structures – it might even save them money if people decline unnecessary, expensive care.

Traditionally, being a patient came with very few responsibilities with respect to the doctor-patient relationship.  You arrive at the doctor’s office on time, answer the doctor’s questions, listen to the care instructions and then take your medications or do your therapies.  It was and still is very paternalistic in that sense.  When these patient norms were set, the cost of care was incredibly low, but now more expensive drugs and techniques are taking over.  Nowhere in that traditional role were patients asked to  “think about cost” – it was just assumed that it would be covered.

Being a consumer implies that you have the freedom to walk away from a purchase or product if it’s too expensive.  Our medical ethos doesn’t allow for this in medicine.  Or at least it shouldn’t for the right care and therein lies the catch.  People need to understand cost and reduce their healthcare usage, while maintaining a high level of care.

With little mind to costs, America's healthcare rates are increasing at 8% per year. We need to get smarter with how we spend those dollars.

So, patients need to better understand what their care costs – how we do that is for another post.  But, for now I’d like to propose that patients remain patients, and we continue to consider how to leverage consumer principles and awareness to help drive patients helping to keep the cost of care down.  We’re spending an inordinate amount of time and effort trying to engage patients with their data.  I think connecting patients to their cost will have a much more dramatic effect, but it needs to be done carefully.

I’d like to suggest that while the concept of consumerism is being applied to being a patient, I think that patients should remain patients, but become more engaged with their care.  We should begin to act and think more like consumers when it comes to healthcare, but we still need to be patients at some point.  More on that in a future post.

What do you think? Do you want to know what your healthcare costs?  Should cost ever be a determining factor in whether someone receives healthcare?

I haven’t posted on genomics in a while, so it’s about time. Two weekends ago I attended the Sage Bionetworks and Science Commons 1^st annual Sage Congress here in San Francisco. The main aim of the conference was to begin to gather science folks from across the country and begin thinking about making scientific research and data sets more open. While that may seem like an easy task in the era of open source, it’s tricky from many perspectives and the effort still has a lot of skeptics. But, more on that soon – personally, I think Science Commons and Sage Bionetworks are brilliant ideas.

At the conference Anne Wojcicki, co-founder and president of 23andme gave the keynote on the last day of the conference (video at right). To be fair, in the past I’ve been skeptical of 23andme – particularly from a clinical perspective. And, the MD side of me remains skeptical of genetic testing in general – at this point we know too little to apply genomic information to clinical care. There are a few exceptions, like breast cancer and a few other diagnostics, but otherwise in my humble medical opinion tests like 23andme should be used with a skeptical eye from a clinical and medical perspective. Again, there are a few case examples of where genetic testing has helped, but those remain too few and far between.

All that said, something about Anne’s keynote struck a chord with me – the amount of phenotypic data that the company is gathering in conjunction with their tests holds tremendous promise. Consumers purchase the test, and once their results are delivered, 23andme asks the consumer to participate in a series of surveys about their health and physical traits. To date, as was mentioned time and time again at the Sage Congress, research efforts to link patient, clinical and genomic data have proven to be arduous, time consuming and expensive. But, 23andme is capturing it right out of the box.

It’s hard to really convey how valuable this data truly is. A lot of the genomic data and research the scientific community has done to date has been on a couple cells in a petri dish or in mice, etc. Less has been done in humans, but that’s changing. With the collection of millions of genetic data points per consumer plus their trait/phenotypic data via 23andme, that will all begin to change much more rapidly. Being able to directly correlate genes to their traits will be a powerful tool for researchers to help push our genetic understanding and medical knowledge forward.

How we think about DNA and our genetic information as consumers is changing. Here, a DNA gel is aligned as art.

What makes 23andme special is that they’re utilizing social media and other consumer internet approaches to engage consumers and get them to provide their data essentially for free. While this might sound intuitive to most internet junkies, it hasn’t been for much of the scientific community. Indeed, from my perspective at the Sage Congress, 23andme’s approach seemed to me met with a bit of skepticism from the community – and this was an even more open and broad thinking group of people. But, it’s working. Consumers are readily contributing information, but it’s because of 23andme’s social media and internet approach. Not only will it change consumer genetics, but I bet that 23andme’s approach will alter how we collect research data, which will in turn, accelerate breakthroughs.

This shift in thinking will be critical as genetic research and genetic testing moves forward. Genes are far from being directly causal – i.e. very rarely does one gene lead to one distinct feature. And to uncover the patterns of the chaotic interaction of genes and their environment, gathering the type of rich data that 23andme does with their surveys will be absolutely critical as we move forward. Part of the next movement in genetic testing and genetic discovery will also require new tools to deal with massive data sets and help us find those needle-in-the-haystack discoveries that shed new light on human health and disease.

Again, more DNA as art - we're beginning to re-think our relationship to our genetic information.

And, to boot, one large win for society with companies like 23andme is that they are making consumers more and more comfortable with the concept of genomic testing. That in and of itself is a tremendous value to the market and for research. In the future I predict that we’ll look back on efforts like 23andme as landmark and critical to helping us reach the next plateau of genetic discovery and understanding. And, because of that and 23andme’s awareness of that fact, I think they’ll be successful in the long run.

I’ve got a job for you!  How does this sound – spend your college days studying away (sorry, only minimal time for parties) worrying about standardized tests, spend 7-8 years after college training for your job, go in the financial hole on average $160,000 and for the first 4 years of your career earn $45,000.  Sound good?  There’s more.

Spend the rest of your career jamming in as many clients as possible a day – maybe upwards of 20 or so – worry about malpractice insurance, be squeezed by Medicare. And, while earning a respectable salary, there’s really no hope of raises outside of adjustments for inflation.  In fact, there’s a high probability outsiders will likely attack your salary and maybe even reduce it.  Did I mention about mountains of paperwork and clients wanting your professional opinion for free?

Sounds a bit dramatic, but that’s the negative side – aka the con side –  that a person faces when deciding whether or not to be a General Practitioner.  I was sparked to write this post when a friend of mine – Ab Brody, PhD, NP – tweeted about a new Journal of the American Medical Association (JAMA) article laying out some of the challenges in recruiting MDs to General Practice.  The current healthcare reform debate has renewed the debate over the types of MDs we need to train.

Indeed, there are lots of benefits to being a GP – not the least of which is the satisfaction of getting to know families, helping people overcome day-to-day medical issues, etc.  It’s truly rewarding.  But compared to other professions and medical specialties I have no idea of why, from a financial perspective or even a career fulfillment perspective why anyone would choose General Practice.

Dermatologists – same professional satisfaction.  Sure, you have to look at the occasional butt pimple, but you can make a dramatic difference in someone’s life.  Career satisfaction?  Check!  Good hours? Check!  Oh, and on average they make $351,000 annually.  Or, 2.5 times what a GP makes.

I’ve done the math – a GP, making the average salary and with the average student loan debt load will never be able to purchase a house in San Francisco without significant additional income.  If that same physician buys a modest house in Atlanta, by the time they’re 65 they’ll have almost $500k in the bank.  However, that’s much less than what other careers bring in. It’s more than a lot of people, but given the struggles they went through to become physicians, it’s not all that much.

To be sure, I’m writing this post to be incendiary and provocative.  I truly believe that GPs will be the heart of healthcare reform here in this country and I hope we start treating them like so.  Why?  Because we need them – they coordinate care, they’re the first line and if trained the right way they can be beacons of savings – to the tune of several billions of dollars of savings each year.  But, we need to fix the factors that I spend time lampooning above.

How do we get more smart, young physicians to become GPs?

So how can we rectify this issue? I think that the first step is to come clean and admit that it’s, at least a little bit, about the money.  There’s absolutely nothing wrong with wanting to earn a great living.  If someone offered you a better lifestyle, more pay, better hours, wouldn’t you take it?  We need to change how we reward our GPs – base their income on outcomes.  Patient outcomes, that is.  Promote tort reform to help avoid frivolous law suits.  Provide scholarship opportunities to help them with the financial hole they face out of school.  And, to boot, pay them commensurate with other areas of medicine.  We’ll all benefit from that!

The demands we place on GPs are too great – the malpractice threats, the paperwork, diminishing incomes/reimbursements, etc.  It’s a tremendous burden even outside the financial disparities.  Add both of those to the pot and it’s a surprise anyone becomes a GP.

It’s also a reputation issue, too. Or at least that’s the way I’d argue it.  My medical school, for one, highly praised those who went to specialty residencies.  Let me be clear – I’m exceptionally proud of all my classmates and their choices.  However, the school did a super lousy job pointing students to general med.  I’d even say that it was actively passively dismissed though the school’s emphasis on specialties and choosing a competitive specialty as the highest success.  In fact, we really didn’t have a fantastic role model to emulate in the GP space – compared to access to the best heart surgeons, cancer docs, orthopods, etc in the world.  IMHO.  I’d say a lot of med schools actively dissuade the pursuit of becoming a GP through how the schools grade, praise specialties, elevate their leaders, etc.  Becoming a GP was passively aggressively looked down upon.

Lots has to happen between now and then – I’m really curious to hear your thoughts.  Should GPs be paid better salaries? What role should they play in our healthcare system?

Combining medicine and technology hasn't always been smooth for people like diabetics

I’ve been thinking a lot recently about people’s [in]ability to integrate and think about a lot of different data points, particularly over time.  Specifically, I was thinking about consumer healthcare solutions that have been popping up.  I was advising a couple friends last night on an idea that they had in the consumer wireless space to help people manage a specific health condition – let’s say blood sugar for type 2 diabetics.  Seems like a noble goal, right?

I thought so too 3 years ago when I tried to create my first start-up, Element Mobile.  With our first product, CurrentCare, we were aiming to help diabetics easily, quickly and seamlessly track their blood sugar and other related statistics.  We were aiming for both type 1 and type 2 diabetics.  However, the interesting thing in the marketplace is that there’s about 1.5million type 1 diabetics (those who require insulin to live) and about 22.1million type 2 diabetics (tend to be more obese and insulin resistant) in the United States.  We were aiming for both populations with CurrentCare.

But, here’s the rub.  Type 1 diabetes patients tend to get used to a routine and learn how their body reacts to insulin and over time they lose the impetus to continuously and religiously track their blood glucose levels.  And, for the most part they do pretty well and live relatively healthy lives.  Type 2 diabetics tend to be individuals who haven’t taken as good care of themselves – if most were to lose weight and track their blood sugar levels (among many other lifestyle changes) they could probably get their disease under control and maybe even become totally healthy once again.

And, by “healthy again” I also mean that if they get back to healthy, they could avoid complications like heart attacks, toe and foot amputation, kidney failure (which requires dialysis), blindness, etc. Caring for complications of diabetes alone cost the US healthcare system about $116,000,000,000 a year – yes, $116 BILLION – and another $58 billion in associated costs.  That’s enough to scare the bejeezus out of me, but most type 2 diabetics don’t manage to control their blood sugar or attempt to lose the weight they need to avoid these ills.  Why?

One of the problems is that these complications occur many, many years after the initial onset of diabetes.  It takes 10-20 years of neglect (sometimes sooner) to run in to these issues.  It’s hard for type 2 diabetes patients to really be scared of something that’s 10, 15 or 20 years down the road, particularly if they don’t feel that bad today.  As a side note, type 2’s do report feeling worlds better if they kick the disease through diet and exercise, so there would be some immediate, near-term benefits to becoming healthy.

The same applies to people with high blood pressure, poor eating habits, or who are overweight, etc.  Most of these people feel “fine” today – they’re getting along just fine and don’t feel the need to change.  The punchline, however, is that 10-20 years down the road when the deleterious effects of a lifetime of neglect kick in, it’s almost surely too late to recover to 100% health.  This leads to the inherent problem with consumer healthcare and “health 2.0.”

If people aren’t inspired or driven to take care of their condition because they can’t see the deleterious effects that loom 15 years down the road, why would people be inspired to care for their conditions with new internet and wireless tools?  Even if these techniques and tools lower the barrier to adoption and make tracking super simple, for a vast majority of people it’s simply not worth it to care for or improve their condition.  It’s one thing to create an elegant solution and another to gain adoption among this population of people. Creating these solutions faces the problem of getting multiple types of users on board – providers, patients and payers.

All too often we only really care about our health when something is staring us in the face – like an illness or a cancer diagnosis or heart attack.  Or even something as joyous as pregnancy. And even then we go online, look up a few web pages, maybe do a bit more of investigative research and we’re satisfied.  Because of this, the opportunities to monetize these interactions and create a sustainable business is somewhat limited.

There’s an inherent human behavioral trait that’s just so hard to manage in a way that causes people to change.  However, the person or company that can solve this problem – to create a health tracking solution that gains steady user adoption and traction – will almost certainly win the start-up prize. But, until then, I think there are (unfortunately) going to be a lot of dead startups in the middle of the road. I think the answer lies more in consumer behavior rather than creating effective clinical solutions.

How are things going to ultimately change? Is it scaring people out of their wits to change? Is it substantially lowering the barriers to adoption? Is it some other intuitive device or solution? Or something completely different like incentive or disincentive programs that get people to change? What do you think?

Earl Butz, Secretary of Agriculture under Nixon and Ford, was primarily responsible to the reform of our agricultural policy that has led to the abundance of corn-based products such as high fructose corn syrup. His effects are still being felt 40 years since his time as secretary.

Earl Butz.  I’d like to argue that he might just be the most important name in the healthcare reform debate and an exemplar of how good intentions can have immense (pun intended) ramifications for millions of Americans 40 years on.

Ol’ Earl was Secretary of Agriculture under Nixon, but his lasting legacy is the farm bill that he introduced.  The bill provided financial subsidies for growing corn and was meant to encourage the mass planting of corn and other basic crops.  It allowed farmers, in fact it encouraged farmers, to grow more and more corn (among other effects). The original intention of the farm bill was quite nationalistic – to provide food at a more reasonable cost to millions of Americans.

With low priced corn and corn byproducts came the need for food “innovation.” In other words, how were food manufacturers going to utilize this new, cheap resource?  How would they make low cost food from corn and other subsidized crops?  The result was the widespread use of high fructose corn syrup and processed oils and other pseudo-synthetic chemicals to produce many of the foods that we now see in the “middle aisles” of the supermarket.  Everything from Coke to cereal to ice cream to granola bars are filled with the stuff.  Food prices have gone down, but many other things have gone up.

For those who’ve seen CornKing or Food, Inc or read In Defense of Food (Amazon reviews) are quite familiar with the long-term outcome of this farm subsidy strategy.  And because I’m overly-aware of the fact that I’m from now from California, I’m going to try to take a slightly different take, if to not sound not too left-coast-hippy-ish.  I’m going to talk about why I think, from a physiological perspective, why having so many corn-based products in our diet is a bad thing.

The deal is this – foods filled with these corn-based ingredients give you a feeling of fullness, but that fullness disappears very rapidly, especially compared to the way “natural” food is treated in the body.  With natural food you feel full, but that satiety lasts far longer – the types of sugars in natural foods are released more slowly and keep blood sugar at a good, steady state.

A USDA graph detailing the rise of high fructose corn syrup as part of our diet. Relatively unused until 1974, it now is the most widely used sweetener in US food.

The quick burst of sugar in high fructose corn syrup actually gives your brain a really big reward – a really “good” feeling, but it crashes fast.  That means you need more and more to continue feeling good.  Whereas with natural food you don’t get as much instant reward – rather, it’s more spread out over time.  Put another way, my hypothesis is that people who consume a lot of high fructose corn syrup based products are actually addicted to those foods.  It’s an actual addiction – the same goes for foods that contain the types of fats McDonalds and other fast food joints use – it’s a very similar and analogous principle.

To fully connect the dots, it seems pretty clear to me that the farm bill has created a market for cheap food (like corn syrup-based foods), and that many Americans over-eat those foods because they’re literally addicted to the food.  We’re short circuiting how the body is supposed to react to food, it’s making us addicted to high fructose corn syrup and other synthetic food, and it’s leading to an obesity epidemic.

But it’s even more relevant today during our healthcare debate.  The obesity epidemic is costing Americans $200-300 billion each year in medical costs alone, notwithstanding productivity and other losses.  We’re paying for our cheap foods through other healthcare and chronic care costs.  The problem is that those other health-related costs come many years down the road and that’s really hard for most people to understand and act upon in the present. This is a massive problem for healthcare reform today and will continue to drive up costs in the future.

The number of people in the US with Type 2 Diabetes - the current number is around 20-21 million people in the US.

We need to figure a way to get Americans off of this type of food.  Another addition that took a while for Americans to kick was smoking. The most effective tool against smoking proved to be rising prices in the form of increased taxes – not advertising or making people aware of the dangers of smoking.  When smoking became an economic drag, people stopped smoking.

However, food taxes are quite controversial. in that some people who consume these foods are economically challenged as it is – taxing this food would create a greater financial strain.  Additionally, linking smoking to lung cancer and other diseases was relatively easy compared to linking high fructose corn syrup to over eating, obesity and ultimately disease. But, then again, maybe we could also begin to subsidize healthy foods so that people can afford to purchase them instead of high fructose corn syrup based foods.

Ol Earl Butz yet again - I just love the hair and glasses myself.

Whether that’s a tax or some other sort of intervention, something has to happen to change this very fundamental human behavior.  Otherwise we’ll only reform part of our system with the proposed healthcare changes.  And if you think it doesn’t affect you, if you’re a tax-paying American it is affecting you.  You’re helping to subsidize this healthcare – whether through taxes or private insurance payments.  Healthcare reform without this type of policy and behavior reform will only go so far.  Altering farm subsidies may be too much change for now (given healthcare reforms, the wars, etc) – that’s why something like junk food taxes are somewhat appealing.

A farm bill and reform by ol’ Earl Butz in the 1970s still has far reaching effects today – even reaching in to your wallet – no ifs ands or Butz about it!

What do you think?  How can we fix things? What should we do to Ag policy to impact Healthcare Reform?

Afterthought: One simple solution would be to remove the corn subsidy.  But I’m not so sure that will work well.  Reason being that the subsidy supports so many farmers and a large portion of our economy.  If we were to get rid of that subsidy (and subsidize other fruits and vegetables), we’d need to do so slowly and methodically over years, if not decades.  But change needs to happen now – thus the sugary food tax idea.   However, as some of you may point out, that tax would go in to federal coffers, coffers that subsidize corn production, which in turn makes people heavy through sugary food – food we tax.  That’s a pretty bad cycle.  But it’s at least a start.  Something has to be done to curb America’s dependence on these foods.

Most people want the best health coverage possible, but is it possible Cadillac Health Plans are the wrong way to think about it?

Cadillac Health Plans and insurance remain a hot topic of conversation since I pondered Cadillac Health Plans several months ago.  Generally a Cadillac Plan provides many bells and whistles for its subscribers, but also comes with a much higher premium.  Taking that car analogy in a different direction, what if we could rethink what it means to have good health insurance and model it after car insurance? This would give people more control over their health and health spending, much like the car insurance model.  Now, that would be more like a true Cadillac Plan . . . . I digress.

In an earlier post about health insurance costs I talked how we (my wife and I) will pay about $12,960 for health insurance in 2010. It’s a pretty good plan – a PPO – one that has more degrees of freedom than other plans. But it still dictates how we spend the dollars that we’ve paid in to the system and incentivizes wasteful spending.  Moreover, why does everyone have to be on the same paradigm? Put a lump sum in, get some care out – why not create insurance products that work differently while at the same time creating social pressures to reduce unnecessary costs?

The annoying thing about this insurance plan is that we only used about $2,000 worth of the benefits.  So, in essence, we pay almost $13,000 in to the system and the system tells us what we can and cannot do and only allows us to use $2,000.  And that was only for costs that were deemed “appropriate and necessary” by the insurance company.  We had to pay another $1,500 out of our own pockets for legit physical therapy and dermatology treatments.

OK, so clearly that extra $11,000 that we paid in is a risk premium to cover catastrophic costs – if something happened to either one of us, I’m sure we’d be glad we had the insurance.  That said, $11,000 sounds like an awful lot, particularly when you consider that you probably pay only $1,000 or so a year in car insurance.  Why can’t healthcare be structured more like that?  The person pays for maintenance and routine care, while insurance pays for catastrophic and serious illnesses/conditions.

For instance, let’s say such a plan existed.  My wife and I could contribute $2,000 (more or less, depending on how much we wanted to put away) in pre-tax dollars to a Health Savings Account (HSA – yes, it rears its head again).  That $2,000/year per person could be used to cover sick visits to the doc, derm care, physical therapy or other costs – any way we saw fit.  Another benefit is that if we needed more money, we could pay out of pocket and submit those receipts on our taxes much like we do today – all care dollars would be pretax.  Best of all, those HSA dollars would roll-over year to year just like cash.

For catastrophic illnesses, we could purchase insurance much like we do for our cars.  Let’s say it would cost us $2,500/year per person for that insurance – that’s almost 3-4 times more than our car insurance covers and our car insurance covers about $100,000 worth of damages and injuries. Seems decently reasonable.

And, according to this simplified model, we’d still only be contributing $9,000 for our healthcare – that would leave an extra $4,000 in our pockets over what we’re spending today.  We’re not used to thinking about that money as coming out of our paychecks because it’s part of our benefits. But, you can be sure it’s affecting our take-home dollars.  Additionally, I’m sure spending money out of our HSA would also cause us to pay more attention where our money is going and help curb frivolous spending.

When looked at from another angle, the current state of doing business in healthcare it pretty bad. Why not completely change some aspects to make it work better?

What I’m proposing is that we as consumers gain more control in how we spend our healthcare dollars.  This insurance model could be similar to how car insurance works today.  You pay for your own maintenance costs (i.e. the HSA dollars) and then pay-in to insurance for catastrophic costs.

For example – let’s say you went in to the ER with abdominal pain and the doc suspects you have appendicitis and a CT scan is performed.  Lo and behold you need to have an appendectomy – that’s a pretty serious illness, which would be covered by your catastrophic insurance.  Everything from the CT scan to the operation and anesthesia.  All told, about $20,000 worth of care – easily less than most car accidents, and therefore it seems that there should be a feasible business model like car insurance in there somewhere.

I’m sure that I’m over simplifying the catastrophic insurance proposal and it might cost more per person per year.  Even so – if we paid $3,000-$4,000 a person per year for catastrophic insurance that would still save us money over what we pay today.  To boot, we’d have more control and responsibility over our day-to-day healthcare spending.

This plan won’t work for everyone and we’d still have to make a determination of how to provide care for the uninsured and current Medicaid patients, but I’m sure we could use a system similar to what we have today.  Additionally, chronic illnesses would also need to be addressed, but it’s most likely do-able if some of the current healthcare reforms go through.  This high-level model that I’m proposing is at least a new way to start thinking about the change we’d like to see. Maybe it would be a sub-component of larger change?  It’s a start.

Cadillac care, indeed.  Or at least modeled after insurance for Cadillac autos.  What do you think?  Curious to your thoughts!

My wife and I recently had to decide what we wanted to do with our health insurance for 2010, and it really made me think hard about the way we understand the finances of and how we pay for healthcare as individuals. However, once we dove in we found that insurance companies and their policies and available information make this process overly difficult.  Given the current state of healthcare reform, creating this cost transparency for consumers should be a top priority.

We have a fairly unique PPO-type plan that gives us a $2,000 budget to spend as a family – on doc visits, lab tests, drugs, etc.  We don’t pay for a single co-pay or for a drug or a test until we utilize $2,000 worth of services.  Everything from $2,000-$6,000 comes out of our pocket, and then after that $6,000 threshold, the insurance company would have to pay for everything else 100%.  Not too bad, especially for healthy individuals, right?

But, what if ended up using more than that $2,000 budget? We’d be on the hook for 100% of our costs up to $6,000.  The alternative insurance plan we were weighing against included co-pays as our only costs with the plan. Period – no other hidden costs (or so it was our impression). We wondered whether there was a chance that if we had chosen the alternative plan, even despite making the co-pay payments all year, that it would have actually been cheaper over the course of the year to just pay for the co-pays out of pocket? We wanted to understand at what financial point would our co-pays and all the out of pocket expenses under the alternative plan actually be better than getting our “free care” up to $2,000?  A break-even point, if you will.

Well, as it turns out, it’s literally 100% impossible to answer that question.

It wasn’t possible for us to make a real informed decision as to which plan would have been right for us.  I see the dermatologist 4-5 times a year and a general practitioner about once for a cold.  My wife has regular check-ups and maybe visits the doc 2-3 times a year.  But we each might have a few tests here and there or a minor ‘procedure’ at one of these visits.  Given that, we wanted to know how quickly we’d burn through the $2,000 budget.

Given all that, we called the insurance company and asked to get an estimate of what our costs would be, which would then allow us to make an informed decision. I asked about specific acne treatments at the dermatologist and my wife asked about other doc visit costs.  The insurance company literally refused to release those financial figures.  We couldn’t do basic estimations on visits and yearly costs because the insurance company wouldn’t release the figures.  They said something about costs varying on a per-provider (doctor or facility) basis and pharmacy.  Each time one of us called there was a new or different excuse as to why they couldn’t make the costs transparent.  Sounded like a lot of fudging to us.

We got the distinct sense (and from talking to others, we’re not the only ones) that the insurance company (and other insurance companies I researched) was deliberately throwing up smoke screens and trying to be opaque.  Whenever a system actually strives to be opaque regarding costs or hides facts, that’s a red flag to me that something’s up. Certainly from the way the insurance companies are acting, it seems as if they are better off at keeping us all in the dark.  The less the public knows, the better. Confusion seems to be a key component to the insurance industry’s business proposition and model.  This needs to be alleviated in the current healthcare reform process.

My sense is that the system as a whole would be a lot more efficient and effective with greater transparency and improved business models.  Healthcare reform needs to include new insurance models that provide this transparency and make it easier for consumers to make informed decisions.  I’m going to follow up on this with upcoming posts on how healthcare IT and new healthcare polices would be able to not only improve our care, but make our system more efficient and actually save money.  My upcoming posts are going to address that exact fact, look at how the system can be more transparent, why it’s failed in the past and how several different types of business models in the healthcare and insurance industries might actually make sense.

As I’m pulling those posts together I’d love to hear from you!  What do you think?  What have you noticed about your insurance company that might be a bit odd or difficult? How should that affect healthcare reform?

Image of healthy tissue on the lower right (notice the orderly ring structure - in this case it's a healthy gland within the breast), while the large image is one of breast cancer. The image illustrates the chaotic nature of cancer - disorder where there was once order. Courtesy Vincent Cryns, MD at Northwestern

An interesting article appeared on NYTimes.com today that deals with “new” old approaches to the cancer thought and research paradigm. In essence, the article points to research that indicates cancer is more than just a group of genetic mutations – it’s also caused by the tiny interactions of proteins and other parts of the cell that are sometimes not genetically based.  Physical entities inside cells like proteins and other environmental aspects clearly play an important role in cancer, its prognosis and will eventually inform its treatments and cures.  At an even higher level that means that cancer is even more of a multifactorial disease – it’s far more complex than we ever thought.

The implications are that research will have to focus not only on genetics, but proteomics and cellular metabolism and physics.  An interdisciplinary approach.  However, one of the biggest problems here is that often each of these areas tend to be researched in silos – there’s not much overlap or intercommunications between research groups.  This has to change.

Thought about another way, often research can focus on specific areas for years while neglecting other important areas of research that are simply not as trendy (yes, even researchers can be petty at times).  For example, antibiotic research took a backseat to HIV/AIDS research starting in the mid 90′s, which extended up until a couple years ago.  The result is that we now have fewer new antibiotics to treat drug resistant bacteria.  We neglected one area in order to make advances in another – it’s a classic resource allotment problem as well.  Where do you place scare resources?  In this case, specifically, what research do you fund?

For cancer it’s my sincere hope that none of the individual disciplines are neglected – they all need to grow in unison and in turn inform and help each other to advance.  For example – one genetic mutation could in turn affect many different cellular processes on a metabolic level.  Understanding not only what the individual metabolic disturbances do, but how they link back to mutations and other cellular processes will be absolutely critical in understanding the disease.  These seemingly disparate areas of research will have to collaborate in order to make more breakthroughs.

Romanesco - a cross between broccoli and cauliflower. The result is a pattern that is a naturally occurring fractal - a pattern that repeats itself as you look closer and closer.

What makes it difficult now is the chaotic nature of all those cellular processes.  The cellular processes, while seeming complex today, may seem relatively simple once we gain the ‘right’ perspective, which may be many many years in the future.  It reminds me of fractals – chaos on top of chaos but from a certain perspective a pattern emerges.  And, as you go deeper you discover more and more previously unknown patterns.  If you look too closely you only see one aspect of the fractal.   If you look from too far away you might see the overall large pattern,  you’ll miss the intricacy of the smaller, repeating pattern.  An approach from both perspectives is necessary to understand the fractal.  I think the same can be said for not only cancer research, but all biological research in general.

An up close perspective of romanesco. Pretty amazing pattern if you ask me.

For biology the deeper perspective will be gained through not only new technologies but collaborations between disparate fields within biology (and potentially other sciences) that bring novel perspectives to these findings.  Tools like whole genome sequencing, biophysics modeling and the interplay between all of the fields will help transform how we view biology, which in turn will yield new insights.  Not only that, but if these currently disparate or silo’ed fields begin to collaborate my bet is that we will continue to not only make new discoveries, but continue to make them faster and faster.  And it’s not only the hard core, more quantifiable aspects of scientific research – qualitative field like clinical medicine and information from medical informatics systems will need to be included as well. But, as we know from the fractal example, the closer we look, the more we find, the more we have to discover.

Beautiful artful image of chaos - reminds me a bit of DNA. Courtesy David Nightingale @ Chromasia - http://www.chromasia.com

To get to this type of collaboration we’ll need not only advanced technologies, but collaboration tools and a willingness between researchers, corporations and other players to begin to cooperate and collaborate.  That might actually be the bigger challenge and require a whole blog post to itself (or many many posts!).  There are many perspectives in the fight against cancer and in the push to eliminate other diseases they should work harder to influence each other and promote novel ideas and create new discoveries.  I bet that approach would radically accelerate the pace of new discoveries and breakthroughs.

The bottom line for me is that I’m happy to see that these ‘old’ ideas in cancer research continue to stick around and that we have researchers and experts who continue to push the field along despite the nay-sayers.  I’m looking forward to more and more collaboration between disciplines and research groups.  And that’s no small feat.

My last post dove in to healthcare quality versus spending and introduced the Dartmouth Atlas as one of the key insight tools we have for healthcare spending and quality here in the US.  Essentially the Atlas takes a look at the entire country’s healthcare spending by using Medicare claim data as a proxy.  From this Medicare data the Dartmouth group can also glean quality of care data to pair with the spending figures.  And, for those of you wondering, yes, despite the fact that most Medicare patients are over 65, the data that can be gleaned from their data can highlight trends across the entire healthcare ecosystem.  Or, at least, it’s the best tool we’ve got.

I wanted to dive a bit deeper to look at regional differences in quality versus spending at a hospital by hospital basis. To take a look at the data provided by the Atlas and see if there were any high level trends that could inform the latest round of healthcare reforms.  I was wondering whether hospitals could provide high quality care in a cost effective manner.  In essence, the higher the quality of care, the better the patient outcome (and subsequently this saves the system money in the future from complications and further illness) – better outcomes for less money, aka a more efficient system.  Turns out it is possible to have high quality, yet more-affordable care.

Before I do that I want to recognize the limitations of the analysis of this work.  It hasn’t been blessed by a statistician or healthcare economist, etc.  It’s just looking at high level trends to show that, yes, there is pretty good evidence that quality healthcare doesn’t have to cost as much as it does today and that reform that properly aligns incentives can bring about not only savings but improved health outcomes.  In other fields, less spending often is equated with decreased quality.  In healthcare, this data indicates that it is possible to not only save money, but provide a higher standard of care at the same time.

Let’s break my analysis down by data type first.  I looked at overall spending per patient at hospitals during the last 2 years of that person’s life.  I’m not sure why the Atlas breaks the info down this way, but I was assured that this method does correlate to real world spending and is the easiest way to be consistent in collecting data.  That spending is reflective of the hospital’s overall spending habits.  The composite quality score measures how many patients out of 100 receive the right/highest quality of care.  So, if a hospital’s score is 85.4 that means that out of 100 patients that are seen in the hospital for a condition, 85 of them will receive the standard of care.

US Hospitals - total spending per patient in the last two years of life on the x-axis, and on the y-axis is an overall composite quality score. Upper left quadrant is the ideal - lower spending, yet high quality care.

For the country as a whole, you can see the plot of data for hospital spending (x-axis) vs quality (y-axis) – it’s quite a jumble, but all hospitals in the green quadrant are in the top half of being low cost (they spent less per patient), but are also in the top half of hospitals in terms of quality.  In otherwords, the hospitals in the green quadrant are low-spending, but high quality.  The opposite is true of the red quadrant – they are high spending, low quality hospitals.  It’s striking to see how many hospitals stray away from the top left part of the graph and it’s also striking how many high-cost, low quality hospitals exist across the country.  You can imagine that if all the hospitals in the red and white quadrants were able to change behaviors and become more effective and efficient just how much money the whole system could save.  And that’s not to mention massively improved outcomes.

To go a bit deeper with more meaningful numbers, I took the top 10% of US hospitals with low-spending/high-quality profiles and compared them to the remaining 90% of hospitals.  Overall, that top 10% spent $40,119 per patient, compared to $56,641 for high-spending hospitals for a savings of 28.9%.  The top 10% had a quality score average of 90.8, while the bottom 90% had a quality score of 85.7 – an improvement of 5.9%.  In summary, this means that the hospitals that perform at the top of the heap have a higher quality and they save, on average 28.9% of costs per patient.  Better outcomes, lower cost – it can happen, it does happen.

SF Bay Area Hospitals spending v quality graph. Click to expand.

However, it’s difficult to look at these stats on a nationwide basis because healhcare costs are more expensive (or less expensive) depending on where you live – just like every other living expense, healthcare is more expensive in expensive cities.  I took San Francisco (actually, the Bay Area) and Pittsburgh and subjected them to the same chart as I did the US.  The visual patterns are a little harder to discern, although in both cities you can still see that there are a handful of hospitals that have low-cost and high quality, while a majority are either high spending or low quality.  To me this means that there’s a lot of room for improvement across the board, even when looking at expensive and middle of the road metro areas.  While no clear pattern emerges, it is quite clear that most hospitals are not working as efficiently as they could be.  For you numbers oriented people, the top 10% in San Francisco saved 9.6% of costs and had 6.2% higher quality.  While in Pittsburgh, the top 10% saved 14.5% of costs and had 7.5% higher quality.

Pittsburgh Hospitals - spending v quality. Despite being a lower cost city than San Francisco, overall both cities have similar graphical plots.

There clearly are ways to save on healthcare expenditures, while still increasing quality.  Now, why is this in depth look appropriate for an entrepreneur blog that tends to focus on the biomedical sciences side of medicine rather than pure healthcare and policy?  Well, one reason is to help identify opportunities in healthcare for entrepreneurs.  Wherever there are inefficiencies in the system there is room for entrepreneurs.  However, the tricky thing is that it’s not so easy to just go start a hospital to introduce these changes de novo.  This change is going to require not only Congress, but the leads of hospitals to recognize the opportunities and to be entrepreneurial within their own hospitals.  Perhaps there’s even a market for efficiency tools from one hospital to the next – a sale of techniques that in the end save massive amounts of money and improve lives.  I wanted to point out these inefficiencies because I think they point to an opportunity for the right types of entrepreneurs to come in and make a difference.  I’m not sure how these ineffiiencies will be taken care of, but someone will figure it out.  I hope.  Put another way, if we leave reform only to politicians and insurance companies, more than likely we’ll have more of the same.

As a note, the higher the composite quality scores indicate not only better outcomes at that particular patient visit, but also tends to indicate a lower level of complications and ‘follow-on’ illnesses/diseases, thus saving the system a lot of money well in to the future in addition to the present.  Often these savings go unnoticed when thinking about healthcare reform.  The right care now not only amounts to savings in the present, but automatic savings well in to the future.

Because of all the recent debate on healthcare reform, there’s been a lot of attention on healthcare costs and quality.  A NYTimes Magazine article this last Sunday focused on the evolving principles of effective healthcare spending. Specifically, the article focused on changing physician behavior toward using the most efficient and effective care techniques, rather than what their ‘gut’ tells them. Most often, the “evidence based” techniques mentioned in the article aren’t used because physicians have their own way of doing things. Indeed, the practice of medicine is more of an art than a science and that aspect of the practice of medicine needs to be preserved – not all cases fit a mold. However, most cases do fit  in to evidence based techniques and when these techniques are followed patients have better outcomes.  And in the end that also saves a lot of money.

I’m incredibly glad to see the article in the Times Magazine and to hear this type of conversation taking place in a more mainstream location. For too long we’ve been focusing on the wrong cost centers in reforming healthcare. For example, most people point to rising prices in drugs are the main source of rising healthcare costs. The truth, which most people wouldn’t guess, is that drugs account for only about 10% of healthcare spending (although, granted, costs continue to rise). The big costs are from how we care for our sick, particularly in hospitals (31% of spending) and physician care (21% of spending). The Centers for Medicare and Medicaid Services have some rather amazing healthcare costs data here.  Rather than focusing on what the public perceives as major healthcare costs (which, are often hot-button topics picked to help improve politicians’ chances for re-election), we need to focus on how we can change the real cost centers in healthcare.

The NYTimes article cites work out of the Dartmouth Atlas, which is what I’d like to dive a bit deeper in to. Comprised of Medicare data from all 50 states, and although that only covers people aged 65 and older, it’s one of the best sources of healthcare spending vs quality and outcomes we have. And it’s just about the only public source of data that gets down to a hospital level of resolution. Most databases only look at regional or state-wide data, which makes the Dartmouth Atlas all that more important. From this compilation of data the Dartmouth crew assembles the graphs and charts of the Dartmouth Atlas to help healthcare providers and thinkers generate policy suggestions.

Some of the most important data tracked by the Dartmouth Atlas is not only the spending, but the quality of care provided by a hospital as well. Oftentimes, it’s difficult to discern between the high quality vs high spending. Socially, we’re predisposed to see a business with wood paneling or modern architecture to be of a higher quality than one that’s has beige cubicles in a nondescript office park. While that nondescript business may actually be the better business, it doesn’t have the perception of quality. I’d argue that’s because we’re looking at the wrong measurements of how to determine the quality of the business – they should be judged on how they operate and deliver, rather than the physical office space or location.

The same goes for healthcare (my post on “Cadillac Plans”).  Most people might think that lots of tests or brand new equipment or name brand medicines is what defines high quality healthcare.  However, high quality care relates more to whether you got the right care at the right time that will improve the patient’s outcome.  For example, receiving the right care during the period immediately after a heart attack – the “golden hour” – will decrease the damage done to the heart muscle, and greatly improve the care of the patient.  To further increase the quality of care, that patient’s physician should prescribe specific medicines to help decrease the overall workload on the heart to help it heal.  These medications are often overlooked.

A typical 12-lead electrocardiogram of a heart attack. Yes, believe it or not, this makes sense to most docs.

High quality doesn’t mean being taken to the high-class hospital across town with the perception of better care. That “high-class” hospital probably spends much more on care, despite similar (or potentially worse) care and outcome. In other words, high quality means that the care that is delivered is correlated with better outcomes – high cost doesn’t automatically mean high quality. We have pretty good data – it’s time we start using it well. I applaud the NYTimes for tackling such a contentious and often misunderstood issue.

In my post tomorrow I’ll go over some specific trends I’ve picked up through working with the Dartmouth Atlas data and look at hospitals in specific metropolitan areas and compare high-quality, low-spending hospitals with the rest in their regions. I think some of the differences will surprise you.