The Big Get Bigger, Until They Don't

You may have missed it, but the Open Markets Institute released a report on what it calls "America's Concentration Crisis."  The report begins bluntly: "Monopoly power is all around us: as consumers, business owners, employees, entrepreneurs, and citizens."  As David Leonhardt wrote in his op-ed about the report, "The federal government, under presidents of both parties, has largely surrendered to monopoly power."

Their associated data set details market concentration within 32 industries, several of which are health related.  For example, in electronic health record systems, the top 3 firms account for 58% of the market, whereas in pharmacies/drugstores, the top 3 control 67% (and the top 2 alone have 61% share). 

This shouldn't come as a surprise by anyone who pays even minimal attention to healthcare, yet here we are. 

Credit: Federal Reserve Bank of Minneapolis

Perhaps due to the available data, Open Markets Institute did not look at hospitals, physicians, payors, or pharma, but a few months ago, Lindsay Resnick, writing in Becker's Healthcare, warned that we should "get ready for a future of rampant healthcare consolidation."  He cited the following:

• Five for-profit insurers now control 43% of the market. 
• More than 60% of community hospitals belong to a health system
• Less than half of physicians own part of a private practice. 
• Vertical integration mergers and acquisition deals topped $175 billion in 2017.

Even more telling, earlier this year the Commonwealth Fund released a report about market concentration of healthcare providers and health insurers, and found that 43% of markets were "super concentrated" for providers and another 47% were "highly concentrated."  For insurers, 55% of markets were highly concentrated and 37% were moderately concentrated. 

Credit: Commonwealth Fund

The argument is always that such consolidation leads to great efficiencies and more ability to reduce unnecessary care, but as far as I know, the research to support such claims does not exist.  To the contrary, study after study has found that consolidation almost always to higher prices and increased spending. 

The New York Times recently commissioned its own study on the matter, and found that: "The mergers have essentially banished competition and raised prices for hospital admissions in most cases."  In the 25 markets it studied, prices went up from 11% to 54%.  As one expert told them, "The puzzling part for many of us in the state is why anyone would allow these oligopolies to form."

Mr. Leonhardt and the Open Markets Institute could explain it.

Mr. Leonhardt attributes both income stagnation and a decline in entrepreneurship at least in part to what he calls this "corporate gigantism," and Dave Chase, among others, has been preaching for years that, specifically, out-of-control health care costs have been robbing workers of wages for years.   

We don't have an Alphabet, Amazon, Apple, Facebook or Microsoft in healthcare -- yet -- but, left unchecked, it's only a matter of time before local/regional monopolies become national ones.  

It would be easy to get discouraged about this trend, but the ever-optimistic John Nostra, writing in Psychology Today,  points out: "Giants are meant to die." He cites the work of Professor Mark Perry, who looked at the Fortune 500 in 1955 and again in 2017, and found that 88% of the ones in 1955 did not make the latter list.  Some had gone bankrupt, some had merged/been acquired, and some were just were no longer big enough to qualify.  Professor Perry refers to this as "Schumpeterian creative destruction."

Professor Perry sees this as a "positive sign of the dynamism and innovation that characterizes a vibrant consumer-oriented market economy, and that dynamic turnover is speeding up in today’s hyper-competitive global economy."  Mr. Nostra is similarly encouraged, noting: "The early movers in a marketplace can often become the dominant player, but commonly, they are also the ones who stumble."

It wouldn't seem that time-honored institutions like hospitals, physicians, pharmaceutical companies or health insurers are "early movers," but it may just be a matter of perspective.  It may be that our medical model of "health care" is the early mover, and will be replaced by other models that do not value those as highly. 

As I've written previously, healthcare's "monoculture of thought" limits its ability to come up with truly new ideas and approaches, thus creating opportunities for outsiders.

Take what's happening in banking.  Traditional banking is a huge industry, also time-honored and increasingly concentrated, but it is being challenged by "neo-banks" -- typically digital only enterprises without a bank charter.  Accenture says 19% of financial institutions in the U.S. are considered new entrants, largely what they term "digital disruptors."  The New York Times reports that U.S. neobanks received four times as much venture capital so far in 2018 as they did all last year, and ten times as much as in 2015. 

Credit: Australian FinTech

Chime, for example, has 2 million accounts and is adding more customers per month than Wells Fargo or Citibank.  Neobanks in other countries, including Australia, Britain and China, are moving even faster. 

World Finance asserts that the 2008 global financial crisis led to a wave of anger towards, and lack of trust in, traditional banks that has created the opportunity for neobanks.  Even so, though, "they will need to offer a positive alternative of their own that is more convenient, more secure and cheaper than what is currently available."

I don't know what healthcare's "neobanks" are going to be (for that matter, the financial services industry isn't yet sure what its own neobanks are really going to be).  Perhaps they will be AI personal health assistants or 3D printed-at-home prescription drugs.   Perhaps they will be something someone is still sketching out the idea for.  Perhaps we won't even recognize them as being such at first. 

If consumers' anger towards and lack of trust in an industry creates opportunities for outsiders, then healthcare certainly is ripe, perhaps even more than financial services.  We're going to see more market consolidation in healthcare before we see effective challenges to it...but we will see them.  Even giants die. 

Healthcare does have a concentration crisis, but that creates opportunities for the right challengers.  Who will they be? 

It's MY Data...I Think

Data privacy is hotter than ever.  We're all mad/upset/concerned about what tech giants like Amazon, Facebook and Google are doing with our data.  Indeed, a new Harris Poll found that data privacy (65%) tops our list of pressing social issues -- ahead of healthcare, supporting vets, or even job creation -- while we're pretty critical about how well companies are dealing with it.

It has been a few months since I've written about data privacy, but it's not out of lack of interest or because it's not important.  Neither is true.  It's that, the more I think about it, the more I wonder if we even understand the real issues. 

There has been a lot happening with controlling our own data.  In Europe, for example, GDPR was put into place in May 2018.  Is is one of the broadest attempts to restrict what data is collected about us and how it is used, but it doesn't fundamentally change who is collecting and using our data. 

Some are going further.  Hu-manity.co, for example, has asserted ownership of our data as the "31st human right," declaring:  "Everyone has the right to legal ownership of their inherent human data as property."  

The concept of data as property, and the corollary that we have the unique right to own that property, is a novel one that flies against the industries that have grown up around using us as the product.  Co-founder and CEO Richie Etwaru told TechCrunch: "We’re starting with the idea that your data is your digital property, and we are allowing you to have the equivalent of a title, like you have for your car."  

They've got a nifty app -- #My31 -- that uses smart contracts on blockchain to help manage this property, and are partnering with IBM's Blockchain Platform to achieve this.  Health data is one of their first areas of focus, in part because there are clear customers for such data; they estimate an individual's health data alone might be worth $200 - $400.

Then there is Health Wizz.  As reported by FierceHealthcare, they want to help consumers collect their health information in a "central, virtual depository," then be able to sell it to interested buyers like pharmaceutical companies.  They also use a blockchain approach to manage the data and any payments. 

Health Wizz will screen buyers, to help ensure that consumers know exactly how their data will be used, although consumers can sell it off-platform too.  People will have to be careful about who has their health data because protections like HIPAA primarily apply to health providers and health plans -- not, for example, to Facebook or Google.

In the interests of time, I won't go into other (blockchain-based) patient-controlled health data approaches like Citizen Health,  Gem, HealthBank, Iryo, Patientory,  Timicoin, or YouBase, any one of which deserves its own discussion.  Clearly, there is something happening here.

Some are skeptical about consumers taking control of their own data.  For example, Niam Yaraghi, a Fellow at Brookings, argues that data from an individual "has very limited value before processing. It is the aggregation, merging, and analyses of such data that creates value."  I.e., a lot of little data is needed before Big Data can produce value.

Moreover, he adds, "even if one could successfully assess the fair value of patients’ data, distributing the fair share of profits to patients would require a sophisticated tracking and accounting system," which would eat into any profits that might be shared with those individuals. 

Let's assume, though, that my data is my property, that I control it, and even that there are entities which would pay me for it.  The question I have is: what is "my" data?

Many would think about, say, the data gathered at physician visits or hospital stays.  It might include my vitals, my prescriptions, my diagnoses/symptoms, lab values, and any procedures or tests.  Those feel like data that are "mine," as they are about my health.

But they are also about the healthcare provider(s) who were involved.  The data is a record of things they've done, things they've observed, things they've recommended.  That's why healthcare providers feel such a sense of ownership about them, and why this kind of data is used in medical reviews and/or malpractice suits.  The providers aren't going to give up their "ownership" without a fight. 

Or take data gathered by a wearable, including smartphones.  Yes, it is a record about me, but is also a record of what the wearable was doing, and potentially how well it did that.  The manufacturer might argue that it has a "right" to that data as well, such as to ensure proper operation. 

Similarly, when I buy something on Amazon, Amazon, any third party vendors, and my credit card company all view that transaction as data involving them, to which they should have rights, if only as a business record.

Even a uniquely personal data like my DNA is not solely my own, now that "familial" DNA can be used to identify relatives, such as ones involved in a crime.  Yes, it's data about me, but it is also data that is also about others related to me. 

So what data, exactly, belongs solely to me?  If I want to collect and potentially sell it, who has competing interests to it that need to be considered? 

There is no question that many privacy laws are woefully outdated, especially HIPAA.  Most were engaged in a pre-Internet, pre-smartphone, pre-IoT, pre-Big Data time.  All those need to be considered in any updates to those laws.  GDPR is probably about as good as we have, but even it makes assumptions that I'm not sure are entirely valid. 

Data may be less like a piece of physical property than it is like the atmosphere.  I live in it, I partake of it, and I contribute to it, but it's hard to really say what piece of it is "mine." 

I don't have any answers to these issues, and I wish all these data start-ups success, but I suspect we're going to need a 21st century re-conceptualization of "data" before we can really come to grips with ownership of it.

Too Much Stupid Stuff

Melinda Ashton, M.D., has a great article in NEJM: Getting Rid of Stupid Stuff.   It describes a program her health system (Hawaii Pacific Health) undertook to do exactly that, with some promising results. 

That sounds like something everything in healthcare should put at the top of their priority list. 

The impetus of their program was to address the issue of burnout, specifically around documentation burdens.  Their EHR had been in place for 10 years, and they reasoned that some tasks might no longer be necessary or appropriate.  So, starting October 2017, they asked all employees to nominate anything in their EHR that was "poorly designed, unnecessary, or just plain stupid."

If that sounds unusually blunt, credit Dr. Ashton.  She explained to FierceHealthcare:  

We were going to call it ‘administrative simplification’ for a while and I sort of pushed back and said, 'You know, I really think we need to be clear on this.'  I just had a sense that calling it stupid stuff was going to resonate better.  

Dr. Ashton and her team reminded employees that: "Stupid is in the eye of the beholder. Everything that we might now call stupid was thought to be a good idea at some point.”  Fair enough.  They expected nominations to be in three categories:

• unintended documentation that could easily be eliminated;
• documentation that was needed but that could be collected more efficiently;
• documentation that needed better training to accomplish.

They ended up getting nominations in all three categories, and have already implemented a number of changes, as well as eliminating 10 of the most frequent 12 physicians alerts, because they were just being ignored.  Interesting to them, but not surprising to me, they got more nominations from nurses than from physicians.  

Credit: NEJM, Melinda Ashton MD

The program has now been extended beyond just documentation and beyond just the EHR because, as Dr. Ashton writes: "It appears that there is stupid stuff all around us."

Boy, put that one on our healthcare system's tombstone.  

It would be easy but short-sighted to take healthcare's collective frustration out on EHRs.  Many clinicians feel like EHRs were forced upon them, not designed for their ease, and ended up taking time and attention from actual patient care.  Nor have their fulfilled their promise of making patient records easily accessible across providers, improving care by more quickly identifying previous issues and reducing duplicate treatments.  

But let's not kid ourselves: EHRs are not the stupidest thing we have in healthcare.  EHRs may, in fact, be the smartest stupid thing healthcare has done, because at least there are significant upsides to having EHRs, even if we're not achieving them yet.  There are plenty of things we do in healthcare that are just plain stupid.

Admit it: if you work in healthcare, you see stupid stuff every day.  Some are things imposed on you from external sources, and some are things required by your own organization.  

As Dr. Ashton cautioned, some may have been a good idea at some point.  Some may never have been a good idea.  Some are things that just keep getting done simply because of habit/ tradition/rules.  Some are stupid things that someone, somewhere, still thinks is a good idea but, when push comes to shoving patient care, aren't. 

They're still stupid, and should be stopped. 

Maybe your healthcare organization has a process for taking suggestions (from employees and/or patients), but I'd question how often that results in changes that ease some of the worst pain points.  I love what Dr. Ashton and the team at Hawaii Pacific Health are doing, and think every healthcare organization undertake a similar effort to stop doing stupid stuff.  

That hard part won't be finding the stupid stuff: the hard parts are getting people to speak up about them, and making the changes needed to actually get rid of them.  Many stupid things are inter-organizational rather than intra-organizational, which makes it harder -- but not impossible -- to change them.  

A few months ago I wrote that healthcare should learn from Dan Gingiss and "do simple better," because "in healthcare we make the simple complicated, we make fast slow, and we make fun at best boring and worst scary."  I urged that we should strive to make healthcare simple, or at least simpler.  I still believe that, but now I think that before we do even that we should work to make it less stupid.  

We'll probably find that doing the one will help accomplish the other.

The program at Hawaii Pacific Health as aimed primarily at reducing daily frustrations for its employees, but we need to go much further.  These kinds of programs need to attack daily frustrations for all stakeholders, and especially for patients.  

If you are a healthcare leader, start a program like this.  If you work in a healthcare organization, advocate for one until your leadership puts one in.  If you are a patient or family member of one, don't wait for a formal program from the healthcare organizations you interact with; speak up about the stupid stuff you see and have to deal with, and make sure your thoughts get to those organizations' leadership.   

It's stupid to accept stupid stuff, especially with something as valuable as our health at stake.

In the meantime, if you want to report stupid stuff in healthcare, put it on the comments below, or on one of the threads about this article on Twitter, or on posts about it on Linkedin and/or Facebook.  It probably won't get it fixed, not right away, but we can at least get more of the stupid stuff out in the open.  

The Business of Healthcare Is Business

Hmm, that headline doesn't seem right, does it?  I mean, shouldn't the business of healthcare be, well, health?  Or, at least, caring?  Actually, shouldn't the business of healthcare be patients?  After all, everyone in healthcare says it's all about patients.  Everyone says they're patient-centered, whatever that means. 

But think about this: who in healthcare gets paid for you to be healthy?  Or, conversely, who in healthcare doesn't get paid when you get sick, or when you don't improve under their care?

Whether we planned it or not, whether we admit it or not, or whether we like it or not, our healthcare system is a business that has become about making money. 

We have a healthcare system that is like a bizarro world.  It operates unlike any other business, treating its supposed customers like second class citizens while violating most laws of economics that apply to other industries.

Let's look at a few recent examples:

• Kaiser Health News reported on a $48,000 allergy test.  The patient's insurer "negotiated" it down to a mere $11,000, leaving her with more than $3,000 to pay out of pocket.  As one billing expert told KHN, "That charge is astronomical and nuts."  The patient expressed her confusion: "No one cut into me. No one gave me anesthesia. I had partly open plastic containers filled with fluid taped to my back."  
• Denver's 9News reported on how patients are going in for what they assume will be in-network surgeries, and coming out with liens placed on their houses due to bills from out-of-network physicians involved in their care.  This despite Colorado having a law that is supposed to prevent balance billing.  As one patient -- no, let's call him what he is: one victim -- told 9News: "This whole system is crazy.  You have insurance. You have an emergency. It should be taken care of.”
• "Non-profit" hospitals continue to claim the benefits of that status, but often don't act like it.  As health economist Gerald Anderson told NBC News: "The tenor and the responsibility of hospital CEOs has now changed over time.  They focus on the bottom line and … they get performance ratings based on profitability."  
• Pharma keeps raising prices and coming up with new, always-more-expensive drugs.  Novartis, for example, is talking about a one-time dose for a gene therapy that they think is worth $4 million.  There are already other drugs that cost near $1 million a year.
• Yet another study confirmed that "serious illness often means financial disaster for Americans."   For example, nearly half of cancer patients spend their life savings in the first two years of treatment.  No wonder, then, that medical bills now account for 1/3 of GoFundMe campaigns.  
• The chief medical officer for the American Cancer Society just resigned in protest to some of the (lucrative) partnerships it has formed with businesses like Herbalife, Long John Silver's, or Tilted Kilt.  ACS is far from the only advocacy group with ties to companies with dubious health credentials, and KHN found that patient advocacy groups also take millions in from pharma.  

I could go on and on, but Elizabeth Rosenthal's An American Sickness covers this ground at greater length (and with greater eloquence). 

Bottom line: Healthcare. Should. Be. Embarrassed. 

Jesse Tinsley / The Spokesman-Review

Still, though, I would be remiss if I didn't include an example of  how technology fails in healthcare, as again reported by Kaiser Health News.  It seems that Epic, the largest EHR vendor, can't even handle the switch to/from daylight savings time. 

As one RAND researcher told KHN: "It’s mind-boggling.  We expect electronics to handle something as simple as a time change. Nobody is surprised by daylight savings time. They have years to prep. Only, surprise, it hasn’t been fixed."

No wonder, as Atul Gawande wrote in The New Yorker, 

Something’s gone terribly wrong. Doctors are among the most technology-avid people in society; computerization has simplified tasks in many industries. Yet somehow we’ve reached a point where people in the medical profession actively, viscerally, volubly hate their computers.

Many believe they're so bad because they're neither about physicians nor patients, but about billing.  As seems all-too-usual in healthcare, it comes down to the money, not the care.

And, yet, we seem to want the healthcare system, bizarro though it may be, to take on ever greater responsibility.  Dhruv Khullar, MD, wonders if we've "medicalized everyday life," He worries: "But we may also be medicalizing much of normal human behavior — labeling the healthy as diseased, and exposing them to undue risk of stigma, testing and treatment."  

Dr, Khullar concludes:

More fundamentally, we need to reconsider where the upper and lower bounds of diagnosis should be. Many experts believe the pendulum has swung too far, such that much of normal human behavior now falls within treatment thresholds. This reassessment is particularly important because those with mild or borderline symptoms may be less likely to benefit from treatment than those with more severe symptoms.

It shouldn't come as a surprise, then, that an article in BMJ asks if "lifestyle medicine" should be a new medical specialty, or that we talk about getting "prescriptions" for exercise.  "Exercise for Medicine" is an actual initiative.  Honestly, should we really need a prescription for exercise, and should our lifestyle be under the purview of our doctor? 

Credit: American College of Lifestyle Medicine

Where is the line between our life and our medical care?  Who should be making money off of it -- and how? 

Healthcare is slow-walking its way to outcome-based payments and value-based purchasing, but we don't really know what either of those are and we're not really anywhere near ready to put anyone at major risk for them.  Let's be realistic about what they might accomplish, and when.

Look, I don't mind that healthcare is a business, or that people and organizations make money in it, even large amounts of money.  What I do mind is how we're treated by that business, and how little we seem to know about what we are buying with all that care it delivers. 

It's time -- way past time -- for the business, and the business model, to be about our being healthy, not about paying for what happens to us when we are not.