May I See Your Credentials...Oh, Never Mind

Chances are, your doctor is Board Certified.  Chances are, if you have gone to a hospital, it was accredited by The Joint Commission.  Many health care consumers look at these kinds of credentials as a proxy for quality, helping ensure that the people or institutions from whom/which they receive care are, in fact, well-qualified to provide. 

It turns out those expectations may be overly optimistic. 

Board Certification is overseen by the American Board of Medical Specialties (ABMS).  Following medical school, residency, and licensure, physicians can take a specialty-specific exam to obtain their board certification.  Following that, in order to remain board certified, they must follow a process called Maintenance of Certification" (MOC) in order to demonstrate ongoing competence, and it is MOC that has proved controversial. 

Credit: Association of American Physicians and Surgeons

In a recent survey from MDLinx, 65%  of physicians say MOC provides no clinical value, despite costing physicians thousands of dollars and significant time.  Only 4% felt it enhanced their ability to practice.  Seventy-seven percent also added comments elaborating on their frustrations.  One cardiologist told MDLinx, "These are people in a bureaucratic ivory tower who have the pomposity to state that these computer tests are going to help patients, when they're really helping themselves." 

Four internists have recently filed a lawsuit against their speciality board (ABIM), claiming the MOC process amounts to restraint of trade.  They'd like more acceptance of other certification options, such as offered through the National Board of Physicians and Surgeons.  This comes on top of an investigation three years ago that charged that the specialty boards -- and the ABIM in particular -- were using board certification and MOC to rake in huge windfalls for their organizations. 

The ABMS, for one, is not sitting idly.  It just released its draft report on its vision for the future of certification, trying to address some of the concerns raised and asking for public comment on their vision.  It's a good bet they'll get some.

Things aren't much better on the hospital side.  The accreditation process is costly for hospitals in terms of staff time and actual dollars.  Despite that, a new study found that patient outcomes were not really better at accredited hospitals than non-accredited ones, with no difference in mortality.  The authors were blunt in their conclusion:

...we found that hospitals accredited by private organizations did not have better patient outcomes than hospitals reviewed by a state survey agency. Furthermore, we found that accreditation by The Joint Commission, which is the most common form of hospital accreditation, was not associated with better patient outcomes than other lesser known, independent accrediting agencies.

It gets worse than that.  The Wall Street Journal reported that even when state or federal regulators find significant safety violations, hospitals rarely (e.g., 1%) lose their accreditation status. Professor Ashish Jha (who was one of the authors in the study above), told the Journal, "It’s clearly a failed system and time for a change,” and the Journal finding “shows accreditation is basically meaningless—it doesn’t mean a hospital is safe."  

Equally troubling, the Joint Commission actually has a subsidiary that provides consulting services to help hospitals with the accreditation  process, which creates potential conflicts of interest. The Journal's reporting caught the attention of CMS, which announced it was going to look into these.  CMS Administrator Seema Verma said: 

We are concerned that the practice of offering both accrediting and consulting services—and the financial relationships involved in this work—may undermine the integrity of accrediting organizations and erode the public’s trust.  

The Joint Commission, of course, defends its accreditation process and also insists it keeps a strict firewall between it and its consulting efforts.  

Credit: The Leapfrog Group

Meanwhile, the Leapfrog Group does its best to track hospitals' actual quality performance.  In its latest survey, of the 2,600 hospitals evaluated, only 32% received an "A."  A plurality (37%) only got a "C."  The results do not differ significantly from previous years, which should be worrisome.

All of this boils down to the same underlying problem: we don't really know how to measure quality in health care.  Sure, we have many quality measures and many ways of trying to gauge knowledge and/or processes that should lead to quality outcomes, but you still rarely know if you have one of the best doctors/hospitals, or one of the worst. 

And that is a problem.

I'm deeply sympathetic to physician and hospital complaints about the certification/accreditation processes.  They are expensive, take much time, and don't seem to have the desired results.  What I am not sympathetic, though, is the lack of meaningful options being proposed.

We already don't really understand the distinction between a certification from ABMS and one from NBPS, or between an accreditation from the Joint Commission and one from the Healthcare Facilities Accreditation Program.   We don't really know if graduating from Harvard Medical School makes someone a better doctor than graduating from Virginia Tech Carilion School of Medicine, or if doing a residency at the Cleveland Clinic matters more than where a doctor went to medical school.   We don't really know if a physician's performance is improving or declining over time.

What we need to know is, who is helping patients the most?  Who is harming them the least?  How much difference will it likely make if I go to this doctor/hospital versus that doctor/hospital? 

We should know these things, but we don't.  Physicians and hospitals should know them, and should use them to continuously improve their performance on them, but they don't and they can't effectively.  We can't entirely blame them: in today's litigious society, measuring and reporting on those kinds of specifics open the door to more lawsuits and higher awards.

The problem goes to the age-old debate: is medicine art or science?  Art is subjective; it can't be measured or easily compared.  Science thrives on measurement and proof.  We like to think of medicine as being scientifically-based, but human health is not only highly subjective but also highly variable.  So we tend to shrug at the problem, measure what we can, and use these kinds of pseudo-scientific accreditations to bridge the gap.

We have many problems in healthcare.  Much good work is being done on a number of them.  But until we can answer those three questions above -- for a specific doctor/hospital -- we're likely to keep risking our health, and wasting our dollars. 

What College Can Teach Healthcare

Mitch Daniels, the former Governor of Indiana and current President of Purdue University, gave an interesting interview to The Wall Street Journal about what Purdue has been up to during his watch.  Mr. Daniels -- who knows a thing or two about healthcare -- drew an explicit parallel to healthcare in the interview, so I wanted to take some time to talk about what he said, and to try to extend the parallels further.

Here's how he described the parallels: 

"You're selling something, a college diploma, that's deemed a necessity.  And you have total pricing power."  Better than that, "when you raise your prices, you not only don't lower customers, you may actually attract new ones."

For lack of objective measures, "people associate the sticker price with quality: 'If school A costs more than B, I guess it's a better school.'"  A third-party payer, the government, funds it all, so that "the customer -- that is, the student and the family -- feels insulated against the cost.  A perfect formula for complacency."  The parallels with health care, he observes, are "smack on."  

People in healthcare may quibble, especially about the "total pricing power," but "smack on" seems about right to me.

Credit: Purdue University

Higher education is one area where prices seem to be rising even faster than in healthcare, and both much faster than wages.  Student debt just hit a record $1.465 trillion -- yes, trillion -- and now trails only mortgage debt in size.  We're past the point of talking about "real money;" we're now in the stratosphere of healthcare money.

We spend a lot more -- nearly twice as much per student annually -- on higher education than almost any other developed country, according to OECD.  Some might argue that more spending on higher education is a good thing, but that may not be true.  "The U.S. is in a class of its own,” Andreas Schleicher, the director for education and skills at the OECD, told The Atlantic.  “Spending per student is exorbitant, and it has virtually no relationship to the value that students could possibly get in exchange."

Yep, sounds like U.S. healthcare all right.

Mr. Daniels is trying to change that.  For one thing, he's focused on holding the line on costs, such as by bringing Amazon in to help lower textbook prices.  Purdue had raised tuition 36 years in a row prior to his arrival, and now has not raised them since 2012.  “We’re able to say,” he says, “that the total cost in nominal dollars of going to Purdue will be less in 2020 than it was in 2012."

How many healthcare organizations could boast something similar?

While Professor Clayton Christensen, the O.G. of disruptive innovation, has famously predicted that half of traditional universities will be bankrupt within 10 years, in large part due to competition from online universities, Mr. Daniels led Purdue to buy Kaplan University.  He converted the online distance learning giant to a nonprofit, Purdue University Global, that enrolls 29,000 students nationwide and is extending the Purdue brand.  

It's as if Kaiser Permanente bought Teladoc.

Credit: Purdue University

But here's what really caught my eye.  Purdue pioneered the use of Income Share Agreements (ISAs), an idea attributed to economist Milton Friedman.  Students don't owe tuition during college, but six months after graduation they begin to pay a percentage of their income for a fixed number of years (e.g., 10 years).  Repayment is capped at 2.5 the initial funding.   Several other universities are now rolling out their own versions.  

Instead of students taking on debt, they are, essentially, selling a share of their future financial success.  Do well, and you'll end up paying more than the student loans would have been (but also have more income with which to pay); get lower paying jobs, and your repayments scale down accordingly.  

In a world where universities are starting to be evaluated more by their graduates' salary potential, ISAs are a way for universities to put their money where their marketing promises are.  

The application of ISAs to healthcare may not be obvious.  It's not about basing contributions/taxes for healthcare/health insurance on income, although that is certainly something we should be doing more of.  The healthcare system makes no promises about future income, nor should it.  It does, though, supposedly exist to try to help us be in better health than we would be without it, and that's where the parallels might be drawn.

In an earlier post, for example, I suggested treating our health as a capital asset.  We would seek to spend -- invest -- money on things that increase it, and avoid things that decrease it.  It would, admittedly, be hard to quantify any of this, but doing so would force us to measure and to track.  We measure a lot of things in healthcare, but too few of them tell us what we really want or need to know.  I.e., are we getting better or worse?  Are we spending our money on the right things?  

Perhaps a Healthcare Share Agreement (HCSA) would have a healthcare organization make a quantifiable prediction about your health, and what you pay each year would depend on how they do against that prediction.  We'd have to agree on how to measure it, over what period of time, but both the prediction and the measurement are feasible (e.g., QALY).   

Are all QALYs equal? www.joelcooper.co.uk

The payment could be in lieu of health insurance premiums or health care organization's charges.  The healthier-than-expected you are, the more you pay; the worse-than-expected you are, the less you pay.  It's value-based payment at the next level.  It could be done as agreements with individuals and organizations, or, say, between health plans and health organizations at a population level.

The key thing is for healthcare organizations to do what Purdue is doing: bet on their ability to actually make a positive impact in the lives of the people they serve.   

I don't know how it would work.  I don't know if it can work.  But I'd sure like for someone to give it a try, because the existing business models sure don't seem to be working.

If Mitch Daniels -- with no previous educational background -- can take a solid-but-not-top-tier university and bring about some real innovations that position it well for the future, where is the Mitch Daniels of healthcare?   

No Parking Here

Design firm IDEO published another thought-provoking blog, Owen Sanderson's To Transform Your Industry, Look At Someone Else's.  It talks about an example of what they call "analogous research;" as Mr. Sanderson describes it: "Analogous research is a form of exploration that takes a team outside of its industry to find inspiration in the ways others have tackled similar challenges."  As may be evident from my prior articles, it is a thought process I love to follow.

The example Mr. Sanderson discussed involved taking some clinicians and healthcare executives to the airport, to see how JetBlue handled customer service.  Personally, I think using any airline for examples of customer service is setting a pretty low bar but, well, healthcare has a hard time even clearing those.  Their clients seemed to get something from the experience. 

I want to try some analogous research too, and I'll pick an even more off-beat topic: parking. 

Jae C. Hong/AP and CityLab

Parking?  Parking is on many people's minds this time of year.  Perhaps you fought the crowds on Black Friday, or tried to avoid them by shopping on Cyber Monday.  Either way, at some point this month most of us will find ourselves trying to park at some shopping destination, searching for the perfect parking space. 

You might, then, be surprised to hear that many experts think we have too much parking, way too much.  CityLab reports we have 2 billion spaces for our 250 million cars.  They quote Donald Shoup, a professor of urban planning at UCLA: "The area of parking per car in the United States is thus larger than the area of housing per human."  That's pretty scary.

CityLab says that we have enough parking spaces not just for busy days like Black Friday but for "multiple" Black Fridays, something that Strong Towns pointed out two years ago.  The latter created #BlackFridayParking to help document the excess parking, "Because, even on a day that is supposed to be one of the biggest shopping events of the year, we've noticed that year after year after year after year, the parking lots are simply never full."

Credit: Sarah Kobos, Strong Towns

Much of this excess parking is actually prescribed by local zoning or retail merchant requirements that are based on, well, who knows what the required ratios of parking to retail/office/housing square footage are based on.  All of that parking, of course, comes with a cost -- not just the cost to build and maintain the parking, but also the lost opportunity costs of how else the land might be used. 

As Sarah Kobos of Strong Towns describes our obsession with parking: "It’s an inefficient system that hits municipalities–and taxpayers–directly in the pocketbook."

We know how we got here.  We started moving to the suburbs, which meant we needed more cars, because we didn't want to walk or take public transit.  Retail stores followed, as did other businesses, all of which then built parking lots -- the more, the better. 

Los Angeles, ironically, is one of the places looking at how it might end the madness.  Architectural form Woods Bagot did a study More LA, asking: "What if L.A.’s miles of parking could be unlocked for more productive urban uses?"  The firm believes converting unnecessary spaces could create housing for up to 1.5 million people while boosting retail spending and creating more green space.

The trouble is not just the current carrying costs of all that parking, but what future trends are telling us.  More people are going online to shop, work, or socialize rather than driving to them.  More people are moving back to more urban areas, fewer people of all ages are getting drivers licenses, and ride-sharing services like Uber or Lyft are on the rise.  In the not-too-distant future, personal ownership of cars may become passe, and much of our lives will be experienced virtually.

We've designed our communities around the car-crazy culture of the 2nd half of the 20th century, but we're now into the 21st century.  We need to rethink what that means for those communities, including but by no means limited to parking lots.

Healthcare has a lot of parking lots -- both literally and figuratively. 

Start with the literal.  All those health care facilities and all those medical office buildings, come with parking.  They have the same problem as the malls and other retail establishments; parking is built for worse-case scenarios, leaving those parking lots often significantly underutilized.  The costs for all that parking, of course, gets built into what we pay for care.

More troubling are the figurative parking lots.  Let's start with the easy one: waiting rooms.  There's almost no one who has had a healthcare encounter who doesn't have their own waiting room story.  The problem is both that we spend too much space on them, and that we make people spend too much time in them. 

Or my favorite example, hospitals.  They are huge capital sink holes, often far from full, and too often housing patients who, with some creative effort, could well be taken care of at home or in the community.  We need to rethink our concept of a "hospital" for the 21st century, not build more of them, much less more parking lots for them. 

Then there is telehealth.  It remains a hot topic, even if currently not widely used (as a recent special Health Affairs highlighted).  That's not going to remain true.  At some point -- as Kaiser Permanente has shown possible -- a majority of visits will be done virtually. 

We need to be planning for a healthcare system where a majority of health care happens virtually or delivered at home, rather than happening in healthcare facilities.  Those parking lots, those waiting rooms, and those hospitals are going to look awfully deserted. 

Urban planners and developers are starting to realize they need to plan for a world that needs less parking.  It will be a big shift, and won't happen overnight, but it will happen. 

Similarly, healthcare executives need to be planning for a healthcare system in which care is delivered very differently -- and where "care" itself will be redefined.  It will also be a big shift, won't happen overnight, but it, too, will happen.

Parking may be the least of healthcare's worries.

The Empire Strikes Back

It seems deeply ironic that a week after I wrote about how even giant companies eventually get surpassed, I'm writing about the resurgence of one such giant, Microsoft.  Last week Microsoft won back the title of world's most valuable company (as measured by market cap), passing Apple.  Apple had that distinction since 2012; Microsoft hasn't had it since 2002.

Admittedly, Microsoft was only able to pass Apple because a recent tech stock downturn dropped Apple from its record trillion dollar valuation, and, as of this writing, Apple has pulled back in front again, but the fact that it is a race again says a lot about Microsoft.

The moral of the story may be that big can stay big, but not by sticking to the same things or doing them in the same way.  Healthcare, pay attention.

CEO Satya Nadella is helping Microsoft fight back.  Credit: Business Insider

Apple was always the cool kid (especially post-iPods), while Microsoft was the nerd.  Apple was the charismatic Steve Jobs; Microsoft was Bill Gates, the King Geek himself.  Apple was elegant, integrated hardware/software, Microsoft was all-too-often kudgy software.

Google "Tech Big 4" and you'll most likely get Alphabet, Amazon, Apple, and Facebook.  Wall Street tends to focus on the stocks of FAANG -- Facebook, Amazon, Apple, Netflix, Google (Alphabet).  People in healthcare and in tech like to speculate endlessly about what Amazon, Apple, and Alphabet might do in healthcare (Prime Health, anyone?). 

Microsoft often seems like an afterthought, if thought of at all.

It's true that Microsoft has had its share of blunders.  It was famously late to the Internet; even now, its browser has less than a 3% market share.  It failed with its phone. then blundered even worse with its acquisition of Nokia.   Or there were failed products like Zune, Vista, MSN Watch, and Microsoft Bob, to name a few.

Still, once Satya Nadella became CEO in 2014, things have changed.  Its stock has tripled under his leadership.  Its cloud business is a strong second to Amazon.  Office has gone from a licensing model to a more attractive-to-investors subscription model (Office 365).  Its Xbox line is a $10b business, is growing rapidly, and an area in which Microsoft will continue to invest "aggressively."

It now makes its own hardware -- the Surface line of PCs, laptops, and tablets (which, by the way, started under prior CEO Steve Ballmer) -- that have generated largely position, sometimes rave reviews.  Surface is now a billion dollar business.

Microsoft has also made some key acquisitions, such as open source leader GitHub this year, business networking site Linkedin in 2016, and video game Minecraft in 2014.  Mr. Nadella preaches: "We need to be insatiable in our desire to learn from the outside and bring that learning into Microsoft."  

Meanwhile, its foray into virtual reality/augmented reality -- Hololens -- hasn't necessarily generated a lot of revenue yet, but it has generated a lot of buzz, including a just-announced $480 million contract with the U.S. Army.  More benignly, Hololens is also being used to guide surgeons. build cars, and train medical students (see video below):

As two of the Hololens examples illustrate, Microsoft is paying a lot of attention to health.  HealthVault, the personal health record it introduced over a decade ago, never quite gained traction, and Microsoft shut down its HealthVault Insights app earlier this year, although the platform itself remains.  

More significantly, in 2017 Microsoft launched Healthcare NExT, which it described as:

a new initiative to dramatically transform health care, will deeply integrate greenfield research and health technology product development, as well as establish a new model at Microsoft for strategic health industry partnerships

Healthcare NExT -- which is now just Microsoft Healthcare -- is betting big on the use of artificial intelligence (AI), through its Microsoft AI in Health Partner Alliance. and cloud computing.  One of their current areas of focus is using "executable biology," such as to combat cancer. 

Their collaborations include the Fred Hutchinson Cancer Center, St. Jude Children's Research Hospital, Adaptive Biotechnologies, the University of Pittsburgh Medical Center, and the British Columbia Cancer Agency in Canada.

Peter Lee, the head of the unit, described to Medscape his approach:

But when you think about doing that, the first question you ask yourself is, 'What right do we have to exist in healthcare at all?' And it's not uncommon for big companies to do that with maybe even some arrogance. So it's important to be grounded, and I would put it this way and ask the question, if Microsoft disappeared today, what potential would be lost for the healthcare world?

Good questions for any company thinking of getting into healthcare -- and for ones in it now.

Microsoft could have coasted along for a long time on Windows and Office, but they didn't.  They weren't even under Mr. Gates (Xbox) and Mr. Ballmer (Skype).  But its bets are really starting to pay off under Mr. Nadella. 

For tech or other companies thinking of getting into healthcare, I'd advise that they think long and hard about Dr. Lee's rubric: if you didn't get in healthcare, what potential would be lost?  E.g., would healthcare really miss what you might bring?  If you aren't sure, or if it is strictly a revenue grab, please -- stay away. 

For companies already in healthcare, I'd advise that they learn from Microsoft's own story: it's not enough to double down on what you are already doing.  You have to be willing to take risks, place some big bets, in areas that are not in your traditional areas of competency.  Some of them may -- no, will -- fail, but you have to try nonetheless.  The sure bet is that your future is probably not going to be defined by what you are doing today. 

If Microsoft can successfully reinvent itself, maybe there is hope for healthcare organizations as well.