We Must All Be Healthy Together...

Is there anything our microbiome can't do?

We're starting to get a better picture of how our microbiome impacts our health, and I'll get to that shortly, but at the recent Biohack the Planet conference some clever folks at Biota Beats figured out how to turn the microbiome into music:    

Click here to check out what it actually sounds like (especially the full symphony).  

OK, so it's not Beethoven or even Jay-Z (although David Sun Kong, an MIT biologist who presented the work, says DJ Jazzy Jeff is going to put a track from his microbiome on his next record), but it is pretty cool.  

Imagine that one day we might diagnose our health by checking the sounds of our microbiome.

For anyone who hasn't been paying attention, the microbiome are all the microbial organisms living in, on, and around us.  They are literally everywhere, and their genes outnumber our genes by 100-to-1, perhaps more.  They even have more cells than we do.  

That probably sounds terrible to many people.  We're a nation that demands antibiotics at the slightest sniffle, that puts antibiotics in its food chain, that uses antibiotic soaps.   Ever since we discovered penicillin, we've decided that if we can kill off "foreign" invaders to our bodies, we should.

And, certainly, much good has come from that.  We don't usually die of infections any more.  The trick, though, is understanding what is "foreign," and what is "invading" us, rather than simply at home in us.   

We start acquiring our microbiome in the birth canal (and, in fact, if you came out via a Cesarean-section, it can adversely impact your microbiome), and its composition is constantly changing from then on.  Children eating dirt, for example, is generally frowned upon by modern parents, but it is actually is a great way for them to boost their microbiome.  There is a "hygiene hypothesis" that links increasing incidence of autoimmune and allergic diseases to our efforts to avoid such "germs."

The Human Microbiome Project has been studying our microbiomes since 2008, and, as with our own genome, it seems that the more we learn, the more we realize how much more there is to learn.  Links between our microbiome and our health seem to be everywhere we look.  

The microbiome is deservedly becoming a big research focus.  Indeed, the Cleveland Clinic listed microbiome as the top medical innovation of 2017:

IBM, Harvard, MIT, Mass Gen, UCSD and the Flatiron Institute are teaming up to map 3 million genes found in the gut microbome (you can donate spare computing time in the effort).   This is only one of several efforts in the field, TechCrunch reports.   

It has been well documented that our gut microbiome not only helps us digest foods, but also how we store fat, gain weight, regulate blood glucose, even what food we crave (e.g., chocolate!).  The following chart illustrates the complex interactions:

Boulange, et. al.

Researchers Jasenka Zubcevic and Christopher Martyniuk assert that: "There’s growing evidence of a link between the brain and our microbiota as well."  Their research found that the brain communicates with the gut microbiome via the bone marrow immune cells, which suggests connections to our immune responses and immune diseases.

In addition, the gut microbiome has been linked to stress, anxiety, and other mental health issues.  Which, as Professors Zubcevic and Martyniuk put it, gives "a whole new meaning to the term 'gut feeling.'"

And we're still being surprised.  A new study of the Hadza, an African hunter-gatherer tribe, found that their microbiome varied seasonally, possibly based on changing diet throughout the year.  The degree of the changes were unexpected, with some of the microbiota dying off entirely, then reemerging.  

Their microbiome was also dissimilar to those found in more industrialized societies.  As to why, or what it meant for our health, the researchers could only say: "That’s a huge question — it’s the elephant in the room." 

Justin Sonnenburg, the lead author of the Hadza study, admitted to The New York Times, "We don’t have a good grasp of what these seasonally varying microbes even do."

Two 2016 studies tried to correlate a host of factors with people's microbiome, and could only explain 8-16% of the variation.  As one of the researchers said, "It's very humbling."

Two researchers -- Rebecca Vega Thurber and Jesse Zaneveld -- have proposed what they call the Grand Unification Theory of Unhealthy Microbiomes,  It theorizes that when microbiomes become unhealthy, they do so in unpredictable ways.  They become more varied, but in every direction.  

That's why Dr. Zanesveld likes to call it the "Anna Karenina" hypothesis, as in, Tolstoy's famous opening: "All happy families are alike; each unhappy family is unhappy in its own way."

The theory is still in the early stages, but it is drawing attention.  The fact that our microbiomes vary both from each other's and over time even when healthy complicates our understanding of when it is not.  As The Atlantic's Ed Yong points out,  "if the microbiome is ruled by randomness, then it might be hard to determine whether a particular community is unhealthy, and to develop standardized, effective ways of steering it back on course."

We're proud of 21st century approaches to medicine like breakthroughs in immunotherapy or gene therapy, but, in some ways, we're still like when we started understanding the role of bacteria and viruses.  Dr. Sonnenburg concluded: "We have to think of ourselves as these composite organisms, with microbial and human parts."  

Professors Zubcevic and Martyniuk came to a similar conclusion, especially as we increasingly rely on pharmacological interventions that may impact the microbiome:  

Much like the chicken-or-the-egg scenario, however, this complex interplay warrants further investigation to fully understand the consequences (or benefits) of perturbing one single component of the gut microbiota.

The fundamental change to thinking about our health that we have to make is that, when it comes to our microbiome, it isn't "us" versus "them."

It's all us.

When he was urging his fellow citizens towards independence, Benjamin Franklin famously said, "we must, indeed, hang together or, most assuredly, we shall all hang separately."  So it is with our health and the health of our microbiome.  We're in this together.

Meanwhile, I'm looking forward to hearing my microbiome!

We Need More Dumb Ideas

Over the years I've listened to many new-to-health-care entrepreneurs pitch their great new idea.  They're so excited: health care is so inefficient!  People are so frustrated by the system!  It will be so easy to improve it!

I usually end up thinking, "Oh, you poor people.  You really don't know much about health care, do you?"  They don't fully grasp the strange way it is bought and sold, the convoluted financing, or the layers of regulation.  So I wish them well and wait to hear about their eventual failure.

But now I'm thinking, maybe it is experts like me who are part of health care's problem.

In Harvard Business Review, Ayse Birsel suggests that companies need to do more "reverse thinking," deliberately thinking up wrong ideas.  As she says:

Wrong thinking is when you intentionally think of the worst idea possible — the exact opposite of the accepted or logical solution, ideas that can get you laughed at or even fired — and work back from those to find new ways of solving old problems.

"Wrong" ideas force us to think differently, and to identify exactly what about them is actually wrong.  Doing so can open up new ideas or new avenues to investigate.  One of her examples of this is biochemist Fred Sanger, who was trying to sequence DNA back in the 1970's.  He went at this by trying to do the opposite, building DNA instead of breaking it down.  His resulting insights garnered him his second Nobel Prize.

Ms. Birsel has several suggestions for how companies can spur such wrong thinking, but the most powerful one may be "Be the Beginner."  She cites the famous Zen quote:

In other words, sometimes we can know too much, and that knowledge can cloud our thinking about what the possibilities really are.  Sometimes we need all those possibilities.

Be the Beginner, indeed.

We've all been in meetings where everyone is trying to show off how much they know and what they think should be done.  People often talk past each other, not really listening and certainly not being open to any dumb ideas that might end up not being so dumb after all.  It's more about showing how smart they are rather than solving the problem.

Thom Crowley, in Fast Company, thinks that we'd more more effective if we'd all just stop trying to be the smartest person in the room.  Knowing when to say "I don't know," he believes, "might make you the most useful person in the room, which is way more valuable than being the most knowledgeable."

Don't always try to be the "expert."

Dumb ideas are sometimes what we need.  Panos Mourdoukoutas, a Professor of Economics at LIU, asks: "What do Amazon, Dell Computer, Home Depot, Airbnb, and Uber have in common? They all started with a “dumb” idea."

Smart ideas, he says, are easier, in a sense.  They address conventional markets, with well-defined ideas about the products.  But these markets usually have lots of competitors and slow growth.

On the other hand, so-called dumb ideas serve non-conventional markets, where neither products nor competitors are well-established.  That opens up all sorts of possibilities.

Admit it: the first time you heard the business models for Uber or Airbnb you probably thought they sounded like pretty dumb ideas, but the venture capitalists who let that stop them from an early investment are probably kicking themselves now.  As Professor Mourdoukoutas concludes: "The bottom line:  “Dumb” ideas can bring a fortune, provided that they are executed right."

Source: Anuja Shukla, Ideo

Leif Huff, a partner at Ideo, recently outlined "5 Ways to Think Like a Designer," which were: collaborate, get into a question-framing mindset, get lost in dreams, be curious, and -- my favorite -- challenge assumptions.  Those are tips we should all take to heart.

Health care is full of constraints.  Physicians guard clinical matters closely; no one can do anything that resembles the "practice of medicine" without joining their guild, with all its attendant training, rules, and ways of doing things, even ones that seem counter-productive (e.g., 100 hours a week for residents).

Health insurers are similarly wary about other entities being in "the business of insurance," although they can't stop self-insured plans from competing with them.  Both  now operate under federal rules about what their products can even look like.

As is well known, drug companies charge much more for drugs in the U.S. than anywhere else in the world, and are opposed to importing not just drugs approved in other countries but ones already approved for sale here.  They use that, patent protection, and FDA approval as barriers to competition, ostensibly to protect patients but, many believe, to maximize profits.

Take any aspect of our health care system, and you'll find professionals who want to preserve (and, if possible, expand) their role, and regulators who help provide barriers to entry to anyone who might want to usurp some or all of that role.  It is not a system where new ideas, especially "dumb" ideas, are welcomed.

Look, I get it.  Health care is very complicated.  It is about people's health, one of the things we (supposedly) value most.  Make a mistake, pick the wrong idea, and people could die, or, at the very least, not get better.

But health care comes up with enough of its own dumb ideas, and its own ways of harming people.  It shouldn't be immune to having to listen to other dumb ideas.

Sometimes we need new thinking, even in health care.  Sometimes we need to think of a bunch of wrong ideas to understand what might make them "right."  Sometimes we need to take a chance on a "dumb" idea that maybe isn't really so dumb.  Sometimes we need ideas that are, for lack of a better word, dangerous, if only to the status quo.

Some dumb ideas are, in fact, dumb.  Many will fail; others would make things worse.  But you can't let that keep you from coming up with ideas that are outside people's comfort zones.  Oscar Wilde had it right:

So next time someone pitches me an idea that sounds naive at best ad dumb at worst, I promise I'll try to be more patient, listen a little harder, and try to get past my own "expertise" in order to be open to its possibilities.

Dare to think of dumb ideas.  Don't be afraid of dangerous ideas.  Be the beginner.

11 Things About Health Care I'm Dying to Redesign

The folks at Ideo recently published 19 Things We're Dying to Redesign, covering a wide range of products, services, and systems, both big and small.  It's very thought-provoking, but only one of them addressed a health care topic (oddly enough, incontinence).  If there is an area of our lives that badly needs redesign, it would be health care.

And not redesigning it sometimes literally results in us dying.

Let's start with a clean slate.  I'm not as ambitious as Ideo, in terms of the breadth or number of topics, but here are 11 things about heath care that I'm dying to redesign:

1. Assure affordability: We don't expect that everyone can buy a Mercedes, or even a car, but we do have federal programs that try to ensure poor people can get food (SNAP) and housing (Section 8 and other programs).  When it comes to health care, though, we're wildly uneven, both in terms of who gets help and what that help looks like.  That is not the mark of a civilized country.
2. Share high costs broadly:  It is well known that a small percentage of the population accounts for a majority of health care spending.  Unfortunately, while some of those people fall under broad social programs like Medicare or the VA, most do not.  They may be covered by an employer plan or a small health plan, and their cost can be catastrophic to that plan and the other people covered by it.  The highest cost patients should be a broadly spread social burden.
3. Count: Sadly, we don't know the actual effectiveness of many things we do in health care.  Even for the ones we do, we know many don't work for many, if not most, of people they're done to, although we don't know which people or why.  We know there is more unnecessary care and more medical mistakes than there should be, although, again, not which care, done to which people by which providers.  Even counting mistakes is frowned upon, due to malpractice fears.  Health care is not voodoo, and $3 trillion is too much to pay for art.  It should be more of a science, and that requires not just better data but better use of it.
4. Health, not medical: We don't have a health care system.  We have a medical care system, and it shows.  We need to treat health habits and social determinants of health at least as importantly, if not more, as we do medical care.
5. Recognize who "we" are: We talk about "our" health, but it is becoming increasingly aware that our health is heavily dependent on the health of our microbiome.  We don't fully understand how it impacts us, but we know there are more of "them" than "us," and treatments that impact our microbiome impacts us.  We need it to be healthy for us to be healthy.
6. Reinvent health insurance: Insurance is supposed to protect us against unexpected and catastrophic expenses.  Somehow it now also is used to encourage preventive care, pay for budgetable expenses, subsidize lower income members, negotiate payment rates with providers, dictate our choice of providers, and try to manage our health.  Plus, we've decided to treat dental, vision, and most long term care separately, not to mention health portions of auto insurance or workers compensation.  None of this makes sense; time to start over.  
7. Get rid of the mystique: Medical care is complicated.  It has lots of codes, lots of jargon, and uses highly trained professionals to dispense it.  This is not a system designed for us to understand, and so we put our health in the hands of the people who have helped it be so complicated.  We defer to the degree and the white coat.  We each should be the best expert about our own health, and others in the health care system should help us achieve that.  
8. Encourage responsibility: Few of us are maximizing our heath.  We don't eat right, we don't exercise enough, we're under too much stress, we weigh too much, we drive too distracted.  Then we delegate taking care of the consequences of our behavior to our various health care professionals.  We're not responsible for everything that happens to our health, but we should take responsibility for much more of it than we do now.
9. Move health back home:  Too much of our care happens outside the home -- in a doctor's office or outpatient facility, or, if we're more unlucky, in a hospital or long term care facility.  Indeed, hospitals now own increasing portions of the delivery system.  This is backwards.  We want to be at home, with our families and living our lives.  We should recognize that as the locus of our health, deliver more care there, and see a stay in a facility not only as last resort but as a failure. 
10. Remember whose health it is: The health care system is not oriented around us.  It is designed around health care providers, and oriented around their views of and interactions with us.  As a result, our data is siloed, incomplete, and often incomprehensible to us.  No one who has had to wait hours for an appointment or a procedure can think it is about them.  It should be about us.  
11. Better, not just more: Health care is like the defense industry, where technological advances get progressively more expensive without necessarily having the corresponding effectiveness.  New drugs add minor health improvements but cost tens of thousands more.  Technology should drive costs down and productivity up, and make our experience better.  Where is the iPhone of health care -- delighting consumers at a price they are more than willing to pay? 

These are not little asks.  These would not be small changes.  They are, indeed, suggesting that we basically rethink everything about health care.  They may not be possible.  

And yet.

We're spending almost 20% of GDP, for mediocre results, and with neither patients nor health care professionals happy about the system we've built, or, at least, allowed to develop.  It's only going to get worse, unless we drastically change the course we are on.  

This is not a time for tweaks.  

Maybe your dying-to-redesign list for health care would include things like better hospital gowns or slicker apps, but I'd prefer to think bigger.  

Make My Genes Better...Than Theirs

The age of gene editing is upon us.  Specifically, the use of CRISPR.   Amazing things are happening, proving again how clever humans are.

Whether we're smart remains to be seen.  

For those who are unfamiliar with it, CRISPR -- more accurately, CRISPR-Cas 9 -- is a new technique for gene editing.  It has allowed faster, more precise, and less expensive gene editing.  It can already do more than you may realize.

CRISPR has been much in the news lately, due to a new study published in Nature.  Researchers successfully corrected a DNA mutation that causes a common heart disease that is sometimes fatal, especially for young athletes.  In what is believed to be a first, the researchers repaired viable embryos.  Moreover, they repaired most (72%) of the embryos, which is much better than previous efforts.

The mutation would have been fixed not only for the individual but also for their descendants.

The results produced some surprises.  For example, of the 42 embryos where the mutation was corrected, 41 of them corrected it using the mother's (correct) version of the gene, rather than the inserted template DNA.  That was not expected, and points to the unknowns involved in the process.

Development of embryos after co-injection of a gene-correcting enzyme 

Photo: Oregon Health & Science University 

There are several important caveats.  These were embryos in a lab, not a womb.  They were not then implanted to verify that the embryos were viable.  There were only a few dozen embryos, which did not have the trillions of cells that even an infant would have.  And, perhaps most importantly, the researchers focused on a single mutation.

As Dr. Izpisua Belmonte, one of the researchers, told The Washington Post, "I don’t want to be negative with our own discoveries, but it is important to inform the public of what this means.  In my opinion the percentage of people that would benefit from this at the current way the world is rather small."

Most diseases, physical characteristics, talents and traits are genetically complex, involving numerous genes (height, for example, may involve 93,000!), and so are not easily amenable to this approach.  Still, some 10,000 medical conditions are believed to be caused by specific mutations, including Huntington's disease cystic fibrosis, and sickle cell anemia.

Robin Lovell-Badge, a professor of genetics at London's Francis Crick Institute, told The New York Times, "You could certainly help families who have been blighted by a horrible genetic disease.  You could quite imagine that in the future the demand would increase. Maybe it will still be small, but for those individuals it will be very important.”

The research team has already said that the BRCA gene mutation, associated with breast cancer, may be one of their next targets.

Despite this, there were articles about this being the prelude to "designer babies," as well as more balanced articles about why that was not true -- yet.  Alta Charo, a professor of law and bioethics at the University of Wisconsin, told The Atlantic:  "This has been widely reported as the dawn of the era of the designer baby, making it probably the fifth or sixth time people have reported that dawn.  And it's not."

The researchers and many others are keenly aware of the ethical issues involved.  The Executive Director of the Center for Genetics and Society warned about people being willing to pay for genetic upgrades:

Once those commercial dynamics kick in, we could all too easily find ourselves in a world where some people’s children are considered biologically superior to the rest of us. We need to ask ourselves whether we want that new kind of excuse for extreme social disparities we already tolerate.

In many countries, there are restrictions on this kind of research.  15 out of 22 Western European counties, as well as Canada, ban attempts to change the human germline.  In the U.S., federal funding is not allowed, nor are clinical trials, but other research is permitted, under some voluntary guidelines.

Shoukhrat Mitalipov, one of the lead researchers in the recent study, hopes there will soon be some consensus on how to regulate the field, as otherwise, "this technology will be shifted to unregulated areas, which shouldn’t be happening."  There is an international summit on gene editing scheduled for early 2018 in China.

China is already a leader in the field.

The technique has made tremendous progress in just a few years, and it is going to make even more in the future.  However, we're going to find that directed changes to our genome are even harder than we suspect.

But they are going to happen.  We can use technology for good or for bad, but history has taught us that, once developed, we will use it, one way or another.  CRISPR and whatever comes next in gene manipulation will be no exception.

There are several ways this could go:

1. We walk before we run: We could first focus on single mutation diseases, figuring out how to prevent them from occurring, possibly even reversing them.  Only then carefully move to more complex conditions.
2. We widen inequality: We already know that more money means better health and a longer life.  Genetic engineering could drastically further widen all of these inequalities -- permanently. Remember Brave New World?  
3. We weaponize it:  We know China is working on gene editing.  Who knows what North Korea or Iran is doing.  If a country could create smarter, stronger, more creative citizens, they'd have an economic or even military advantage.  If used on other populations, it could make chemical or biological weapons seem trivial.  It has already been called a potential weapon of mass destruction.
4. We goof: We are just beginning to really understand the complex interplay of genes, their environment, and other factors, not to mention the impact that our microbiome -- whose genes vastly outnumber our own -- has on us.  We're going to have more surprises, and they may not all be good  As Kevin Esvelt, a prominent researcher in the field, has admitted: "My greatest fear is that something terrible will happen before something wonderful happens."

The Pandora's Box of gene editing is now open.  We have high hopes for it, but we should remember that, in the original parable, hope was the last thing in the box, not the first  

Let's hope we're smart about it.

A Kangaroo Walks Into a Bar

Let's start with a joke:

A kangaroo walks into a bar, puts down $20, and orders a beer.  The bartender figures that a kangaroo probably doesn't really understand money, so he gives the kangaroo the beer but only a dollar in change.  He casually observes: "we don't get too many kangaroos in here."  The kangaroo replies: "With these prices, no wonder."

My friends, we are that kangaroo, and health care is that bar.  Only we keep going back to it.

Complaining about health care prices is nothing new.  The medical component of CPI has been higher than the overall CPI for decades.  As far back as 1989 Gerry Anderson and colleagues showed "It's the Prices, Stupid" that explained why our national spending was so high compared to other countries.

More recently, Elizabeth Rosenthal detailed those prices in an series of reports in The New York Times.  She recently followed those up with her incisive book An American Sickness.  Dr. Rosenthal also illustrated some of the clever techniques used to wring the most money out of our pockets, such as the upcoding industry and tacking facility fees onto visits.   

As the saying goes, if you're sitting at a poker table and you can't figure out who the sucker is, it's you.

Over the past twenty years, the notion of "consumer-driven" health care has caught on, based on the premise that we'll spend heath care dollars more effectively if we use more of our own money.  We're certainly now paying more in premiums and in deductibles.   The average deductible for the cheapest ACA plans in 2017 are over $6,000.  Employer-plan deductibles aren't quite as high, but also have been rising rapidly.

In response, an entire industry has developed around "transparency tools," which attempt to help consumers comparison shop based on cost and quality.  Companies like Castlight Health, Healthcare Bluebook, and GoodRx have sprung up to address the need for better information.  Indeed, United Healthcare reported last year that nearly a third of consumers had comparison shopped, up from 14% in 2012.

The trouble is that there doesn't seem to be much evidence that such comparison shopping works.

Health Care Cost Institute estimated only 43% of health care services are "shoppable," further noting: "There is not that much savings to be gained from consumer shopping for many non-emergency services." Studies published in JAMA and elsewhere seem to confirm that use of transparency tools have little discernible impact on spending.

Despite the lack of evidence, requiring providers to post more prices has been a favorite legislative tactic, including the Affordable Care Act and in numerous states.  The HCI3-Catalyst for Health Payment Reform scored the latter, and only awarded 3 states with "A"s for their efforts; 43 states received "F"s.

Ohio is an example of a state that passed a tough law, requiring providers to provide patients with a "good faith" estimate of what patient's (non-emergency) services would cost, after insurance.  As Kaiser Health News reports, it was passed two years ago but still has not gone into effect, facing legal and other opposition by a wide range of provider organizations.  They claim the information is too difficult to obtain, and better provided by insurance companies.  

The problem is two-fold: providers could more easily provide an estimate of their charges, which would in most cases would be both embarrassing (because they'e so high) and meaningless (because few people actually pay them), and prices vary dramatically both between health plans (based on their negotiated prices) and even between within a health plan (based on network/plan design).

There are no real prices in health care, and here's an example of why:

If you don't understand the graphic, don't worry: the parties involved in it don't intend for you to.  It happens to be for prescription drugs, which have a distinct set of players, but it would be easy to do similar graphics for other parts of the health system.  You're not intended to understand any of the pricing.

It's as if Amazon based your prices on when you were shopping, where you lived, who you worked for, what device you were shopping on, and which credit card you used.  And even then you'd find the pricing results might vary 10x or more between sellers, leading you to wonder if what you were buying was the even same thing.

In a health care system where we can't even figure out what prices are now, it shouldn't be surprising that health care prices rise quickly, because who can tell?

In theory, the prices our health plans negotiate ostensibly on our behalf should mitigate providers' price increases, but that doesn't seem to have happened.  Critics claim that having predictable provider prices is more important to health plans than having lower ones, since as premiums rise so can their profits.  That's probably not entirely fair, but it is fair to say that neither providers nor health plans have focused enough on making care affordable for consumers.

In an article in The Wall Street Journal (which was the source for the kangaroo joke), Andy Kessler notes "the high cost of raising prices,"  claiming: "The more prices rise, the more customers bolt."  He cites the U.S. Postal Service, movie theaters, and ESPN as examples.

Mr. Kessler points out that GE's former CEO Jack Welch preferred costing costs, adding features, and improving service to raising prices, telling subordinates: "any idiot can raise prices." .

Evidently there are a lot of idiots in health care.

Our crazy-quilt system of health care pricing cannot last.  It's costing us too much and not delivering the results it should.  We may end up with single payor (or, as Dan Munro suggests, single payor pricing).  Or, new entrants will steal the market.

Mr. Kessler says: "Increasing prices attracts others to attack your market... Investors love protected businesses, but eventually relentless price increases kill them all"  He specifically quotes Amazon's Jeff Bezos, " Your margin is my opportunity," and it certainly is no coincidence that Amazon is increasingly rumored to be moving into health care.

It may not end up being Amazon that disrupts health care, or it may not end up being only Amazon, but it will end up being someone.

We deserve to be treated better than that kangaroo.

Health Care's Kodak Moment

For those of us of a certain age, a "Kodak moment" connotes a special event that should be captured by a photo, presumably on Kodak film.  For younger generations,  the term probably doesn't mean anything, because they don't know what Kodak is and have never seen film.  That's why, for some, "Kodak moment" has come to suggest a turning point when big companies and even entire industries can become obsolete.

Health care could soon be at such a point.

Anthony Jenkins, a former CEO of Barclay's, recently warned that banks could face a Kodak moment soon.  He said they're already seeing a "Uber-moment," where smartphones and contractless cards are transforming the industry.  "The Kodak moment is completely different," Mr. Jenkins explained.  "That’s where customers realize there’s a totally better and different way of doing what they want to do, and the incumbent becomes obsolete."

In a separate speech, Mr. Jenkins elaborated that, due to new technologies, "we can imagine total transformation of the banking system, using blockchain for example, in a world where banks don't really exist anymore."  He predicted banks have 5 to 15 years to face these challenges, or become irrelevant to their customers.

The "good" news, he added, is that: "Banks can avoid that, but they have to act now, and what they really need to do is think about innovation, but also transformation, doing something radically different."

For "bank" or "banking system" feel free to substitute "doctor/hospital" or "health care system"

It might be useful to recap some of Kodak's downfall.  As Scott Anthony outlined last year in Harvard Business Review, it wasn't technology that did them in.  It wasn't that Kodak wasn't aware of trends that might impact their business.  It just didn't take them seriously enough, or react quickly enough.

Consider:

• Kodak invented digital photography, well back in 1975.  The engineer behind it has said management's reaction was "that’s cute – but don’t tell anyone about it," but they did invest billions into it.  However, they tried to replicate film quality rather than focus on digital's simplicity.
• Kodak also was early into online photo-sharing, buying Ofoto in 2001.  It could have become Instagram, Snapchat, or even Facebook before their founders were even out of high school.  But Kodak wanted it to help boost printing digital images, not promote sharing memories.
• Unlike Kodak's still thriving competitor Fuji, they stuck primarily to their core business, not wanting to risk the profitability of film, while Fuji expanded to adjacent and not-so-adjacent businesses.

Again, it wasn't that Kodak unaware of what was looming.  Vince Barabba, a former Kodak executive, has said that as early as 1981 Kodak's research suggested that digital photography would replace film, in as little as ten years.  Kodak's management just couldn't accept that film wasn't going to continue to be their core business.

Kodak declared bankruptcy in 2012 and now has a market capitalization of under $400 million, down from its peak of $30b.  

Incumbents all-too-often grow protective and/or fail to take advantage of new opportunities.  Kodak's rival Polaroid also lost out to the digital wave, and neither of them thought much about smartphones.  Xerox basically invented the PC at PARC, but let Apple and IBM steal the market.  Sony bet on Betamax's quality rather than duration of recording, and so lost the VCR war.

The irony of disruption, Mr. Johnson noted, is that it is "actually a great growth opportunity," and that "incumbents are best positioned to seize disruptive opportunities."  His advice -- aimed at digital transformation but applicable more broadly -- is for businesses to ask themselves three questions:

1. What business are we in today?
2. What new opportunities does the disruption open up?
3. What capabilities do we need to realize those opportunities?

Health care has a number of legacy problems that make it ripe for disruption.  It's still focused on medical care, not on health, and it does so in a way that is both reactive and provider-centered.  It uses too much technology that is way too clunky.  It assumes that the historical information asymmetry between health care professionals and the rest of us is inviolate and that shopping for health/health care, based on either price or quality, is beyond us.  

Innovators look at these problems and see opportunities.

The opportunities -- or, threats, depending on one's point-of-view -- on health care's horizon are numerous.  They include:

• Digital health makes real-time information and communication feasible, such as with wearables and telehealth.
• Big Data will help us finally understand what is happening with patients and predict with better accuracy how we can manage our health.
• Robots will take over health care tasks/jobs that humans either don't want to do or lack the required precision to do.
• Artificial intelligence (AI) will be able to make sense of all that Big Data and all the various research studies, and can serve to either augment or, at least in some cases, replace physicians.
• 3D printing will allow us to replace an ever-increasing number of body parts, even systems, and do so with unprecedented speed and affordable cost.
• Nanotechnology will allow us to monitor and maintain us down to a cellular level.

The wolves are at the gate, so to speak.  Google's Deep Mind or IBM's Watson are already big into health care.  3D printing is on the verge of becoming mainstream.  The market for health care robots is booming, as are the nanotechnology and wearable markets 

Meanwhile, traditional health care companies -- from providers to middlemen to manufacturers to insurers -- are waiting with some trepidation to see what 21st century behemoths like Amazon or Apple are going to do in their space.  McKesson's Tom Rodgers told CNBC: "Everyone in the supply chain is nervous.  It's a low-level paranoia that Amazon will drive down profitability."

Getty Images | Alex Wong

Disruption might come from innovators within the health care industry, but it might also come from unexpected sources -- and in unexpected ways.  Kodak didn't take digital photography seriously enough, and it certainly wasn't expecting smartphones as the new camera.  

Health should have a number of the old-fashioned Kodak moments -- the birth of a child, a miraculous recovery, achievement of a health goal, and so on.  Whether health care organizations or even the entire health care system suffer the other kind of Kodak moment depends on how (and when) they respond to the disruptive opportunities now available to them.  

If your organization isn't thinking about what could cause its Kodak moment, rest assured: competitors/potential competitors are.

We Get What We Pay For

Politico (Dan Diamond) had two great pieces last week -- one on how tax-exempt hospitals benefited from the Affordable Care Act (ACA) while cutting charity care, and the second on how the Cleveland Clinic has built an island of prosperity amidst an impoverished community.  

I'd like to say I'm surprised, but I'm not.  I wrote about the supposed community benefits of "non-profit" hospitals two years ago, and Politico's analysis suggests things are getting worse.

They looked at the top seven hospitals, as ranked by U.S. News & World Report, and found:

The top seven hospitals’ combined revenue went up by $4.5 billion per year after the ACA’s coverage expansions kicked in, a 15 percent jump in two years. Meanwhile, their charity care — already less than 2 percent of revenue — fell by almost $150 million per year, a 35 percent plunge over the same period.

So, surprised, no.  Outraged, appalled -- yes.

My favorite trick is how hospitals claim the gaps between those outlandish charges and Medicare/Medicaid reimbursements as a community benefit.  They can also claim community outreach programs or screenings, local investments, even staff education.

Neither hospitals or the IRS are even doing a good job complying with the ACA reporting requirements, according to Politico, yet: "Not a single hospital has lost its tax-exemption because of the new measures in the ACA."

These are hospitals enjoying federal state, and local tax preferences.  They often don't pay property taxes, for example, despite often being huge property owners.  They get tax-preferred borrowing AND tax-deductible donations from you and me to build/buy even more.

Meanwhile, they are part of what critics call a "crushing lack of competition," with half of our country's hospital markets considered "highly concentrated."

Politico cited a 2016 study that found 7 of the top 10 most profitable hospitals in the U.S. were technically not-for-profit.  The lead author of that study noted, "The taxing system may not be working properly if nonprofit hospitals are making a lot of profit and not necessarily putting it back into the community."

The hospitals dispute all this, of course.  AHA didn't waste any time, shooting back the next day.  Ron Pollack, AHA's President and CEO, claims that Politico "takes a narrow view of community benefits and fails to account for the full array of programs and services hospitals provide to their communities," and that "One out of every four hospitals in America operates in the red."

Hospitals, Mr. Pollack asserts, are "finding new ways to help improve the health of their communities" and are "also working tirelessly to address and combat the social determinants of health."

Maybe he should read the second piece, on the Cleveland Clinic's uneasy coexistence with its neighborhood.

By almost every account, the Cleveland Clinic is a smashing success.  It is an $8b empire, is consistently lauded in "best of" rankings, makes plenty of money (over $500 million last year), draws (wealthy) patients from overseas, has a sprawling (165 acres!) main campus, and is Cleveland's largest and Ohio's second largest employer.

In a Rust Belt city, the Cleveland Clinic is a shining example of how health care can drive a local economy.  

But, the neighborhood around it?  "That community is poor, unhealthy and — in the words of one national neighborhood-ranking website — 'barely livable.'"  Their own community assessment ranks the two surrounding neighborhoods as the "highest need."

CEO Toby Cosgrove told Politico: "We have three obligations.  We need to provide great health care, we need to provide great jobs and we need to support education. And we have done all those three things."  Yes, except that  the benefits of the Clinic's vaunted expertise are not accruing to the local population, at least not as by measured by, say, diabetes incidence or mortality rates, those jobs aren't going to them either, and their education suffers by the Clinic not paying local property taxes.  

Dr. Cosgrove acknowledged issues with the local community and the need for more population health, but he threw up his hands at the problem: 

We don’t get paid for this, we’re not trained to do this, and people are increasingly looking to us to deal with these sorts of situations.  I say that society as a whole has to look at these circumstances and they can’t depend on just us."

Yes, but you're in charge of the entity receiving huge tax breaks in return for doing exactly those things. 

Workers demolished the Church of the Transfiguration to serve as the site of a new Cleveland Clinic hotel.
(Marvin Fong, Plain Dealer file)

It's not just the Cleveland Clinic, of course.  UPMC, Johns Hopkins, or numerous other non-profit giants are doing well but not necessarily improving the lives of their surrounding communities (and, of course, most such hospitals are busily expanding to more affluent suburban communities).

Still, it's unfair to blame non-profit hospitals for seeking profits rather than community health, just like it's not fair to blame physicians for opting for orthopedic surgery instead of primary care or pharmaceutical companies for investing in expensive new treatments instead of preventive remedies.  

They're just doing what Jerry Maguire taught us: "show me the money."

We spend our $3 trillion on big hospitals, highly compensated health care executives and physicians, 16 million health care jobs, thousands of health care facilities, ridiculous numbers of prescriptions, and high-tech medical devices, then we have the nerve to wonder why our health outcomes are so poor.  We don't live as long as we should, we have alarmingly high rates of chronic diseases, and we have a sneaking suspicion that many of the medical services we get are unnecessary.  

Meanwhile, 43 million of us live in poverty, some 42 million of us struggle with hunger, 30 million of our homes have serious health and safety problems, close to 2 million of us use homeless shelters or live on the streets, and less than 3% of us live a healthy lifestyle.

We act mystified about how much more we spend on health care than other countries, but that may just be because of what we count.  We spend our money on medical care, rather than on social determinants of health (SDOH), on which many other countries spend more.  

Our problem is not so much a problem of technology, or innovation, or even how we pay but rather what we've chosen to pay for.  As long as we keep focusing on (and paying for) medical care rather than on health more broadly defined, we're just going to keep getting more of the same.