The Myth of the Sovereign Consumer

The title of this post comes from a provocative article by Bruce Vladeck in a recent Health Affairs Web First edition focused on provider consolidation.  I'll get back to Dr. Vladeck shortly, but anyone who has been following my posts knows that provider consolidation has been a source of much concern to me (such as in Not Choosing Very Wisely), so the four articles in this HA edition were of much interest.

PwC just reported that M&A deal activity in the U.S. health sector rose 152% in Q1 2014.  That's not a typo.  Growth in M&A deals continues in most sectors of the health sector, not just hospitals, so this special HA edition was quite timely.

Paul Ginsburg and Gregory Pawlson's article takes it as a given that providers have been consolidating, are going to consolidate, and that, left unchecked, this would tend to raise prices.  They outline a fairly comprehensive list of potential strategies to deal with this impact.  They confess it is not clear that market approaches will succeed, and may require more direct government involvement, including direct regulation of payment rates, which they confess may not be politically easy nor clear-cut as to how to make effective.

Another article, from economist Martin Gaynor, reviews the issue of consolidation, some of the research on it, and the various ways that competition is regulated.  My big takeway from his article was his point that:

There is no federal competition policy entity for the economy overall, let alone specific to health care...Competition policy in health care is made by many different actors, at both the federal and state levels, and effective policy requires harmonizing their actions.

That's not going to make it easy to ensure we're regulating this in a desirable manner, especially not with the existing health sector's lobbying power I mentioned in Not Choosing Very Wisely.

A third article, from MD/JD Professor William Sage, suggests that the problem is not so much provider consolidation as it is "getting the product right."  He argues that much of our health care system isn't as competitive as it could be because a "..long history of regulation and subsidy has distorted prices, quality, and innovation."  He further posits that:

Because of regulations and subsidies, what pass for products in health care are often professional process steps that have uncertain value to patients. Instead, they serve the economic interests of physicians, hospitals, and other suppliers within an established administrative framework of health insurance.

Hard to argue. 

I love the phase "professional process steps" to describe what we are buying now.  Professor Sage notes, for example, that the entire CPT process is developed and owned by the AMA, illustrating that they have a certain vested interest in the status quo.  Rather than paying for these historically-based process steps, he urges development of more obvious competitive bundles that better reflect what consumers find valuable.  He doesn't spare health plans from his criticism either.    

I couldn't agree more that we've lost sight of the product in health care.  Furthermore, I suspect many health care professionals are aghast to think of health care as being a product of any sort.  Still, I'm not sure that even Dr. Sage is going deep enough in his proposed redefinition.

The fourth, and most fun, article was from Dr. Vladeck, who is always a good read.  He doesn't seem as worried about either provider consolidation or the ultimate need for government rate setting (although he acknowledges it is not politically likely).  He views the Sage and Ginsburg/Pawlson articles as being based too much on what he calls a "fundamentally obsolete conceptual model": the myth of the sovereign consumer. 

Dr. Vladeck seems skeptical of Sage's proposals to redefine the product, and sees consumers as being clearly worse off than twenty years ago, especially since:

...consumers are regularly inundated with self-serving or downright erroneous information from health insurers, providers, and entrepreneurs alike about health care services and their use that carries the implicit message that any illness or financial difficulty is essentially the fault of the consumer.

Huh?

Dr. Vladeck concludes that large payors, including the government, may be the best bet to control prices, but concludes that "instead of continuing to try to impose axiomatic and solipsistic theories on a reality to which they increasingly fail to apply, we need to figure out what kind of health care system we really want and how much we are prepared to pay for it."

I don't disagree with his conclusion, just most of what preceded it.



Chip Kahn, President of the Federation of American Hospitals, used the HA edition to post his thoughts on consolidation.  Not surprisingly, he's all for it, citing what he sees as the more ominous consolidation on the health plan side.  He points to what he calls the reality that proves consolidation is good: "price growth in health care generally, including hospitals, has been in a steady decline for years."

That's not that prices are going down, or that price growth for hospitals isn't happening, or isn't happening faster than in other parts of the economy -- just that they are not going up quite as fast as they once did.  The Milliman Medical Index just reported that it costs over $23,000 to cover a family of four in an average employer plan.  The rate of increase may be smaller, but the cost has doubled in the past ten years, and the rates of increase are still well above overall CPI. 

If this is victory, I don't think we can take too much more winning.



Neither Mr. Kahn nor Dr. Vladeck seem to credit a slowdown in the rate of increases to the last recession, or to changing consumer behavior due to increased cost-sharing and less confidence in their economic prospects.  In the health care world, people skipping or avoiding care is usually seen as a bad thing, even when many experts cite widespread unnecessary care.  They just want to be the ones deciding what is unnecessary, not the patients.

Which leads back to Dr. Vladeck's "myth of the sovereign consumer."  Yeah, I'd have to agree that the record is pretty poor about consumers taking good care of their own health, as witnessed by our declining exercise habits and increasing weight, both with the subsequent health consequences.  I'd also have to agree that the full impact of increased cost-sharing is, as yet, unclear -- it probably is causing consumers to seek less care, but it is uncertain about when that proves positive and when it proves short-sighted. 

At the end of the day, though, given a choice between having responsibility for my health or abdicating it to someone else, I'd rather have it, and I think most people would agree.  It's not that the "sovereign consumer" is a myth, it's that we haven't ever really tried it, not in our convoluted, paternalistic health care system.  We should give it a try; after all, it'd be hard to do much worse than we've been doing.

Frankly, in many ways, it is pointless to decry provider consolidation, because it is going to happen, just as it is happening in virtually every other sector of the economy.  I don't mind if provider systems are large or even vertically and horizontally integrated -- as long as I still have real choices, and those systems know consumers will avoid them if they don't focus on improving the quality of care and maintaining competitive prices. 

With evolving options like retail clinics, telemedicine or medical tourism, there's no reason consumers couldn't find great care outside the normal catchment areas, unless licensure restrictions or narrow networks doom us to settling for what happens to be close.  The FTC and other oversight bodies really need to be thinking outside the box about what is good for consumers.


The Commonwealth Fund is "searching for the next breakthrough in health care, by which they mean "an idea, a paradigm, a strategy that positively and profoundly disrupts the status quo."  Finding ways to truly empower consumers -- not just paying lip service to it -- may just be such an idea.

Breaking the Choice Habit?

Marcus Merz, the President and CEO of MN-based health plan PreferredOne, recently described his company's narrow network strategy to The New York Times by saying "we have to break people away from the choice habit that everyone has."

That may be the best quote I've read this week.  Maybe this month, or even this year.  By "best" I don't mean most insightful or most eloquent, but I do mean most memorable -- and maybe most misguided.

I have to wonder: if we're trying to make our health care system be more patient-centered, more consumer-driven, why in the world would we possibly want to break the choice habit?

I do not mean to pick on Mr. Mertz or on PreferredOne.  After all, they are hardly alone in pursuing a narrow network strategy, especially among exchange health plans.  And, hey, it worked for them, winning a larger-than-expected chunk of the Minnesota exchange market.  There has been extensive coverage of this trend over the past year, especially as it became clear that narrowing the networks was an integral part of health plans' exchange strategies, but the consumer and regulatory backlash is only beginning.

I mentioned narrow networks in my last post, and wrote a longer piece on it last fall (It's a Narrow World After All), and I didn't intend to revisit the topic quite so soon.  But, after all -- break people away from their choice habit?  That's hard to resist.

Last month CBO optimistically updated their ACA projections, citing in particular that "the plans being offered through the exchanges this year appear to have, in general, lower payment rates for providers, narrower networks of providers, and tighter management of their subscribers’ use of health care than employment-based plans do."  These restrictions helped lower their estimates of premiums for those plans.


Indeed, a Kaiser Family Foundation tracking poll found that, overall, consumers preferred higher premiums in return for broader access, but among the young, the lower income, and the previously uninsured, they were quite willing to give up such access.  Whether we like it or not, price can trump access, especially among people not getting much care already.

One way to think about narrow networks is to use the analogy of a restaurant which offers a buffet, and which decides to hold its prices by putting out fewer options.  If all you care about is getting some food, that might be all right.  If you are a gourmet and aren't worried about cost, you're probably not eating at the buffet anyway.  But if you are on a more restricted budget and have some critical food-related needs (perhaps peanut allergies, for example), then the restaurant cutting back on your options could have a big impact on your health.  It could mean life or death.

So it is with narrow networks.

Their advertising campaigns aside, no hospital is the best at everything.  No city -- or state, for that matter -- has all the best care.  So narrow networks are going to end up with some patients not being able to get the (in-network) care that is the best for their conditions.  Those patients might not have tried to find the best providers in any event, but for the ones who are that empowered, I hate that narrow networks make that decision more difficult.

Let's go back to the choice habit that Mr. Merz refers to.  The second part of his quote referred to consumers' "fixation on open access and broad networks."  That is, after all, the aftermath of the attempts in the 1990s to offer narrow, tightly managed networks (and, in the interest of full disclosure, I ran such a health plan at that time).  Big networks became virtually required for health plans, with few visible restrictions.  Mr. Merz is absolutely right in this regard.

But I think we're looking at the problem wrong if we think it is choice itself that is the problem.  The problem is lack of discerning choice.

According to Pew Research Center, only 17% of internet users consulted online reviews of physicians or other providers, and only 14% did so for hospitals.  The Altarum Institute similarly found that 27% used online quality ratings of physicians, but only 16% for cost information.

Many proponents claim that consumer-directed health plans will spur consumers to shop more effectively, but EBRI has found that people in CDHPs use quality information at about the same rate as those in other types of plans, and use cost information only slightly more.  Still, no more than one in three used this kind of objective data in their decisions, and usually not even that high.  They seem to be more likely to avoid care than to shop for it.

We've blundered our way into a system where we offer consumers broad networks, but with few incentives to pick the best or most cost-effective providers.  We've allowed consumers to think of health plan spending as OPM -- other people's money -- when, in fact, it is their own money and that of healthier people covered by the health plan.  We've persuaded consumers that they should pay as little as possible for their care, especially for preventive care. 

Yes, we've trained consumers to frequent in-network providers to an astonishing level -- often 90% or higher -- but have done a pitiful job of training them how to weigh potentially higher out-of-pocket costs against better health outcomes.  Even the many transparency solutions still focus mostly on differentiating in-network providers, not helping consumers search for the best match for them regardless of network participation status.

Now we're squeezing down the number of in-network options.  I suspect health plans and their regulators will work to ensure those networks provider adequate access, if access is measured by simple standards like distance to hospitals or to a certain number of physicians and other providers, but that's different from ensuring the highest quality providers are accessible.


Worse than that, consumers still often have no compelling reasons to question the value of some of the treatments they are receiving.  A new study in JAMA Internal Medicine found that up to 42% of Medicare beneficiaries may be getting services that they don't need.  The authors caution that these services only account for less than 3% of Medicare spending, but may also only be the tip of the iceberg.  And, of course, 3% of Medicare spending is still a lot of money. 

Think about a health plan that has identified a surgical practice and a health system that does, say, bypass surgery very cost-effectively.  They do enough procedures to have it all run very efficiently, and their outcomes are best-in-class.  The health plan negotiates a favorable bundled payment with them.  Now, why should they ever pay more to other surgeons or health systems? 

If it sounds like reference pricing, that's because it is.  EBRI recently did an analysis and concluded that we could save close to $10b by adopting reference pricing for just a handful of tests and procedures.  They refer to it as another form of defined contribution for health care, but at a more service-level approach than the movement by employers that puts workers in private exchanges which is also often considered defined contribution.

Reference pricing is still in an early stage of development and needs to have a lot of kinks worked out, not the least of which is getting consumers to approach it as empowering them rather than abandoning them.  Choice has consequences, including the possibility that some people will make bad choices or not want to have the responsibility.  Welcome to life.

I've written on the following idea before (20th Century Health Plans in the 21st Century), but I think we should scrape the idea of networks entirely -- and negotiated payment rates as well.  Health plans should be assisting consumers search for the best/most appropriate providers, and paying a market-based amount towards their care.  Consumers will have to make their own choices about out-of-pocket costs versus reputation, convenience or other factors. 

Narrow networks are a paternalistic approach to solving the wrong problem.  Instead of trying to manage costs by restricting consumers' access, let's instead open up that access and help them make smarter choices. 

It can't be any worse than what we've already tried.

Not Choosing Very Wisely

A new study by the ABIM Foundation -- the sponsors of the Choosing Wisely campaign that aims to reduce the incidence of unnecessary services -- found that nearly three-fourths of physicians think that unnecessary tests and procedures are a serious problem for our health care system, and about the same percent say the average physician orders those at least once a week.

No kidding.

The physicians seem to put a lot of the blame on patient demands, with 47% reporting they get such requests at least once a week.  The physicians overwhelming (87%) claim they always/almost always try to talk patients out of unnecessary tests, and that patients usually (70%) follow their advice, but most (53%) admit they likely would give in if a patient was insistent, even if the physician knew the test or procedure was unnecessary.  Given all those unnecessary ones that still happen, there must be a lot of insistent patients.

The tests and procedures may or may not have potential adverse health impacts on patients, but they certainly have cost implications.  Still, 57% of physicians reported talking about costs of tests and procedures half of the time or less.  19% never discuss costs at all, which was about the same as those who claim to always/almost always do so.  That's disappointing -- but not surprising.

The physicians do see themselves as being in the best position to address the problem of reducing unnecessary services (58%, compared to only 15% for the next highest party, the government), which leads one to wonder why they are not doing so already.

Maybe they're just not paying attention.  Heck, only 21% of the physicians have even heard about the Choosing Wisely initiative (at least unaided -- after being read a short description a whopping 38% thought they knew something about it).

I wrote about a similar issue a year ago (It Was Those Other Guys), when a JAMA study found that physicians cited everyone other than themselves for being responsible for rising costs.  There's a certain head-in-the-sand aspect of all this that I just have to shake my head at.  

Maybe handling demands for those unnecessary tests help explain results of another new study.  Guilherme Del Fiol and colleagues did a meta-analysis of studies that looked at clinical questions raised during patient care -- and found that clinicians only followed up on the questions only 51% of the time.  To be fair, when they did pursue the questions, they found answers 78% of the time, but I'll bet patients wouldn't be too happy if they knew it was only 50/50 (well, 51/49) that their clinician will follow-up on their own clinical questions.

I like to believe that the open questions were ones that, in the scheme of things, were just not considered important, rather than ones that simply fell through the cracks.  In any event, it makes me wish patients were more insistent about getting those questions answered instead of insisting on those pesky unneeded tests and procedures.


Dr. Del Fiol's study suggested that perhaps technology could help clinicians track and ensure follow-up on such questions, and I hope they're right.  Of course, a recent RAND report found that, while they like EHRs in principle, physicians are often dissatisfied with certain aspects, including the difficulty of data entry.  So I wouldn't hold my breath for better documentation of those clinical questions.

The unnecessary tests and open clinical questions certainly are a problem, but I fear we're making poor choices on a broader, more structural level that may haunt us for a long time.  A new study on market consolidation caught my attention due to its important (although unsurprising) results.  Laurence Baker and his Stanford colleagues found that hospital ownership of physician practices does increase hospital prices and spending.  Prices went up 2-3% for every time market share increased by one standard deviation.

The data for the study was from 2001-2007, and may not reflect "newer" strategies such as shared savings models, but still suggest that there is a difference between vertical integration designed to wring out supply chain savings (think Walmart or Amazon) and vertical integration aimed at knocking out competition.

Dr. Baker's study did find that some looser forms of integration, such as PHOs or IPAs, did not appear to have quite the same increase in spending, but those don't seem as preferred as outright acquisitions

This is not the first time these kind of results have been found (see, for example, last fall's Hospitals, Market Share and Consolidation by Cutler and Morton), but the results add to the warnings about what we're getting ourselves into with these acquisitions and other types of consolidation efforts.  I have to wonder why the community leaders -- including the board members of the non-profit health systems and the largest local purchasers -- are not raising harder questions about these consolidations. 

While economists are still studying the issue, health systems are busy acting: hospital mergers and acquisitions continue their dizzying pace, up 51% in 2013 relative to 2010.  Acquisition of physician practices also has continued.


The FTC is starting to wake up about the problem, especially if the health system in question is named St. Luke's (e.g., the Boise and Toledo cases).  As Deborah Feinstein, the director of the bureau of competition for the FTC, told The Washington Post, "We have seen, over the last couple of years, hospital-doctor combinations that are troubling to us.  And we are looking at it."

I feel better already.

I can't think about provider consolidation without thinking about ACOs.  One doesn't necessarily imply the other, but it'd be foolish to ignore the potential connection.  According to consulting firm Oliver Wyman, there are now 522 ACOs -- more than double a year ago -- which serve some 17% of all Americans.  Two-thirds of Americans live in an area served by an ACO, although only 40% live in an area served by two or more. 

For ACOs to be successful, they require partnership not only between hospitals and physicians, as well as other providers, but also between the ACO and payors.  They're not starting off on great footing for the latter.  ReviveHealth's 2014 Payor Survey found that on a scale of 0-100, hospitals' trust in payors scored 53.2, which would be an "F" in most grading situations.  The highest rated payor -- Cigna -- only scored 63.1, which is still at best a "D."

United Healthcare drew the lowest ratings on virtually every aspect, even though the Blues tended to pay even less.  The Blues were seen as most trusted by consumers and most honest in contract negotiations.

Despite the lack of trust for payors, hospitals are drinking the Kool-Aid about joining narrow networks, with 47% reporting they are already in the works to be in one and another 13% planning to do so.  They may be hoping they can consolidate their market enough so that they are the narrow network.

I've expressed my skepticism about narrow networks previously (It's a Narrow World After All).  They may appear less expensive in the short term but it's hard for me to believe that they are best for patients in the longer term.

With CMS pressing the accelerator for ACOs and FTC putting on the brakes for consolidation, many are wondering where federal government is driving the health system.  As Robert Field, a law and health policy professor at Drexel University in Philadelphia, told the Post, “The federal government has a schizophrenic attitude toward provider consolidation.”

Maybe schizophrenia explains why we're not making better choices.

Vive la Différence

I read with some interest a recent op-ed titled Nurses Are Not Doctors, largely because I was intrigued by the self-evident title.  The author (Sandeep Jauhar) is a physician, and he was lamenting New York legislation that will soon allow nurse practitioners to practice primary care without physician oversight.  As I read the piece, though, I couldn't help thinking of that French expression (which is usually used in a different context): vive la différence!

This particular battle has been fought -- and is still being fought -- across the country, resulting in a patchwork system where nurse practitioners have fairly full autonomy in some 17 states plus D.C., and varying degrees of restriction and physician oversight in others.  Physicians claim that patient safety would be jeopardized if they aren't overseeing nurse practitioners, while the nurse practitioners think they can handle most primary care situations just fine on their own, including prescribing.


It's interesting to me that nurse practitioners seem to be very active in trying to expand their scope of practice, while physician assistants appear to be taking a more subtle approach, agreeing to work as part of a physician-led team but happy to get broadly delegated authority.  And the desire to get a wider scope of practice is not limited to these two types; for example, pharmacists wouldn't mind getting ability to prescribe and possibly diagnose, as they can in some other countries.

Like most things, I suspect the truth is somewhere in the middle, although I confess I tilt more towards the NP's side.  The fight revolves around how to best increase issue of access to primary care.

Some of the facts are clear.  The U.S. has one of the lowest ratios of primary care physicians to specialists among the OECD countries.  The annual rate of visits is much higher for specialists than for primary care physicians, something that wasn't true even ten years ago.  And, of course, specialists make much more than primary care physicians -- almost twice as much on average, with some specialists making a lot more.

Surveys of medical school students' career intentions show continued low interest in primary care, which is not surprising not only because of the perceived lower income and worse work/life balance but also because residency slots are limited -- and often not even offered by larger and most prestigious hospitals.  Only about 30% of medical school graduates are filling primary care residency slots.

Some of the projections are slightly less clear, but still generally dire.  HRSA projects a shortage of 20,000 primary care physicians by 2020, while the American Association of Medical Colleges projects twice that.  In total, AAMC says there will be a shortage of some 91,500 physicians by 2020.

Not everyone agrees with these projections.  Physicians/policy wonks Scott Gottlieb and Ezekiel Emanuel proclaimed No, There Won't Be a Doctor Shortage.  They think we can get by through making physicians practice more effectively, and by expanding the scope of practice laws for nurse practitioners and pharmacists to help deliver primary care, along with making better use of technology.  It's the kind of thing Dr. Jauhar is opposed to.


There is evidence that nurse practitioners can provide care just fine, and more cost-effectively.  A 2013 study in The Journal of Nurse Practitioners (OK, perhaps not an unbiased source) surveyed the literature on NPs versus MDs and found outcomes the same or better for NPs.  In California, the Bay Area Council just released a study that claims expanding NP scope of practice could save $1.8b over 10 years while increasing use of preventive services. 

A survey done by Karen Donelan and colleagues and reported in NEJM found strong support among both physicians and nurse practitioners that the latter should be able "to practice to the full extent of their education and training," but they disagreed on most everything else, especially NP scope of practice.  Why am I not surprised?

As I read about physicians criticizing nurse practitioners' training, I keep wondering: why are only something like 80% of physicians board-certified?  It supposedly provides clear benefits, yet one-fifth of physicians don't have the advanced training their own specialty societies say they should have? 

This fight over scope of practice may usually be framed around patient safety, but it's about the money, of course.  Most physicians may not want to get into primary care themselves (and I can't resist noting that Dr. Jauhar is actually a cardiologist), but they don't want that money going to anyone else either.

If the physicians' argument is going to be patient safety, though, they're not starting with a very impressive record.  I've written on patient safety before (Patients Come Second) and on health care's often unfortunate culture (Health Care Culture Wars).  I wish I could say there were encouraging signs, but, if there are, I'm not seeing them.

The Commonwealth Fund's 2014 State Health System Scorecard found that "on a significant majority of measures, the story is mostly one of stagnation or decline. In most parts of the country, performance worsened on nearly as many measures as it improved."

Similarly, The Leapfrog Group's latest hospital safety score found only "incremental improvements," with (only) one-third of hospitals making improvements of 10% or more, and an overall improvement of only 6.3%.  Leah Booker, the President and CEO of the Leapfrog Group, was happy just to see any movement at all, which should be depressing. 



The supposedly self-policing state medical boards don't seem to be doing much policing (as I wrote about a few years ago).  Analysis of the recent Part B data released by CMS has already found numerous cases where physicians who lost their license in one state or were barred from state or federal programs continued to practice -- and collected millions from Medicare alone.  CBS News recently reported on the questionable (over)use of spinal fusions, including ones from physicians who had prior bad histories.  An investigation article by the Syracuse Post-Standard focused on the persistent problem of bad behavior by doctors, citing in particular the issue of a local surgeon who allegedly would slap sedated patients on their buttocks while also verbally insulting them. 

I am not making that last example up.

It's not that there are some bad doctors -- there are some bad members in every profession -- as it is that they are tolerated by their colleagues and coworkers, even long after it is clear their behavior is bad for patients.  Physicians protecting other physicians, even when incompetent, is sometimes called the "white coat of silence," and it is not acceptable. 

Perhaps once physicians get around to improving this kind of bad behavior and requiring the kind of practice-specific training for themselves that they say nurse practitioners should have, then I'll have more sympathy for their arguments.

We have kind of a Goldilocks situation.  Some people happen to get the right care from the provider best trained to provide it, while others get less than ideal care from providers who aren't trained to treat their condition -- and still others have trouble getting access to care at all.


We should be seeking to ensure access to the right care from the most appropriate providers, and worrying less about fitting certain kinds of providers into practice limits based more on historical precedents or cultural stereotypes than on competence or training.  It's about really making a patient-centered health system, not simply trying to maintain a physician-centered medical system.

No, nurses are not physicians.  Neither are nurse practitioners or physician assistants.  For that matter, though, internists are not cardiologists, and cardiologists aren't neurosurgeons.  Nor are physicians nutritionists or personal trainers.  Each type of professional brings their own set of skills and knowledge to helping patients, and we should celebrate and fully utilize those.  Vive la différence indeed!

Making Health Care More Personal (Again)

Earlier this week The New York Times proclaimed that "House Calls Are Making a Comeback."  I wouldn't get my hopes up just yet, at least not for the old-fashioned version of them.  As I wrote about in my last post, we keep thinking about the past when we should be thinking about the future.

As it turned out, the house calls in The Times article were for very sick patients following a hospital stay -- not anything most of us would want to need -- and it seems that the supposed return of house calls has been trumpeted many times before (see examples from 2013, 2009, or 2006).  It is kind of odd to me that people keep talking about physicians making house calls, because I venture to guess that the majority of the U.S. population hasn't lived in a time when such house calls were common.  Indeed, it may be a sign of advanced age to have actually experienced one.

It may not even be what we really want.

I suspect that "house calls" may be a euphemism for the kind of relationship that patients wish they had with their physician.  After all, office visits are now often squeezed to fifteen minutes or less, and that's after waiting for over twenty minutes, on average.  That doesn't take into account people who simply opt to go to a retail clinic.  None of that is conducive to strong patient-physician relationships.

It may be that our best health care relationship in the near future is not going to be with a physician at all, but with a personal health assistant.

For example, take the start-up Better.  The Mayo Clinic is backing the service, a personal health assistant app that is intended to help consumers deal with the admitted complexity of our health care system. Better relies on Mayo Clinic content and resources, including nurses and physicians that power the personal health assistant.

The free version of Better allows users to get personalized health information and even a symptom checker.  For $49.99 a month, users get the better version of Better, which features a 24/7 personal health assistant.  The assistants can assist with health questions and concerns, and can also help with a wide range of health-related issues, including getting recommendations on physicians in their area, making appointments, or even health insurance advice.  There are limitations on how much the assistants can do due to state laws about practicing medicine, especially across state lines.

According to Better's founder Geoff Clapp, patients are frustrated with not getting enough time with their physicians to form a personal relationship, which he believes Better will allow.  The pricing reflects saving 2 hours a month from dealing with unwanted health tasks.  He and Mayo seek to have 200 million lives (!) using Better by 2020.

It is not clear to me if Better allows users to have a specific assistant on an ongoing basis, or if whom one gets is the luck of the call/click.  "Personal" in the 21st century may be less about dealing with a unique person than it does interactions being tailored specifically to you.

I wish Better lots of luck, but if they get to 200m users - or even half that -- then our health care system is even more screwed up than I thought.  I guess if we can't actually reduce the complexity in our health care system, the time-honored solution is to add another layer to try to manage it better (no pun intended).

Plus, at $50/month, concierge medicine starts to become more competitive; the services are not identical, but many patients may like the in-person option concierge medicine allows.  Or they'll take advantage of options like the American Well retail option, which charges $49 per tele-visit, but which I'm guessing will someday morph into a per-month option as well.

Of course, there's nothing particularly new about personal health assistants (or health coaches).  Most of them have been provided through health plans or employers, such as through Accolade or Healarium, but there have been other retail personal health assistant services, including Allayo and Humana's HomeCare Solutions.  Better brings the powerful Mayo brand into play, continuing to broaden its reach.  They are already a leader in the use of social media.

Thinking even more futuristically, there are already "virtual" personal health assistants.  NextIT developed Alme, a virtual assistant, and has versions of it for multiple industries (including Aetna's customer service version "Ann").  Last fall they announced their health care virtual assistant, which they say can assist not only with administrative problems but also clinical questions.  They see Alme not so much as a consumer solution but rather as a solution for health care professionals to assist with patient demand, which strikes me as very 20th century thinking.  Toshiba has already partnered with NextIT to provide solutions for Toshiba's tablets and laptops aimed at health care professionals.

Many people think that Apple's virtual assistant Siri will soon be able to take on health care concerns, which would fit in neatly with Apple's rumored interest in health.  Mayo is going to have a hard time staffing Better with real people if it does get those 200m users; one way or another, the personal health assistant business is going to have to rely heavily on virtual assistance if it is to scale.

The implication of all this is that instead of house calls from -- or even office visits with -- a physician, we may prefer access to a personal health assistant that is available anytime, anywhere, with little or no wait, and which may or may not involve humans interactions.  Technology is changing not only what we can do, but also our expectations. 

Intel's Healthcare Innovation Barometer, released late last year, found that consumers are optimistic about technology advancing health care.  More than 70% were receptive to remote monitoring, and more than half reported being as or more confident about a test they administered as they would one done by a physician.  They're not waiting for their doctor to tell them what to do, and, in fact, they don't want to have to wait for him/her at all.

While we're rethinking the need for patient-physician visits, we should be rethinking other aspects of our delivery system as well.  That same Intel survey found that 57% think traditional hospitals will be obsolete in the future, something I agree with.  Many hospitals have tried hard to rebrand themselves as being in the broader health business instead of in the medical business, such as through fitness centers and more emphasis on holistic medicine.  Heck, the Cleveland Clinic now has an herbal therapy clinic.  Other hospitals are trying to design their campuses to be less medicine and institutional and more integrated into the community with a wellness focus. 

They need to keep trying.  Personally, I'm still trying to understand why the Hospital at Home movement has not taken off.

We're still getting our health care from a system that, for the most part, relies on us going to buildings in order to get care and advice, and to get those from physicians.  That system still strictly circumscribes what only physicians can do, and in which physical areas they can do even that.  It's a system of hierarchies and institutions, of having to ask permission, and in which patients are people things are done to, not people who actively do things for themselves.

But we live in a world that is increasingly virtual, where information is broadly available and flows freely.  We live in a world where remote monitoring becomes more and more viable, and which bionics will revolutionize further, especially as we figure out how "Big Data" can make all that data actionable.  We live in a world where artificial intelligence and algorithms are getting smarter and smarter, and which may now or soon be more able to process and use the torrent of medical information and research than physicians can. 

I don't need to ask any personal health assistant which world I want to get my care from.

Always Fighting the Last War

There's an old military adage that generals always fight the last war.  I get that feeling a lot about the health care system, and that was illustrated this past week by the CMS release of Part B claims data.

For those who might have missed this, the AMA has been trying to block such a release since 1979, but a series of legal actions and analyses by The Wall Street Journal finally prevailed.  To no one's surprise, it revealed that a small percentage of doctors are getting paid a lot of money -- some 344 made over $3m and one earned just shy of $21m.  Ophthalmologists and oncologists topped the list, in large part because their practices pass through the costs of some very expensive drugs they administer.

The AMA, of course, wasn't happy.  On their website, they point out the "considerable limitations" of the data, such as the difference between practice revenue and personal income, and the fact that the data doesn't reflect quality or value.  Their official statement proclaims that they are committed to transparency, and seems to suggest that the public is somehow worse off because of the release.

I have a hard time feeling any sympathy for the AMA.  They've had six decades since the inception of Medicare to come up with better alternatives.  They can claim to be in favor of transparency all they want, but neither they nor the AHA -- or any of the various provider specialty organizations that I am aware of -- have exactly been leaders in finding ways to measure value or for the public to better evaluate the performance of their members.

Shame on them, and shame on us for not insisting.

The Part B data will no doubt end up being subject to a number of detailed analyses, and hopefully will work their way into some consumer- and purchaser-friendly ways to better judge performance and value, but I worry that some providers are looking at the big numbers in it and are simply thinking "hmm..."  

In his last speech as President, Eisenhower warned about the "unwarranted influence" of the military-industrial complex.  Had he been as prescient, President Johnson -- who initiated Medicare and Medicaid -- could have done the same with the medical-industrial complex.

We're now talking about $3 trillion in annual spending, or, as I prefer to think about it, revenues for someone.  We've gone from a world of local community non-profit hospitals, solo physicians, and relatively small medical device and pharmaceutical industries to a world where hospitals are merging, physicians are being acquired by those hospitals, and the medical device industry and pharma each generate over $300b in annual revenues.  And it's hard to find anyone who thinks that kind of market consolidation will do anything but increase costs.

As for the "unwarranted influence," well, estimates are that 2013 spending on lobbying for health interests was some $480m -- which was down from prior years.  The only industry spending more -- and only slightly more at that -- was financial services.  Did anyone ever expect health care to seek the same level of K Street influence that Wall Street has long had?  Add the fact that hospitals are now among the largest employers in many, if not most, communities, and the concern about influence becomes even clearer.

I suppose you'd have to say that the last war was between payors and providers, and that the providers emerged from the fiercest battles of the managed care era as the winners.  As those two sides continue to fire salvos at each other, you'd also have to say that the patients have been the innocent bystanders, and have often suffered the collateral damage.   That's the war that both sides are still fighting -- and it is the wrong war.

The war should be about improving people's health.  All the parties claim to have improving health as their goal, but it's getting harder to believe that (see, for example, Patients Come Second).  The U.S. continues to lag on most measures of its population's health.  We're getting fatter, sicker, and more medicated than ever, and yet paying more than ever for that dubious privilege.

We already have insurgents in our midst.  PwC just released a provocative report, Healthcare's new entrants: Who will be the industry's Amazon.com?  It cites of number of new entrants into the health space -- some of whom are already Fortune 50 companies -- and emphasizes that consumers are very open to getting care in new places and in new ways, such as retail clinics and using mobile apps. They see these new entrants taking some $64b of revenue away from "traditional" provider revenue -- small compared to overall health spending, but enough to get people's attention.

Their two pieces of advice for existing health care organizations: always put the consumer at the center, and figure out what matters most.

Simple as those sound, they are things that health care has historically not done well.  It's hard to claim that many health care organizations have truly been acting to put consumers in the center, or even know how to do so.  Health plans have primarily catered to employers, although that is starting to shift due to ACA and its exchanges.  Hospitals have catered to physicians, and physicians have answered to, well, I guess, God. 

Our existing health care system was built on the fundamental knowledge asymmetry between providers and patients.  It was compounded by a paternalistic system of health coverage provided by employers and the government.  That led to generations who did what they were told, were willing to submit to long waits and other indignities, rude attitudes, and incomprehensible bills and terminology.

That's not going to cut it with a new generation of Millennials who are used to technology, are masters of using social media to get recommendations, and are distrustful of institutions.

Physicians as the dispensers of all health wisdom and advice?  Not any more, not with the vast amount of information available online.  Hospitals as the model for where to put sick patients?  Forget about it -- try something like Hospital at Home.  Making patients drive someplace -- then wait -- to get tests?  Not as long as they've got a smartphone.  Secret schedules of hugely inflated charges and a myriad of "contractual allowances" for tens of thousands of potential procedures and evaluations?  Not for consumers expect to instantly compare options and prices.  Waiting for patients to have health problems and then trying to attack and manage those problems?  Outdated in a world of real-time monitoring and feedback. 

It's a whole new world.

The most charitable way we could describe the last war -- the existing war -- is that it was a war on illness, and we let ourselves we distracted by the power that gave health care organizations.  The new war -- the war for better health -- is going to be fought on new fronts, with higher consumer expectations, and by some entities who haven't been entrenched in the stodgy health care way of doing things.  When new entrant Apple comes calling on old entrants health plans to subsidize their new iWatch health platform, it will be interesting to see which is the most surprised by the other -- and which blinks first. 

Personally, I am skeptical that most of our existing health care organizations -- be they health plans, health systems, physician organizations, or whatever -- are going to lead the way into this new world.  That's not to say they won't play a part in it, but I think it is going to take some more consumer-focused organizations, with different attitudes about their health, to lead the way.  Maybe not Amazon (although I'd be interested to see how Jeff Bezos would approach it) but probably a combination of some already trusted brands (Walmart?  CVS?) and some daring new companies (ZocDoc?  Jawbone?).  And you know the current stakeholders are going to come out swinging to protect their turf -- and their revenues.

PwC's second piece of advice for the new health care world was to figure out what matters most.  I hope that will include a focus on making health care products and services "insanely great" (as Steve Jobs would have said), instead of just being insanely expensive.

Wayne Gretzky famously said he skated to where the puck was going to be, not where it is.  Health care organizations need to be thinking that way, and they better be thinking ten or twenty years out.

Hacking a Better Health System

Who knew hacking might help us reinvent our health care system?

I must be old-fashioned, or at least not a true techie, because I still thought of hacking as a bad thing, like all those cyber-criminals trying to get at our sensitive data, a problem for which health care continues to be a target.  I was thus surprised to read in The Wall Street Journal that “hackathons” are a trend for the good in health care. 

For others who are also behind this particular curve, hackathons are intense, all-night (or more) sessions when a small groups of programmers band together to attack tough specific problems with concentrated coding efforts.  If you’ve seen The Social Network or other depictions of the tech world, with scenes of unkempt young men (and they are almost always young men) sitting around furiously pounding away on their keyboards while surrounded by cans of Red Bull and boxes with leftover pizza slices, you probably get the picture.

The Journal article highlighted MIT’s Hacking Medicine’s Grand Hackfest, which is part of MIT’s Hacking Medicine initiative.  MIT has been at this since 2011, seeking synergies between MIT’s technical expertise and the vaunted Boston-area medical community.  They believe hackers can help health care with: Scaling Medicine, Accelerating Data, Identifying and Tackling Big Opportunities, Hacking Ethos for Lean Medical Innovation, and Infecting Non-Life-Scientists with the Mission. 

Pretty lofty list of goals.

Health 2.0 – which “promotes, showcases and catalyzes new technologies in health care” -- has their own version, which they call Code-a-thons.  They offer some $6.5m in prizes in their developer challenge, and have several events and challenges scheduled in the next few months.  As their recent San Diego code-a-thon illustrated, these are not necessarily big prizes nor huge breakthroughs, but they serve the purpose of getting more people excited about solving problems in health care.

Goodness knows that health IT has never been known for being either nimble or on the cutting edge, so some fresh blood with new perspectives certainly seems like a good idea, right?  As one clinician whose mobile app benefited from solutions suggested at the MIT hackathon said, "Sometimes when you are too close to something, you stop seeing solutions, you only see problems.  I needed to step outside my own silo.''

Not to be outdone by Boston, New York-Presbyterian Hospital recently held what they claim was the first Hackathon for New York Hospitals, which the specific aim of helping them improve myNYP, their patient portal.  I’ll be interested to hear if and how they incorporate the results.

Out on the other coast, UCLA-Berkeley has had three iterations of their own version, Hacking Health.  Last year’s event focused on Digital Health, and attracted 18 teams working on a wide variety of problems, such as Google Glass-enabled paramedic app. 

Stanford has their Medicine X initiative, described as “the intersection of medicine and emerging technologies.”  At their annual conference, one of the events is the IDEO Design Challenge, which aims to attract various stakeholders to develop solutions to use technology improve patient care.  This year it will focus on assisting chronic care patients with managing their condition through technology. 

Just to rub us oldsters’ noses in it, there’s an organization called YTH (youth + tech + health) that believes the “#selfie generation” can do better.  As Jamia Wilson, YTH’s Executive Director, says, “the time has come for young people to be treated as designers and developers for health technology solutions that serve them and their communities on their own terms.”  They just hosted their own Health Hackathon in conjunction with their YTH Live 2014 conference.     

The trend is not limited to the United States.  The British National Health Service has NHS Hack Days, in Canada there is Hacking Health, and in Europe there’s CPH Health Connect HackDay in Copenhagen and Hacking Health Stockholm.  I’m sure this is by no means an all-inclusive list, but it is big enough to indicate there is something going on here.

Not to wander too far away from health, but the health sector is not the only one which seeks value in hacking.  Late last year Intel bought Hacker League,  a platform for managing hackathons, while Booz Allen Hamilton just announced a partnership with start-up incubator 1776, formalizing a collaboration they’ve had for the past year as they’ve hosted “hackcelerators,” which aim to combine hackathons and small business accelerators.  If stalwart companies like Intel and Booz Allen Hamilton see a future with hacking, it could mean it is here to stay…or that its moment has already passed.

Looking back at last fall’s healthcare.gov debacle, or more recent reports of similar issues with various state exchanges, one has to wonder if they just should have held a hackathon.

PwC’s 6^th Annual Digital IQ Survey found that healthcare CEOs were far ahead of other industries in championing information technology as an integral part of their strategy.  I rather doubt that many health systems or payors are using hackathons for their big mainframe-based systems – like eligibility, billing, claims payment, or (most) EHRs – but mobile efforts are natural targets for this kind of approach. 

There’s no shortage of targets.  Payors are finding ways to use mobile technology to cut administrative costs, engage members, and manage patients’ care.  Aetna is one payor in particular which brags about their IT strategy, especially in mobile, such as their iTriage app and an upcoming monitoring device called Scanadu Scout. 

The Mayo Clinic recently reported one of their apps reduced cardiac readmissions by 40%, no small triumph in an era when Medicare and private payors are hitting hospitals with penalties for readmissions.  And, of course, Apple is rumored to soon be getting in the health space, through a body monitoring device called Healthbook. 

Still, in a recent Robert Half Technology survey of CIOs, health care led the pack in lacking a mobile strategy, with 36% reporting their organization had none, which perhaps why the Harvard Business Review recently pointed to insurers’ untapped digital opportunity. 

No wonder they might be looking for hackers.   

It’s great to bring in new ways of attacking the many problems of health care, but I do worry what happens when they hit the may brick walls health care has.  I’ve been seen several instances where non-health care companies – especially financial services firms -- dipped in to health care, thinking they could bring their expertise to bear, only to be shocked at how messy much of the data is.  Exactly who the patient/member is, what services they received, how much should be paid – questions whose analogs in other industries would be clear-cut are often very murky in health care.

And, of course, people have proven dismayingly stubborn about how they take care of their own health – just look at our obesity rates.  For all the buzz about the potential for “wearable technology” in health care, a recent survey found that a third of users stopped using it within six months.   Changing bad health habits is hard, hard work.  There’s not just an app for that.

It’s one thing to build a nifty single purpose app in the health space, but the heavy lifting is connecting all the many pieces and players together, especially in a way that patients understand and buy into.  And, of course, the usual M.O. in health care is to charge lots more even for small improvements, as The New York Times recently highlighted.  A typically close minded approach in health care is the trend towards “medical scribes” to transcribe into an EHR (which I’ve talked about before) instead of simply making EHRs fit better into how physicians practice.  Why reengineer processes and technology when we can simply add costs?   

That’s got to change. 

What I like best about the hacking in health movement is twofold – bringing in new kinds of expertise and an attitude that problems can be solved.  Those have been sorely missing in health care.  Or, as Mark Twain once put it, “all you need in this life is ignorance and confidence, then success is sure.” 

Hack away!