The tech, law enforcement, and privacy worlds are abuzz with the recent decision by Apple to refuse to help the FBI crack the security on an iPhone, even though the iPhone in question belonged to an alleged terrorist/mass murderer. As fascinating and important as that story is, I was even more interested in another cybersecurity story, about a hospital paying ransom to hackers in order to regain access to its own computer systems.
This was not the first such occurrence, and it won't be the last.
In early February, Hollywood Presbyterian Medical Center found itself locked out of its computer and electronic communication systems, along with a demand for ransom. The hackers apparently didn't steal anything, but, rather, encrypted the hospital's files so that they couldn't be accessed.
In the end, the hospital not only paid the random, but also publicly admitted what had happened. A hospital spokesperson stressed that patient care had not been compromised, and that paying the ransom was "the quickest and most efficient way" to restore its systems. A cybersecurity expert told US News & World Report: "From an economics perspective it was probably the best – or only thing
to do,” while adding: “From a
strategic perspective it is terrifying to me that most companies pay
because the alternative is too painful."
This kind of blackmail is more common than we may realize. Symantec's 2015 Internet Security Threat Report estimated that 317 million new pieces of malware were created in 2014, with ransomware attacks up 113%. "Crypto-ransom"attacks, like HPMC suffered, went up 4,000%.
According to NBC News, health care record hacking rose 11,000 percent last year alone, with as many as one-in-three Americans having had their health data compromised -- usually without them being aware. In most of these cases, actual patient information was taken, as it can then be used to perpetuate fraud. We've all read about these breaches, since HIPAA requires disclosure when patient information is compromised...assuming the organization is even aware of the breach.
Locking down hospital systems rather than simply stealing the data -- and, of course, there is no guarantee that the HPMC hackers didn't also steal patient data -- is a tactic that is less often reported. As another security expert told CBS News: "Unfortunately, a lot of companies don't tell anybody if they had fallen victim to ransomware and especially if they have paid the criminals."
As with kidnapping (or terrorists), experts are split about whether to give in to ransom demands or not. There are often ways to recover the data or restore control of systems without giving in to the demands. In the case of HPMC, one expert told CBS News, "If they decided to pay the ransom, it probably means that they didn't
have very good backups, they weren't able to recover the data, and that
the data would have been lost if they didn't pay the ransom."
Two things about the HPMC situation especially struck me. For one thing, the hackers only got $17,000. I mean, HPMC is not a huge hospital, but it is not a small one either, and one would expect that access to their systems would be worth more than $17,000. They probably would have paid their IT staff more than that in overtime to fix the problem, if they could have.
Maybe the hackers just needed some quick cash to buy a Yaris.
The second interesting thing was that the hackers demanded payment in Bitcoin. I hadn't realized it, but Bitcoin apparently has become the preferred currency of ransoms, especially crypto-ransoms. Being both virtual and not issued by a government or financial institution, it is much harder to trace, and it can be easily transformed into "real" money. As one expert told The New York Times, "The criminal underground very much likes Bitcoin. It’s enabled a
greater sense of obfuscation.”
It probably took longer for HPMC to figure out how to pay in Bitcoin than whether to pay at all. Other healthcare organizations may want to be brushing up on their Bitcoin expertise, just in case.
It seems likely that there will be more such attacks, especially now that the HPMC ransom payment became public. As one expert told Newsweek, "I think whenever a ransom demand is shown to work for the bad guys—meaning victims pay up—it is an incentive for criminals." These kind of hackers are anything but stupid, and they will keep attacking until it is shown that their efforts no longer work.
Moving more data and more operating systems to the cloud is one strategy that has been touted as a way to counter cyberattacks, since the cloud vendors claim to have more robust defenses, but it becomes a risk/reward proposition. A cloud computing vendor might have bigger and tougher walls, but, once penetrated, there would be "a fruit-bearing jackpot" for hackers.
The really scary thing about health care hacking may not be being locked out of computer systems or even loss of patient data. It may be that any medical device that is connected to the Internet or WiFi could be hacked, even taken over. As proof, a security researcher recently hacked into a hospital's MRI. He noted, "In this case it was easy. Medical devices are still insecure, I can see
it. Some manufacturers really secure them but some [developers] are
thinking about internet security in second or third place."
The researcher was doing it as to make a point, but how much would someone pay to regain control of, say, their pacemaker? How much business would an imaging center lose if it became known that hackers could digitally alter its scans? Would you undergo a laser procedure or robotic surgery if you weren't 100% certain their software hadn't been hacked? Would you trust a mobile app that might have been compromised?
The Internet of Things offers many exciting possibilities for "smart" devices and better tracking, but it also vastly expands the range of things that could be hacked. This fear was a hot topic at this year's Consumer Electronics Show (CES), with no easy answers but with many pleas for developers to build in security as a foremost consideration as IoT is developed.
There aren't any easy answers. Health care has never been known for its leading edge systems or programming expertise, but when it comes to combating cyberattacks, it needs to be in the forefront.
Friday, February 19, 2016
Friday, February 12, 2016
Blame It On the Old Me
New research from Johns Hopkins suggests that if you want to have better habits, you probably should have made better decisions in the past.
Millions of mothers are probably now thinking, "I told you so!"
The research conditioned participants to associate red and green objects on a computer screen with small financial rewards ($1.50 and $0.25, respectively), then had them perform another task to find certain shapes on the screen, with no reference to color and no reward. By using a PET scan to monitor brain activity, the researchers found that, instead of focusing on the new task, the participants' attention was still drawn to red shapes.
As the authors concluded,
Of course, we've known about conditioned responses for decades. The new research underscores the brain chemistry behind this kind of conditioning, illustrating why old habits can be so hard to break. It also found that some people were more easily distracted by prior rewards than others, and the researchers believe that people who are prone to addiction are among the ones most easily distracted. Their hope is that there may be pharmaceutical ways to disrupt the neurochemical responses which cause the distractions.
These findings are very pertinent in a time when we increasingly understand the connection between lifestyle choices and diseases, especially (but not exclusively) chronic diseases. Lifestyle diseases include such common diseases as heart disease, obesity, and type 2 diabetes. Dr. David Boyd of Cancer Treatment Centers of America says half of cancers can be avoided through lifestyle changes as well. Changing bad health habits is clearly essential to improving our health and to helping to combat rising health costs.
"Population health management" is seen as a key tool towards this. It uses data to identify at-risk individuals and coach them to behaviors that might help them prevent or defer their getting lifestyle-related diseases, or at least help them manage the risks of ones they already have.
Population health management is hot, predicted to grow at a 23% CAGR between 2015 and 2020, reaching some $31b. For that much new spending, there better be a lot of offsetting savings, but realizing those savings may not be so easy. A new survey by Numerof & Associates found that virtually all health care organizations surveyed said population health management was important to their future success -- 54% said it was critical -- but two-thirds thought their capabilities were only average, or worse.
That doesn't bode well.
It's just hard to change bad health habits. For example, many employee wellness programs use financial incentives or penalties. Despite employers getting increasingly tough about workers (and their families) participating in them, the $8b spent on them annually has not shown much provable ROI (unless they are targeted specifically to the people already shown to be high cost).
A new study in Health Affairs found that financial incentives in such programs were not effective in promoting weight loss. The authors concluded that the financial incentive was not what motivated people, and that how the incentives are designed -- such as more periodic feedback -- is critical.
In other words, people's brains were lighting up at the memory of that donut, but not so much about those potential future financial rewards.
Many people believe that digital health solutions may be the not-so-secret weapon in helping people improve their bad habits. Chloe Schneider writes in Mashable about how mobile apps and devices can serve as "blind spot detection tools for your life," helping people combat habits they are trying to break or helping instill desired new habits into their lives.
I especially liked Ms. Schneider's quote: "To break a habit, you have to make a habit," which is very similar to what one of the authors of the Johns Hopkin's study told CNN: "Often the most effective way to unlearn a habit is to replace it with a new one."
Yusuf Sherwani recently recapped the importance of using mobile health tools to tackle chronic conditions, but stresses that "it's all about health behavior." He urges that digital health must do a better job of getting clinical validations for its interventions, and create "...highly structured and personalized evidence-based behavioral therapies to tackle specific risky health behaviors."
As he pointed out, not all smokers smoke for the same reasons, nor have the same motivations for wanting to quit, so a smoking cessation program that doesn't recognize these differences is doomed to fail for most people.
It's the same reason that over half of people who buy health trackers stop using them within six months.
Maybe the answer to this will be better living through more prescription drugs. The Johns Hopkins study speculated about using them to block neurochemical triggers for people prone to addiction. Scientists are already hard at work on pills to combat obesity ("poop pills"?) or even to mimic the effects of exercise. I'm sure there are numerous other examples of trying to use a pharmaceutical approach to behavior modification.
We've been trying to manage our lifestyle diseases through an ever-growing number of prescription drugs (spending more on them all the time), so it shouldn't come as a surprise that we might conclude that pharmaceutical approaches might also help us break bad habits that have led/could lead to the diseases
To me, that would be like winning the battle but losing the war.
Certainly chemical interventions may be appropriate for addictions, as they have been for other mental health disorders. Perhaps all "bad" health habits are attributable to chemical imbalances. Still, I like to think our brain can play a bigger role in developing better habits than simply being medicated.
Lots of companies are looking to strike it rich through sophisticated population health management software and snazzy health tracking apps, but the pot of gold will be in solutions that actually get people to replace their bad habits with healthier ones.
OK, now time for my cookie -- er, I meant carrot.
Millions of mothers are probably now thinking, "I told you so!"
The research conditioned participants to associate red and green objects on a computer screen with small financial rewards ($1.50 and $0.25, respectively), then had them perform another task to find certain shapes on the screen, with no reference to color and no reward. By using a PET scan to monitor brain activity, the researchers found that, instead of focusing on the new task, the participants' attention was still drawn to red shapes.
As the authors concluded,
What's surprising here is that people are not getting rewarded and not expecting a reward. There's something about past reward association that's still causing a dopamine release. That stimulus has become incorporated into the reward system.This will not come as a surprise to anyone who has ever had a donut.
Of course, we've known about conditioned responses for decades. The new research underscores the brain chemistry behind this kind of conditioning, illustrating why old habits can be so hard to break. It also found that some people were more easily distracted by prior rewards than others, and the researchers believe that people who are prone to addiction are among the ones most easily distracted. Their hope is that there may be pharmaceutical ways to disrupt the neurochemical responses which cause the distractions.
These findings are very pertinent in a time when we increasingly understand the connection between lifestyle choices and diseases, especially (but not exclusively) chronic diseases. Lifestyle diseases include such common diseases as heart disease, obesity, and type 2 diabetes. Dr. David Boyd of Cancer Treatment Centers of America says half of cancers can be avoided through lifestyle changes as well. Changing bad health habits is clearly essential to improving our health and to helping to combat rising health costs.
"Population health management" is seen as a key tool towards this. It uses data to identify at-risk individuals and coach them to behaviors that might help them prevent or defer their getting lifestyle-related diseases, or at least help them manage the risks of ones they already have.
Population health management is hot, predicted to grow at a 23% CAGR between 2015 and 2020, reaching some $31b. For that much new spending, there better be a lot of offsetting savings, but realizing those savings may not be so easy. A new survey by Numerof & Associates found that virtually all health care organizations surveyed said population health management was important to their future success -- 54% said it was critical -- but two-thirds thought their capabilities were only average, or worse.
That doesn't bode well.
It's just hard to change bad health habits. For example, many employee wellness programs use financial incentives or penalties. Despite employers getting increasingly tough about workers (and their families) participating in them, the $8b spent on them annually has not shown much provable ROI (unless they are targeted specifically to the people already shown to be high cost).
A new study in Health Affairs found that financial incentives in such programs were not effective in promoting weight loss. The authors concluded that the financial incentive was not what motivated people, and that how the incentives are designed -- such as more periodic feedback -- is critical.
In other words, people's brains were lighting up at the memory of that donut, but not so much about those potential future financial rewards.
Many people believe that digital health solutions may be the not-so-secret weapon in helping people improve their bad habits. Chloe Schneider writes in Mashable about how mobile apps and devices can serve as "blind spot detection tools for your life," helping people combat habits they are trying to break or helping instill desired new habits into their lives.
I especially liked Ms. Schneider's quote: "To break a habit, you have to make a habit," which is very similar to what one of the authors of the Johns Hopkin's study told CNN: "Often the most effective way to unlearn a habit is to replace it with a new one."
Yusuf Sherwani recently recapped the importance of using mobile health tools to tackle chronic conditions, but stresses that "it's all about health behavior." He urges that digital health must do a better job of getting clinical validations for its interventions, and create "...highly structured and personalized evidence-based behavioral therapies to tackle specific risky health behaviors."
As he pointed out, not all smokers smoke for the same reasons, nor have the same motivations for wanting to quit, so a smoking cessation program that doesn't recognize these differences is doomed to fail for most people.
It's the same reason that over half of people who buy health trackers stop using them within six months.
Maybe the answer to this will be better living through more prescription drugs. The Johns Hopkins study speculated about using them to block neurochemical triggers for people prone to addiction. Scientists are already hard at work on pills to combat obesity ("poop pills"?) or even to mimic the effects of exercise. I'm sure there are numerous other examples of trying to use a pharmaceutical approach to behavior modification.
We've been trying to manage our lifestyle diseases through an ever-growing number of prescription drugs (spending more on them all the time), so it shouldn't come as a surprise that we might conclude that pharmaceutical approaches might also help us break bad habits that have led/could lead to the diseases
To me, that would be like winning the battle but losing the war.
Certainly chemical interventions may be appropriate for addictions, as they have been for other mental health disorders. Perhaps all "bad" health habits are attributable to chemical imbalances. Still, I like to think our brain can play a bigger role in developing better habits than simply being medicated.
Lots of companies are looking to strike it rich through sophisticated population health management software and snazzy health tracking apps, but the pot of gold will be in solutions that actually get people to replace their bad habits with healthier ones.
OK, now time for my cookie -- er, I meant carrot.
Tuesday, February 2, 2016
Brother, Can You Spare a Thousand Dollars?
In game theory, the diner's dilemma is the situation where, when people agree to split a restaurant bill evenly, the average bill goes up. People in this situation tend to pick a more expensive meal than they otherwise would have, at best hoping the other diners will subsidize their meal, and at worst not wanting to get stuck subsidizing the similarly more expensive meals ordered by their companions. Everyone loses.
The embedded video below nicely explains it:
Health insurance is, essentially, an example of the diner's dilemma writ large.
Imagine, if you will, one of your neighbors. Not your next door neighbor, not a neighbor you are best friends with, just a neighbor you know well enough to wave hello to but perhaps not well enough to invite to dinner. You almost certainly wouldn't ask them to pay for a cleaning service, or to pay for your new windows, but if you had a fire that wasn't covered by your homeowners' insurance, you might ask them to help out.
Now imagine that the next time you have a health expense, you have to knock on their door and ask them to pay for it. I suspect that if it is something catastrophic, something that is time-limited, most of us would pony up at least something (I've discussed this previously). But to pay for your routine exams or even moderately expensive services, well, most of us probably wouldn't just hand over a check.
Except, of course, when that check is delivered out of our health insurance premiums.
Whenever you file a health insurance claim (or, more likely, one is filed by the provider for you), you are essentially asking someone else to pay for your care. Those other someones are the people in your health insurance pool, who could be -- to name a few -- other people in your company/union/association, other people with the same individual health coverage as you, or other taxpayers.
To be fair, some portion of your costs are paid for by your own premiums, but if you are one of the 80% with relatively low claims, that portion is pretty small; most of everyone's money goes to paying for the small percentage of people who are unfortunate enough to have very large claims. This skewed distribution has been recognized for some time now, at least by people with good math skills and/or above average interest in the problem.
With health insurance, we're in the diner's dilemma. If we don't use health care services, our health insurance premiums are just going to be spent by other people, leaving us as the sucker who pays for other people to get more services than they might have otherwise. So we end up doing the same, and everyone's premiums go up as a result.
That's why it cracks me up when I read about Bernie Sanders acting like a "Vermont auctioneer" by asking people at his rallies to shout out their health insurance deductibles, everyone outraged by having to pay several thousand dollars of their own money before coverage kicks in. Whose money do they think it should be? Mine? Yours? Our grandchildren's?
Yes, certainly for some people even routine health expenses are beyond their ability to pay, but (private) health insurance was never intended to act as a wealth transfer, nor should it.
Maybe health payers have simply been doing things wrong. Adam Koppel, a Biogen VP, claims that Google's view of traditional actuarial math is: "it's like the 19th century," and that they believe they could do much better using their Big Data analyses. As a result, he says, Google wants to become a payor; indeed, according to Mr. Koppel, "They want to take over CMS."
They could hardly do worse.
Certainly analytics could make huge impacts in spotting fraud and overutilization, both of which have been the usual suspects for cutting "waste" for at least the past 30 years, but neither of which seem to have been greatly impacted yet. New research has found that the variations in both price and utilization are even more pervasive than we'd already known. CMS has just announced new rules that would make it easier to pool public and private claims data to help attack this, and better analyses of more data should be a potent weapon.
For example, a recent report found that one percent of doctors account for 32% of malpractice claims. I'm willing to bet that a relatively small percentage of physicians also account for a disproportionate share of spending (analogous to the statistics on patients), and that if we could identify the intersection in the Venn diagram of those three circles we'd find some easy targets for significant interventions. The question is who will be the first to figure that out; maybe that will be Google, maybe not.
Mr. Koppel believes the changes in the payer sector go beyond Google's interest in it; he flatly says, "Payers are essentially becoming health IT companies."
Certainly payers have long been big in health IT, such as for their claims and other operational systems. Those systems have, though, often been criticized for being clunky legacy systems that rely on imperfect data. But the payer leaders are moving well beyond these, especially in terms of analytics expertise: Aetna bought ActiveHealth in 2005, Anthem bought Resolution Health in 2008, and United's huge Optum subsidiary had as its kernel Ingenix. The Blues are now all pooling their data in BCBS Axis.
Aetna has further gone into the health IT space by acquiring health information exchange vendor Medicity and health app maker Healthagen (both 2011), while United picked up its own H.I.E. vendor Axololt in 2010, as well as Connextions (2011) and MedSynergies (2014). So maybe Mr. Koppel is on to something.
Payers, though, tend to be big battleships, slow to turn and already struggling to make the shifts to ACOs/value-based purchasing/consumerism, so expecting them to behave more like nimble health IT companies may be expecting too much, at least in the short term. On the other hand, expecting health IT companies to remain as nimble in the rocky waters of provider contracting, employers as customers, and consumers always wanting their plan to pay more is also asking a lot.
I'm all for better analytics, new entrants in the payer space, and new paradigms about what health insurance even is, but if we don't do something about our version of the diner dilemma, we may be wasting our time.
The embedded video below nicely explains it:
Imagine, if you will, one of your neighbors. Not your next door neighbor, not a neighbor you are best friends with, just a neighbor you know well enough to wave hello to but perhaps not well enough to invite to dinner. You almost certainly wouldn't ask them to pay for a cleaning service, or to pay for your new windows, but if you had a fire that wasn't covered by your homeowners' insurance, you might ask them to help out.
Now imagine that the next time you have a health expense, you have to knock on their door and ask them to pay for it. I suspect that if it is something catastrophic, something that is time-limited, most of us would pony up at least something (I've discussed this previously). But to pay for your routine exams or even moderately expensive services, well, most of us probably wouldn't just hand over a check.
Except, of course, when that check is delivered out of our health insurance premiums.
Whenever you file a health insurance claim (or, more likely, one is filed by the provider for you), you are essentially asking someone else to pay for your care. Those other someones are the people in your health insurance pool, who could be -- to name a few -- other people in your company/union/association, other people with the same individual health coverage as you, or other taxpayers.
To be fair, some portion of your costs are paid for by your own premiums, but if you are one of the 80% with relatively low claims, that portion is pretty small; most of everyone's money goes to paying for the small percentage of people who are unfortunate enough to have very large claims. This skewed distribution has been recognized for some time now, at least by people with good math skills and/or above average interest in the problem.
With health insurance, we're in the diner's dilemma. If we don't use health care services, our health insurance premiums are just going to be spent by other people, leaving us as the sucker who pays for other people to get more services than they might have otherwise. So we end up doing the same, and everyone's premiums go up as a result.
That's why it cracks me up when I read about Bernie Sanders acting like a "Vermont auctioneer" by asking people at his rallies to shout out their health insurance deductibles, everyone outraged by having to pay several thousand dollars of their own money before coverage kicks in. Whose money do they think it should be? Mine? Yours? Our grandchildren's?
Yes, certainly for some people even routine health expenses are beyond their ability to pay, but (private) health insurance was never intended to act as a wealth transfer, nor should it.
Maybe health payers have simply been doing things wrong. Adam Koppel, a Biogen VP, claims that Google's view of traditional actuarial math is: "it's like the 19th century," and that they believe they could do much better using their Big Data analyses. As a result, he says, Google wants to become a payor; indeed, according to Mr. Koppel, "They want to take over CMS."
They could hardly do worse.
Certainly analytics could make huge impacts in spotting fraud and overutilization, both of which have been the usual suspects for cutting "waste" for at least the past 30 years, but neither of which seem to have been greatly impacted yet. New research has found that the variations in both price and utilization are even more pervasive than we'd already known. CMS has just announced new rules that would make it easier to pool public and private claims data to help attack this, and better analyses of more data should be a potent weapon.
For example, a recent report found that one percent of doctors account for 32% of malpractice claims. I'm willing to bet that a relatively small percentage of physicians also account for a disproportionate share of spending (analogous to the statistics on patients), and that if we could identify the intersection in the Venn diagram of those three circles we'd find some easy targets for significant interventions. The question is who will be the first to figure that out; maybe that will be Google, maybe not.
Mr. Koppel believes the changes in the payer sector go beyond Google's interest in it; he flatly says, "Payers are essentially becoming health IT companies."
Certainly payers have long been big in health IT, such as for their claims and other operational systems. Those systems have, though, often been criticized for being clunky legacy systems that rely on imperfect data. But the payer leaders are moving well beyond these, especially in terms of analytics expertise: Aetna bought ActiveHealth in 2005, Anthem bought Resolution Health in 2008, and United's huge Optum subsidiary had as its kernel Ingenix. The Blues are now all pooling their data in BCBS Axis.
Aetna has further gone into the health IT space by acquiring health information exchange vendor Medicity and health app maker Healthagen (both 2011), while United picked up its own H.I.E. vendor Axololt in 2010, as well as Connextions (2011) and MedSynergies (2014). So maybe Mr. Koppel is on to something.
Payers, though, tend to be big battleships, slow to turn and already struggling to make the shifts to ACOs/value-based purchasing/consumerism, so expecting them to behave more like nimble health IT companies may be expecting too much, at least in the short term. On the other hand, expecting health IT companies to remain as nimble in the rocky waters of provider contracting, employers as customers, and consumers always wanting their plan to pay more is also asking a lot.
I'm all for better analytics, new entrants in the payer space, and new paradigms about what health insurance even is, but if we don't do something about our version of the diner dilemma, we may be wasting our time.
Tuesday, January 26, 2016
Doing Different Differently
I was all set to write about bacteriophages, both because I hadn't known much about them until recently and because they represent an approach that doesn't just proliferate the antibiotic arms race. Then I realized that what appealed to me about them was as an example of attacking mainstream problems with non-mainstream solutions, so I decided to write more generally about how organizations are trying to encourage that.
Because, goodness knows, health care needs a lot more of them.
Let's start with IBM. Yes, I said IBM. Believe it or not, Big Blue is trying very hard to reinvent itself as a design company, or at least a company that uses "design thinking" to develop products and services. They're investing over $100 million in the effort, dropping their ratio of designers to coders from 1:80 to 1:15, according to Wired.
Their design principles emphasize "making users your North Star," using collaborative multidisciplinary teams, "restless reinvention," and a continuous loop of "observe/reflect/make." I particularly like the restless reinvention principle, with its great reminder that "everything is a prototype" and with its explicit admonition to "solve problems in new ways."
So far, about 10,000 employees have gone through the design bootcamp, and around 100 products have been developed using design thinking. Those are drops in the bucket for IBM, but the approach is an audacious and, one might say, long overdue attempt for IBM to stay relevant in a millennium in which Apple has reminded companies about the importance of design.
Or take Microsoft. If there is any doubt that Microsoft is well on its way to doing things differently, look at the Surface Book or Surface Pro, each of which has won rave reviews that might make Apple itself envious. CEO Satya Nadella has been shaking things up ever since he took over two years ago.
One of Mr. Nadella's key actions was to break up Microsoft's Research group, which historically had been kept separate from the day-to-day action. Bloomberg reports that Mr. Nadella has insisted that the research teams work hand-in-hand with the product teams to get new ideas into actual products quicker. They focus less on pure research and more on making an impact on products.
Mr. Nadella has emphasized, "we need to be open to new ideas, and Microsoft Research is where they will come from." This attitude led to Skype Translator becoming an actual product within three months of Mr. Nadella learning about the underlying research, a time frame that was previously unthinkable for Microsoft.
It ain't Bill Gates' Microsoft.
Venture capitalist Anshu Storm has a theory -- "stack fallacy" -- that he believes explains why so many big companies fail to innovate. The theory posits that many companies suffer from the "mistaken belief that it is trivial to build the layer above yours."
He cites how Apple has built great devices but also has missed on simple apps, or IBM's classic blindspot about letting Microsoft own the OS layer that ran their PCs. Then there is Google with its efforts to expand into social networks (Google+, anyone?).
Mr. Storm explains that "we (over) value what we know," which can lead to a lack of understanding about end users' needs. In his view, "Product management is the art of knowing what to build." The trouble is that too many companies focus on the how and not enough on the "why."
Christopher Mims, writing about Mr. Storm's theory, says that they key to avoiding stack fallacy "is figuring out how to have true, firsthand empathy for the needs of the customer for whatever product you’re trying to build next." That sounds logical, even obvious, but evidently is hard to actually do well.
For example, think about hospitals. They're trying hard to position themselves as patient-centered health systems, but no one who has been in a hospital can believe that hospitals see patients as the customer. Hospital gowns? Waking patients up in the middle of the night to take vitals? Corridors upon winding corridors?
Sadly, I could go on, and not just about hospitals, but the point should be clear.
The customers hospitals cater to are physicians, who bring them patients and thus revenue. That's not to say that the people working in hospitals don't care about patients, but the processes, procedures, and design clearly aren't about putting patients first. You can't just proclaim you are "patient-centered."
Still, Tom Graham, M.D., the former Chief Innovation Officer at The Cleveland Clinics, thinks health systems and academic research centers will be the "logical crucibles" of innovation in health care. He emphasizes the importance of collaboration, which hits health systems' and academic research centers' sweet spot, since they already have "interdependent communities with nuclei of creative thought." His new book, Innovation the Cleveland Clinic Way: Powering Transformation by Putting Ideas to Work, details his thoughts.
I worry that putting a bunch of smart health care people together may generate more innovation, but that the resulting innovation may look like, well, more health care ideas. That's not what we need.
We need the health care experience to be less like health care and more like things we actually like. Nick de la Mare suggests that hospitals (and schools) "should be more like theme parks," and that designers should be aiming for "magical experiences." As he asks, why shouldn't health care settings be the "happiest places on earth?"
That's the attitude we need to be taking as we try to innovate; it's not just doing more, but really rethinking the overall consumer experience. I was particularly struck by Mr. de la Mare's caution:
There is cool innovation going on within health care. David Chase, for example, raves about how Zoom+ (which I've written about before) has revamped the ER experience, and there is no shortage of other health care companies hoping to be disruptive (e.g., Becker's list of 30). These may not reinvent the consumer experience, but at least they may improve it.
There is plenty of incremental innovation going on, and health care sure can use it, but I continue to be on the lookout for breath-taking innovation -- innovations that surprise, excite, and delight.
Because, goodness knows, health care needs a lot more of them.
Let's start with IBM. Yes, I said IBM. Believe it or not, Big Blue is trying very hard to reinvent itself as a design company, or at least a company that uses "design thinking" to develop products and services. They're investing over $100 million in the effort, dropping their ratio of designers to coders from 1:80 to 1:15, according to Wired.
Their design principles emphasize "making users your North Star," using collaborative multidisciplinary teams, "restless reinvention," and a continuous loop of "observe/reflect/make." I particularly like the restless reinvention principle, with its great reminder that "everything is a prototype" and with its explicit admonition to "solve problems in new ways."
So far, about 10,000 employees have gone through the design bootcamp, and around 100 products have been developed using design thinking. Those are drops in the bucket for IBM, but the approach is an audacious and, one might say, long overdue attempt for IBM to stay relevant in a millennium in which Apple has reminded companies about the importance of design.
Or take Microsoft. If there is any doubt that Microsoft is well on its way to doing things differently, look at the Surface Book or Surface Pro, each of which has won rave reviews that might make Apple itself envious. CEO Satya Nadella has been shaking things up ever since he took over two years ago.
One of Mr. Nadella's key actions was to break up Microsoft's Research group, which historically had been kept separate from the day-to-day action. Bloomberg reports that Mr. Nadella has insisted that the research teams work hand-in-hand with the product teams to get new ideas into actual products quicker. They focus less on pure research and more on making an impact on products.
Mr. Nadella has emphasized, "we need to be open to new ideas, and Microsoft Research is where they will come from." This attitude led to Skype Translator becoming an actual product within three months of Mr. Nadella learning about the underlying research, a time frame that was previously unthinkable for Microsoft.
It ain't Bill Gates' Microsoft.
Venture capitalist Anshu Storm has a theory -- "stack fallacy" -- that he believes explains why so many big companies fail to innovate. The theory posits that many companies suffer from the "mistaken belief that it is trivial to build the layer above yours."
He cites how Apple has built great devices but also has missed on simple apps, or IBM's classic blindspot about letting Microsoft own the OS layer that ran their PCs. Then there is Google with its efforts to expand into social networks (Google+, anyone?).
Mr. Storm explains that "we (over) value what we know," which can lead to a lack of understanding about end users' needs. In his view, "Product management is the art of knowing what to build." The trouble is that too many companies focus on the how and not enough on the "why."
Christopher Mims, writing about Mr. Storm's theory, says that they key to avoiding stack fallacy "is figuring out how to have true, firsthand empathy for the needs of the customer for whatever product you’re trying to build next." That sounds logical, even obvious, but evidently is hard to actually do well.
For example, think about hospitals. They're trying hard to position themselves as patient-centered health systems, but no one who has been in a hospital can believe that hospitals see patients as the customer. Hospital gowns? Waking patients up in the middle of the night to take vitals? Corridors upon winding corridors?
Sadly, I could go on, and not just about hospitals, but the point should be clear.
The customers hospitals cater to are physicians, who bring them patients and thus revenue. That's not to say that the people working in hospitals don't care about patients, but the processes, procedures, and design clearly aren't about putting patients first. You can't just proclaim you are "patient-centered."
Still, Tom Graham, M.D., the former Chief Innovation Officer at The Cleveland Clinics, thinks health systems and academic research centers will be the "logical crucibles" of innovation in health care. He emphasizes the importance of collaboration, which hits health systems' and academic research centers' sweet spot, since they already have "interdependent communities with nuclei of creative thought." His new book, Innovation the Cleveland Clinic Way: Powering Transformation by Putting Ideas to Work, details his thoughts.
I worry that putting a bunch of smart health care people together may generate more innovation, but that the resulting innovation may look like, well, more health care ideas. That's not what we need.
We need the health care experience to be less like health care and more like things we actually like. Nick de la Mare suggests that hospitals (and schools) "should be more like theme parks," and that designers should be aiming for "magical experiences." As he asks, why shouldn't health care settings be the "happiest places on earth?"
That's the attitude we need to be taking as we try to innovate; it's not just doing more, but really rethinking the overall consumer experience. I was particularly struck by Mr. de la Mare's caution:
The trick is to deploy technology strategically and sparingly, since new tools tend to introduce unintended complexities....A hospital patient may feel similarly overwhelmed by impersonal and bureaucratic processes that seem to serve the health care provider at their expense. Just because we have the technology to do something, doesn’t mean we should.I especially love that last sentence.
There is cool innovation going on within health care. David Chase, for example, raves about how Zoom+ (which I've written about before) has revamped the ER experience, and there is no shortage of other health care companies hoping to be disruptive (e.g., Becker's list of 30). These may not reinvent the consumer experience, but at least they may improve it.
There is plenty of incremental innovation going on, and health care sure can use it, but I continue to be on the lookout for breath-taking innovation -- innovations that surprise, excite, and delight.
Sunday, January 17, 2016
My Digital Twin Is Worth More Than I Am
It used to be said that the human body was only worth pennies, based on its minerals (although that has been updated to $160), If one counts the value of our organs, the figure is several hundred thousand dollars. And, according to other estimates, if one includes the value of our DNA and bone marrow, a human body is actually worth close to $46 million.
The funny thing is, other people seem to get all the benefit.
What started me thinking about this was a report from MobiHealthNews on the FTC's PrivacyCon, particularly a discussion about the monetization of consumer health data. We talk a lot about Big Data, but it is worth remembering that Big Data is made up of lots of little data from people like you and me.
Companies are keen to make money from the data they collect about/from us. The Economist Intelligence Unit just released The Business of Data on this topic. Some of its key findings
The Pew Research Center also just released a new report, Privacy and Information Sharing. They found consumers have mixed attitudes towards sharing their data; "it depends" was the prevailing attitude when evaluating various sharing scenarios. They often see benefit in giving up some of their privacy -- we love "free"! -- but worry about how their data will be used and by whom, especially given the risks of security breaches.
One of the scenarios Pew presented was having your doctor upload your personal health data to a secure third party site, in return for access to your medical record and easier appointment scheduling. Somewhat surprisingly, more respondents (52%) found this sharing acceptable than in any of the other, non-health scenarios, Those who found it unacceptable tended to cite doubt about how secure the data really would be, noting the consequences if their data was hacked.
This concern is certainly valid. Being hacked is bad enough, but even having your data de-identified may not be enough, since whether de-identified data can stay de-identified is very much in question, as datasets get larger and analytic techniques get better.
As a researcher at PrivacyCon said:
In a very real sense, we are our data, with DNA a fantastically effective means of storage. Having this data stolen is especially troubling. I wouldn't want to suddenly run into my clone.
One way or another, Big Data is posed to become a huge market. Pharma in particular stands to benefit, with Big Data potentially revolutionizing drug development and targeting. All of this relies on our data. We may directly benefit from our sharing, or the benefits may accrue to other patients, particularly future ones.
Many people (including President Obama) believe precision/personalized medicine is the future of health care, tailoring treatments and even diet to a person's specific make-up. The success of this depends on Big Data. The President has also pushed for a "moonshot" to cure cancer, and many feel that not only does this need Big Data but also that lack of sharing data has been one of the big problems in cancer research (and, indeed, in all clinical trials).
GE's Digital CEO Bill Ruh believes that a detailed software model of a person, which he calls a "digital twin," will become integral to health care (as well as to products in other fields). As he said,
Take, for example, Datacoup. They are one of the first companies to allow consumers sell their data. Consumers upload their data to Datacoup, which then markets it to data purchasers, with the consumers getting paid based on how much those purchasers pay. Datacoup's CEO told the EIU: "If merchants are willing to provide value in exchange for more or better consumer consented data, then you’ll see a vibrant and massive marketplace spawned for the direct exchange of data, and in effect a more direct relationship between consumers and merchants."
I'm all for pooling our data to figure out better ways of helping people, but I'm less sure that I should be doing that for free, especially given the risks of my data being stolen or used for purposes I didn't intend.
If our digital twins are going to have economic value -- as they no doubt will -- shouldn't we share in that?
The funny thing is, other people seem to get all the benefit.
What started me thinking about this was a report from MobiHealthNews on the FTC's PrivacyCon, particularly a discussion about the monetization of consumer health data. We talk a lot about Big Data, but it is worth remembering that Big Data is made up of lots of little data from people like you and me.
Companies are keen to make money from the data they collect about/from us. The Economist Intelligence Unit just released The Business of Data on this topic. Some of its key findings
- Over 80% of surveyed organizations are taking steps to generate more value from their data.
- 60% are already generating revenue from their data.
- Over 50% are selling or buying data.
- 86% say their customers trust them with their personal data, although only 34% think they are very effective in being transparent about their use of it.
- 82% believe they are effective about keeping their data secure, although 34% admit to having had a significant breach within the past 12 months.
The Pew Research Center also just released a new report, Privacy and Information Sharing. They found consumers have mixed attitudes towards sharing their data; "it depends" was the prevailing attitude when evaluating various sharing scenarios. They often see benefit in giving up some of their privacy -- we love "free"! -- but worry about how their data will be used and by whom, especially given the risks of security breaches.
One of the scenarios Pew presented was having your doctor upload your personal health data to a secure third party site, in return for access to your medical record and easier appointment scheduling. Somewhat surprisingly, more respondents (52%) found this sharing acceptable than in any of the other, non-health scenarios, Those who found it unacceptable tended to cite doubt about how secure the data really would be, noting the consequences if their data was hacked.
This concern is certainly valid. Being hacked is bad enough, but even having your data de-identified may not be enough, since whether de-identified data can stay de-identified is very much in question, as datasets get larger and analytic techniques get better.
As a researcher at PrivacyCon said:
What we have to realize is that genetic data is the most personal data out there...We also know this data is inherently identifiable. There's growing recognition that it is not possible to de-identify this data in a way that is not possible to re-identify later. The other thing is, this data is irrevocable. If there's a privacy breach, you can't change it. It's not like your iTunes password.We're increasingly in a world of biometric screening and DNA sequencing (including DTC sequencing). We are starting to use biometrics as a form of identification, as DNA has been used for many years, most notably in law enforcement. We've gotten used to the prospect of identity theft when it comes to our financial information, but it takes on even more ominous connotations when it comes to our genetic and health information.
In a very real sense, we are our data, with DNA a fantastically effective means of storage. Having this data stolen is especially troubling. I wouldn't want to suddenly run into my clone.
One way or another, Big Data is posed to become a huge market. Pharma in particular stands to benefit, with Big Data potentially revolutionizing drug development and targeting. All of this relies on our data. We may directly benefit from our sharing, or the benefits may accrue to other patients, particularly future ones.
Many people (including President Obama) believe precision/personalized medicine is the future of health care, tailoring treatments and even diet to a person's specific make-up. The success of this depends on Big Data. The President has also pushed for a "moonshot" to cure cancer, and many feel that not only does this need Big Data but also that lack of sharing data has been one of the big problems in cancer research (and, indeed, in all clinical trials).
GE's Digital CEO Bill Ruh believes that a detailed software model of a person, which he calls a "digital twin," will become integral to health care (as well as to products in other fields). As he said,
I believe we we will have a digital twin at birth, and it will take data off of the sensors everybody is running, and that digital twin will predict things for us about disease and cancer and other things. I believe we will end up with health care being the ultimate digital twin. Without it, I believe we will have data but with no outcome, or value.Whether we like it or not, whether we realize it or not, monetization of our data is happening, While research suggests we are overwhelmingly willing to share our health information for research, once the implicit value of our contributions becomes clearer, that willingness may be more conditioned upon an explicit return.
Take, for example, Datacoup. They are one of the first companies to allow consumers sell their data. Consumers upload their data to Datacoup, which then markets it to data purchasers, with the consumers getting paid based on how much those purchasers pay. Datacoup's CEO told the EIU: "If merchants are willing to provide value in exchange for more or better consumer consented data, then you’ll see a vibrant and massive marketplace spawned for the direct exchange of data, and in effect a more direct relationship between consumers and merchants."
I'm all for pooling our data to figure out better ways of helping people, but I'm less sure that I should be doing that for free, especially given the risks of my data being stolen or used for purposes I didn't intend.
If our digital twins are going to have economic value -- as they no doubt will -- shouldn't we share in that?
Monday, January 11, 2016
Self-Driving Cars As The Future of Health Care
I'm a sucker for driverless cars. I've only owned cars with manual transmissions, and in recent years I've been telling people that I'm more likely to jump straight to a self-driving car than to simply get an automatic transmission. There's lots going on in the field these days, but what caught my eye was a new report from KPMG that forecast the number of auto accidents could drop 80% due to autonomous cars, shrinking the auto insurance industry by some 60%. They are not alone in these kind of predictions.
We should be talking about those kinds of changes for health insurance, and health care more generally.
Most of us drive, and most of us probably think we're good drivers -- it's all those other bad drivers! -- but over 90% of auto accidents are caused by human error. No wonder; there are so many other things we'd rather be doing, like texting or talking on our phone. Maybe even checking our destination on Yelp or Google Maps. They even have a name for this -- distracted driving -- with plenty of grim statistics that you'd think would deter us, but which do not.
Google has gotten lots of press for its driverless car project, but we've been heading this direction for some time. For example, cruise control and anti-lock brakes have been routine for decades, but now there are also self-parking cars and ones that can alert you when other cars or objects are too close. Tesla is in beta with a feature to let your car essentially valet itself (although they've already had to put further restrictions on it), and Elton Musk thinks fully autonomous cars will be ready in 2-3 years.
All this is in line with KPMG's prediction that by 2025 we'll be in an autonomous car world, with consumers shifting over to it by 2040. That's when the auto insurance industry will be in big trouble, at least in its current form.
The industry executives KPMG surveyed aren't worried yet. Only 29% felt they were very knowledgeable about autonomous cars, with 23% claiming to know nothing about them. Most felt that their business wouldn't be impacted for at least ten years. When the changes come, the executives thought that their focus would move more towards commercial, instead of personal, auto lines, and they expected new competitors would include tech companies like Google and the auto manufacturers themselves.
Perhaps it is no surprise, then, that GM just invested $500 million in Lyft, hedging its bet not only on a self-driving world but one where car ownership shifts to the "Uber" (sorry, Lyft!) model where cars are available on demand, with someone else doing the driving. That model really disrupts the traditional auto industry, as it removes much of the personal attachment most of us have historically felt about our cars.
Once it isn't our car and we're relying on another driver anyway, do we really care if that driver is the car itself? We just want to get where we're going safely, and, oh-by-the-way, more cost-effectively.
It won't just be the auto insurance industry that will be impacted by these trends. The whole ecosystem will be: car manufacturers, parts manufacturers, repair shops, rental companies, gas stations and oil companies, and advertising agencies. to name a few. The changes will be bigger than we realize and sooner than we expect.
All that is very interesting, but what does it have to do with health care or health insurance?
When it comes to managing our health, we're not much better than we are with our driving. We weigh too much, we eat the wrong things, we don't get enough exercise or sleep, we have too much stress, and when we do get medical care, we often don't listen to or understand our doctors, or simply don't follow their instructions. If any area of our lives seems like it needs someone/something to take over for our (poor) judgement, it would seem to be in regard to our health.
We might think those auto insurance executives who believe they have ten years to get ready are being short-sighted, but no one in health care should be feeling any better about its existing model. The seeds for similar disruption are already here for health care as well.
Telemedicine, AI advice, digital tracking, and consumer diagnostic tests -- all these are the kinds of things that have the potential to take the locus away from your friendly local physician/hospital/lab/pharmacy/imaging center. They are slowly working their way through the laborious regulatory system and the consumer acceptance stage, just as they are for autonomous cars and the ride-sharing industry. But it would be foolish to believe that they won't become mainstream.
Of course, short of uploading our minds to live inside an android or a robot, it would be hard to fully delegate our health to some third party. I've previously made a pitch for an omnipresent digital health assistant that would help guide us to better health choices, but we're not quite there yet.
That's why perhaps wearables/digital health are the most likely bet in the short term. We're seeing traditional tools like stethoscopes being replaced by digital options, lab testing being ordered by, and results delivered to, consumers, and an array of other self-monitoring options. Two-thirds of Americans say they are willing to use digital health tools.
Products like Apple Watch, Samsung Gear, or Fitbit are all doing their best to be a ubiquitous and value-added presence in our lives. Whether they can actually help us improve our health remains to be seen, with early results indicating...maybe.
Health care professionals think that their revenue can only go up -- here's looking at you, drug companies! -- but I'm convinced that well before the auto insurance industry suffers its big decline in revenues, health care will have already done so.
We've used "consumer-directed" as shorthand for making consumers responsible for more of the bill and "patient-centered" as shorthand for getting all the various health care professionals involved in delivering a patient's care to talk to each other, but in both cases without truly changing any of the fundamental dynamics. Perhaps the real parallel to driving is not handing management of our health over to some third party -- which we've done too much of already -- but in actually taking control of it.
When it comes to health, the "self-driver" is us.
We should be talking about those kinds of changes for health insurance, and health care more generally.
Most of us drive, and most of us probably think we're good drivers -- it's all those other bad drivers! -- but over 90% of auto accidents are caused by human error. No wonder; there are so many other things we'd rather be doing, like texting or talking on our phone. Maybe even checking our destination on Yelp or Google Maps. They even have a name for this -- distracted driving -- with plenty of grim statistics that you'd think would deter us, but which do not.
Google has gotten lots of press for its driverless car project, but we've been heading this direction for some time. For example, cruise control and anti-lock brakes have been routine for decades, but now there are also self-parking cars and ones that can alert you when other cars or objects are too close. Tesla is in beta with a feature to let your car essentially valet itself (although they've already had to put further restrictions on it), and Elton Musk thinks fully autonomous cars will be ready in 2-3 years.
All this is in line with KPMG's prediction that by 2025 we'll be in an autonomous car world, with consumers shifting over to it by 2040. That's when the auto insurance industry will be in big trouble, at least in its current form.
The industry executives KPMG surveyed aren't worried yet. Only 29% felt they were very knowledgeable about autonomous cars, with 23% claiming to know nothing about them. Most felt that their business wouldn't be impacted for at least ten years. When the changes come, the executives thought that their focus would move more towards commercial, instead of personal, auto lines, and they expected new competitors would include tech companies like Google and the auto manufacturers themselves.
Perhaps it is no surprise, then, that GM just invested $500 million in Lyft, hedging its bet not only on a self-driving world but one where car ownership shifts to the "Uber" (sorry, Lyft!) model where cars are available on demand, with someone else doing the driving. That model really disrupts the traditional auto industry, as it removes much of the personal attachment most of us have historically felt about our cars.
Once it isn't our car and we're relying on another driver anyway, do we really care if that driver is the car itself? We just want to get where we're going safely, and, oh-by-the-way, more cost-effectively.
It won't just be the auto insurance industry that will be impacted by these trends. The whole ecosystem will be: car manufacturers, parts manufacturers, repair shops, rental companies, gas stations and oil companies, and advertising agencies. to name a few. The changes will be bigger than we realize and sooner than we expect.
All that is very interesting, but what does it have to do with health care or health insurance?
When it comes to managing our health, we're not much better than we are with our driving. We weigh too much, we eat the wrong things, we don't get enough exercise or sleep, we have too much stress, and when we do get medical care, we often don't listen to or understand our doctors, or simply don't follow their instructions. If any area of our lives seems like it needs someone/something to take over for our (poor) judgement, it would seem to be in regard to our health.
We might think those auto insurance executives who believe they have ten years to get ready are being short-sighted, but no one in health care should be feeling any better about its existing model. The seeds for similar disruption are already here for health care as well.
Telemedicine, AI advice, digital tracking, and consumer diagnostic tests -- all these are the kinds of things that have the potential to take the locus away from your friendly local physician/hospital/lab/pharmacy/imaging center. They are slowly working their way through the laborious regulatory system and the consumer acceptance stage, just as they are for autonomous cars and the ride-sharing industry. But it would be foolish to believe that they won't become mainstream.
Of course, short of uploading our minds to live inside an android or a robot, it would be hard to fully delegate our health to some third party. I've previously made a pitch for an omnipresent digital health assistant that would help guide us to better health choices, but we're not quite there yet.
That's why perhaps wearables/digital health are the most likely bet in the short term. We're seeing traditional tools like stethoscopes being replaced by digital options, lab testing being ordered by, and results delivered to, consumers, and an array of other self-monitoring options. Two-thirds of Americans say they are willing to use digital health tools.
Products like Apple Watch, Samsung Gear, or Fitbit are all doing their best to be a ubiquitous and value-added presence in our lives. Whether they can actually help us improve our health remains to be seen, with early results indicating...maybe.
Health care professionals think that their revenue can only go up -- here's looking at you, drug companies! -- but I'm convinced that well before the auto insurance industry suffers its big decline in revenues, health care will have already done so.
We've used "consumer-directed" as shorthand for making consumers responsible for more of the bill and "patient-centered" as shorthand for getting all the various health care professionals involved in delivering a patient's care to talk to each other, but in both cases without truly changing any of the fundamental dynamics. Perhaps the real parallel to driving is not handing management of our health over to some third party -- which we've done too much of already -- but in actually taking control of it.
When it comes to health, the "self-driver" is us.
Monday, January 4, 2016
What If They Are Right?
Let's say you have a product that you just can't get the public to want. You market the heck out of it, you sell a bunch of different versions of it, and you warn people about how their lives could be ruined if they don't buy it, which, in fact, isn't untrue. You even manage to get the government to require people to buy it, and also to provide subsidies for them to purchase it. Yet still the customers you want most remain stubbornly uninterested. At some point most people would conclude it isn't a marketing problem but a product problem.
When the product is health insurance, though, we tend to think those who won't buy it are short-sighted and even irresponsible -- but what if they're right?
The New York Times just reported that many Americans find that it is cheaper for them to pay the fine for not having health insurance than it is to actually pay for health insurance, despite increasing fines, subsidies for the purchase, and the presumed financial benefits of having health insurance. It cites a recent Kaiser Family Foundation analysis which found that there are some seven million such uninsured Americans. As one resister told the Times, "I don’t see the logic behind that [buying coverage], and I’m just not going to do it."
The article gave examples of several consumers who were surprised -- in one case, "offended" -- that the plans featured large deductibles that would require them to pay the initial several thousand dollars of medical expenses. If something truly catastrophic happened, one claimed: "I feel like it’s better just to die."
Maybe not such a great strategy.
It's not that there aren't some positive signs. NCHS data indicate that the number of uninsured has dropped from 45 million in 2013 to 28.5 million for the first half of 2015. Sarah Kliff reports that people under 35 account for 35% of healthcare.gov's open enrollment sign-ups, versus 33% in 2014, with close to million new enrollments from that demographic, versus under 700,000 a year prior. Not wanting to pay the penalty motivated their enrollment more than older enrollees.
The NCHS also reported that the number of people under 65 who had problems paying medical bills in the past 12 months decreased from 56.5 million in 2011 to 44 million in the first half of 2015. The percentage varies by insurance status (29.8% for uninsured, 21.8% for those with public coverage, and 12.2% for those with private coverage) and income (24.5% for the poor, 27.1% for the near-poor, and 12.2% for the not-poor).
Still, 28.5 million people remain without coverage, 44 million are having trouble paying medical bills, even among those with private insurance or "not-poor"...gosh, that doesn't seem like a raging success.
A couple other articles have deepened my belief that we've gone down the wrong path:
This is not all the fault of health insurance, but it has had a role. We entrusted public and private payors with negotiating on our behalf with health care professionals and industries. As it turned out, it was easiest for them to do within some arbitrarily narrow definitions, limiting who can be paid how much for what. Our "health" system is a medical one.
The end result is this system where prices vary irrationally even when one has insurance, where the care you get is a function of which provider you get it from rather than what is best, and where we spend more than any other country and certainly more than many of us can afford. The end result is that the same kinds of entities that were getting the biggest share of our health care dollar in 1960 are still getting about the same shares now (as I discussed previously), which sure seems like some kind of a sweetheart deal to me.
It seems foolhardy to self-fund oneself in a world where a lengthy hospital stay or drug regime can easily bankrupt anyone other than the so-called 1%, yet health insurance allows and, to some extent, exacerbates that kind of expensive treatment. It has become part of the problem.
Look, I worked in the health insurance industry for a long time. I helped introduce consumer-driven/high deductible plans to help foster cost-awareness. I bought into the protection-against-big-expenses meme. I personally have never not had health insurance. So, by most standards, I should be biased in its favor. But I'm beginning to wonder if health insurance itself is the problem, or at least a big part of the problem.
I've written before about some of the new entrants into health insurance; more power to them, and the more the merrier. What I continue to be disappointed by is that we're not really seeing fundamentally new approaches to what health insurance is. Going back to the product analogy above, we're just iterating versions of the iPod instead of introducing the iPhone. We probably would have continued to love our iPods if the iPhone hadn't come along, but not many of us would opt for a world that had better iPods but no iPhones.
I wish I knew what the alternative to health insurance was. I wish I even had a good idea for an idea for it. The closest I've come is a thought experiment I posed some time ago, where we crowdsourced any help we wanted for our health spending, which would be subjective and unpredictable, but which would at least open our eyes about who is paying for our care.
Here's a radical suggestion: instead of thinking of more ways to force people to buy health insurance they don't want, we should be developing products to protect their heath that they actually want to buy.
When the product is health insurance, though, we tend to think those who won't buy it are short-sighted and even irresponsible -- but what if they're right?
The New York Times just reported that many Americans find that it is cheaper for them to pay the fine for not having health insurance than it is to actually pay for health insurance, despite increasing fines, subsidies for the purchase, and the presumed financial benefits of having health insurance. It cites a recent Kaiser Family Foundation analysis which found that there are some seven million such uninsured Americans. As one resister told the Times, "I don’t see the logic behind that [buying coverage], and I’m just not going to do it."
The article gave examples of several consumers who were surprised -- in one case, "offended" -- that the plans featured large deductibles that would require them to pay the initial several thousand dollars of medical expenses. If something truly catastrophic happened, one claimed: "I feel like it’s better just to die."
Maybe not such a great strategy.
It's not that there aren't some positive signs. NCHS data indicate that the number of uninsured has dropped from 45 million in 2013 to 28.5 million for the first half of 2015. Sarah Kliff reports that people under 35 account for 35% of healthcare.gov's open enrollment sign-ups, versus 33% in 2014, with close to million new enrollments from that demographic, versus under 700,000 a year prior. Not wanting to pay the penalty motivated their enrollment more than older enrollees.
The NCHS also reported that the number of people under 65 who had problems paying medical bills in the past 12 months decreased from 56.5 million in 2011 to 44 million in the first half of 2015. The percentage varies by insurance status (29.8% for uninsured, 21.8% for those with public coverage, and 12.2% for those with private coverage) and income (24.5% for the poor, 27.1% for the near-poor, and 12.2% for the not-poor).
Still, 28.5 million people remain without coverage, 44 million are having trouble paying medical bills, even among those with private insurance or "not-poor"...gosh, that doesn't seem like a raging success.
A couple other articles have deepened my belief that we've gone down the wrong path:
- A new study, as reported by The New York Times and with some additional observations in Health Affairs, confirms the long-known wide ranging pricing and utilization in the U.S. What's new is that Medicare spending is not necessarily linked to private insurance spending -- "lower cost" markets for one does not automatically result in lower costs for the other. It also reaffirmed that prices vary wildly not just across markets but within markets, even for negotiated insurance rates.
- A new study found that our convoluted patent/FDA approval system makes it more financially advantageous to invest in cancer drugs that extend cancer patients' lives by a few months instead of on drugs that might prevent cancer. Huh?
This is not all the fault of health insurance, but it has had a role. We entrusted public and private payors with negotiating on our behalf with health care professionals and industries. As it turned out, it was easiest for them to do within some arbitrarily narrow definitions, limiting who can be paid how much for what. Our "health" system is a medical one.
The end result is this system where prices vary irrationally even when one has insurance, where the care you get is a function of which provider you get it from rather than what is best, and where we spend more than any other country and certainly more than many of us can afford. The end result is that the same kinds of entities that were getting the biggest share of our health care dollar in 1960 are still getting about the same shares now (as I discussed previously), which sure seems like some kind of a sweetheart deal to me.
It seems foolhardy to self-fund oneself in a world where a lengthy hospital stay or drug regime can easily bankrupt anyone other than the so-called 1%, yet health insurance allows and, to some extent, exacerbates that kind of expensive treatment. It has become part of the problem.
Look, I worked in the health insurance industry for a long time. I helped introduce consumer-driven/high deductible plans to help foster cost-awareness. I bought into the protection-against-big-expenses meme. I personally have never not had health insurance. So, by most standards, I should be biased in its favor. But I'm beginning to wonder if health insurance itself is the problem, or at least a big part of the problem.
I've written before about some of the new entrants into health insurance; more power to them, and the more the merrier. What I continue to be disappointed by is that we're not really seeing fundamentally new approaches to what health insurance is. Going back to the product analogy above, we're just iterating versions of the iPod instead of introducing the iPhone. We probably would have continued to love our iPods if the iPhone hadn't come along, but not many of us would opt for a world that had better iPods but no iPhones.
I wish I knew what the alternative to health insurance was. I wish I even had a good idea for an idea for it. The closest I've come is a thought experiment I posed some time ago, where we crowdsourced any help we wanted for our health spending, which would be subjective and unpredictable, but which would at least open our eyes about who is paying for our care.
Here's a radical suggestion: instead of thinking of more ways to force people to buy health insurance they don't want, we should be developing products to protect their heath that they actually want to buy.
Subscribe to:
Posts (Atom)