Health Care Business

Perspective from The New England Journal of Medicine — Use of Health IT for Higher-Value Critical Care

  Alere’s purchase of Medapps prompts me to discuss a question posed to me daily, “What is the ROI of digital health technologies?”  Discussants in the Digital Health Linkedin Group were surprised at the purchase price of ‘no greater than $22M’ for Medapps.  The real issue of these technologies in my mind is not as much what the potential market is as what the ROI is. I am not going to apply economic theory or formulas in this post, as I have no formal training in economics.  However, I will make this a qualitative discussion because it is a fundamental which is relevant to the adoption of such technologies, as well as furnishing some examples.

Insurers looking to compete in the ever-changing healthcare marketplace will continue to focus on technology in 2013 as a means of improving payment models and partnerships with provider groups and as the industry looks to make the transition to consumer-focused products it will offer on health insurance exchanges.

That’s the view of a two industry analysts and consultants, Jean-Pierre Stephan, healthcare senior executive at Accenture and Vaughn Kauffman, principal and U.S. healthcare advisory leader with PwC.

“We are seeing the acquisitions the payers are making have been around the managed care businesses that focus on Medicaid and that is clearly a play to attain membership. The other one is the payers are looking at acquisitions of non-traditional companies in the technology space around mobile platforms,” said Kauffman. “The whole point of that is the opportunity to improve the care coordination and innovation (with) technology that, quite frankly, is pretty ubiquitous in other industries.”

One of the things that has always amazed me about the discussion around health care transformation is this: no matter what the forum or venue, no matter who the discussants are or whom they represe...

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"Partnerships are key. Not just aligned synergies. True partnerships. Taking the time to understand the barriers that every partner faces from their siloed vantage points. Listening. Showing respect and establishing trust. Embracing the complexity of our interconnectedness as a strength, not shying away from it as a perceived liability. Not being afraid to make mistakes, or to say something really crazy. And getting to know each other, as people. Embracing the human relationship part of all this discussion."

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"Barriers fall when the vision is clear and shared; when focus is on the patient and the patient experience rather than on the institutions serving them, and when there is a commitment to a culture of respect, trust and transparency."

Ramsay Health Care, Virgin Care, Harmoni, The Practice, Circle and Care UK cannot be treated as going concerns without the financial support of their parent companies

Germany's pharmaceutical trade organisation, the BPI, has challenged the country's mandatory discounts and price freezes on drugs, arguing that they are no longer justified.

The BPI (Bundesverband der Pharmazeutischen Industrie) made its assertion shortly after the comment period for a second review of the pricing control plan expired on November 23, 2012.

Germany's 2011 Law for Reforming the Market for Pharmaceuticals (AMNOG or SGB V) introduced higher mandatory insurance costs for its citizens but also did away with free pricing via a new system of federal price controls (G-BA) which links into clinical benefit and the cost of competing medicines.

The government imposed a three-year price moratorium while increasing the discount that manufacturers are obliged to offer state health insurers from 6 per cent to 16 per cent, but also committed to regular reviews of the need for the measures.

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Last month, GlaxoSmithKline’s chief executive Andrew Witty appealed to European governments to draw back from price cuts that are eating into profitability and threatening the future of EU-located R&D and manufacturing.

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The move toward accountable care organizations, the ubiquity of cell phones and changing patient expectations all are contributing to the rise of mobile monitoring of chronic diseases, but it still may take years before home care becomes a routine part of medicine.

Friday morning at the 4th annual World Congress Leadership Summit on mHealth in Boston, Dr. Mohit Kaushal, executive VP of business development and chief strategy officer of the West Wireless Health Institute, La Jolla, Calif. surmised that it would take as many as five years to figure out effective business models for mobile monitoring.

In the meantime, organizations continue to experiment.

Future Practice: November 2012...

Physicians want electronic health records to improve quality of care by providing accurate, timely and complete information...

see how Canada is moving..

It’s hard to escape hearing about social marketing platforms being acquired by major tech players these days.

It's not about listening to customers, or even communicating with them. The future of social marketing is now all about collaboration:

Phase one: social listeing

Phase two: social management

Phase trhee collaborative marketing

See the 5 steps to begin positioning your brand for success as we ente this third hase of social marketing1

Market forces are beginning to emerge in health care, and employers are beginning to stir.

From 1999 to 2011, health care premium inflation grew steadily at 4 times the general inflation rate. During that same period, the percentage of non-elderly Americans with employer-sponsored health coverage fell from 69.2 to 58.6 percent, a 15.3 percent erosion rate.

Health care’s boosters like to argue that it has buttressed the economy, and that it means more jobs and economic prosperity within a community. A February 2011 Altarum Institute report estimated that private sector health care jobs now account for nearly 11 percent of total employment. Since the recession began in December 2007, health care employment has risen by 6.3 percent while employment in other industry sectors fell by 6.8 percent.

But there’s a darker side. Health care’s ever-increasing revenue growth has come at the expense of individuals and firms that pay its bills, directly, through health plan premiums and through taxes, often instead of buying other goods and services. It transfers wealth to health care from everyone else. Like the finance services industry, health care has become a disproportionate “taker” industry, sapping economic vitality of America’s communities.

And it is also clear that a sizable part of health care cost is inappropriate and unjustified......

http://bit.ly/TbRPhYMeanwhile, people knowledgeable about the mechanisms that undergird health care’s excesses will increasingly exploit these as market opportunities to win for purchasers. A few of America’s health care organizations are actively engaged in developing more market-capable business practices. They seek to trade lower per patient revenues and margins for greater market share that will be drawn from their competitors...

Newsroom - Organisation for Economic Co-operation and Development:

Health spending in Europe falls for the first time in decades.

16/11/12- Health spending fell across the European Union in 2010, as cash-strapped governments curbed outlays to help cut budgetary deficits, according to Health at a Glance: Europe 2012, a new joint report by the OECD and the European Commission.

This drop in spending per person and as a percentage of GDP reverses increases seen in the years before the economic crisis, when health spending per person grew two or three times faster than incomes in many countries. From an annual average growth rate of 4.6% between 2000 and 2009, health spending per capita fell to -0.6% in 2010. This is the first time health spending has fallen in Europe since 1975.

In Ireland, health spending fell 7.9% in 2010, compared with an average annual growth rate of 6.5% between 2000 and 2009. In Estonia, health expenditure per person dropped by 7.3% in 2010, following growth of over 7% per year from 2000 to 2009, with reductions in both public and private spending. In Greece, estimates suggest that health spending per person fell 6.7% in 2010, reversing annual growth of 5.7% between 2000 and 2009.

The report cautions that the reduction or slowdown in spending in nearly all EU countries may have a long-term impact on health care outcomes.

Health at a Glance, new recent report from the OECD.

All overview of health care parameters!

Until recently, Greece had a typical European health system offering universal care, but the unemployed are now often left on their own if they get sick.

Does it look like patients satisfaction scores are counted in reimbursement of hospitals?

See: "CMS begins pay-for-performance at hospitals today | Central Penn Business Journal"

The Centers for Medicare and Medicaid Services begin a pay-for-performance incentive program at general acute-care hospitals today.

See also "Administration Implements New Health Reform Provision to Improve Care Quality, Lower Costs" 

Included in Affordable Care Act, Value-Based Purchasing Will Reward 3,500 Hospitals Based on Quality of Care for PatientsThe Affordable Care Act includes a number of policies to help physicians, hospitals, and other caregivers improve the safety and quality of patient care and make health care more affordable. Starting in October 2012, Medicare will reward hospitals that provide high quality care for their patients through the new Hospital Value-Based Purchasing Program. This program marks the beginning of an historic change in how Medicare pays health care providers and facilities—for the first time, hospitals across the country will be paid for inpatient acute care services based on care quality, not just the quantity of the services they provide.

http://1.usa.gov/nG7xvS

And, see, as an example how it gets into business too:

"Value-Based Purchasing Puts Patient Experience in Spotlight"

http://bit.ly/SVbSjU

(I like the blog; I have no interest in the commercial promotion of the featured software).

Dr. Alvin Rajkomar was doing rounds with his team at the University of California, San Francisco Medical Center when he came upon a puzzling case: a frail, elderly patient with a dangerously low sodium level.

As a third-year resident in internal medicine, Dr. Rajkomar was the senior member of the team, and the others looked to him for guidance. An infusion of saline was the answer, but the tricky part lay in the details. Concentration? Volume? Improper treatment could lead to brain swelling, seizures or even death.

Dr. Rajkomar had been on call for 24 hours and was exhausted, but the clinical uncertainty was “like a shot of adrenaline,” he said. He reached into a deep pocket of his white coat and produced not a well-thumbed handbook but his iPhone.

With a tap on an app called MedCalc, he had enough answers within a minute to start the saline at precisely the right rate.

The history of medicine is defined by advances born of bioscience. But never before has it been driven to this degree by digital technology.

The proliferation of gadgets, apps and Web-based information has given clinicians — especially young ones like Dr. Rajkomar, who is 28 — a black bag of new tools: new ways to diagnose symptoms and treat patients, to obtain and share information, to think about what it means to be both a doctor and a patient.

And it has created something of a generational divide. Older doctors admire, even envy, their young colleagues’ ease with new technology. But they worry that the human connections that lie at the core of medical practice are at risk of being lost.

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