August 31, 2011
Could a “strange bedfellows” coalition of patient advocates, healthcare providers and pharmaceutical companies emerge and fight a possible budget deal coming out of the new Congressional super committee?
That’s the thesis put forward by Chris Jennings in the current issue of the New England Journal of Medicine. Jennings, now a lobbyist, was formerly the senior health care advisor to President Bill Clinton, so he knows the lay of the land.
According to Jennings healthcare “stakeholders” are very afraid of the possible healthcare cuts that are likely to come out of the new super committee. They have concluded that “any plan agreed on by the super committee would result in larger aggregate cuts and would have a greater negative impact. More specifically, they know that such a plan would almost inevitably include new and damaging Medicaid cuts (Medicaid is exempted from the automatic cuts) and more extensive Medicare cuts (beyond the $130 billion to $150 billion that would be cut through the fallback 2% cap on total Medicare spending).
“They are quite aware that Republicans would insist on much greater reductions to entitlements than the automatic cuts require, and they know that the Obama administration would have to spend health care negotiating chips to fulfill the President’s desire for an up-front middle-income tax cut and investment initiative designed to help jump-start the economy.”
Jennings goes on to explain how each stakeholder group, patient advocates, pharma companies and providers, sees the dangers. For example, patient advocates, “have virtually no reason to want the super committee to act, since the automatic cuts explicitly exempt seniors and the lowest-income Americans from any increases in cost sharing. These groups are highly skeptical that an alternative big deal would be balanced and fair, believing that the elderly and the poor would be exposed to painful increases in out-of-pocket costs in an agreement that probably would not include higher taxes on the highest-income Americans. They do not understand the strategy of agreeing to such cuts and thereby removing any leverage with which to secure revenues in the future.”
Jennings concludes that his inchoate coalition will likely work hard to defeat the super committee budget deal when it comes to Congress.
This analysis of how the various players will act makes sense to me. When faced with change, especially unknown possibly harmful change, most groups (and individuals) will work hard to maintain the status quo.
August 25, 2011
While Google announced two months ago it was pulling the plug on its nascent healthcare IT effort, Microsoft seems to be increasing its commitment to our industry.
The company announced today that Michael Robinson has been named general manager of U.S. health and life sciences and Dr. Dennis Schmuland has been promoted to the newly created position of chief health strategy officer.
Dr. Shumland previously served as Microsoft’s national director of health plan industry solutions and is the founder and former CEO of Pointshare, a Bellevue, Wash., health IT company whose main business was acquired in 2001 by Siemens.
In a company blog posted yesterday, Michael Robinson listed a number of healthcare projects the company is involved with. One example was the Wisconsin Health Information Exchange using the Microsoft Amalga Unified Intelligence System to enable providers to get more patient information quickly, thus avoiding unnecessary testing and procedures.
Another project involved Emblem Health, a regional health plan, using Microsoft Azure and Windows Phone to deploy a mobile health app that lets consumers quickly and easily find flu shot locations on their mobile device. This sounds interesting, but Windows phone has a tiny market share.
In a separate blog, posted six weeks ago, Microsoft noted that 14 large health plans have adopted the Microsoft’s Health Plan Sales Solution for Microsoft Dynamics CRM in the last 12 months.
From these tidbits, one can assume Microsoft is pursuing the corporate customer much more than the consumer (e.g. its Healthvault product).
This makes sense for two reasons. First, that’s where the money is to be made. Consumers are not ready to spend money on healthcare information yet. They expect to find it free via search. Second, large insurers are very comfortable with Microsoft. Almost all of them are already Microsoft customers. In the corporate world, Microsoft has a good reputation for being a reliable vendor who pays attention to large customers.
August 18, 2011
Cuts, cuts, cuts. Everybody is bracing for the expected Medicare and Medicaid cuts. Some stocks now have a potential upside, however, according to a recent Barron’s article. The piece, “Health-Care Names Least Exposed to Medicare,” states there has been an “overreaction” to the potential cuts coming if the budget super committee can’t come up with an acceptable plan.
The article notes that in the worst case scenario, the debt deal would produce $2.5 trillion in cuts in the first year. This prompted a 30% drop in a number of healthcare stocks.
The article says the drug distributor sector, which has “very limited” exposure to Medicare reimbursement is oversold. It gives a “buy” rating to AmerisourceBergen, Cardinal Health and McKesson.
The article is neutral on the hospital sector. It notes that government reimbursement (Medicare, Medicaid) is a significant portion of hospital revenue. Beyond the rate changes, many hospitals derive funds from ancillary government programs such as disproportionate-share hospital (DSH) and Medicare graduate medical education (GME) programs.
As for other healthcare industry sectors, the article notes that labs have “some exposure” to Medicare and PBMs “limited” exposure. Drug stores also have limited exposure with about government reimbursements representing just 15% of total revenue.
August 10, 2011
Cloud computing, which has gained a large market share in the IT and retail industries, has been slower to catch on healthcare. A few major names, Kaiser, The Mayo Clinic and The Cleveland Clinic, have announced major initiatives to store information in the cloud, but many smaller organizations have been reluctant to try it based upon security concerns.
According to a new article in Technology Review, researchers at Microsoft have built a virtual vault that could work on medical data without ever decrypting it. This could enable virtually all medical data to be encrypted, greatly easing concerns about lost laptops or malicious hackers.
The Microsoft team has built a prototype which can perform statistical analyses on encrypted data despite never decrypting it. The results worked out by the software emerge fully encrypted, too, and can only be interpreted using the key in the possession of the data’s owner.
According to Microsoft, the new design would ensure that data could only escape in an encrypted form that would be nearly impossible for attackers to decode without possession of a user’s decryption key. “This proof of concept shows that we could build a medical service that calculates predictions or warnings based on data from a medical monitor tracking something like heart rate or blood sugar. A person’s data would always remain encrypted, and that protects their privacy,” said a Microsoft researcher.
Currently you can push encrypted data into a cloud service today, but it can’t be indexed, searched, or operated on, thus limiting its use for healthcare applications.
If this breakthrough can be applied to electronic health records and laptop computers, it could hold great promise for medical groups. Cloud computing and SAAS hold tremendous promise for medical groups and clinics. They are relatively cheap and offered on a pay-as-you-go basis.
They are easy to use. There is no software to install or maintain, no backup hardware required; all you need is an Internet connection. Most cloud-based software vendors offer concierge telephone support and extensive training tutorials.
And because the vendor maintains and regularly updates the software, a medical practice does not need on-site IT staff support.
August 3, 2011
If you want your employees to stop smoking, what is more effective: cash rewards for quitting or penalties for continued use?
And what if you decide to implement a nonsmoking policy for all employees? Is that legal?
According to a new study in the current New England Journal of Medicine, said that in designing smoking cessation programs, employers should take into account “mental accounting.” According to the authors,
This concept reflects how people categorize monetary receipts and payments. For example, rewards and/or punishments diminish when bundled into larger sums of money.
“A $100 discount on premiums may go unnoticed, whereas a $100 check in the mail may register as an unexpected windfall. Increases or decreases in insurance premiums that are deducted from periodic paychecks will probably be less salient and effective than similar financial incentives provided separately.”
Thus employers should send a single, large check (or make a single large penalty) rather than simply reducing or increasing monthly premiums.
The article also reports another pitfall: nonsmoker resentment. One company announced a $750 cash reward for stopping smoking and received many complaints from nonsmokers who said colleagues shouldn’t be rewarded for “something I did myself without any reward.”
Overall, the article reports, “The effectiveness of outcome-based wellness incentives is uncertain, and their use raises concerns about distributional equity; nevertheless, these approaches are gaining momentum because of rising health care costs and payers’ belief that incentives should work in health care as they do in other spheres.”
As far as announcing a “no hire” policy for smokers, such a policy is legal in 21 states. However, 29 states have laws that protect the rights of smokers, making such policies potentially illegal.
Nonetheless, many employers, in particular healthcare companies are refusing to hire smokers as new employees and demanding that current workers who smoke quit. Two prominent examples are The Cleveland Clinic and Memorial Health Care.
The Cleveland Clinic announced its policy in 2007. CEO Toby Cosgrove told The Wall Street Journal in 2009 that he would also refuse to hire people who were obese, if that were legal. However, he later backed down and apologized after a storm of protest ensued.
A separate article in American Medical News from last year notes that while many states allow employers to refuse to hire (or even terminate) smokers, many laws currently on the books prevent hiring or firing based upon obesity.