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Keep wasting your money, Silicon Valley venture capitalists

Silicon Valley is at it again.

Last week, digital health accelerator Rock Health unveiled its new offices, and from the news coverage, it seems as if it’s creating an image as much as incubating startup companies.

According to Xconomy, “a big crowd of investors, executives, and other life science industry insiders took time away from JP Morgan to attend the grand opening of Rock Health’s stylish new headquarters in the Mission Bay neighborhood of San Francisco.” And stylish it is.

“Rock Health’s kitchen and community gathering space includes a Cirque-du-Soleil-style swing,” Xconomy reported. Because, you know, incubating companies that will fix a broken $2.8 trillion industry with their “solutions” requires a little avant-garde spectacle à la Québécoise — or perhaps Las Vegas. Having been at the Digital Health Summit at International CES in Sin City myself a week earlier, I was happy to see more focus on substance than style in the meeting room, if not in the exhibit hall.

© Bruce Damonte/Studios Architecture

I bet that swing cost a lot of money. So did the design, since Xconomy saw fit to identify the architecture firm. (For that matter, so did I, but only to give proper credit for the photo.) In an industry where a third or more of spending is wasteful — completely irrelevant to care and probably preventable — according to a 2012 report in Health Affairs, are such frills really necessary? I’m certainly not blaming Rock Health here. It’s the investors who are throwing away their money.

In opening the center, Rock Health reportedly dubbed Mission Bay the ‘United States’ New Digital Health Hub.’” That’s a bold statement. There certainly is a lot of potential there, but, as the person who identified San Diego as “a leader in mobile healthcare” back in January 2010, I still see more substance and tangible results in Southern California than in Northern California. For that matter, the Boston area could make a strong case, as could New York City. Smaller but healthy communities have popped up in places like Madison, Wis. That’s fine, competition is good.

However, I’ve seen more failures in Silicon Valley than anywhere else. But does that stop Silicon Valley’s No. 1 media cheerleader, TechCrunch, from declaring, “VC’s Investing To Heal U.S. Healthcare”? No, it does not.

No flame-out has been as spectacular as that overhyped vaporware known as Google Health. Google is back at it again with its VC arm, but this time the Internet giant seems to have a direction and a clue. Maybe.

As TechCrunch reported, “Google Ventures is addressing the nation’s healthcare dilemma with investments in companies like the physicians’ office and network One Medical Group, which raised a later stage $30 million last March. At the opposite end of the spectrum in December 2013 Google invested in the $3 million seed financing of Doctor on Demand, which sells a service enabling users to video chat with doctors.”

Google appears to be scrapping the torturous direct-to-consumer route in favor of going where the money actually is, from third-party payers and from providers, newly incented under the Patient Protection and Affordable Care Act and private reform efforts to work more efficiently and better coordinate care.

On the other hand, it’s been less than two weeks since Stephen Colbert made fun of Doctor on Demand. (Health 2.0 boss Matthew Holt commented on that post that it was “Kind of unfair that Doctor on Demand get the publicity when American Well and a [scad] of others have been doing this at scale for years.” He was right, but, hey, Google.)

Google Venture General Partner Dr. Krishna Yeshwant told TechCrunch the real motive behind all the VC money flooding into healthcare. “As an entity it is where we’re spending 17 percent to 18 percent of GDP, so any one segment is tens of billions of dollars,” Yeshwant is quoted as saying. “Increasingly you’re seeing IT investors who have a fine sense of disruptive opportunities enter the market.” In other words, it’s all about the Benjamins.

But do they understand that healthcare doesn’t work like any other industry? I’m not so sure. And I haven’t even addressed the bigger questions of privacy, data stewardship, interoperability and workflow.

As you prepare your hate mail for me, check out this site, “What the F*** Is My Wearable Strategy?” (NSFW). Refresh the page for more hilarity, but be forewarned: some of the ideas may hit close to home.

You’re welcome.

January 20, 2014 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

‘Bitter Pill’ only tells half the story

I finally got around to finishing “Bitter Pill: Why Medical Bills Are Killing Us,” the 24,000-word special report about healthcare costs that took up the entire feature section of the Feb. 20 edition of Time magazine. I was expecting to agree with most if not all of Steven Brill’s supposedly epic investigative piece. Instead, I was underwhelmed and quite disappointed that Brill, the founder of CourtTV (R.I.P., reincarnated as TruTV in Turner Broadcasting’s quest for more “reality” programming) and of American Lawyer magazine,  only told half the story about all that ails the U.S. healthcare industry. Brill also editorializes far more than he should.

Granted, the story is about the high cost of care, but you can’t discuss cutting costs without also delving into the subject of improving outcomes. As has been stated in many other places, we have more of a sick-care system than a healthcare system. The incentives favor treating illness, not preventing it.

I have to say I learned a lot about how the racket known as the chargemaster works to keep the true costs of care opaque to patients. I suspect that, with the exception of uninsured people who are the only ones expected to pay full price, the public was unaware of the chargemaster system that hospitals guard like a state secret. Brill is right when he says, “Unless you have Medicare, the health care market is not a market at all. It’s a crapshoot.” But he’s not telling the full story. Medicare’s payment list is public, sure, but do Medicare beneficiaries really care what the federal government pays their hospitals and doctors? No, they, like everyone else with insurance coverage, only pay attention to their out-of-pocket cost.

Sure, Brill spends a lot of time discussing the perverse incentives in healthcare, particularly those that encourage expensive testing, and even touches on some of the reforms in the Patient Protection and Affordable Care Act that seem to have been left out of the debate over insurance coverage. Think the Medicare policy of not reimbursing hospitals for certain preventable readmissions.

But he completely neglects accountable care. Nor is there a mention of electronic health records and how interoperability can help reduce duplicate testing and unnecessary care. And he never addresses the elephant in the room, the shamefully high rate of medical errors that makes American healthcare far from the best in the world.

July 23, 2013 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Say it with me: clinical decision support

I just read one of the worst articles I’ve ever seen about the quality of American healthcare, and it illustrates just how badly some reporters who don’t regularly cover healthcare can misunderstand this sector that accounts for more than one-sixth of the U.S. economy.

I give you this Motley Fool story entitled, “The 5 Most Misdiagnosed Diseases,” written by Sean Williams. (His profile says he has experience investing in healthcare. Investing in companies is one thing. Figuring out how to fix a broken industry is another. And really, from a financial standpoint, plenty of people are getting rich off of others’ suffering.)

The story curiously discusses a 2009 study in the Internet Journal of Family Practice that found the five most misdiagnosed diseases, based on autopsy and malpractice data. I suppose Motley Fool might decide to run something that’s four years old in order to discuss current investment opportunities. This is where the story veers off the rails.

According to the article: “The benefit of this data is twofold: it exposes problem areas in diagnosing certain diseases, which should help improve attention to detail from both physicians and patients exhibiting those symptoms, and it highlights the potential for more accurate diagnostic equipment. As investors, it also gives us definable opportunities to take advantage of instances where certain medicines or diagnostics may greatly increase in usage to improve patients’ quality of life.”

Wrong.

The problem isn’t the accuracy of diagnostic equipment and the solution isn’t more expensive testing and treatment. The problem is accessing and processing data that physicians should already have but perhaps do not. The answer to this problem is an accurate, current and complete record with an accurate, current and complete patient history, run not through the physician’s brain on the spot but through a clinical decision support engine that matches patient-specific facts with known medical evidence.

Say it with me: clinical decision support.

 

July 21, 2013 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Health Wonk Review: money talks, but IT helps

The latest edition of Health Wonk Review is hot off the digital presses, with Joe Paduda taking hosting duties on his Managed Care Matters blog. And managed care does matter in this trip around the health blogosphere, with most of the attention on healthcare costs and insurance coverage.

On the quality front, which is my primary interest these days, there is some interesting discussion about  whether the new Medicare hospital readmissions policy truly will produce better care or will prod some into providing the minimum level of service to readmitted patients.

(Frankly, hospitals have been overtreating for years. If a minimal level of service gets the job done for the patient, that’s a good thing. And the policy is supposed to cause hospitals to do the right thing in the first place, knowing that they will lose out later if they don’t. I’m all for that.)

My post on consumer ignorance of telemedicine is in there, as is a good one from Vince Kuraitis and Leslie Kelly Hall about the duty providers have to share information with patients. EHRs and wearable sensors also make this edition of HWR. Not bad from an IT perspective.

May 10, 2013 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Guest podcast: Deborah Gordon of Network Health talks reform with Sivad Solutions

Last September, I was a guest on a podcast hosted by Todd Schnick and Charles Davis of Sivad Business Solutions. Afterwards, we decided to share content if and when it made sense. That hasn’t happened until now (actually last month — I’m just getting around to posting now).

Schnick and Davis interviewed Deborah Gordon, chief marketing officer of Network Health, a health insurer in Massachusetts, to discuss healthcare reform. I wouldn’t be posting this if it didn’t have a focus on real reform of health care, and not just insurance expansion, with a strong element of patient safety and attention to outcomes.


From Sivad:

An honor to welcome Deborah Gordon, the Chief Marketing Officer for Network Health. Debbie joins us to talk about one of the more innovative non-profit health plans one can find across the US. You can learn more about Network Health here, the number three health plan for Medicaid health plans.

Discussion topics included:

1. The challenges of serving a very diverse population and customer base, along with lower income customers as a result of income or job situation.

2. Network Health, and states like Massachusetts, have lead the nation in Medicaid health care. How can that trend, and how can the reforms found in Massachusetts, spread across the land?

3. The creation of the Health Insurance Exchange is the key to success…which brings competition and market forces to bear in health care. “It is like Expedia for health insurance…”

4. A focus on quality patient care going forward…

5. What are the challenges going forward, and how does the heated national debate impact the work they are doing.

6. The innovation that’s possible when market forces are at play… “Regulators spawning innovation…”

7. More technology is available and serving the health care markets, which is exciting. But, will access to that technology be accessible to the low income markets?

8. The e-discharge program…

9. The utilization of analytics…

10. Exposing more information to the consumer makes them better patients, healthier, and more compliant to health recommendations…

11. The patient should be the center of the health care system… not the doctor.

12. Debbie was recently named a 2013 USA Eisenhower Fellow, a prestigious fellowship which recognizes emerging leaders who are making momentous contributions to society. In 2013, she will travel to Singapore and Australia where she will explore how these countries have successfully established systems and supports that allow consumers to make good decisions about their health care. The goal is to gather insights and best practices that can be applied here in the U.S.

 

April 16, 2013 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

My HIMSS will be all about quality and patient safety

As regular readers might already know, 2012 was a transformative year in my life, and mostly not in a good way. I ended the year on a high note, taking a character-building six-day, 400-mile bike tour through the mountains, desert and coastline of Southern California that brought rain, mud, cold, more climbing than my poor legs could ever hope to endure in the Midwest, some harrowing descents and even a hail storm. But the final leg from Oceanside to San Diego felt triumphant, like I was cruising down the Champs-Élysées during the last stage of the Tour de France, save the stop at the original Rubio’s fish taco stand about five miles from the finish.

But the months before that were difficult. My grandmother passed away at the end of November at the ripe old age of 93, but at least she lived a long, full life and got to see all of her grandchildren grow up. The worst part of 2012 was in April and May, when my father endured needless suffering in a poorly run hospital during his last month of life as he lost his courageous but futile battle with an insidious neurodegenerative disorder called multiple system atrophy, or MSA. (On a personal note, March is MSA Awareness Month, and I am raising funds for the newly renamed Multiple System Atrophy Coalition.)

That ordeal changed my whole perspective, as you may have noticed in my writing since then. No longer do I care about the financial machinations of healthcare such as electronic transactions, revenue-cycle management, the new HIPAA omnibus rule or reasons why healthcare facilities aren’t ready to switch to ICD-10 coding. Nor am I much interested in those who believe it’s more worthwhile to take the Medicare penalties starting in 2015 for not achieving “meaningful use” than to put the time and money into adopting electronic health records. I’m not interested in lists of “best hospitals” or “best doctors” based solely on reputation. I am sick of the excuses for why healthcare can’t fix its broken processes.

And don’t get me started on those opposed to reform because they somehow believe that the U.S. has the “best healthcare in the world.” We don’t. We simply have the most expensive, least efficient healthcare in the world, and it’s really dangerous in many cases.

No, I am dedicated to bringing news about efforts to improve patient safety and reduce medical errors. Yes, we need to bring costs down and increase access to care, too, but we can make a big dent on those fronts by creating incentives to do the right thing instead of doing the easy thing. Accountable care and bundled payments seem like they’re steps in the right direction, though the jury remains out. All the recent questioning about whether meaningful use has had its intended effect and even whether current EHR systems are safe also makes me optimistic that people are starting to care about quality.

Keep that in mind as you pitch me for the upcoming HIMSS conference. Also keep in mind that I have two distinct audiences: CIOs read InformationWeek Healthcare, while a broad mix of innovators, consultants and healthcare and IT professionals keep up with my work at MobiHealthNews. For the latter, I’m interested in mobile tools for doctors and on the consumerization of health IT.

I’m not doing a whole lot of feature writing at the moment, so I’d like to see and hear things I can relate in a 500-word story. Contract wins don’t really interest me since there are far too many of them to report on. Mergers and acquisitions as well as venture investments matter to MobiHealthNews but not so much to InformationWeek. And remember, I see through the hype. I want substance. Policy insights are good. Case studies are better, as long as we’re talking about quality and safety. Think care coordination and health information exchange for example, but not necessarily the technical workings behind the scenes.

And, as always, I tend to find a lot more interesting things happening in the educational sessions than in that zoo known as the exhibit hall. I’m there for the conference, not the “show.”

Many of you already have sent your pitches. I expect to get to them no later than this weekend, and I’ll respond in the order I’ve received them. Thank you kindly for your patience.

February 13, 2013 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Rock Health seems to be learning

My first impression of healthcare startup incubator/accelerator Rock Health was not a favorable one. I wrote in MobiHealthNews last July that the San Francisco-based organization founded by some hotshot, young Harvard MBAs demonstrated “yet another example of Silicon Valley arrogance.” I said that Rock Health was mostly targeting the young end of the market with cool, fitness-oriented apps, not the elderly and chronically ill who account for the bulk of the nation’s $2.5 trillion annual healthcare spend. That group wants things that are easy to use rather than fun and hip.

Needless to say, I was not invited to Rock Health’s Christmas party. I did share a quick “hello” nod with Managing Director Halle Tecco when I saw her in a meeting room at the mHealth Summit last month, though.

Even then, I wondered if Rock Health had changed its attitude at all, seeing that even the executives were outfitted in company t-shirts in the buttoned-down world of (just outside) Washington, D.C. (I once had a Capitol Hill press pass early in my career. The rules require members of the media to conform to the same dress code as members of Congress. That means a coat and tie for men, while women have to have jackets if they choose to wear slacks. An unwritten rule of D.C. in general calls for women to wear stockings if they go with a skirt, even if it’s 95 degrees and humid, which it frequently is in the summer.)

Today, though, I saw a clear sign that Rock Health is starting to learn from its earlier mistakes. MobiHealthNews reported on the incubator’s class of 2012, and I was pleasantly surprised to see that the majority of the 15 companies are aimed at either healthcare providers—an important constituency largely missing from the first Rock Health class—and on treatment of truly sick patients. One startup, for example, helps people being treated for breast cancer prepare for doctor visits, while another produces an EHR for home-health agencies. Good stuff in my critical eyes, though really, enough with the social networking to get people to exercise. There are too many of these platforms and apps already.

I never thought I would say this, at least not before the end of 2011, but kudos to Rock Health for making a real effort to figure out the complex healthcare industry and to add some substance to what heretofore had been all style.

December 20, 2011 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Anthem’s California plan turns to Google Maps to reduce ER costs

Remember back in February when I cut my face open at the HIMSS conference and needed medical assistance while 1,000 miles from home? I blogged then about how I used Google Maps to find an urgent care clinic close to the convention center instead of riding to a hospital emergency room in an ambulance? I’m guessing that course of action saved me at least $1,500, money that would have come out of my pocket because, as a self-employed individual, I was only able to qualify for an afford an insurance policy with a high deductible.

Though most Americans still aren’t engaged as consumers when they seek healthcare services, there are tens of millions of uninsured people and a smaller number of people like me with high-deductible plans that would face the same conundrum when they have a non-life-threatening condition: go for “traditional” ER care and pay through the nose, or take a few minutes to seek out lower-cost alternatives.

Now, insurers are trying to encourage the same kind of behavior, because they usually are the ones on the hook for high-dollar ambulance transport and emergency care, even if the condition isn’t a true emergency. Last week, Anthem Blue Cross in California announced a new program to encourage members to seek out non-emergency care—walk-in retail clinics and urgent care centers—when their regular physicians are not available.

“When your five-year-old is crying with a fever at 7 p.m. on a Friday because she has a sore throat or an ear ache, what do you do?” Anthem Medical Director Kurt Tamaru, M.D., said in a press release. “It’s important people know that they have options for less serious ailments other than an ER, such as retail health clinics and urgent care centers that provide quality care and cost them significantly less.”

According to Anthem Blue Cross, an ER charges an average of $641 treat strep throat, something that would cost about $70 at an urgent care center and just $27 at a retail health clinic. This does effect patients directly, too, because Anthem requires a $150 co-pay on average for a ER visit, but just $10 to $40 for care delivered at a walk-in clinic or urgent care center.

The technology driving this program? Google Maps and its brethren.

Just go to Google, Yahoo or Bing and type in “Anthem and urgent care,” and you will be directed to an Anthem educational site (or visit the site directly at http://www.anthem.com/ca/eralt). There, you will find a Google map showing ER alternatives within Anthem’s California network.

Members can sign up for educational e-mails explaining the types of conditions that don’t usually require emergency care, and the potential costs savings by seeking an alternative. Anthem also will make automated phone calls to members who recently had a costly ER visit that could have been avoided.

Anthem cited a study that proved the efficacy of such as an approach. Hopefully, the statistics are accurate and Anthem has success with its program. It worked for me because a lot of money was on the line. Likewise, Anthem members now face higher out-of-pocket expenses if they choose the expensive option rather than the right option. And all it takes is a simple, proven piece of technology called Google Maps.

 

July 15, 2011 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

Consumer engagement in healthcare is harder than it seems

Every time I hear a story about consumer empowerment in healthcare, I get optimistic that consumers really can make a difference in containing runaway healthcare costs. Then something comes along to make me think that it’s a pipe dream. I just had one such occurrence.

Trending on Twitter right now is the meme “#pricesthatshockyou.” Just for fun, I clicked. Right near the top I saw this:

Honestly, i don't know why the american gov't makes the people pay so much for medical bills. Its not always their fault #pricesthatshockyou

Uh, the American government doesn’t set the prices. Sure, CMS sets Medicare reimbursement rates that often serve as a model for other payers, but providers set the rates they charge. Whether you have insurance or not, the government doesn’t have much say at all on the list price for medical services. (Yes, regulation adds to costs, and Medicare sets the tone for the fee-for-service model that has resulted in ridiculous utilization patterns, duplication and the like, but I really don’t think we’re dealing with an actuary or healthcare finance professional in this particular tweet. This is an average citizen with no concept of how the system really works.)

The sad thing is, it’s been retweeted at least 10 times.

June 30, 2011 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.

iPad 2 may hit Android, but wait for BlackBerry PlayBook

Looking for more commentary about another aspect of health IT? Don’t forget that I’m now a regular contributor to MobiHealthNews. This week, I comment on the rave reviews coming in for the iPad 2, particularly from the healthcare sector, and note the significance of Microsoft discontinuing its Zune digital music player, the product that never did gain much traction against Apple’s ubiquitous iPod.

While it looks as if the Android platform may be losing out to the iPad in healthcare, I say don’t call this one for Apple just yet, at least not until Research in Motion comes out with its BlackBerry PlayBook next month.

I also recently wrote a special report for HFM, the magazine of the Healthcare Financial Management Association, on the subject of optimizing and enhancing healthcare revenue-cycle performance with IT. Download the PDF here.

March 16, 2011 I Written By

I'm a freelance healthcare journalist, specializing in health IT, mobile health, healthcare quality, hospital/physician practice management and healthcare finance.