Business Innovation in Health Care
I have long argued that rather than whining as Kathleen Sebelius rearranges the deck chairs on a listing SS Healthcare, those of us in the medical industry should be crafting business-model innovations calculated to get us out of the cost--complexity--more cost death spiral we find ourselves in.
Patients want more value in health care. The politicians cannot deliver and are making things worse. Well, technology to the rescue.
Yesterday, I spoke at the Wireless Health 2010 conference in San Diego and was treated to a variety of luminaries, such as Qualcomm founder Irwin Jacobs, and West Wireless chief innovation officer, Eric Topol, who are working to merge the latest medical science with wireless technology that makes old-fashioned personalization possible once again. Remember that, unlike healthcare, you typically get more for less as wireless and computer technologies advance.
Today you can trade stocks and pay bills from your mobile phone, but to be of any use to a loved one with a chronic disease--the job of 50 million American family caregivers--you must show up in person. We don't build tools into medical products to help family caregivers--this remains a physician-centric world. Factor in that most people with chronic disease don't take their medications properly and physicians have no real idea how a given patient is responding to therapy, and you have a real problem--and a tremendous market opportunity.
And it will cost less.
- Comment (17)
- · Quote
- · UnfollowFollow (3)
Comments :
Sep '10
Re: Business Innovation in Health Care
A few months ago I heard an interview with Joe Califano on the subject of medicare. The questioner asked him why he thought the Johnson administration's estimates of the cost of medicare were so far off and he blamed improved technology. I almost wrecked the car but then I realized he was talking about improved life expectancy. Still for anyone who has bothered to pay attention to technology over the last 20 years the last thing one thinks about is higher costs. It shows how detached they are from reality and yet those in the delivery of health care seem only to use their influcence to reduce competition and keep prices high.Its hard to be optimistic.
May '10
Re: Business Innovation in Health Care
I have only the slightest connection into the medical technology business, through a web application I've created which is in use in several states, but I am in regular contact with technology vendors and medical services providers. My impression is that the involvement of the Feds in such a big way has everyone behaving very cautiously, afraid to commit.
So many great plans are on-hold for fear that the government will either favor one technology or vendor and crush the smaller entrepreneurs, or bail and pull the rug out from everyone, or perhaps do both.
It seems that no one trusts the current systems or the current reform law to stand. All expect big changes, but they could be in any direction.
Someone's going to make a bundle, and a bunch of people are going to go bust. And good products, or good medicine, or even cost reduction won't matter. It's all politics.
May '10
Re: Business Innovation in Health Care
Dr. Savage - Comment on this: As noted in other posts my 13-year-old son needs a tonsillectomy and that ObamaCare has forced my insurance company into bankruptcy. After the consult the finance lady sent me the paperwork that gives me a 70% discount because I'm not going through an insurance company. She explained that's the amount they get from insurance after all the arm-twisting and discounts anyway.
Is this any way to run an airline?
Re: Business Innovation in Health Care
The pricing distortions caused by today's government-dominated third-party reimbursement system are large, pernicious and pervasive. I'm surprised you managed to get the cash discount since the usual provider worry is that offering a low price will trigger a downward revision in the entire third-party payment stream--Reimbursement clerk: We pay 30 percent, and you lowered your rack rate for EJ, so now we're going to pay 30 percent of that amount.
Market reforms are desperately needed in health care service delivery--tax equalization between personal and employer-provided insurance; health plan availability across state lines; an end to policy mandates. However, until then, mobile technology promises a workaround: state-of-the-art therapy cheap enough to be paid for out-of-pocket, avoiding the entire mess of the reimbursement system.
May '10
Re: Business Innovation in Health Care
What do y'all make of this news? I should have seen waivers coming, but I didn't.
Jun '10
Re: Business Innovation in Health Care
EJHill: Dr. Savage - Comment on this: As noted in other posts my 13-year-old son needs a tonsillectomy and that ObamaCare has forced my insurance company into bankruptcy. After the consult the finance lady sent me the paperwork that gives me a 70% discount because I'm not going through an insurance company. She explained that's the amount they get from insurance after all the arm-twisting and discounts anyway.
Is this any way to run an airline? · Oct 7 at 1:15pm
If you will accept a response from an officious intermeddler who has been a hosptal CFO, that's very common. The average payment as a percent of charges for Blue Cross, Cigna, United, Aetna etc is frequently in the 30-40% range. Anyone who is paying their own hospital bill out-of-pocket can expect to negotiate discounts on this order for ready cash. (not so if you are trying to pay off $8000 at $25 per month)
Re: your rhetorical: "Is this any way to run an airline?" -- that pretty much is the way they run airlines, a pricing algorithm that seems to make no sense to the customer.
May '10
Re: Business Innovation in Health Care
On the upside, he doesn't have to wait for payment.
Jul '10
Re: Business Innovation in Health Care
What an opportunity!
Some campaign contributor somewhere will get a $20 million earmark to develop a web-conferencing system for Death Panels.
Well, yeah, that could be done on Go-to-Meeting or Skype, but no Congressman is going to let a bundler stand disconsolate as the gravy train passes by.
May '10
Re: Business Innovation in Health Care
We're no longer a nation of laws. There's never a waiver for the little guy. Disgusting.
Jul '10
Re: Business Innovation in Health Care
Scott Reusser
We're no longer a nation of laws. There's never a waiver for the little guy. Disgusting. · Oct 7 at 4:46pm
Yeah. Meanwhile the high-deductible HSA plan my wife and I purchase through her small business will be banned. We'll be forced to buy an exorbidantly-expensive plan that offers an array of coverages we don't want and don't need.
If the GOP doesn't kill Obamacare in its cradle, there will be hell to pay.
Jul '10
Re: Business Innovation in Health Care
George, you hint at it above, but until we manage to revive a true consumer model to health care all the technology will do is create slightly more efficient madness. I have worked in the managed health care industry for 20+ years. I have seen technology after technology touted as the thing that will change everything. Only they haven't.
Tell me, do you believe that the technology itself can force changes on the model? Or do we need to clear government madness out of the way before the technology can gain the traction it needs? I tend to believe the latter. I would value your take.
Re: Business Innovation in Health Care
Not an either-or thing. The problem with the technologies you've seen that "will change everything" is that they all followed the statist reimbursement system in the one favored direction: ever more dollars chasing absolute therapeutic capability at ever higher incremental cost. This is inside-the-asylum innovation since we all know that the current approach is fiscally unsustainable.
Why not innovate in a different direction by ignoring the existing system as much as possible? Instead of a component aimed at the physician, market a treatment system designed to delight patient and family; take whatever payment is on offer for a standard product, but offer a better one at no extra charge; pursue consumer-pay revenue opportunities based upon value that is real and tangible to individuals.
By making the free market alternative real and tangible, negate fear and feed political forces favoring liberty.
May '10
Re: Business Innovation in Health Care
George Savage
By making the free market alternative real and tangible, negate fear and feed political forces favoring liberty. · Oct 7 at 7:44pm
....which is exactly what HSA's are doing. I haven't met a single person who has one who is not totally satisfied, usually after initial apprehensions (see the steady growth of Gov. Daniels's system for state employees).
We may have been nearing a tipping point with HSA's and their appeal, which explains the Dems' urgency in driving through Obamacare.
May '10
Re: Business Innovation in Health Care
At an awards dinner in SF last night (the event was titled "Technology and Social Innovation for the Public Good") Intel CEO Paul Otellini said very much the same thing as George has posted above. His remarks brought applause from the audience.
He said that just applying the same savings and efficiency improvements already demonstrated in many other industries to health care would revolutionize it and dramatically reduce costs. He's right, of course.
May '10
Re: Business Innovation in Health Care
Many changes need to occur, and Republicans are just as guilty of demagogy in this area as is the other side, as evidenced by the use of Medicare cuts as a cudgel against ObamaCare. There is no way that Medicare can continue to operate as it currently does. Major funding chops are inevitable- the key is to enable the changes that preserve decent quality care at the same time, not add different 3rd party payment schemes to the current mess.
This problem will be solved when the market incentives militate in favor of cost reduction rather than protectionism of the game insiders. The true creative destruction will wreak havoc on the incomes of backward-looking or static medical personnel, insurers, hospitals, tort lawyers, government, device providers, pharmas, etc. Andy Kessler has done a decent job of discussing some of this.
But nothing good will happen until medicine becomes a fundamentally retail proposition. The Left knows this, which is why their mission with ObamaCare has been to move the system even farther away from market discipline than it has been.
May '10
Re: Business Innovation in Health Care
Generally true, but Ryan has made legitimate use of this cudgel by pointing out that those cuts (to the extent they actually materialize) are used not to shore up Medicare but to fund yet another unsustainable entitlement, a waste of low-hanging fruit.
I'd encourage Republicans to hammer this point home good and hard. (Though I agree with your broader point.)
Jun '10
Re: Business Innovation in Health Care
Duane, could you give us some leads on Andy Kessler's work? Google has a hedge-fund manager and a skate-board champion.