In Memoriam FFS

On April 16, 2015, President Obama signed into law H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), effectively sentencing Fee for Service (FFS) to death. The best explanation for how FFS is destroying the nation comes from Charles Munger, vice-chairman of Berkshire Hathaway and ad-hoc health luminary, who is equating what American doctors do, to raising rattlesnakes so they can collect the bounty for dead rattlers offered by the government in an effort to combat a growing snake problem. Based on this, and other equally compelling insights, FFS was found responsible for willful destruction of our great nation.

A few months before Congress delivered its coup de grâce to the FFS system, the Secretary of Health and Human Services, explained to the elite group of NEJM paying customers, how “30% of Medicare payments should be tied to quality or value through alternative payment models by 2016 (50% by 2018)”. Other than transforming traditional Medicare into a vintage 1990s HMO, the Secretary intends to make sure that “the same new alternative payment models and payment reforms are broadly adopted by a critical mass of payers”, effectively transitioning the entire country into managed care. Just like that.

By faith, and faith alone, embrace, believing where we cannot prove

The first MACRA option for physicians to get their little Medicare bonuses is to participate in an alternative payment model (APM), where doctors behave like miniature insurance companies, and provide care based on sound actuarial principles. Somewhere, somehow, someone figured out that fragmenting insurance pools into tiny groups of insureds provides better “value to consumers” than having large and diverse insurance pools. The same architects of health care improvement, decided that having each accountable care organization (ACO) purchase, implement and manage separate instances of  hugely sophisticated and very expensive actuarial (a.k.a. analytics or population management) software is another great way to add “value to consumers”. 

The latest word about APM results comes from a research study sponsored by the American Medical Association, conducted by the RAND Corporation and published prior to the passage of the FFS killing legislation. To make a long and fascinating story short, and I highly recommend that you read this report, here are the key findings:

• APMs did not substantially change how physicians delivered face-to-face patient care
• APMs increased the overall quantity and intensity of physician work because of growing patient volume expectations and ongoing pressure for physicians to practice at the “top of license”
• Physicians in practice leadership positions were optimistic and enthusiastic about APMs
• Physicians not in leadership positions expressed apprehension with APMs (and resignation), because of additional burdens they did not believe would improve patient care
• APMs caused practices to merge, become affiliated with or become owned by hospitals, to enable capital investments in computers and data infrastructure, to better negotiate with health plans and to mitigate fear
• APMs had negligible effects on the aggregate income of individual physicians, since financial incentives were not passed through to physicians
• The greatest financial incentive facing nearly all physicians in APMs  was to increase “productivity” as measured by revenues or relative value units (RVUs)

In summary, it seems that APMs are well positioned to change absolutely nothing, with the possible exceptions of increased prices for medical services due to consolidation and the massive burnout of doctors, while providing a steady source of government and health plan “incentives” to pay for more computers and more administrators.

A brand new study of 32 Pioneer ACOs, published this month in NEJM, calculates that on average the ACOs generated 1.2% savings, approximately $120 per member per year, in 2012, with no substantial changes to “quality” as measured by mammography screenings and lab testing frequency. Another, even newer study of the same 32 Pioneer ACOs, paid for by CMS and published in JAMA, found that the same 32 Pioneer ACOs generated approximately $427 per member per year savings, in 2012, with slight improvements in patients perception of their experience. The JAMA study looked at 2013 as well, and found a sharp drop in savings to just $135 per member per year.

Both studies acknowledge two glaring limitations. First, Pioneer ACOs were handpicked by CMS to be those organizations most likely to be successful from the get go. Second, these savings, or rather differentials in growth of expenditures, do not account for costs to set up and run an ACO. The more flattering JAMA study estimates $385 million in savings over the two years period for 32 Pioneer ACOs. This translates into an average $6 million savings per ACO per year. A separate report from the National Association of ACOs, estimates ACO costs in year one, ranging from $300,000 for a small ACO up to $6,700,000 for larger ones. The Pioneer ACOs in the JAMA study were rather large, with over 20,000 lives per ACO on average. Note that these costs do not include the costs to Medicare to run and administer the ACO programs. Put it all together, and this is starting to look more like robbing patients and doctors to pay for, you guessed it, more computers and more administrators.

The second option to get your MACRA incentives is the Merit-Based Incentive Payment System (MIPS). The structure of the MIPS is a monumental tour de force in micro management, petty vindictiveness and accounting, that combines all current Medicare initiatives (i.e. PQRS, value-based payment modifiers, meaningful use, and practice improvements) into one monster program designed to push all doctors into risk assuming APMs. If you are a glutton for punishment, you can read the English language translation, provided by the Ways and Means Committee. The only certainty here is that implementing this temporary payment scheme is going to cost taxpayers, directly and mostly indirectly, more than the amount of incentives slated for payment to physicians, with practically all additional expenditures to flow, yet again, to more computers and more administrators.

But FFS will rise, on stepping-stones of its dead self, to higher things

Whereas paying doctors a fixed fee for each service is considered an unholy abomination, paying Walgreens, Walmart, CVS, Teladoc, American Well, and the like, a fixed fee for each service is considered a Culture of Health. In a new and groundbreaking report sponsored and published by the esteemed Robert Wood Johnson Foundation (RWJF), a bunch of business consultants are making recommendations to the big box retail clinics industry on how to enhance their value proposition and “become a much more powerful enabler of a Culture of Health”.  Recommendations range from steadily increasing complexity of services provided by non-physicians in retail settings, to include chronic care management, and health care for children (casually dismissing recommendations from the American Academy of Pediatrics), to bundling and upselling “health” foods to patients.

Since telehealth is hotter than molten lava nowadays, the report includes analysis of the incredible cheapness of telehealth services “at retail clinics and beyond”. Before proceeding to recommendations about lobbying state legislators and public payers to allow and pay for unfettered access to telehealth services, the RWJF report is informing us that “the most common diagnoses made during telehealth visits are sinusitis, cold, flu, pertussis, and urinary tract infections—conditions also frequently treated at retail clinics”[emphasis added]. This bit was copied and pasted from an equally insightful marketing piece for the telehealth industry written by an expert actuary. It took major effort to restrain my urge to call the White House and ask the President to declare a national state of emergency and shut down every port of entry into the continental United States.

Just the facts ma’am

One would hope that the decision to eliminate FFS for doctors was based on something other than rattlesnake fables and whooping cough pandemics. One would also hope that decision makers observed and learned from, or at the very least considered, health systems of other wealthy nations that are supposedly better and cheaper. One would be wrong. According to the latest Commonwealth Fund international report on health care systems, it seems that many of those enlightened and cheap nations pay doctors mostly with FFS, some exclusively so, especially Germany, the economic powerhouse of the European Union. For some reason FFS seems to have no devilish toxic effects outside the international borders of the United States.

(click image to enlarge)

You may be tempted to blame the misunderstanding on clueless bureaucrats, accountants and bean counters who don’t understand patient care. You would be wrong again. Bureaucrats understand numbers. They understand financial and operational charts and tables, better than doctors do. The reason FFS is being killed off in America is not so we can achieve better results at lower costs as other developed countries have consistently done. FFS for physicians, and only for physicians, is being eliminated so we can roll out the cheapest possible substitute to medical care, and frankly dear doctor, with all due respect, you're in the way.

Vegan Sweet Potato Burgers

These past couple of weeks I've been completely stuck in a dinner rut, unable to get out. Or rather, I've been too lazy to cook any proper meals, making hummus and rice cakes my go-to din din companions for better or worse. So today was finally the day to put an end to the dreary repetitiveness and get my ass in the kitchen to actually cook, and not just blend things together and hope for the best.

You see, there was this sweet potato that had been sitting in the fridge for almost a week, glaring at me each time I neglected to acknowledge its existence, giving me a hard time for not putting its beautiful, sweet flesh to good use. So, I pondered. Sweet potato brownies (I'll probably never be able to top Deliciously Ella's, so no), sweet potato pie (come on Tilda, 'tis not the season), sweet potato gnocchi (been there, failed that) or ... sweet potato burgers! Yes, I'd gladly watch your metamorphosis into a burger, sweet potato o' mine.

I got so excited over these burgers, I even went ahead and made my own whole grain spelt buns! Sadly, there won't be a recipe for those as they were a disappointment but I'll try my luck again sometime in the future. As for now, I suggest you either find a better bun recipe on your own, or go buy some from the store. I won't judge. (But the sweet potato might o_o)

Now, time to stop with this nonsense and get down to business. The recipe's right here below, enjoy!

Vegan Sweet Potato Burgers

Burgers:

- 1 medium sweet potato (200 g peeled)

- 1/2 can chickpeas (120 g)

- 1/4 cup quinoa flakes (could sub for oats but then you may have to start with a little less than 1/4 cup)

- 1 tbsp sweet miso paste (you can omit the miso paste if you don't have any but it really takes away from the flavour...)

- 1/4 small bell pepper, finely chopped

- 1 tsp onion powder

- 1 tsp garlic powder

- Salt and pepper to taste

Condiments:

- 4 buns of your choice (bonus points if you make your own.)(I did.)

- Avocado

- Thinly sliced vegetables of your choice such as tomatoes, lettuce, red onions etc.

How to:

1. Start by peeling and chopping the sweet potato into large cubes. Steam until it's soft enough to pierce with a fork (15-20 min).
2. In a large bowl, mash all of the ingredients together with a fork until everything sticks together nicely. Blend with a hand blender for a smoother consistency. (Though I highly recommend keeping the chunks!)
3. Form 4 big or 6 small patties with your hands.
4. Fry the burgers in a non-stick pan or a spoonful of coconut oil over medium to low heat until the patties have a nice colour on both sides, approximately 5-10 minutes on each side.
5. Serve immediately and with all the toppings your heart desires! (That is, stuff as much avocado as you possibly can in there. So worth it.)

Pasta Pea-mavera

Now this isn't what you would call a traditional Pasta Primavera. Not even close actually. To be honest I just stole the name to fit a little pun in there. Puns make for infinitely catchier titles than mere descriptions do. Yes. This doesn't mean, however, that this Pasta Pea-mavera doesn't live up to the springtime feeling of the original. The wonderful greens combined with freshly squeezed lemon juice make for a great springtime dinner or lunch, so the cheeky little name appropriation wasn't entirely uncalled for. (My sincere apologies to any offended pasta connoisseurs out there!)

This dish is also a great way to get your greens in... Because they're literally everywhere in this recipe! Wohoo! The broccoli will provide you with an abundance of vitamins (namely, vitamins A, C, K and folate) plus a great deal of your daily fibre needs, while the peas contribute with protein and a wonderful sweetness to the sauce. Go super greens!

Here's the recipe!

Serves 2

Ingredients:

- 1 heaped cup frozen peas
- 1/2 cup vegan sour cream substitute
- 2 big handfuls fresh basil leaves + more for garnish
- 2 small heads of broccoli (approximately 250 g)
- 1 tbsp + 1 tsp lemon juice
- 1 tbsp extra virgin olive oil
- Garlic powder (optional)
- Salt and pepper to taste

- Brown rice pasta or pasta of your choice, enough for two servings (approximately 150 g)

How to:

1. Bring a small pot of water to the boil and cook the pasta according to instructions on package.
2. Divide the broccoli into small, individual florets and steam until it is almost cooked through but not mushy.
3. Meanwhile the broccoli steams and the pasta cooks, place the peas in a saucepan over low heat until they have thawed completely.
4. Add in the remaining ingredients (except for the broccoli) and blend with a hand blender until fairly smooth. You can go on for longer if you want an even smoother texture but I prefer it a little chunkier. (You may also have to re-heat the sauce before putting it on the pasta.)
5. Toss the cooked pasta in the sauce and add the broccoli. Top with a few fresh basil leaves and serve immediately!

Value-based Interoperability: Less is more

Interoperability in health care is all the rage now. After publishing a ten year interoperability plan, which according to the Federal Trade Commission (FTC) is well position to protect us from wanton market competition and heretic innovations, the Office of the National Coordinator for Health Information Technology (ONC) published the obligatory J'accuse report on information blocking, chockfull of vague anecdotal innuendos and not much else. Nowadays, every health care conversation with every expert, every representative, every lobbyist and every stakeholder, is bound to turn to the lamentable lack of interoperability, which is single handedly responsible for killing people, escalating costs of care, physician burnout, poverty, inequality, disparities, and whatever else seems inadequate in our Babylonian health care system. 

When you ask the people genuinely upset at this utter lack of interoperability, what exactly they feel is lacking, the answer is invariably that EHRs should be able to talk to each other, and there is no excuse in this 21st iCentury for such massive failure in communications. The whole thing needs to be rebooted, it seems. After pouring tens of billions of dollars into building the infrastructure for interoperability, we are discovering to our dismay that those pesky EHRs are basically antisocial and are totally incapable or unwilling to engage in interoperability. The suggested solutions range from beating the EHRs into submission to just throwing the whole lackluster lot out and starting fresh to the tune of hundreds of billions of dollars more. When it comes to sacred interoperability, money is not an object. It’s about saving lives.

As the HIMSS15 extravaganza is getting under way, and every EHR vendor flush with cash from the Meaningful Use bonanza is preparing to take its unusable product to the next level, machine interoperability is shaping up to be the belle of the ball. A simple minded person may be tempted to wonder why people who, for decades, manufactured and sold EHRs that don’t talk to each other, are all of a sudden possessed by interoperability fever. The answer is deceptively simple. After exhausting the artificially created market for EHRs, these powerful captains of industry figured out that extracting rents for machine interoperability is the next big thing.

The initial pocket change comes from selling machine interoperability to their current bewildered (or stupefied) clients, and to less fortunate EHR vendors. But the eventual windfall will not come from the health care delivery system or the hapless patients caught in its web. How much do you think access to a national and hopefully global network of just-in-time medical and personal data is worth to, say, a pharmaceutical company giant? How about life insurance, auto insurance, mortgage, agribusiness, cosmetics, homeland security, retail, transportation? Google built an empire by piecing together disjointed bits of personal data flowing through its electronic spider webs. What do you think can be built by combining everything Google knows with everything your doctor knows and everything you know about yourself?

Machine interoperability is not about patient care in the here and now. Interoperability is not about ensuring that all clinicians have the information they need to treat their patients, or that patients have all the information they need to properly care for themselves. Interoperability is about enriching a set of interoperability infrastructure and service providers and about electronic surveillance of both doctors and their patients. Machine interoperability is about control, power and boatloads of hard cash.

For example, if you are hospitalized, it makes sense that your primary care doctor should know that you are (not in the past tense), and when you are discharged, he or she should be appraised of what transpired during your hospital stay. In the old days, before the advent of hospitalists, this could be assumed. Today, thanks to more efficient division of labor, not so much. If the government was genuinely concerned about smooth transitions of care, it would mandate that upon discharge, hospitals must provide all pertinent information to the primary care doctor, and the patient, by any means necessary. If this meant that a piece of paper is stapled to the patient’s robe, and that the hospital employs an army of delivery drones for the purpose, so be it. Eventually, hospitals, which are big businesses, would come up with the most cost effective and efficient way to be compliant with the law.

That’s not how things currently work or how they are envisioned to work. Discharge summaries have a mandated format of structured data elements, complete with metadata, based on government approved standards that change with frightening regularity. Furthermore, to satisfy regulations, the summaries must be generated and transmitted electronically from one “certified” EHR to another, allowing for a host of intermediaries to access and collect said data or at the very least its metadata. Consulting with the PCP by phone for an hour doesn’t count. Sending the information from a non-certified software package doesn’t count. Printing and sending over information by special courier doesn’t even begin to count. Attempting to build a device that streams the information as it happens directly into the PCP medical record will get you excommunicated or burned at the stake.

If you refer a patient to cardiology service, and in a misguided senior moment decide to pick up the phone and talk to the cardiologist at length about this patient, it doesn’t count. If the cardiologist pens a concise and beautiful letter to you after she sees your patient, thanking you for the referral and summarizing her impressions and plan of care in proper English, it doesn’t count. The only thing that counts is a lengthy clinical summary containing all the sanctioned data elements sent from you to the cardiologist, copied in its entirety and returned from the cardiologist to you, hopefully with some indication about what happened during the consult. Having your EHRs talk to each other this way is considered interoperability. Whether you actually read the interoperated information is irrelevant. As long as the contents are captured by the network for other uses, it’s all good.

But wait, there is more. If you practice, say, in St. Louis, Missouri and work for a huge health system or somehow managed to string together a machine interoperable network with the twenty or so specialists you use on a regular basis and the four hospitals where you have admitting privileges, that’s not good enough. Nothing is good enough unless any research lab in Hopewell, New Jersey or Bangalore, India can discover you on the (inter)national interoperability network and request data about a patient you may have treated five years ago, and nothing will be good enough unless any app store developer in Cupertino, California can discover your patient and subsequently obtain her medical data once she downloads a free diet app from iTunes.

Are you “just” a patient eager to be “engaged” in your own care? Picking a doctor who will spend two hours with you listening carefully and explaining things you don’t understand, and who will give you his cellphone number in case you have more questions, doesn’t count. Getting a team of physicians together on a conference call to brainstorm about your mom’s options, doesn’t count. Building a long term relationship with your pediatrician and having her come see your sick kid at home because your car is in the shop and your toddler can’t keep any food down, and now the baby won’t stop crying, doesn’t even register on the interoperability radar. Nothing counts unless you log into a website or an app, accept the cookies, the tracking beacons, the small print, and then click on some buttons to verify that you are a “Never smoker”, or to peruse machine generated visit notes that even your doctors don’t read anymore.

Perhaps machine interoperability on a national scale is a wonderful thing, but so is having arugula in every fridge. There is absolutely no evidence that either one will improve health and/or reduce the price of care. Every dollar spent on national machine interoperability is a dollar that was previously used, or could be used, to provide medical care. Where did we find the moral fortitude to demand that people experience adverse outcomes at least three times before letting them have a slightly more expensive pill, while spending billions of dollars to incentivize the purchase of unproven and often failing technologies? If we are supposed to be parsimonious in our use of health care resources, if we are supposed to choose wisely in all other areas, where is the comparative effectiveness research showing that expensive machine interoperability on a grandiose global scale provides more value than cheaper and simpler localized or human mediated communications?

• Add one doctor visit for every Medicare beneficiary for the next 8 years
• Give primary care a 20% raise for the next 4 years
• Double the number of residencies for the next 3 years
• Educate 60,000 new primary care doctors from scratch
• Buy an iPhone glucose monitor for every diabetic patient and an iPhone BP monitor for every hypertensive patient (no, I'm not a "technophobe")
• Put a brand new playground, a gym teacher and a home economics teacher in every elementary school in the U.S.
• End homelessness in America

These are some of the things we could do with the billions of dollars spent on machine interoperability. Which has more value for our collective health? How did health care become a fully owned subsidiary of the computer industry? Who authorized this unholy acquisition and how much were those brokers paid? Have we forfeited our right to choose, or even know, how endless fortunes are steadily interoperating out of our treasury and into the hands of global technology firms? Publishing fuzzy ten year plans on obscure websites, so the Technorati can tweak them, doesn’t count. Publishing thousands of pages of regulations in the federal register, so interest groups can preview the fruits of their labor, doesn’t count either. Raiding public coffers to please friends and family and to curry political favors is hardly a disruptive innovation, so let’s just call it what it is.

The Primary Care Journey from Tomatoes to Ketchup

According to OECD data, Americans see doctors less frequently than people in any developed nation. We are hospitalized less frequently and we stay in the hospital less time than citizens of other nations. The vast majority of Americans, more than any other nation, describe themselves as healthy, and America has the largest percentage of young people in its population. So why is health care in America so much more expensive than it is in all those other developed countries? In the US, we spend more than twice as much as the nearest nation on administrative activities (over $200 billion per year). We also pay a lot more for each hospital stay, in spite of it being shorter. We pay orders of magnitude more for each imaging test and we are paying a hefty price for medications we probably shouldn’t be taking. All of these things amount to one major difference between America and the (largely socialist) developed nations: our unit pricing for medical services is completely out of whack.

Ignoring simple math, the government of the United States in cahoots with insurance companies, and a host of other global business interests, is hell bent on having Americans use even less medical services than the modest amounts they are currently using. This may be medically questionable, but one could see how overall health care expenditures could be reduced, if and only if, unit prices were held constant. To the certain dismay of every fourth grader learning how to multiply big numbers, the government is simultaneously encouraging unprecedented increases in unit prices.

By promulgating a flurry of complex regulations, the government is eliminating all small and lean medical facilities in favor of large quasi monopolistic entities able and willing to raise unit prices at will. On an individual business level these health care conglomerates are also seeing healthy increases in service volumes, driven by mass destruction of their competitors. Higher unit prices coupled with higher volume is a sure recipe for higher profits, even when discounting for extra costs of compliance with regulations, and decreased utilization on a personal patient level. Health insurers couldn’t care less about the allocation between volume and unit price, as long as total expenditures remain the same, or the increase is covered by taxpayer largesse and/or individual out of pocket responsibilities.

The net result is that when you buy fewer tomatoes, but you buy them all at the one mega store, and pay twice as much for each tomato, you get less tomatoes and the mega store gets more money. Since greed has no boundaries, maybe we can substitute ketchup for your tomatoes? Herein lays the value in value-based utilization of medical services, or tomatoes, because bait and switch is an honorable and time tested business model. There is however a minor problem. What if the cashier refuses to cooperate and walks out? This of course is what thwarted value-based extraction of wealth in the nineties. Somehow, things seem different now. People are becoming increasingly convinced that ketchup is just a more convenient form of tomatoes, while doctors are increasingly willing to peddle Heinz and none more so than primary care physicians.

Direct Primary Care

At one time all care was direct and most care was primary care. You called the doctor, he came to your house, did whatever he did, and before he left you gave him some sort of payment for his services, directly from your hand to his hand. If you had nothing to give, you went without, or relied on the doctor’s charitable nature, if he had one. Later on, you obtained health insurance, and you could send the receipt from your doctor to your insurer, and the insurer would reimburse you for all or part of the money you paid your doctor. Today, you sign a form to reassign your health insurance reimbursement to your doctor and let the two of them duke it out over proper reimbursements. A few decades ago, representatives of all doctors got together and recommended to the government, the largest health insurance payer in the country, that primary care work is essentially worthless. The government and all other insurers agreed.

A few disenchanted primary care doctors decided to bypass this unfair (to them) system and opened little concierge practices, where they charged what they believed their services are worth and where the patients paid directly to the physician owner. Just like an expert cupcake maker does not open a little bakery store to solve world hunger problems, these concierge docs never presumed that what they do is a solution for the national health care fiasco. They are small business owners who want to make a decent living by doing something they love doing, and are presumably very good at.

As is usually the case, some people figured out how to monetize this disenchantment with the system. Today, the direct primary care (DPC) moniker has been hijacked by a more ambitious business proposition. Establishments calling themselves DPC today are usually founded by entrepreneurial primary care physicians with the explicit goal of creating national chains of primary care clinics where practicing doctors are employees or franchise managers, like Starbucks or McDonald’s. DPC chains charge subscription fees hovering around $1,000 per patient per year regardless of utilization. This is significantly more than a primary care physician is paid by the typical mix of insurance plans. In return for the higher unit price, DPC chains promise to provide superior services, better doctors, higher availability, longer visits, and a host of ancillary benefits ranging from Skype visits to personal trainers (Tomatoes).

The DPC chains were never intended to be truly direct pay practices, but they did purport to offer doctors who were too frightened to hang out their own shingle, another way to practice medicine free of micromanaging insurers. That didn’t last long, because most health care money (public and private) is controlled by health plans, and because venture capital is not in the habit of forgoing its obscene and customary returns on investment. Hence, these venture capital funded DPC chains are actively seeking and some already have contracts with the same evil health insurance companies their employed physicians were trying to avoid. The directness of this model, which was tenuous from the get go, is now practically nonexistent.

Since the entire DPC terminology is headed straight down the drain, Todd Hixon, founder and managing partner at New Atlantic Ventures is suggesting a much more accurate definition of this model of primary care: “Population Management Primary Care (PMPC), a new business model based on retainer plus value-based payments to manage a set of customers”. First, “independent payers (health plans, large employers, managed care organizations) will want to work with strong Population Management Primary Care companies to manage their members to good health at affordable cost”. Second, “PMPC providers will need to integrate with retail medicine providers, and also integrate with virtual medicine providers, or become partly virtual themselves”, so they can “equal” the lower pricing of these “other primary care providers” for delivering “low-acuity care more efficiently” (Ketchup).

At this point there is not even a sliver of daylight between the old HMO doctor and the brave new PMPC doctor. No worries though, America, because Mr. Hixon, who is actively investing in PMPC companies, is assuring us that “the comfortable, simple primary care of Marcus Welby, MD is long gone, but if Dr. Welby came back and took a look at what is happening, he might like what he sees”. Or he might just hang himself from the first available chandelier.

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Fixing Health Care: Rockefeller Style

Health care in America is a perfect example of the Pareto principle, because 80% of our gargantuan expenditures on health care are due to only 20% of us who are very sick, elderly, disabled and vulnerable in many other ways. If we genuinely wished to reduce health care expenditures, common sense dictates that we would leave the 80% alone and zero in on those 20%, trying to care for them better than we currently do, and hopefully as their health improves, we would see a spectacular bang for our buck, not to mention the moral gratification of having helped our neighbor, because there but for the grace of God go we all. 

I have a better idea. Following the tried and true philosophy of John D. Rockefeller, why not turn the health care disaster into an opportunity to create the magnificent Standard Oil of our times? The 20% of people, who burn through 80% of our $3 trillion of health care money, are known as high-utilizers, frequent-flyers, hot-spotters, train-wrecks, million-dollar-babies, and all sorts of other terms indicative of receiving highly complex medical treatments, many times with minimal odds of getting better. Although, there is practically no way for us to partake in this messy frequent-flyer market, what if we could shrink its size and simultaneously expand the much nicer healthy market?

What if we could blow the Pareto principle to smithereens and reduce medical spending on the sick from 80% to say 50%? That would free almost $1 trillion dollars per year, just waiting to be disruptively innovated into our accounts receivable, by selling something to the 80% that need little to no professional medical care. Keep in mind that the nation is only expecting to slow the growth of health care expenditures, or to “bend the curve”, not to actually reduce the amount of money it spends on health care. The $3 trillion will be there year after year for us to enjoy. We just need to come up with a smarter allocation of resources.

Unfortunately, it looks like other innovative folks are having the same epiphany, so we will have to share the bounty and engage in some serious team work. The two pronged approach consists of prying the money out of the clenched fists of doctors who provide medical services to the 20%, and of using a few non-practicing physicians to legitimize increased reallocation of expenses to the 80%. In other words, we move from a sick care system to a health system, while delegating the care portion to involuntary labor performed by the sick 20% who have the most skin in the game. I think old John D. would be proud.

The first order of business is to obtain support from the government because although we are not a socialist country, the government controls and regulates most of our $3 trillion play money. Check. The second step is to put those high spenders on a budget without seeming heartless or criminal. The best way to do that is to budget indirectly. Instead of going to each sick person and telling them that we will not spend more than say, $100,000 on you this year, we make their doctor an offer she can’t refuse. Here is $100, 000 dollars for this particular frequent-flyer. If it ends up costing more, it comes out of your paycheck. If it ends up costing less, you get a cool sticker.

Doctors went to medical school, not business school, so we may get that deer in the headlights look when we make our offer, which is where our opportunity begins to emerge. We are business people and we know how to budget and allocate resources, so we can share with you methodologies that worked for the banks, for Toyota, for Starbucks, for the Cheesecake Factory and myriad other successful businesses. And we can share technology tools to make you successful, doctor. Of course, this is America, and we need to be successful too, so there is a fee for this cache of wisdom and intelligent software. Not to worry though, we’ll show you how to factor it into your allotted $100,000 and spread it over your entire client population. It’s not like it’s coming out of your pocket, you know.

Team work means that we have to keep hospital systems happy too. Many of them are heavily invested in all sorts of construction projects and machinery. If we cap the spending on the most lucrative 20%, hospitals will fight us tooth and nail, and unlike little doctors, these guys are no deer in our headlights, so we need to think outside the box. To get the best hospitals to join our winning team, we promise to obliterate the competition and funnel all customers to a handful of centers of excellence, while at the same time we allow them to raise unit prices per service. The net result for each team player is that revenues go up slightly, while profits go up significantly, as volume of expensive services drops like a rock. And in return for our innovative counseling and enabling tools, we take a piece of that action as well.

Finally, we take stock of our capabilities to identify stuff we can sell for approximately $1 trillion per year to please the 80% who are basically healthy. We know how to do social media, mobile apps, targeted marketing, data processing, telecommunications and retail. Our go to market plan is crystallizing before our eyes. Social health, mobile health, health surveillance, health data, telehealth, Apple Health, CVS Health, Google Health, basically we just slap health before or after our existing line of products. Not a word about sickness because the 80% want to be healthy, and we are selling health. If we get lucky, even the 20% may be persuaded to see the value of curative hope in a cell phone.

For the sake of completeness our plan should explore the largely historical bumps in the road, such as the Food and Drug Administration (FDA) and its antiquated insistence on regulating medical things. That was fine and dandy for the sick market, but in the innovative health market, everybody is already healthy so efficacy and safety are misplaced notions for wellness vaporware. To solidify our clinical standing, we should come up with some clinically sounding products as well, and impress upon the healthy 80% that every self-respecting billionaire is already using these health enhancing things on a regular basis, whether it’s Tim Cook who can’t live without his new watch, or Mark Cuban who can’t go more than three months without self-inflicted bloodwork (or a little free publicity on Twitter).

This does sound like taking candy from a baby, because it is. Traditional health care did not behave much like a market, but health is a classic consumer market and we are the champs when it comes to selling cheap stuff to consumers, or selling consumers to manufacturers of cheap stuff. The now discretionary $1 trillion is just the beginning, you see. The half trillion or so, previously spent on the healthy 80% is also up for grabs, because we don’t need doctors to sell that stuff. And once we get our foot in the door, we can chip away at the remaining $1.5 trillion wasted on the sick as well. To whet your appetite, here’s a billion dollar idea to leverage community resources: nudge the chronically unemployed to provide free care to the chronically ill, in the comfort of their artificially intelligent homes.