Health Business Blog

When Charlie Baker began his run for Governor of Massachusetts, the Boston Globe critiqued his record and found it wanting (State aided Baker’s business triumph), a piece that struck me as weakly argued and unfair (Why is the Globe picking on Charlie Baker?). To the Globe’s credit, they published an excerpt of my post in their VoxOp column.

Saturday’s Globe carried a piece that was similar in tone (Baker finds campaign trove in health field) arguing that Baker is sucking big bucks out of the health care sector to fund his election campaign and implying that there is something wrong about it. After describing how some Democrats are giving to Baker (a Republican), the article says:

It’s one of many examples of how Baker, in his torrid fund-raising drive, has mined with extraordinary efficiency the health care industry he left last July to become a candidate.

A Boston Globe analysis of contributor reports shows that in seven months Baker’s campaign raised more than $122,000 in contributions tied directly to Harvard Pilgrim. This includes not only $43,000 in contributions from Harvard Pilgrim’s employees, directors, and affiliated companies, but also a broad array of vendors: its accountants, auditing firm, advertising agency, information technology providers, and consultants.

In total, Baker has raised at least $263,000 from employees of health-care providers, other insurers, and related businesses in the health-care sector. That’s about 10 percent of the $2.57 million he has raised overall.

A bit of perspective is warranted here. First, $263,000 is not a lot of money in the context of the governor’s campaign. Second, if anything Baker should be getting a lot more than 10 percent of funding from the health care industry. Health care is 16 percent of GDP and one of the leading industries in Massachusetts. Considering Baker is so closely tied to health care I would have guessed the percentage would be more like 20 or 25 percent.

The Globe could just have easily gone the other way, using the same analysis to ask why the health care industry is not backing Baker.

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This is the transcript of my recent podcast interview with Quantros co-founder and CEO Dr. Sanjaya Kumar.

David Williams: This is David E. Williams, co-Founder of MedPharma Partners and author of the Health Business Blog.  I’m speaking today with Dr. Sanjaya Kumar.  He is CEO of Quantros.  Dr. Kumar, thanks for your time today.

Dr. Sanjaya Kumar: Thank you David.

Williams: There is a lot of attention being given now to implementation of the HITECH Act. I wonder whether this concept of meaningful use is going to have a real impact on the care of patients.

Kumar: Definitely David.  It is really an unprecedented era for such a large influx of dollars to be used to provide more digitization of health care settings and health care environments.  So there is a lot more data available on patient care as well as the patient experience with health care. I think over a period of time this will result in some very meaningful information and knowledge bases that can help guide people to provide better, safer, high quality care.

Williams: Over the last couple years the federal government has been moving to refuse payment for so-called never events and then potentially expanding that to others sorts of preventable problems like infections that are acquired in the hospital. Is that likely to have a significant impact?

I’ve seen varying commentary. A lot of people say, “Well it’s just such a small percentage that it’s not really going to make a difference,” and then some people think it has more of an impact.  I wonder where you fall on that spectrum.

Kumar: All of those changes are heading in the right direction.  We should be paying for quality.  We should be paying for performance.  We should not be paying for things that are definitely preventable.  So I think payment for health care is headed in the right direction at least from the consumer stand point.

Now, how much of an impact will it have on the grander scheme of things? I don’t think people realize the cost of preventable medical errors.  Preventable errors account for nearly $30 billion in excess health care expenses per year.  That money can be utilized to further health care in a much, much better way.  We have to think about how all of these changes will be effectuated into the mainstream, into other payer mechanisms.  It will be interesting to see how the other payers begin to bring about some of their own programs following the example set by the Center for Medicare and Medicaid services.

Williams: Tell me a little bit about Quantros’s business and how you fit into the overall health care ecosystem.

Kumar: I co-founded Quantros 10 years ago.  At that time the Internet had just come about and the premise for Quantros was to utilize the Internet to become a networking vehicle for folks that were interested in improving quality and safety. We wanted to collect appropriate data and be able to have measurements of specific metrics computed in real time and to be fed back to those users that were interested in making changes. We wanted to provide real-time comparative and benchmarking information.

From the beginning we focused on quality and patient safety. We’ll continue to perpetuate that journey with software as a service applications that are delivered via the Internet into secure Intranet portals of health care institutions that are interested in using them.  For example our safety and risk management product helps facilities to track, monitor, collect and analyze data on common, preventable medical errors that occur within their facilities. They are able to then look at all that data and information and be able to provide meaningful evaluation of processes and to effectuate interventions and then track them to see whether they’re having an impact.  We see the great benefit now with all the focus from the health stimulus package on tapping into more electronic repositories of data from the electronic medical records, aggregating that data into our quality and safety monitoring tools and feeding back some really good, meaningful information on a much broader data set than was available before.  So really we see this as a great positive for us in terms of the movement within the health care industry.

Williams: Quantros seems to have been quite active in the business development front lately.  If I’m not mistaken I think you acquired MediQual recently and also announced a partnership with Allscripts.  What can you tell me about those?

Kumar: Well MediQual was actually our foray into becoming recognized as a vendor to do more state-based data reporting.  The MediQual program that we acquired from Care Fusion primarily supported the PHC4 initiative within the State of Pennsylvania –or the cost containment council. The State of Pennsylvania certainly were pioneers in public reporting of quality data. That program started 15-odd years ago and is definitely a key program to emulate in the public reporting of data. We wanted to be at the forefront and set up all those initiatives and be recognized for that. The acquisition is definitely helping us.

The partnership with Allscripts is actually with the division that provides case management and dicharge planning tools.  We are integrating those applications with our quality reporting and our safety and risk management reporting to allow for seamless integration with case managers.  We will have concurrent quality monitoring and far more proactive ways that care managers can address patient safety concerns and issues at the bedside.  The Allscripts initiative will further our play into the area of meaningful use of data from point of care solutions with monitoring solutions like ours.

Williams: I understand that you now sponsor Clinical Café, a new social networking community that’s focusing on patient safety.   Can you tell me about that and what the thinking was behind it?

Kumar: That journey started about two and a half years ago.  I began to see the evolution of social media and networking toole that were beginning to be perpetuated throughout the Internet with MySpace and Facebook and Sermo.  So the concept was very simple: how to take some of the conceptual frameworks around Google, around social networks and how to combine all of that for professional communities that want to interact with each other?

The premise of Clinical Cafe was to benefit our network of users.  Today, Quantros supports over 2,200 hospitals with one or more of its applications with a registered user base of about one million.  So we have about one million users; physicians, nurses, pharmacists, risk managers, compliance officers, quality officers, all with very, very specific needs.  We wanted to provide an environment where they could easily connect with each other, share information and best practices to improve quality and safety with each other, inform each other or chat with each other and to have much more rapid communication and sharing of information.

So connect, share, inform and learn were the premises of Clinical Cafe.

When I designed it, when I thought up Clinical Cafe I really wanted it to be launched with a virtual avatar-based, Second Life-style cafe so you could virtually have coffee with your counterpart, with you peer or colleague in a cafe on the Internet and communicate with them.  I think that is still to come according to my engineers.

The first version of this particular environment provides the tools that you would see in Facebook but geared toward the user community as well as the community of colleagues and peers that we service within health care. I will be interested to see how they will interact with each other.  What will they be talking about?  What kinds of best practices will they be sharing?  We’re going to be providing tools where they can record videos on their best practices and share with people.  So it will be interesting to see how that journey takes off.

Williams: You mentioned at the beginning that you founded the company 10 years ago. That also made me recall the famous IOM Report that came out at the time (To Err is Human), which has celebrated its tenth anniversary.  If you look back over those ten years, not just from a corporate standpoint, but from where we are as a medical system, how are we doing on addressing the issues that were raised in that report?

Kumar: Actually the IOM report shaped Quantros’s journey.  Now, where have we come as an industry?  Where have we come as a population in terms of really addressing patient safety and quality?

I think the journey has just begun to get widely recognized. The IOM report actually allowed us to be shocked like, “Wow, I didn’t know this was of such high epidemic proportions!  I didn’t know that medical errors were killing more people than HIV, AIDS, motor vehicle accidents, and breast cancer combined.” Virtually a jumbo jet going down everyday.  That was the magnitude that got communicated by the IOM and I think that still stands true today.

However what has happened as a result is that today there is far more awareness and many, many more grass root organizations that are rallying around to demand better and safer care.  You’re beginning to see some of that translated to include all of the health stimulus dollars and the different apps that are going around, plus funding for research.  There is a lot more funding, a lot more guidance, a lot more direction in terms of where we need to put our money to have better, safer, good quality care.

Quality needs to get embodied in the payer mechanisms.  So I think over the next decade, we will certainly see more quantification of the magnitude of errors and be shocked that it might actually be higher, because we are paying much more closer attention to it. But it will lead to much better, safer care.

Williams: I’ve been speaking today with Dr. Sanjaya Kumar, he is Co-Founder and CEO of Quantros.  Dr. Kumar, thank you so much.

Kumar: You’re welcome David.

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Joe Paduda has posted a thoughtful, informative Health Wonk Review at Managed Care Matters.

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Quantros provides software and services to the health care industry, with a focus on safety, risk management, quality and performance improvement. I spoke recently with Dr. Sanjaya Kumar, CEO and founder about a number of current topics, including:

• The impact of “meaningful use” on patient care
• The role that non-payment for “never events” and avoidable errors is starting to have
• The IOM report: To Err Is Human –10 years later
• Quantros’s role in the health care ecosystem
• The new Quantros professional networking site: Clinical Cafe

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 David Williams interviews Quantros CEO Dr. Sanjaya Kumar: Play Now | Play in Popup | Download

Much has been made of recent guidelines recommending against routine mammography screening for women in their 40s. I tend to be more cautious than most in my approach to screening exams –more isn’t always better, especially when false positives set off a cascade of stressful, unpleasant follow-up testing and treatment. That’s even without considering the financial cost, which I think should be taken into account.

A new study (Impact of Cognitive Impairment on Screening Mammography Use in Older US Women) documents an example of overuse of mammography screening in women over 70 with advanced cognitive impairment. Eighteen percent were still receiving mammography screening even though their life expectancy was  just three years. One subgroup: those who were married and had a net worth over $100,000– had a screening rate near 50 percent.

The article is available to subscribers of the American Journal of Public Health. Since I didn’t pay the $15 for a PDF I’m just going by the abstract and an article on AuntMinnie.

The results are disturbing. According to American Cancer Society guidelines, women with life expectancy below 4 or 5 years should not be receiving mammography screening. AuntMinnie interviewed the lead author, Dr. Karl Mehta of UCSF, and asked him to speculate on why these women are being screened:

“It could be due to the preferences of the women and their families, or to their doctors’ preferences,” Mehta said.

But it’s possible, according to the researcher, that some doctors are recommending screening because there are no specific guidelines addressing women with dementia.

“Our data support the need for those guidelines,” Mehta said. “We think they should be more explicit about when to stop screening cognitively impaired older women.”

If “doctors’ preferences” refers to a preference for higher rather than lower income then I agree with Mehta.

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Sometimes bio/pharma companies cry wolf over regulations, for example when they claim that the emergence of bio-generics or bio-similars would devastate their businesses by lowering the incentive for investment. But other times they find themselves in a no-win situation and need someone to defend them.

The Avastin/Lucentis story is one such situation and I’ll gladly step up.

Avastin is a highly-effective anti-cancer drug. Lucentis is basically the same drug, but it’s indicated for an ophthalmic condition: wet age-related macular degeneration. Since Lucentis is injected in the eye only a little bit is needed. Some enterprising doctors and pharmacists figured out they could split up one Avastin dose into lots of Lucentis doses. Instead of $2000 or so for a Lucentis treatment they have an Avastin equivalent for less than $100 –maybe as low as $20.

The situation has caused Genentech a lot of grief. Their revenues have suffered, they’ve taken a lot of hits in the press and from eye doctors, and the FDA has started holding Avastin production facilities to stricter standards usually reserved for ophthalmic products. The company is in a tricky situation and has had to fall back on the notion that Lucentis has gone through clinical trials for wet AMD while Avastin hasn’t. That’s a weak argument and is undermined by a new Kaiser study showing equivalence.

In the short run only Genentech loses out. Patients get a much less expensive drug and insurance premiums are a little lower than they would be otherwise.

But it’s also shown the world that the price point for a wet AMD treatment is $20 or so. Now who on earth is going to bother developing a new treatment for wet AMD? I’ve already seen situations where companies chose to drop development of early stage compounds in this therapeutic area because they are afraid they can’t make money.

The problem is really the way that drugs are priced. Avastin is priced by volume, but really what patients are getting is a treatment for cancer that’s worth a certain amount of money, regardless of the amount of physical product used. In the past I’ve proposed a software licensing model for drugs. Despite the challenges of implementation I still think it’s a good idea.

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The latest edition of Grand Rounds (How Much Grand Could a Grand Rounds Grind?) is posted at Musings of a Distractible Mind.

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Now that health reform 2009-style is effectively dead we better hope like crazy that employers are successful in controlling health care costs. Wellness programs are an important weapon in the employer arsenal. By encouraging employees to eat right, lose weight, stop smoking and so on they can improve productivity, reduce health care costs and help employees feel better. There are limits, however, to how far employers can be expected to go in these efforts. For example, are employers really willing to get deeply enough into the off-hours lives of their employees to make a big enough difference in health care costs?

My working assumption has been that we still have quite a way to go before the limits of employer willingness and employee tolerance are reached. But after reading Wellness Efforts Face Hurdle in today’s Wall Street Journal, I’m starting to think that day may come sooner than I originally expected.

According to the Journal, the Genetic Information Nondiscrimination Act, which went into effect in 2009,

…restricts employers’ and health insurers’ ability to collect and disclose genetic information. That includes not only genetic-test results, but family medical history, too.

Some employers say the law is stymieing their efforts to promote employee wellness because it bars them from offering workers financial incentives to complete health surveys that ask about family history.

That’s a problem. Employees with a family history for certain ailments (e.g., heart disease, cancer) should undergo different wellness regimens than those without. Incentives are needed to drive the uptake of health risk assessments, so it’s a real issue if they can’t be offered.

I do understand the rationale for the restrictions, but it reduces the effectiveness of wellness programs, increases health care costs and makes health insurance that much more unaffordable. Over time, it reduces the number of employers who can offer health insurance. If businesses can’t find ways around the restrictions or alternative pathways for cost control, eventually they are just going to give up and ask the government to take over.

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In his latest column, Kaiser Family Foundation president Drew Altman analyzes The Message From Massachusetts. Health care reform was a top issue for voters, he concludes, but their message wasn’t a simplistic “no” to reform.

What do Massachusetts voters want their newly elected Republican senator to do on health reform when he goes to Washington? According to [a Massachusetts Special Election] poll, seven in ten voters, including nearly half of Brown supporters (48 percent), want Senator Brown to work with the Democrats on health care reform. The same opinions held for independents: nearly two thirds of independents (64 percent) say they want to see Brown work in a bipartisan way on the health care proposals put forward by President Obama and the Democrats in Congress.

Altman’s conclusion is that many voters in Massachusetts don’t oppose the substance of the legislation, but they oppose the process, in particular its closed-door nature and perceived payoffs to individual legislators. He also points out that Brown emphasized that Massachusetts already has health reform, so why should we pay more taxes to support the rest of the country in this endeavor.

Altman makes good points but doesn’t tell the whole story. It seems to me Brown won because he campaigned effectively while Martha Coakley was an unattractive candidate who ran a terrible campaign. Brown said and did all the right things. Coakley said and did almost everything wrong.

Even people strongly in favor of health care reform had a hard time getting excited about Coakley. After all, in the primary election she said she’d vote against the House version of the health reform bill. She chastised her opponent Michael Capuano’s vote in favor of the bill because of its inclusion of the Stupak amendment restricting coverage for abortion.

As fellow-primary candidate Steve Pagiluca said in November in relation to the Coakley/Capuano fight:

Senator Kennedy spent 40 years fighting for this opportunity, and today it appears that the two candidates for his seat are risking the greatest opportunity we have had in a generation to make health care reform a reality.

That was prescient.

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This is the transcript of Part 2 of my recent podcast interview with Dr. Robert Wachter and Dr. Arpana Vidyarthi of UCSF.

In Part 1, Vidyarthi and Wachter provided an overview of the traditional case review process and discuss their progress in shifting to a new, technology-enabled process. They discussed key principles of their approach, along with the relationship between culture and technology.

David Williams: Are you using this system outside of UCSF or does it have that potential? With the electronic platform and security it seems like there might be the potential to use it across different institutions.  Is that something that you would want to do or that would have any value?

Dr. Arpana Vidyarthi: We’re using Acesis for our local case review process and a peer review process. I don’t see any value necessarily in collaborating with other institutions regarding the case review process itself. I definitely see value in communicating with other institutions regarding some of our data analysis and the trends, value in disseminating what we’ve been doing so that other institutions can learn from the stumbles that go along with building something brand new.  I think there is also value in using Acesis not only in our division, but across divisions and departments within our own institution.

Dr. Robert Wachter: Nationally, the question I think you’re getting at is one of the very big questions in patient safety. As individual institutions –everything from a three-person doctors office to a 1000 bed hospitals– begin analyzing their errors, or their outcomes weren’t as good as they should have been,  how do you disseminate that information?  How do you benchmark and compare one place to another to look for best practices or see who needs to improve?

Presently most institutions are not particularly enthusiastic about doing it because they worry about disseminating data –where you’re looking at things that didn’t go well– beyond their walls.  It’s hard enough to get people to do it even within your walls, but there are some legal protections about that in terms of the malpractice system.  There are data that are peer reviewed under this framework for quality improvement purposes that are not subject to being sequestered for a malpractice case for example.

Congress passed a law a few years ago that allowed for the creation of Patient Safety Organizations (PSOs) that create a scaffolding for multiple organizations to come together for quality improvement or patient safety improvement. The Agency for Healthcare Research and Quality (AHRQ) in Washington was put in charge of managing this process.  It’s still in the fairly early phases. At this point maybe more than 100 organizations have applied to become PSO’s.  Some of them are already members of other affiliated groups.  They might belong to the same hospital network or have the same owner.

Some of them are using the same computer system to do order entry.  Once PSOs come into being they will be looking for data sharing tools that create all the attributes that Arpana described: a secure environment, facilitate moving data around, analytical tools, those sorts of things.  So we’re doing it thinking quite locally about how to analyze cases in our own division, thinking about how that might roll up within a 600 bed hospital to be used more broadly through the organization. But fairly soon if the tool continues to perform well, organizations that are forming networks will be thinking about using it or something like it to try to promote this kind of activity across the silos.

Williams: How do you expect the case review process to evolve over the next five to seven years and how will be supported by technology?

Wachter: It’s important to see this peer review process as one of the building blocks of a robust quality and safety enterprise. I almost divide them into two separate buckets.  One is: how does an organization know where its problems are, what’s going wrong?  That can range from patients having bad outcomes (tracking outcomes that are veering off from expected outcomes.) It can include ‘trigger tools’ where patients needed, for example, an antidote to a certain medication. That gives you a clue that maybe the medication was given incorrectly or at the wrong dose.

Two: self-reports coming from providers or from patients.  There are a lot of different signals that organizations are going to need to tap into in order to find out what’s actually happening out there that’s not perfect. Then on the back end, once they find that out, the question is how they analyze it, how they move the information around, how they create stories that motivate people to learn how they create new processes or structures that ensure that the care gets better.

What is very clear is that the motivation to do this kind of work has grown tremendously in the last ten years as the public, the media, Congress and others have become more interested in it. Part of this was a recognition of the quality and safety defects in American health care.  There is much more pressure to do this kind of work from a lot of different pathways: regulatory, accreditation, media scrutiny, public interest. The business case to do this work is growing.

We need new tools, new models, and new ways of educating people on how to do this work, new cultures of openness. It’s all pretty new for us.   Arpana went to medical school ten or 15 years ago.  I went 25 or 30 years ago, but I can say that neither one of us learned hardly anything about all of the things that we’ve talked about today in terms of how you analyze this kind of data, how you change organizations, leadership, and so on.

So the tools become an absolutely critical part to try to answer both of these questions. How do we collect these signals in a balanced way?  It can’t all just be from self-reports by providers.  There have to be other mechanisms. You only find out certain things that way.  Then, how do you analyze it? And much more importantly than anything, how do you then make changes that work and stick and change that doesn’t create unintended consequences?  I think the tools are an absolutely critical part of that, but it has to be embedded in a culture where people are doing the right thing and where you have true experts who know how to do this kind of work.

Vidyarthi: The majority of case review or peer review processes won’t cut the mustard moving forward.  Just having a one-off processes where you look at a few cases here and there, not only is it not going to meet the letter of the law as those will be changing over time, but it’s also not going to give you the information you need.  So I think all sorts of health care organizations from very small clinics to very large organizations are going to need to start thinking about how better to learn from their cases, building a robust process and having some sort of technology assistance to be able to make that process efficient, effective and allow for real change.

Wachter: And the technology of course is not in a vacuum.  You have a system like Acesis that facilitates case review increasingly in hospitals, particularly as the Federal government throws $20 billion or  $30 billion at this. Hospitals will also have more robust information technology systems and medical records and computerized order entry and bar coding systems.  Ultimately all of these systems have to speak to each other. It may be that the generation of a case that needs to be reviewed is not coming from a patient or a provider raising a concern but from some signal that comes out of the computerized medical record that shows the patient had a very bad outcome or violated some norm.

It still requires a human being to review it.  I don’t think we’re anywhere near the point where this is so straightforward and clear cut that the review can be based on all measurable parameters.  There is a lot of judgment that goes on here. Sometimes you really need an expert in the area to look at it to know whether there was actually a problem in the care the patient had.  So we need tools for all of these things, but ultimately, we then are going to have to make sure that they speak to each other in a way that’s really seamless.

Right now, we’re still in a mode of creating individual tools for individual functions. I think we’re going to go through a fairly gangly period where those tools don’t work very well together and you’re kind of moving data, porting data from one electronic tool to another. Part of what the Federal Office of Health Care Information Technology is trying to do is create these interoperability standards. Part of that is designed so that when you have different ways of collecting data about patients, it can move from System One to System Two to System Three in a way that’s appropriately private and in a way that uses the same language for the same thing so that you don’t have railroads with different gages trying to connect to each other.

We’re really at the early stage of that kind of interoperability, but that’s what we need where all these things really create or serve a unique function.  For example, I can’t envision a world anytime in the next decade or two where the electronic tools that you get to do medical charting or computerized order entry also serve the functions that Acesis serves and vice versa. But ultimately all these tools have to interdigitate so that you don’t have wasted time and effort, the information moves seamlessly from one to another when necessary.

Williams: I’ve been speaking today with Dr. Robert Wachter, Chief of the Division of Hospital Medicine as UCSF and Dr. Arpana Vidyarthi, Director of Quality.   Thank you both for your time today.

Wachter: A pleasure.

Vidyarthi:  Thanks a lot.

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