Health Business Blog

I was reading the Boston Globe over lunch today and was happy to see they picked up my recent post about Charlie Baker and published it as the lead item in the VoxOp column of the Op/Ed page. They did a nice job editing it, too.

Thanks, Globe!

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American Well is a pioneering telehealth company. It’s responsible for a number of innovations –its principal advance is to work closely with health plans to deploy existing provider networks. I conducted an interview with the CEO, Roy Schoenberg last year and consider myself a fan.

However, the New York Times (Mental Health for the Military Over the Web) seems to have fallen all over itself in praise of the company.

When we first wrote about American Well, a start-up that offers doctor visits over a webcam, a number of the Bits readers suggested that the service seemed well-suited to visits with therapists.

The military will soon use American Well to do just that. It will be the first time that online care has been used to deliver mental health services, according to American Well.

However, as a physician pointed out to me:

That claim is ridiculous.  Individual mental health providers have been using Skype with video to do this for years.  They just didn’t issue press releases.

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Leading disease management company Healthways hopes to make a splash today with the release of The Potential Medicare Savings through Prevention and Health Risk Reduction, in an attempt to put hard dollars on the savings available to Medicare from embracing health promotion, prevention and chronic disease management. Like any serious national policy paper these days –the numbers reach into the trillions of dollars.

Key takeaways from the report:

1. The typical Medicare enrollee costs the system $174,000 from enrollment to death (based on a present value calculation). That’s $6.5 big ones (i.e., trillion) in total for current beneficiaries
2. More than $30,000 in savings per enrollee are achievable (or $1.1T in total) if people can be kept healthy before they enroll at age 65. Another $164B (small dollars, I realize) could be saved by keeping people healthier once they’re already enrolled
3. Not only will costs go down in these scenarios, life expectancy would increase anywhere from 2.4 to 5.7 years. Contrary to popular belief, living longer doesn’t mean higher total medical bills

Healthways will have an ad in the Wall Street Journal trumpeting these findings. The report itself is available on the Healthways website.

For more on Healthways’ perspective, you may want to listen to or read the transcript of my interview with Healthways founder Bob Stone.

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Charlie Baker has filed to run for Governor. That’s no big surprise; in fact he’ll be a welcome entrant into the political scene. According to the Boston Globe (Baker depicts himself as turnaround specialist), Baker is following in former Republican Governor Mitt Romney’s footsteps:

Baker’s pitch was reminiscent of the tack taken by the last successful GOP candidate for governor, Mitt Romney, who emphasized his expertise in business and in turning around the 2002 Winter Olympics in Salt Lake City, as chief executive of the organizing committee. Romney even authored a book called “Turnaround.’’

The Boston Herald –and Baker himself– say that he’s following the mold of ex-GOP Governor William Weld.

Actually, there’s no reason Baker needs to pattern himself after anyone else. Sure, Romney made the argument that turning around the Winter Olympics was like turning around state government. (Turns out it just meant he’d be ready for the next exciting job as soon as he got bored.) But Baker’s role in turning around and continuing to successfully manage a non-profit health plan is an even better qualification.

After all, Massachusetts is basically a big healthcare state. The cost of healthcare is sky high, we have near universal coverage that we’re struggling to maintain, and biotech and healthcare providers are major employers. The state itself  is a big purchaser of healthcare and is responsible for administering a major healthcare bureaucracy.

At Harvard Pilgrim, Baker laments that there’s little he can do to influence provider behavior. Basically the hospitals and physicians just pay attention to Medicare –their biggest customer.

Maybe as Governor he’d have a bit more sway. Looking ahead, if he is elected, does well, and then moves on to seek higher office, I don’t think he’ll follow Romney’s path of disavowing his work in Massachusetts healthcare reform.

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Whatever health reform law is passed is bound to have unintended consequences. Part of this is a result of compromises in the legislation that are needed to pass it. Sometimes that makes things more complex, leading to trouble.

From the New York Times (Health Care Reform and You)

President Obama has also pledged that if you like your current insurance you can keep it

If you prohibit policies from excluding or charging higher rates to people with pre-existing conditions, the incentive is to pick the least coverage possible when healthy and then buy better coverage once sick.  As a result, you can keep your current insurance, but the cost of that insurance will get much more expensive if people can wait to buy it until they actually get sick.

This phenomenon is not really observable under the Massachusetts law, since the minimum requirements for a plan are quite strict –requiring prescription coverage, for example. That might not be the case with a national plan because it drives costs way up.

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Health reform in Massachusetts has been held up as a possible template for national reform. Our state requires all but small employers to offer coverage. In any case individuals are responsible for maintaining coverage. If they can’t afford it they’re subsidized. There had been talk about tackling costs before pressing for universal coverage, but eventually people got impatient and said let’s tackle coverage first since nothing seems to be happening to control costs.

This is one of the only states that could conceivably make it happen. States like California considered similar plans but found they had too many uninsured to start with and too many low-wage workers whose employers could never afford health insurance. I’ve never advocated the Massachusetts model for nationwide adoption and it concerns me when others do it. The costs would be astronomical and there’s almost no one left who can afford to absorb them.

So I read the USA Today article (Vermont could be guide on health care) with some interest. According to the article, Vermont has focused on cost reduction first, with the idea that improving affordability would ultimately increase the percentage of those with health insurance. Vermont doesn’t attempt to achieve universal coverage but does focus on prevention, wellness, and health IT. There’s a public/prviate health plan, too. It’s too early to tell if it’s all going to work, but it seems a better model on the national level than the Massachusetts plan.

“The biggest thing that worries me at the national level,” [Dr. Kirk] Dufty says, “is that the debate has been about payment reform. We have to figure out how to change care so we can afford it.”

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We needed to find a hotel on Cape Cod tonight but since it’s peak season we had a hard time. Our usual trusted chains were booked as was an independent place where we sometimes stay. So rather than heading back to Boston I looked at TripAdvisor and found the Hyannis Travel Inn, an inexpensive but highly rated spot.

The price was right, too. Only $123 with AAA discount. When I called to check availability they quoted me $107. Perfect. I got to the front desk, checked in, and noticed a guy next to me using a coupon from the same RoomSaver.com catalog I’d picked up at a rest stop along the way. When I asked my check in clerk if I could get a better rate with a coupon he said, sure, he could give me that rate: $58.99.

Glad I asked.

The place is clean and recently renovated. Nothing fancy but it does have free wireless and free breakfast. Talk about value for money.

This reminds me a bit of the health care business, where different people pay widely differing amounts for the same thing. The difference here is the price started at a reasonable rate and went down, and service was friendly all the way through the process.

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A physician friend, who wishes to remain anonymous, sent me this guest commentary.

This article (Take the red pill, Mr. President) has a good time poking fun at President Obama for choosing the wrong color, for those who remember a particular movie scene:

“If there’s a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that’s going to make you well?” — President Obama

In last night’s press conference, President Obama seemed to be reliving that famous scene from The Matrix. The main character is offered a choice between a red pill that makes him see reality for what it is, and a blue pill that allows him to continue living in a pleasant world of illusions.

With his example of the red and blue pills, and another about whether a child’s hypothetical tonsils should be removed, President Obama unwittingly presents the real problem with his plan for reform. Here is a well-meaning government official who so fails to grasp the problem in health care that he can present such absurd oversimplifications and suggest that this sort of thing is the real problem — doctors simply lack the common sense to make obvious medical decisions. President Obama wants us to solve this problem by putting himself and other government officials in charge of rescuing medicine from the medical profession. If medical doctors with a decade of schooling cannot distinguish between good cures and ineffective ones that must be discontinued, then by gosh, we’re lucky that the good folks from the government can.

The article also makes a serious point, arguing against comparative effectiveness testing, telling us that doctors have enough common sense to make correct choices without government help.  The problem is that the choices rely not just on common sense, but also on information, which is not free.

As an example of such a choice, currently doctors use Ritalin for ADHD, based on studies financed by pharmaceutical companies showing its effectiveness.  But what if caffeine is equally effective and better tolerated?  No company would do a study on this because no one can patent caffeine.  As a result, doctors practicing “evidence-based medicine” choose Ritalin, when for all we know caffeine may be better.

Comparative effectiveness studies are to answer questions of this sort.  Since no one else is ready to pay to study caffeine versus Ritalin, why not have to government pay for the study if there is a reasonable expectation of saving money by using a lower cost or better alternative?

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Last month the Boston Globe published a poorly reasoned article Older drivers bridle at blanket criticism, calling elderly drivers a menace based on flimsy evidence. In How to mislead with statistics I laid out the real story; I also sent a note to the Globe reporter and told him he could do a better job.

Earlier this week the Globe published a better article (Elderly drivers in fewer accidents than others) citing better sources, including the ones I suggested. The key takeaways:

• Despite all the press attention (hello Globe!) elderly drivers don’t crash a lot compared with other age groups
• Elderly people in crashes are more likely to die –because they are old and frail, not because their crashes are more severe
• The percentage of crashes involving elderly drivers is actually decreasing over time

On average only 38 elderly drivers (which the Globe seems to be defining as age 75+) die per year in Massachusetts. That’s out of a total of 451 fatal crashes.

One reason the issue is so big in people’s minds is that the Globe and other media like to get people riled up. Even this article starts off with three gruesome examples of bad-old drivers. Here’s a statistic that would be telling: what percent of fatal crashes does the Globe write about it overall, and what percentage of fatal crashes featuring elderly drivers are covered?

I’d be willing to bet that reports of elderly drivers crashing are far over-weighted compared with the overall number.

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According to the Washington Post (Doctor’s Orders; Want Treatment? Just Sign This No-Complaint Contract . . .) some physicians are unhappy about online rating sites and are trying to do squelch negative reviews.

As a defensive measure, some physicians are requiring patients to sign broad agreements that prohibit online postings or commentary in any media outlet “without prior written consent.”

Critics call the documents gag orders. Many experts say they are both unethical and unenforceable…

Beth Nash, an internist employed by Consumer Reports, advises that patients dump a doctor who demands a privacy waiver. “While we have all had bad days,” she wrote on the group’s health blog, “I find it hard to believe that a doctor with multiple negative reviews has just been unlucky enough to be judged on those occasional bad days.”

I understand the concerns physicians have about these ratings sites, which is one reason I favor scientifically validated patient experience ratings and clinical quality ratings, reported at the physician practice and individual physician level. In Massachusetts, such information is available from Massachusetts Health Quality Partners, but not at the level of individual physicians.

I also think it’s useful information to report which physicians require gag orders. There could be a website devoted to that, or it could become an element of physician ratings sites.

Of course if you’re in a place like Boston where there’s a shortage of physicians relative to demand, you might as well just look to see who’s accepting new patients and be done with it. You’ll save a lot of time and angst.

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