Category Archives: Health Plan 2.0

SOAP: Apply, Rinse, and Repeat

SOAP (sōp) n.

  1. A cleansing agent, manufactured in bars, granules, flakes, or liquid form, made from a mixture of the sodium salts of various fatty acids of natural oils and fats.
  2. A process of medical evaluation and management which involves subjective, objective, assessment, and plan components.
  3. Slang. Money, especially that which is used for bribery.

I have my 10 year Medical School reunion this year. It is hard to imaging that 10 years have flown by since those halcyon days at the University of Utah. Ahhh, the memories: the incredible pervasiveness of the anatomy lab smell, the 12 hour study sessions in the library, the all night test preparation, the 12 hour study sessions, the incredible pathetic instruction (I eventually completely bailed on going to class), getting introduced to the pharmaceutical pimps, the 12 hour study sessions, passing boards, starting on the wards, proud of my white coat, completely embarrassed that I was but a shell of limited knowledge within the white coat, completely arrogant attendings, even more arrogant residents, cool patients, amazing medical science, powerless medical science, trying to figure out what specialty to go into (what respectable student would “settle” for primary care), spending 5 weeks in Palau, passing Step II, match day, and ultimately graduation day. Whew – memory lane.

In reminiscing, many of the most memorable experiences were the many bizarre and absurd situations you find yourself in. One of those, involved SOAP and learning how to do the physical exam from a legendary figure named Bruce (the latter half of the story can only be shared in person).

For the medically inclined, SOAP stands for a simple paradigm of the medical thought process encapsulated in the daily note you make on patients when you “round” in the hospital. SOAP stands for Subjective, Objective, Assessment, and Plan. It is used daily, by millions of providers, as a simple way to think about the care process. First, you take a Subjective history; typically writing down the exact words that the patient uses to describe their “Chief Complaint”. It is subjective because it is what the patient perceives, experiences, or the manner in which they relate or describe their situation. Next, you perform an Objective physical exam. This is the concrete stuff that you can personally observe, elicit, palpate, or document in some hard, reproducible way. Based on the above, you develop an Assessment of the situation. The Assessment is where the diagnosticians can pontificate and conjecture on the theory behind the illness (and where the surgeons write, “Doing well” regardless of the clinical situation). Based on this, a clinical care Plan is created for the patient from which the team continues to manage patient’s care (and the surgeons write “DC with +BS” [discharge with bowel sounds]). SOAP – short, simple, and systemic way providers think about the daily management of their patients.

Turns out that SOAP has broader implications. As you consider many of the new services being promoted or benefit designs being developed, SOAP provides an excellent framework and sturdy foundation from which to create a health, wellness, or prevention plan. In fact, if you review the materials being created by groups like US Preventive Medicine, they are following the SOAP format to a T as part of their “Prevention Plan“.

USPM is helping people to complete a Subjective evaluation in the form of a Health Risk Assessment. Patients fill out a comprehensive evaluation of their health status, including socio-economic, behavioral, and family/social histories. This is patient generated content and therefore it has an appropriate, but not preeminent place in the medical context. Next, they complete a battery of health and wellness laboratory tests (Assessment) to establish a health status baseline. These tests, and the testing process, form a critical part of the overall evaluation. The patients then undergo a full physical exam to obtain the Objective data that USPM providers will need to create a personalized Prevention Plan.

By using the SOAP approach – USPM is creating a simple and systematic way to engage their patients in a iterative process of evaluation / re-evaluation that fits well into a managed prevention plan – a great concept that I have noted before. By having a solid prevention Plan in place, and adjusting as new SOA information becomes avaiable, an individual can modify their behaviors to ensure a “clean” bill of health.


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Filed under Consumerism, Health Plan 2.0, Prevention, Value

Covering Your Asset: The Body Shop Insurance Company

Asset (ăs‘ĕt‘) n.

  1. A useful or valuable quality, person, or thing; an advantage or resource.
  2. A tangible or intangible item that can be applied to cover liabilities of a person or a business (cash, stock, inventory, rights, or goodwill).

I have previously made the argument that our personal health status should be considered a form of currency, or an asset, that we manage, protect, and work to improve over time. Our health is something that we often take for granted, until it does not exist in the form we want or are used to, and then its paucity gives us uncomfortable, and occasionally, painful pause.

The failure to consider health as an asset and apply the familiar concepts of “asset management” to its maintenance, creates an unpleasant and expensive downstream result. By not taking the long view, nor considering the implications of our health choices, we can mistakenly become so busy with the activities of daily living that we forget there won’t be much living to do unless we actively manage the enabling asset.

This is seen in multiple myriad ways, but perhaps none more clearly than the multiply perverted perspectives we have on health insurance. Since I am in the business of helping to reform health care by looking at the mechanisms in which we finance and manage our health “assets”, I wanted to consider the differing perspectives we seem to imply by how we insure our health and vehicle assets.

While it is an oversimplication to compare health with car insurance, I believe it is instructive to look at the implicit and explicit behaviors we see:

1. True Insurance. We typically view car insurance as truly “insurance” against catastrophic, unpredicted, and unexpected disaster. I don’t expect my car insurance to pay for routine checkups, oil changes, small dents/scratches, and even opt out of reporting moderate body work so as to avoid rate increases. I take responsibility for the preventive maintenance, incidental expenditures, and can choose whether or not to invoke my insurance depending on the need. I don’t rely on my car insurance carrier to advise me on cars, mechanics, or driving behavior. The onus is on me to manage this asset, but I know that I am protected in the event that I have a major accident.

2. Claims Processing. The claims processing is very simple. If I have an incident worthy of invoking insurance, I can make a call to register a claim. Depending on the situation, the call center can either help answer my question or send someone out to help me figure out what to do. Based on that input, I am then responsible for finding a body shop that can repair my vehicle. After getting some bids, these are approved by the insurance company and I am reimbursed directly by EFT to my personal bank account.

3. Market Pricing within Choice. This places the onus on me to directly pay the provider of body shop services and typically drives value seeking behavior. I am incented to seek the best Body Shop that fits my value (outcome/price) system which may be unknown or unknowable by the insurance car carrier but are relevant and important to me. If my bids are excessive, and even if they are low, the carrier will often determine a set amount reimbursement and directly send the check to me personally. I can either pocket the costs savings or pay more for a specific trusted body shop to fix my car. It is my choice. Further more, the pricing is not set, dictated, or regulated by anything other than the invisible hand. Can you imaging your car insurance company trying to negotiate prices with all the body shops in town, including creating networks with special discounts that require contracting, administration overhead, and infinite frustrations as they are designed to cloak true pricing?

4. Customer Satisfaction. I also have high expectations that the car company will keep their promises and protect me in the case of minor / major accidents or related problems. All State has an online claims process, 24×7 call center, and has always kept its commitments to me and my family. In fact, All State even defended me in a bogus ambulance chaser lawsuit resulting from a low speed fender bender. They were there for me when I needed them, and I truly felt like I was in “good hands“. I have had no issues with other claims, with management of my account, or any issue.

5. Incentives for Good Behavior. What’s more, my car insurance company is willing to give me some of that hard earned premium money back in the form of a Safe Driving Bonus. The actuaries at All State have figure out if I demonstrate specific types of behavior that I am less likely to get in an accident and they not only keep my premiums low as a result, but they will also give me some money back. This translates into encouraging my kids to get good grades, slowing down when I am driving, and keeping our car in excellent condition so as to avoid problems.

Now, contrast this with your own Body Shop experience – contracted/networked providers, no price transparency as a result, minimal on-line interactivity, incredibly complex claims process, minimal incentives for care, and exceptional poor member satisfaction.

More to the point, see where your perspectives and expectations are also very different – many people think of health insurance as this never ending gravy train (they should totally cover my gym membership!) wherein they get $10-15K worth of benefits for $2-3K. That clearly is not sustainable. Also, people balk at the notion of paying for their own preventative stuff, but faithfully go get their oil changed, tires rotated, engine repaired, and actively (often lovingly) take care of the car better than the vehicle that transports them through life.

I guess my point is, why doesn’t health insurance operate more like car insurance, and is there a model wherein we can dramatically simplify the current insurance/risk model to adopt the principles of risk and asset management that have been so successful in other industries? I think there is . . . and we are working on it.

The convergence of health and wealth, and the increasing awareness of the need to actively manage our most precious asset, should lend new meaning to the CYA mantra.


Filed under Health Plan 2.0, Insurance

Blogging – One Year In/Out

I just noticed that this December 31, 2007 note had not been published.

Blogging (blŏg) n.

1. A website that displays in chronological order the postings by one or more individuals and usually has links to comments on specific postings.
2. The act of writing entries, creating materials, or maintaing a weblog.

I published my first blog post last November 20, 2006. After making my blog publicly available at the beginning of the new year, I have since been amazed to see the network effect in my own personal life. Having had alot of pent up ideas, I found that blogging became an immediate and highly effective medium from which I could communicate, share, and respond to readers I would never otherwise had the opportunity to meet. While this experience is certainly not unique, it really brought home to me the powerful professional influence the dissemination of ideas can have.

A couple of interesting statistics from the first year (made challenging by my October 31, 2007 switch to WordPress):

  • 88 posts
  • 18,545 visitors
  • 10,103 unique visitors
  • 106 different countries
  • ~25,000 page views

Top articles from last year included:

  1. Health 2.0 Definition
  2. Adware within Health Care
  3. The Canonical Representation of Health 2.0
  4. The Change Agents of Health 2.0
  5. Knowledge Prostitution
  6. Value Driven Healthcare
  7. Adam Bosworth “On Vacation”
  8. New Dimension -Introducting the XHR
  9. Health 2.0 Business Models
  10. Healthcare FICO Score

Honorable mentions, but not enough votes due to posting later in the year:

  1. HealthPlanMine: Scoring the Future
  2. Genomics vs. Proteonomics: Accessorizing
  3. Back in the Saddle and Ready to Ride
  4. Openly Confused: Misys Seeks the Source
  5. Diabetic VistA – The First Amputation

The blog has been ranked as high as 154 on the Health Care 100 blogging ranking system, as well as the blogroll of most of the prominent folks within the Health IT and health care delivery space.  I have had about 90 comments to the blog (roughly 1:1 post:comment ratio) and it has led to numerous personal and professional introductions.

So what have I learned?

Blogging is a powerful tool – it has been more effective than I ever imagined in communicating ideas, trends, and observations with a ready audience. While most folks take 2 minutes or less to read blog posts that took an hour to write, that fleeting connection can open up significant opportunities. I have also appreciated the permanence, or collective memory, it provides to me as someone trying to push the boundaries on new subject matter areas. It also saves me time from re-explaining things, both in terms of forcing my thinking (through the process of writing), but also of being able to direct someone some place for further reading.

My approach to the blog will remain the same with a target of two posts per week. Since my blog is not a summary of news, but rather a commentary on events, I spend a little more time on the thought provoking and verbally pithy blurbs.  I will continue to comment on the ideas around Health 2.0, open source, Health Plan 2.0, risk models, healthcare delivery and finance models, and general Health Reform initiatives.

Looking forward to a great 2008! Bing-batta Boom-batta Blog!

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Filed under General, Health 2.0, Health Plan 2.0

Microcapitation: A Closer Look and New Perspective on Capitation

Microcapitation (mīkrə kăp’ĭ-tāshən) n

1. A healthcare delivery mechanisms wherein a service provider contracts with an administrator to provide health care services on a per capita basis.
2. A financing mechanism wherein a service providers assumes financial risk, is compensated at a fixed per capita rate, usually for predetermined services as appropriate for subscribers to the service.

I have taken my sons on occasion to the Science Discovery Center located in Santa Ana, California. It is a wonderful play land of hands on scientific exhibits designed to entertain while they inform young minds about the physical world around us. My boys love going to explore and roughly handle the well worn exhibits. One of my favorite exhibits is the one that starts way, way . . .way out – “in a galaxy far, far away” and through successive frames brings you back into our galaxy, into our solar system, into our atmosphere, into our continent, into our country, into a state, into a city, into a neighborhood, into a backyard, into the pool area, into a person, into their hand, into their skin, into their tissue, into their cell, into their nucleus, into their genes, into . . .” You get the idea.

I guess the point is one of perspective, and your perspective can change dramatically depending on where you sit relative to the thing being “perspected(Hoodwinked is one of my favorite studies in perspective!). I have always had a natural aversion to capitation, as it has always been associated with the worst of managed care, hurried office visits, and soul-less physicians who in my mind had sold out. I am not sure where I picked up on this attitude, it was probably along my apprenticeship trail wherein I spoke to, interacted with, and was mentored by jaded physician after jaded physician coping with the difficult adaption to “modern” medicine.

I have always thought it incredulous that physicians would accept a set pre-payment for an unknown commitment to provide an unknown amount of services. It seemed to create an unnatural and difficult set of incentives where the less you see your patients and the less you do for them the more money you make. Funny that the Stark laws were created to eliminate the concern about self-referrals leading to excessive provision of care, but that these types of physician enriching paradigms by providing less care are perfectly acceptable. I also never understood how physicians could make these commitments with absolutely no information like:

  • How much health care services do your current patients actually consume each year?
  • How much do these services “cost” you as the physician to provide?
  • What patients can you provide preventative (healthcare) services in order to avoid treatment (disease care) services?
  • What other activities can you engage in that would appropriately lower the consumption of services or shift services to most appropriate care activities?

This information has never been available to physicians in the past, and therefore all the capitation schemes that I have seen have appeared to me to be just an absolute crapshoot. Sign on the dotted line and start crossing the fingers. Well, this just does not cut it, man. No wondered the capitated doc’s would be busting their chops at the end of each year as they got financially decapitated. There is nothing worse than a beaten doctor who succumbs to the incessant financial pummeling. You can see it in their eyes and hear the weariness in their voice when they give in and the dream to provide world-class care, to help their patients attain their healthcare goals, and provide comfortably for their families is broken down in 12-15 minute sound bite sessions with their “subscribers”. Hence the anger and bitterness that were part of my training experience and initial exposure to capitation. It was not a pretty site or a positive training experience.

It doesn’t have to be this way.

Capitation definitely has some advantages as I have since learned. It can create and align some incentives that help both the patients, providers and of course the payors. But lets look at capitation in a new way. How about we set up the capitation around discrete medical conditions, or subsets of clinical activities, that would be amenable to deliver in “care packages”. As mentioned in my previous post, these care packages have a lot of intelligence built into them in terms of their specifications, their ability to self-organize care, and their ability to create a true health care marketplace wherein price, quality, and outcomes can be compared side by side, provider by provider.

The discrete services provided by vertically or virtually integrated teams would enable a new level and degree of expertise. High volume providers would develop additional experience, which would enable them to introduce innovations and efficiencies in a classic virtuous cycle. With the additional delivery and outcomes experience, providers would be much more willing to put out a set fee for a set grouping of clinical services, because for the first time, they could have some confidence in their ability to deliver for that price. This is capitation, but it is “microcapitation” at the medical condition level (which should be the lowest common unit of care delivery that we should measure).

To emphasize the point, Microcapitation (which I have never seen used and a google search on 12/21 produced ZERO results) makes a lot more sense to me because it is for a definable, controllable, and limited set of clinical activities in which providers can, with confidence, provide services for a set fee. Microcapitation, as delivered in discrete “Care Packages”, will be a critical new product feature as we transition to a true marketplace. Microcapitation around specific medical conditions also provides a manageable unit of health care delivery in which we can develop the appropriate care linkages across all the providers who form the team to deliver the full episode of care. It is also an appropriately sized clinical bite in which the appropriate healthcare infrastructure that allows for appropriate outcomes measurement, monitoring, and healthcare outcomes to be reported, compared, and ultimately consumed in a healthcare marketplace (more on this later).

So, to my physician brothers (and sisters!) slogging it out in the capitated trenches, you need to go micro! Take a fresh look at your exposure, and control it by moving to discrete microcapitated “care package” bundles, that you can control, measure, and market.

The fresh perspective should help things look a lot more rosie . . .


Filed under Health Plan 2.0, P4P, Value

Dyscoordinated: Healthcare’s Line Item Problem

Dyscoordinated (dĭs-kō-ôrdn-ātĭd) n.

  1. To purposefully prevent harmoniously working together
  2. To purposefully prevent pleasing combinations; or matches of form and function
  3. To purposefully prevent harmony of common actions or efforts

In addition to doing a little Health 2.0 Experiment in my last post, I have to followup with the actual delivery and payment of the service as well. I am really focused now on these two areas, particularly as they relate to the creation of Health Plan 2.0. The simple outpatient procedure that my son had done, performed at a well respected surgery center, was instructive of how far we have to go and how much opportunity exists to redefine how health care is actually consumed.

First, I showed up at 6AM to sign in as a patient. Fortunately, my wife had called ahead of time (should have been able to do this online) to help provide some basic insurance information (should be able to do with a swipe of my personal identification). After signing in, we took a seat and were called up a minute later to review the billing information. The office manager happened to be checking in patients that day and she dove immediately into her shpeal about signing your obligation to pay, informing me that I was going to get multiple separate statements from multiple separate providers, and essentially wishing me the very best in trying to figure it all out.


Figure 1. Actual form I signed regarding payment for services.

At this point, I stopped her and informed her that I wanted to actually read the materials. I asked her why, for such a simple and well defined procedure (less than 10 minutes in OR), the surgery center didn’t provide me with a single bill? She tried some blow off answer about physician tax ID’s being different. I called her out on it and said that tax-ID’s are bundled all the time for other types of health care services and that I know of several organizations that provide a single episode of care charge for care they deliver. She tried twice more with weak answers, which I patiently and politely challenged.

Finally, she picked up that I wasn’t going to be satiated with the usual fare. I next asked her if she knew of any health insurance companies that provide this simple but highly valuable bill aggregation service or that paid by episode of care. She stated she was unaware of any plans doing this (remember, this is a lady with 30+ years billing experience) but that as an administrator it would make her life dramatically easier. I went onto explain to her that a new health plan is going to be introduced (the Health Plan 2.0 concept I am working on) that would be responsible for creating a new type of health care market. She asked where she could sign up.

I believe that the next iteration of health plans will have to work much harder to earn my business, not only by the simple value added services they provide, but that they are driving important health care marketplace reforms such as the ability to purchase health care at the medical condition level and in discrete episodes, or units, of care. Line item billing (defined in this context as discoordinated care delivery and billing by providers) will only be a bad memory in the next iteration.

The cultural and financial impact of line item billing in healthcare, where individual providers create individual bills disconnected from each other, continues to be a primary driver of the ongoing spiral (up or down depending on your perspective) of our health care “system“. The way healthcare is financed does NOT promote a system, but rather a discoordinated group of individual actors doing their individual thing with total disregard for the patient and zero accountability for outcomes. How did this sorry state of affairs happen? Follow the money: 9,000+ billing codes for doing “things” – ZERO codes for achieving an outcome! Coordinated, efficient, and evidence based care is not financially healthy way to practice medicine.

But it can, and will, and has to get better.

Let’s start by simply demanding that we create a health care marketplace wherein we buy episodes of care at the medical condition level. A hip surgery. Complete evaluation for headache. A comprehensive genetic screening with consultation. 12 months of diabetes care, asthma, or CHF care. Discrete medical conditions with a definable set of care which would encompass all the different providers, care coordination, CPT / ICD-9 compilation, and aggregated single bill for the overall “care package”. This concept of paying for health care services by discrete episodes of care at the medical condition level, or purchasing so called “care packages“, could yield some pretty interesting results:

1. Standardized Care Packages. First, medical science and evidence based guidelines could serve as the standard in creating the specifications of what is included in a standardized care package for a specific condition. Purchasing an asthma care package would entail a know set of clinical activities that would provide optimal care for that medical condition. The care package specification process is important baseline as it allows the creation of side by side comparisons between different groups of providers who self aggregate to provide the service.

2. Provider Self-Organization. This second point is interesting, no longer do payers have to be the ones to aggregate to provide the set of services. Providers would self organize, much like they structurally do in a vertically integrated care delivery system (Kaiser, Mayo, VA, etc), but now this could/would happen in a virtually integrated care system (more on this in another post). Different providers could choose their own care team to provide the specific set of care package components. All this negotiation and magic would happen on the back end and be as transparent to the consumer as all the negotiation, manufacturing, and magic that happens in producing any other finished consumer product (do you care how Vizio assembles all its parts from all its providers or do you just care that you got a totally flossy 50” big screen for a great price?).

3. Market Comparison. The standardized care packages, and the providers who deliver them, would also be able to be compared in a virtual marketplace. This marketplace would not only feature price as a comparison point, but multiple other features that are relevant to consumers. Like patient outcomes, five year survival rates, quality of life improvements, patient satisfaction, and other relevant consumer metrics. This would be a much different experience than what I had recently when trying to piece together this information on my own. The internet infrastructure to do this exists, but the capability for this level of data fluidity does not.

The key point with all this is that the dysfunctionated (discoordinated + dysfunctional) care delivery processes can be modified, often dramatically, but appropriately aligning financial incentives. Healthcare providers currently bill line item by line item because that is how they get paid. Do more, get paid more. Who cares if the patient gets 30 bills as long as mine gets paid. There is no incentive to add value to me as a patient by simply aggregating my bill or even aggregating my care by episode. However, if providers were getting paid to deliver outcomes that required coordinated care among a team of providers, I believe strongly they would respond with more efficient, more effective, and higher quality care. Furthermore, as consumers get experience purchasing care in this way in a true health care marketplace, I can’t imaging they will ever consider purchasing it in any other way.

The concept of care packages as a reform instrument is being kicked off in Minneapolis, MN by a Lemhi backed startup called Carol. It is a vanguard concept that requires significant heavy lifting by first creating care package specifications, convincing providers to self organize and deliver care in this way, and careful conversations with payers to modify their current process to finance this new delivery mechanism. Of interest, the response by patients, providers, and payors has been overwhelming. Official launch date is January 22 – stay tuned.

I, for one, will certainly be cheering from the sidelines: “Go team, hold that line (item)!”


Filed under Health 2.0, Health Plan 2.0, Quality, Transparency, Value