Category Archives: Transparency

Day 48: Data Gathering transitions to Information Analysis

Transition (trăn-zĭsh’ən) n.

  1. Passage from one form, state, style, or place to another.
  2. A word, phrase, sentence, or series of sentences connecting one part of a discourse to another.

In the midst of running Medsphere I became aware that we were onto something very powerful. Somewhere along the line I finally “got it” that what we were actually doing was not implementing electronic health records but rather creating the data collection backbone that would enable future clinicians, researchers, and other interested parties to have access to large volumes of data that they could then turn into useful information and ultimately knowledge about health care delivery. This realization helped me move beyond the mere “features and functions” comparative sales pitch to a much more egalitarian view of how most any standardized information system could most likely serve as an effective tool to gather the data and transform it into clinical relevant and useful information. Since we could offer the tool at a fraction of the price of the other guys, it made perfect sense to me why the customer should select us!

The Veterans Health Administration clearly has led the way in this regard with their implementation (begun in 1996!) and utilization of an enterprise wide electronic health record to radically alter their outcomes. I was fortunate to help  transition this technology to the private sector with OpenVista implementation at Midland Memorial Hospital (and have followed with interest their successes with interest).  Kaiser Permanente also endeavored to initiate one of the largest ever civilian deployments of an EHR to the tune of ~$5Billion dollars across their 35  hospitals. This massive investment has paid off in spades, and we are now just far enough along that we are going to start seeing some of the incredible results enabled by a system wide electronic health record (regardless of variety).

Case in point: An embargoed article was just sent to me by my friends at Kaiser who are just publishing a new article in the Clinical Orthopedics and Related Research journal of the Association of Bone and Joint Surgeons. The paper demonstrates how an EHR-enabled, large-scale total joint replacement registry has enhanced patient safety, quality of care, cost-effectiveness and research, and how a national registry could improve clinical practice and reduce revision rates in the U.S.

Key points from the article include:

  • More than 600,000 total joint replacement procedures are performed each year in the U.S., and the volume and costs associated with these procedures are projected to increase dramatically over the next 20 years
  • Kaiser Permanente’s Total Joint Replacement Registry– the nation’s largest such registry with 100,000+ hip and knee replacement cases – allows caregivers to analyze specific data from standardized forms and Kaiser Permanente HealthConnect (Epic software), the world’s largest private sector electronic health record, to help identify best practices, evaluate risk factors for revision surgeries, assess the clinical effectiveness of implants, and study patient demographics, implant characteristics and surgical techniques related to post-operative infections, revisions and re-operations.
  • Data from the registry has been integrated into a risk calculator that surgeons and patients use to make decisions about treatment. Research from the registry on implants and surgical techniques has influenced changes in clinical practice and optimized both techniques and implants.

The article features some of the authors, surgeons, and even a patient case study of how the registry was used to make an informed clinical decision (my friends at Dartmouth would be proud!).  We are clearly just at the front of this curve wherein we actually start getting into outcomes, accountability, and real shared medical decision making with legit data on the various treatment options. It is going to be an exciting journey to be a part of this data to information transition.


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Filed under EHR, Innovation, Quality, Rational Choice, Transparency, VistA

Customer Disservice: Health Care #FAILs again and again

Disservice (dĭs-sûr’vĭs)

  1. A harmful action; an injury
  2. An act that is not just

Our health care system is completely devoid of customer service. It is pathetic.

I took my son to have a simple tympanostomy (ear tubes) procedure this morning. I show up, sign in and take my seat amidsts the throngs of people in the surgical center waiting room. I brought my laptop and some reading materials to bunker down for the long wait ahead.

20 minutes later I get called up front to sign some additional paperwork. Instead of being greeted, 15 documents each complete with a full page of legalese is shoved my way regarding various aspects of responsibility, payment, agreement, arbitration, and host of other information. The grumpy lady has clearly done this a thousand times and she has absolutely no tolerance for any of my questions. She paries my first few skillfully, but I don’t let her blunt my questions regarding the finances.

She shows me that the facility is charging me $5,600 but that fee has been reduced by the insurance to $1,799. This is an all in fee for the facility only (includes staff, equipment, monitoring, etc) and does not include fees charged by the physician and the anesthesiologist. I ask what those charges will be (I already knew ahead of time), but she says she is not responsible for their charges and that I would have to speak with those providers about that. I start asking her why they don’t bundle everything into one price so I can compare across various combinations of facilities and providers. She has no idea what I am talking about and ends the conversation by giving me their phone numbers. Take your seat Mister, how dare you ask a question about pricing comes across clearly as she stares me down to my seat.

I immediately pick up the phone and talk to the physician office. After about 10 minutes, I finally get the billing person who is able to provide me the CPT code (69436) and Zip Code (92691) as well as what they charge for procedure ($345). I tell here I am not interested in her price because it is irrelevant and that Blue Cross has already dictated the price that you are going to get. A little defensive, she then relays to me the the administratively set Blue Cross reimbursement that has been dictated to this particular physician ($208.08).  I then ask her about bundling of services and created an Ear Tube product that would include all the components so that I can compare across facilities and providers. She has no idea what I am talking about. I give her the hamburger example (I don’t get separate receipts for tomoatoes, buns, and burger – I get a single price for the thing I want – the complete hamburger). I refer her to as an example and she thinks this sounds like a good idea.  When I ask why they don’t do it now that she understands, she says that she doesn’t think the physicians would ever agree to work in that way. She tells me she will pass this along to the physicians, and with a laugh that indicates that will never happen, we end the call.

Next, I call the anesthesiologist group. First the lady attempts to tell me she can’t give the pricing because it is a HIPAA violation. I quickly disabuse her of her ignorance and get her manager on the phone. Anesthesia is unique in all of medicine because anesthesiologist charge for their time in increments called units (typically 15 minutes). So they get a “set up” fee and a “time-based” fee for their services, both in terms of units. So I ask them what their per unit charge is and the manager tells me that it is proprietary information. I call him out on it and say that pricing information is not proprietary, perhaps his costs structure is, but he has a duty to tell me the cost of the service I am about to engage him in. I am pretty frothy at this point and really lay into this guy. He still refuses to tell me his proprietary, negotiated per unit rate with Blue Cross but relents on giving me the overall price. He then passes me along to someone else who looks up in their database and tells me the cost will be either $300 or $360 for the procedure for either a 15 minute or 30 minute anesthesia time. So, knowing they go in 15 minute unit increments, I can tell that there is either 5 or 6 units involved, and therefore a $60 / unit price. So, full pricing is 4 units “setup” and either 1 or 2 units for their time. So much for your proprietary formula and negotiated pricing. $60 bucks every 15 minutes or $240/hour for anesthesiologist time. Thats mid-tier lawyer rates for South Orange County but interesting in how at least this type of physician’s time might be valued by insurance companies.

So finally, after about 45 minutes of phone time, by someone who knows the ins and outs, all the secret handshakes and covert codes, and most aspects of healthcare financing, I am able to arrive at an all in price for a very simple surgical procedures:

CPT Code: 69436
Zip Code: 92691
Facility Fee: $1,699.00
Surgeon Fee:  $208.08
Anesethsiologist Fee: $360.00
TOTAL:  $2,267.08

This is great to know the price information for my selected combination of facility and physicians. However, I have no information on outcomes achieved, safety rates, customer satisfaction, or other metrics to determine if I would not be better off with a different combination of facilities and physicians. What do you think the response was when I attempted to ask about health outcomes for my physician?

Pin drop, anyone?

This is not just another rant, but meant to highlight that the very basic, fundamental courtesies expected during a consumer transaction are all but non-existent in health care. Simple things like getting pricing information, like getting helpful customer service, like understanding what you are buying, and the quality features that attract you to purchase something in the first place. Health care should be one area where customer service is impeccable. I believe you begin to see “brands” emerge that get this, invest in it, and deliver it consistently over time. Looking forward to the ongoing retailization of health care – it truly needs it.


Filed under Consumerism, Rational Choice, Transparency

The Myth of Prevention and EHR’s?

Prevention (prĭ-vĕn ‘shən) n.

  1. Preventing or slowing the course of an illness or disease
  2. Intended or used to prevent or hinder; acting as an obstacle
  3. Carried out to deter expected aggression by hostile forces.

I was just referred this article which I found to be thoughtfully crafted. Abraham Verghese is a Professor and Senior Associate Chair for the Theory and Practice of Medicine at Stanford University. I found the article interesting, by somewhat anachronistic in terms of his perception of prevention and electronic medical records.

First, he raises an important point about the many overstatements as they relate to prevention. When we talk about how effective screening programs could be in identifying people for early interventions we have to realize what we are saying and what tools we are using for identification. Some tools can be too blunt, and not find the people we are looking for (false negatives), while other tools can be too sensitive and capture too many who actually may not have the disease (false positives). This is brought home in the example Dr. Verghese uses around the pitfalls of new diagnostic imaging equipment (and the situation is much worse with genetic testing at this point in time!). With these newer, more sensitive imaging studies you can pick up calcium deposits in a health individual can lead you down a pretty wild (and expensive) goose chase for someone who is completely asymptomatic. He also demonstrates that the “value” of some prevention recommendations as somewhat questionable  – meaning – that while taking cholesterol lowering drugs has clearly shown to be efficacy reducing cholesterol levels and cardiac risk, is it really worth $150K/additional life year extended?

Well, that depends on if it is your life I assume. My point being, that you need additional information to be able to make these difficult, complex decisions. You need to not only know the relative efficacy of the regimen, but also the cost of the regimen to truly get at the “value” of the intervention. In addition, patients have modifiers to which they will place on the intervention in terms of cost in time, pain, and other inconveniences that are unique to their own values. This is where shared medical decision making can have such an impact – lay out the good, the bad, and the ugly and allow the patient to make a decision based on all the available evidence according to their own value system.

I don’t think these types of decisions can be made with the type of information we have today within the current clinical infrastructure. First, the physician gets paid to order the test and not talk to you about whether or not pros and cons of whether you should get it. Furthermore, the doctor has very little to no data upon which to inform that conversations anyway. In the relatively rare areas in which we have evidence, we might not have other components required for decision making in terms of cost and experience of patients undergoing regimen. In the case of prevention items mentioned above, we might choose not to go on statins at $150K per year but instead invest $10,000 in a personal trainer who is going to get rid of the root problem anyway. Without the underlying information, this would never even surface as part of the decision making process. We absolutely must be gathering, comparing, and sharing result outcomes in order to increase our capacity as healers who use the right treatments for the right patients at the right time and in the right way.

Which leads me to my final point – you absolutely need EMR’s to function as an 21st century physician knowledge worker. We are purveyros, translators, and mediators of medical information for our patients. They can get most of it on their own now, but we can still add significant value through our interpretation, personal experience, and ability to process the myriad data points with our clinical acumen (the sum total of our diagnostic prowess which comes from experience, practice, expertise, and intuition). The EMR can be a very effective tool to help us gather, process, and present this information in a way that is meaningful and useful to our patients (actually most EHR’s don’t do this natively today, but with little effort a physician can lift the required information and present it in a format that is highly useful [alling all designers – get into health care!]). Furthermore, I truly dislike the characterization that the EHR makes the relationship cold and sterile.  I believe the current  generation of physicians, who have all grown up with the internet, see the EHR as an indispensible tool that helps them be more effective, efficient, and caring for their patients.

My sense is that I am more optimistic that we will get there with prevention, and that EHR’s will play a vital role to give us the clinical feedback to know whether our treatments (or prevention) efforts are having the impact that we hoped. Furthermore, I am hopeful, that efforts like the X PRIZE and others will help drive us to associate those outcomes with the total costs required to help us acheive the results so we can begin to understand the true value of the intervention. It is in this setting of data liquidity and information transparency, that they myth dissipates into a new reality of next generation medicine.

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Filed under EHR, Healthcare, Prevention, Quality, Transparency

Transcript to Transformation: Twitterview with @Berci

Twitterview (twĭt’ər vyū) n.

  1. A twitterview is a combination of the terms Twitter and interview.
  2. The Twitter medium of 140 characters forces a concise style of interviewing and response.
  3. The public can join in on the conversation and become participants themselves by following along or tracking hashtags.

On March 26, 2009 the leading health care bloggers (see list below) throughout the blogosphere participate din a Blog Rally to raise awareness for public participation in the Healthcare X PRIZE design. Bertlan Mesko, leading Medicine 2.0 Advocate and author of the popular Science Roll blog, also conducted a “Twitterview” in support of the effort.

Berci: Can we start the twitterview now? I’d have 10 short questions, you may have 10 short answers. So everyone can enjoy it.

HealthXPRIZE: Thanks for taking the time. We appreciate your help in getting the word out. This Twitterview will complement the Blog Rally. Ready!

Berci: Great! First, what is the X PRIZE Foundation? What is the X PRIZE model?

HealthXPRIZE: The X PRIZE Foundation is a non profit organization that conceives and operates large incentivized prizes that lead to revolutionary breakthroughs. The X PRIZE model is based on leveraging a large purse, with a clear set of rules, that allows innovators to break through barriers.

Berci: Please tell us more about Healthcare X PRIZE!

HealthXPRIZE: The Healthcare X PRIZE is intended to be a competition to redefine health and demonstrate how new models of care can dramatically increase health value. We chose to focus on health value as opposed to a new wonder drug or device as our sponsor (WellPoint and WellPoint Foundation) & advisors were most interested in a systems prize. Systems prizes are much more difficult to conceive and operationalize than technical competitions like going to space or even replicating the genome rapidly. We are expecting that teams will need to innovate around health finance, care delivery, and individual incentives to increase health value. We are currently developing a clear set of rules, which provide the parameters of competition, as we believe that “creativity loves constraints”.

Berci: Reforming the US healthcare system is quite a brave mission, isn’t it? Why the focus on health value?

HealthXPRIZE: The US Health reform gets serious this summer and the HXP is well timed to actually demonstrate and prove in practice the principles of reform. Value is powerful organizing principle for reform efforts – we cannot just reduce costs, nor can we just attempt to improve quality without financial accountability. The focus on health value highlights the need to focus on both sides of the equation. Since Value =outcomes/cost, we are challenging teams to improve both simultaneously.

Berci: Why use an incentivized competition?

HealthXPRIZE: Incentivized competitions are very efficient, highly leveraged, and create an “X” factor within the competitive framework. Sponsors only pay the winner, a $10MM purse typical spurs >$100MM of investment, and the X factor creates global media attention to a key problem, inspire hero’s, encourage non-traditional thinking, and creates a powerful incentive for innovation.

Berci: And how can you properly measure health value? I guess you need pre-defined parameters. What are these?

HealthXPRIZE: Health Value has never really been measured within the US Health Care system. There are many efforts underway right now to properly define and measure health value. Many innovators are leading the way and we are attempt to build on their work or actively collaborate with new/ongoing initiatives (Dartmouth, IHI, AHRQ, etc) to solidify the health value measurement framework. In the context of competition, we are trying to make our measurement framework as concrete as possible by focusing on outcomes (mortality, specific morbidity, ED visits, hospitalizations, sick days etc.). Effectively communicating the notion of “health value” remains a challenge; we are considering focusing on aspects of health value (like decreased hospitalizations and sick days) as a more effective way to communicate to the public the hoped for prize breakthroughs.

Berci: How are the Teams and Test Communities Selected?

HealthXPRIZE: Teams will be selected by through a series of concept design and testing evaluations. They will be required to demonstrate or model the impact of their proposed interventions against test database provided by WellPoint. Independent judges will evaluate the merit/validity of the concept in order to advance. Communities will be selected based on specific criteria that are still being worked through. Intent is to have a defined population of 10K participants from which Teams will voluntarily enroll in the intervention. Test community will be matched against a geographically adjacent control group. Both the team and community selection requires further design, detailed analysis, and expert opinion which we are soliciting at this time through our network of national measurement experts.

Berci: When does this competition start and when will it end?

HealthXPRIZE: The “competition” has several phases: Design, Selection, Competition. We are currently in Design phase through our anticipated Launch later this fall. The Design phase includes soliciting public comment on how we can improve our initial concept/construct to create the most viable competition possible. After official “Launch”, we will begin recruiting teams to compete. Teams will then be narrowed as described above through late Spring 2011 when 5 finalist selected. After a brief integration period into test community, HXP competition is planned to officially begin in January 2012.

Berci: How does this shift the paradigm? What kind of outcome do you expect?

HealthXPRIZE: Great question – we believe the current paradigm is based on volume not value, on process not results, and incents the wrong behaviors while delivering bad outcomes. We want to shift the paradigm to rewarding the reduction of hospitalization / sick days and begin to pay for overall health improvement (this is the outcome we want!). We also want to not focus solely on disease care, and aren’t interested in just improving health care; but believe that we must move to an entirely new notion of engaged, activated health called “Vitality”. We want to demonstrate that this CAN be done at scale, with new entrants / new ideas, and want to set the HXP up as a framework from which these efforts can be tackled in the real world. By focusing on outcomes, instead of regimenting care processes or dictating care delivery, let providers/patients innovate and create rewards for those who obtain the best outcomes.

We believe incentivized competitions are a great vehicle from which we can accelerate change, shift the paradigm, and be a catalyst for the transformation that is required for the US healthcare system. We hope the outcome is a new way to think about health, measure health value, and demonstration of new models of care that demonstrate how to improve community health and individual vitality.

Berci: My last question, regarding X-PRIZE – first rockets, then genomics, now healthcare. What do you think? What’s next?

HealthXPRIZE: XPRIZE is a mission driven organization seeking to inspire the very best in human kind for the benefit of all – this isn’t just a nice quote. It is inherent in the DNA of the organization. We are attempting to be the catalyst in any “stuck” industry by creating incentivized competitions that can lead to radical breakthroughs to the grand challenges of humanity. HXP is now looking at education, energy (some really cool stuff), and developing world initiatives that can truly have major impacts. Fortunately for me, HXP is our focus for launch this year. It is quite challenging work, deals with multiple hard to think through issues, but includes the privilege to work with great people and teams including our sponsor WellPoint.

I have been thrilled with the level of commitment to this process and this prize development process has been tremendous experience. They have a very talented innovation team, led by Chad Pomeroy, who is fully supported by senior executives all the way up to Chief Executive Officer Angela Braly. They have been driving this initiative forward far beyond the $10MM prize purse; they are providing operational resources, sharing data, working to create appropriate test communities, altering business practices to accommodate the prize, and are committed to transparency as part of the HXP process. Their commitment to the project is the reason I became involved as I saw an unprecedented opportunity to really implement the innovation in an idealized but competitive test environment. We appreciate WellPoints leadership, foresight,and commitment to engage X PRIZE in developing the Healthcare X Prize for benefit of all. Very cool stuff.

Berci: Thank you very much for the interesting answers! I will publish the transcript on in a few minutes.

HealthXPRIZE: Berci, again, thank you for this twitterivew. We hope to have everyone visit our website, download the initial prize design, comment on our blog, and add their input to the Prize Design process.


Filed under Health Finance, Healthcare, Industry, Innovation, Leadership, Quality, Rational Choice, Transparency, Uncategorized

Media Advisory: Announcement of Initial Prize Design for Potential $10 Million Healthcare X PRIZE to Revolutionize U.S. Health System

I am in Washington DC to participate in the 6th Annual World Health Care Congress. It is a power packed meeting with tons of interesting speakers, presentations, announcements from many of the thought leaders throughout the industry. The demographics of this conference are certainly older, and the DC location gives it a very political / policy feel (I am more comfortable in the West Coast Health 2.0 scene!), but it should be be interesting nonetheless.

One of the events I really look forward to is the unveiling, for public discussion, of what I have been up to during the last six weeks. Please read below, follow along here, or via Twitter as we twittercast the event (#HXP)

Initial prize design with call for public comment to be shared at 6th Annual World Health Care Congress on April 14 in Washington, D.C.

WHO/WHAT: Health care, wellness, academic and innovation thought-leaders will join Dr. Peter Diamandis, Chairman and CEO, The X PRIZE Foundation, and Angela F. Braly, President and CEO, WellPoint Inc. to announce – for public comment – an initial PRIZE design for a proposed $10+ Million Healthcare X PRIZE. This first-of-its kind competition will focus on reinventing the health care system in a bold, measurable and scientific fashion to enable dramatic improvement in health care value in the United States. * WHEN: April 14, 2009 from 12:15pm – 1:00pm (EST) WHERE: Press Conference during the 6th Annual World Health Care Congress in the Washington 5, Exhibit Level Marriott Wardman Park Hotel – 2660 Woodley Road, NW, Washington, D.C. 20008 The Prize is focused on improving health care value through optimal health. The proposed design will align and improve care within communities and proactively assist individuals in optimizing their health in a way that reduces overall costs. By setting a higher bar for good health based on better outcomes and an individual’s active participation, The X PRIZE Foundation, the WellPoint Foundation, and WellPoint, Inc. are striving to make health care dramatically more proactive, personalized and focused on engagement in health and vitality. The initial competition design is the result of extensive research into health care market challenges and the identification of opportunities for improvement that could result from an incentivized competition. The PRIZE design work was supported by a team of prominent health care providers, health care thought-leaders, academic and political advisors, including: Dr. Glenn Steele, CEO, Geisinger Health System; Dr. Jim Weinstein, director, Dartmouth Institute for Health Policy and Clinical Practice; Dr. Carol Diamond, managing director, Markle Foundation; Mark Litow, principal and consulting actuary, Milliman; Dr. Dean Ornish, president, Preventive Medicine Research Institute; Michael E. Porter, Harvard Business School professor; Hon. Bill Bradley, former U.S. Senator; and Hon. Newt Gingrich, founder, Center for Health Transformation. A panel discussion with Dr. Diamandis, Angela Braly, Hon. Bill Bradley and Hon Newt Gingrich will follow the announcement. The panel will be moderated by Susan Dentzer, editor in chief, Health Affairs. One-on-one interview opportunities can be scheduled upon request. To listen in by conference call, please contact or 310-741-4884. Questions may also be submitted via Twitter @healthxprize or you can follow the event at #HXP

CREDENTIALS & INTERVIEW REQUESTS: To request credentials and/or to schedule interviews with Dr. Peter Diamandis, CEO and Chairman, The X PRIZE Foundation, Angela Braly, President and CEO, WellPoint Inc., or one of the Healthcare X PRIZE advisors, please contact Arron Robinson at or (310) 741-4899. For more information about the initial prize design or to comment on the draft guidelines, visit

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Filed under Conferences, Health 2.0, Innovation, Quality, Transparency, Uncategorized, Value

The Vitality Index: The Return of the Health Care FICO Score

Vitality (vī-tăl’ĭ-tē)

  1. The capacity to live, grow, or develop.
  2. Physical or intellectual vigor; energy.
  3. The characteristic, principle, or force that distinguishes living things from nonliving things.

I am finding it hard to use financial analogies these days to explain health care concepts given recent events. It’s analogous to the feeling you get when you accidentally use the word “maverick”. But despite the meltdown, I still find the Health / Wealth construct to be very powerful way of effectively communicating emerging health care reform ideas.

One of those worthy health/wealth constructs is the concept of a Health Care FICO score. I originally proposed this back in September 21, 2007 to some mild interest but mostly concern regarding its potential misuse. My efforts to define the Health Care FICO Score concept were unfortunately put forth right about the time another company was trying to develop a new model for rating health care debt differently than traditional debt (I believe that poor idea and confusing concept has appropriately died).

To rehash, I believe their needs to be a singular score, or more appropriately an index, that provides an indication of my health status. It cannot just be one measure, or provide one perspective, but a comprehensive scoring of all the important aspects of my health (health status, behaviors, satisfaction, risks, etc). An “index score” also means that it is weighted in order to normalize for race, genetics, geographies, or other factors. This sounds complicated, and I agree that it might be, but I also believe these complexities can be abstracted out into a little black box managed by statisticians, researchers, and academics as a best effort to create the health index. I don’t think people really care, or even understand, how we arrive at a financial FICO score, but they certainly care what their number is and what it means to their financial health.

The financial FICO score could, and probably should, be considered an “asset” that requires management, protection, and efforts to improve it. The FICO score is universally understood to be a surrogate measure of the level of risk one assumes in lending money to the individual. Lenders use the FICO score to determine if they want to “invest” in a relationship with the individual that is mutually beneficial. Depending on the FICO score, lenders may alter the terms up or down depending on their tolerance for risk and reward. These differential rates are the hallmark of the system and allow for natural risk selection based on behavior, choices, and past performance. It works reasonably well because we all can understand and in general agree what the FICO score means. It is not perfect, and there are problems (and occasional abuses), but in general it is effective.

I don’t see why my health asset should be any different. I think knowing my Health Care FICO score would be very valuable to me personally, would be valuable to my physician, and should be used to help create differentiation in the services I choose to invest in my health. The Health Care FICO score should be a roll up of many different measures that are indicators of my health – both traditional quality metrics as well as new vitality metrics that measures ideas such as satisfaction, nutritional status, wellness/fitness, functional status, etc. In fact, we should not just consider health the absence of disease but rather we should consider health something that we are actively pursuing. Therefore if disease subtracts from my health (or a normalized health index of 100), perhaps someone with diabetes scores an 65. However, when appropriately managed (checking glucose 3X per day, HbA1c <7.0, annual optho exam, etc), perhaps they can shoot up to an 85. However, when they become an activated patient (average sugar 120, active nutrition, exercise program), perhaps their score normalizes back to “Health Baseline” of 100.

On the other hand, a healthy individual (traditionally defined by the absence of disease), is not necessarily a ‘healthy” person. Perhaps they are the pre-diabetic, overweight, underexercised, poor nutrtion individual who is just a time bomb. The Health Care FICO score should be able to adjust for increased levels of “vitality” – active health promotion efforts wherein the individual can be rewarded for health choices and behaviors. Therefore this person can raise their Health Care FICO to 120 with getting BMI in line and cholesterol down but move to 140 as they demonstrate their vitality – active fitness programs, nutritional intake, and online community participation.

This range of scoring could be used in multiple ways, most good but clearly some bad. The key to this concept would be to come to some agreement on what metrics matter, what activities actually produce the results we want, and validate the rules/data collection so that we can actually create a reliable score. There wouldn’t need to be just one aggregated scoring system either – in the FICO world we have three companies who provide this service – and the information is used to triangulate risk assessment (each company has slightly different ways in which calculate the score).

The notion of a Vitality Index can be powerful, but it is fraught with complexity and challenge. I believe the value of having this single, agreeable index could unlock the next wave of payment, performance, and value transformation required to move our health care to a 21st century system of care.


Filed under Consumerism, Transparency, Value, Vitality

Audacity of Reality: Patients must pay for health care

Audacity (ô-dăs’ĭ-tē) n.

  1. Fearless daring; intrepidity.
  2. Bold or insolent heedlessness of restraints, as of those imposed by prudence, propriety, or convention.

I read with amusement this article on the idea that doctors have the audacity of to be charging for their services at the time they provide them. Just think about that for a minute – people upset about the fact that they have to pay for a service they receive.

  • “How dare the movie theater demand I pay before seeing the movie?”
  • “Can you believe I had to actually pay for this suit before they let me wear it home?”
  • “Man, the airlines are killing me by asking me to actually pay for my flight before I have actually flown!”
  • “My lawyer asked for a retainer before she agreed to take my case – can you believe it?”

Of course, these are absurd notions. So why is health different? Why should we think about it differently than we do anyone of our assets that is valuable enough to warrant financial protection (insurance), active management (you wish you knew what to do with your portfolio), and even a trusted advisor (you wish yours knew what to with your portfolio as well!) to guide you through the decision making process.

The article reveals the fundamental, deep, and pervasive misalignments in how we pay for health care. Highlights are mine:

When Nicole Atkinson, 29, of Baltimore scheduled the first obstetrics appointment of her pregnancy last year, she knew the experience would come with its share of surprises. But Atkinson wasn’t at all prepared for a financial one: a request to pay up her full deductible — $600 — before the doctor would see her for the exam.

“So, I fired her,” says Atkinson, who then switched doctors to one who charged only a co-pay for each visit.

But if Atkinson decides to have another baby, she may not be able to avoid that balloon payment. More and more physicians are asking for the patient’s share of that day’s medical fees, including any deductible set by the insurer, at the time of the visit.

“It’s a paradigm shift from what most consumers are used to at their doctor’s office,” says Red Gillen, a San Francisco-based analyst with consulting firm Celent, who last month published a report on doctors seeking upfront payment from their patients . . . According to Gillen, consumer out-of-pocket spending as a percentage of all health-care spending rose to 12 percent last year, and is expected to continue rising.

A survey published by the Kaiser Family Foundation in September, found that 18 percent of people who responded were covered by insurance plans with deductibles of at least $1,000, up from 12 percent the year before. “Until now,” Gillen says, “insured patients would see a doctor, leave a co-pay and then watch a series of insurance and physician envelopes come through the mail over weeks to months, until finally one detailed the actual amount, if any, to be paid by the patient.” Now, largely through new software programs that assess both a patient’s insurance coverage and the day’s charges, those weeks to months are often collapsed into just minutes for an estimate, or even a full adjudication of the bill.

Owe, say, $90 for a sore throat checkup with at least that amount of a deductible still to be paid, and an increasing number of practices will request $90 that day, plus a co-pay if your insurance includes one.

At one doctor’s office, just blocks from the White House, a video screen in the waiting area tells patients that if they don’t have their insurance card, the practice would be happy to “reschedule your appointment.” That practice also asks that the co-pay be coughed up before the patient sees the doctor and calls patients in arrears to a window in full view — and earshot — of other waiting patients.

Those are more draconian measures than many doctors follow. But few providers let patients head home these days without either some payment or a definitive plan for how to pay their share of the bill.

“This combined information is gathered prior to preregistration and is presented to the patient,” says Faria, who adds that “once a patient has a clear idea of what their coverage will cover and what their cost will be, a meeting with our financial counseling office is arranged.”

Mark Rukavina, executive director of the Access Project, a health-care advocacy group in Boston, says finding out how much patients owe right away, rather than hanging in limbo for weeks to months, is a positive.

One payment option will be a credit card. “It’s a myth that people only use their credit cards for flat-screen TVs,” says Tim Westrich, a research associate who specializes in credit issues at the Center for American Progress, a D.C. think tank. “If you’re already financially stressed, a credit card could be your only pressure valve,” Westrich says.

But some guidance on use of the cards for medical expenses, especially unexpectedly higher ones, could help prevent extra charges and higher interest rates. Rukavina advises patients to never use a credit card that must be paid up monthly unless they are prepared to do so. If they don’t pay on time, a $30 flu shot can cost an extra $30 or so for the late fee, plus trigger higher interest rates.

Celent’s Gillen says that as consumer share of medical expenses increases, he expects banks to issue interest-free health-care-specific credit that might be linked to payrolls for deductions and even offer discounts for users. (Some health-care-only cards exist now but are generally intended for elective health expenses such as Lasik and plastic surgery. They generally start with 0 percent interest but trigger a percentage increase if payment is late or missed.)

Bottom line is we need to transition our health care system to one that pays for value – including patient’s paying for value at the time of service just like they do with their clothes, their TV’s, and their cars. Insurance plays a key role by preventing catastrophic loss but we need to be prepared to pay the maintenance fees on our health assets. We need to save, plan, work toward goals, and be accountable for our health care.

Moving toward a value based health system that competes based on results (instead of zero sum cost shifting gimmicks) will help achieve the audacious goal of creating the next generation health care system.


Filed under Consumerism, Transparency, Value