Lab Soft News

Completing Healthcare Transactions at the Point-of-Service

Scott Shreeve in his Crossover Health blog raises the interesting issue of the need to complete healthcare transactions at the point-of-service (see: Millenial Patients: Care Delivery for the Next Generation of Patients). This goes to the question of how to modify healthcare transactions so that they more closely resemble the level of service offered in most other more consumer-oriented businesses. Here's an excerpt from his blog note with boldface emphasis mine:

In addition to getting comfortable discussing pricing, providers will need to be able to complete healthcare transactions at the point of service. As more consumers pay a higher percentage of their own healthcare costs (consumer payments are about $50 billion today), healthcare providers will need to adopt new technology and business processes. Failure to do so will result in an ever increasing uncollected payment burden... Part of this transformation includes eligibility verification, real-time co-pay/deductible accumulators, card/reader technology, and financial integration with consumer accounts. In addition, providers will need to become much more transparent with regard to pricing for their services. Retail clinics have led the way in posting cash prices, and physicians will need to learn to not penalize consumers with much higher cash prices. Rather, they’ll need to reward them for the real and tangible savings that cash payments make possible by avoiding the Byzantine insurance payment process. Companies like Recondo, TriHealix, and even practice management companies like athenahealth are leading the way.

To put the point bluntly, let's come to expect the same level of service from our healthcare providers that we expect from, say, the local grocery store or retail drug store or health club. For me, such expectations will include the following: (1) we should know the exact cost of medical services when we receive them; (2) we should be able to pay for such services when we order or receive them; (3) we should be rewarded in some way for long-term patronage of a business or provider; (4) we should expect a reasonable response when we judge medical services to be inadequate in some way; and (5) cash sales for services should not be penalized by higher prices and should actually be rewarded.

Ironically, direct access lab testing (DAT) is paid for at the time of the test order. The bad news is that these charges are generally not covered by most health insurance plans. The good news is that these DAT charges may sometimes be less than the co-payment amount for lab tests under some health insurance plans. Also, DAT web sites make their price lists readily available and thus make the cost of lab tests more transparent to consumers (see: DAT Makes Cost of Lab Testing More Transparent for Consumers).

An Update on the Kaiser HealthConnect Project

Veteran readers of Lab Soft News may remember a flurry of activity in the November-December, 2006, time period regarding the Kaiser HealthConnect project (see: Kaiser & Epic Respond to Justen Deal's E-Criticism; Is Kaiser Hijacking the Blogosphere?). Much of the controversy related to a young Kaiser employee name Justen Deal who surfaced as an IT whistle-blower and blogged about the total cost of the HealthConnect project, the periodic unplanned and prolonged computer downs, and the rather slow roll-out of the inpatient Epic software to hospitals in the Kaiser chain.

Mr. HIStalk provides us with the following update on the HealthConnect project:

Kaiser says its HealthConnect outpatient rollout is finished, with all 8.7 million enrollees having access, but inpatient is installed in only 13 of 36 hospitals. They admit to its $4 billion cost, which I believe was angrily denied when that number was first estimated by outsiders. Maintenance is $1 billion (!!). The hospitals and health plan announce a 64% net income drop in Q1 because of investment losses. Still, a $250 million quarterly profit for a "non-profit" in one quarter isn’t too shabby (imagine if they weren’t spending $1 billion on HealthConnect maintenance).

Here's some additional information from the article referenced by Mr. HIStalk above on the outpatient rollout:

But Kaiser still has a ways to go on the inpatient side. Officials said 13 of its 36 hospitals (34 of them in California) have installed the EHR software, giving 3.2 million enrollees the advantages of an inpatient EHR system. Some 14 hospitals are slated to do so this year, including 13 in the Golden State and one in the Portland, Ore., metropolitan area. The remaining nine hospitals, including one in Hawaii, will follow in 2009 and early 2010, said Kaiser spokeswoman Ravi Poorsina.

So Kaiser has thus far spent $4 billion in capital on HealthConnect, is incurring $1 billion yearly in operating expenses, and has deployed the inpatient EMR in only half of its hospitals. I suspect that this project has already set some sort of record for healthcare, or even all large-scale computer projects, perhaps even rivaling the military's periodic and often ill-fated electronic medical record initiatives.

Big Pharma Reacts to Its Drug Pipeline Problems

I have posted previous notes about the challenges facing Big Pharma in terms of the lack of potential blockbuster drugs in the development pipeline (see: Number of Global Drug Projects by Phase). David Williams has a posted a very interesting note in his Health Business Blog about how the pharmaceutical industry is reacting, or might react, to this problem (see: How big pharma might use manufacturing as a strategic marketing tool). Below is an excerpt from his note with boldface emphasis mine:

As pipelines dried up and the generic industry became more sophisticated and aggressive, big pharma adjusted its tactics. In product development it’s turned to in-licensing, creating new formulations (especially extended release products), and combination products. Big pharma has combated generics in the courtroom, introduced “authorized generics” that cut into the profits of the initial generic supplier, and attempted to bundle multiple products into its contracts with payers....It’s unlikely that big pharma will succeed in reviving its pipelines anytime soon, but there are things the industry could try. For example, if branded pharmaceutical companies can demonstrate better clinical results through medication adherence programs, they may be able to make the argument that they are selling a “solution” rather than a product.

The suggestion that pharmaceutical companies might launch a medication adherence program as a means to sell a solution rather than a product is very interesting. I know that patient non-compliance with their prescribed drugs is a major, and certainly muiltifactorial, problem. I am sure that some of the underlying reasons include the cost of the medication, avoidance of unpleasant side effects, forgetfulness, mental confusion, and even pure contrariness on the part of patients. I am also sure that inexpensive programs to counter drug non-compliance such as "reminder" web sites would be of little value in counteracting most of these problems. One such site is SmartMinder,  a refill reminder program utilizing phone, pager, cell phone, mail, or email notifications. The service is provide by Echo Pharmacies, a small set of independent pharmacies in the Long Island area.

I believe that visiting nurse or a pharmacy care program (see: Effect of a Pharmacy Care Program on Medication Adherence and Persistence, Blood Pressure, and Low-Density Lipoprotein Cholesterol) as a means to ameliorate drug non-compliance problems would be more effective than web reminder sites but certainly much more costly. However and given the price of many drugs these days, I suspect that many pharmaceutical companies would gladly eat these costs in order to preserve some portion of their market share in the face of stiff competition from generics.

Performing Procedures Can Be Lucrative for Physicians

The Wall Street Journal has just run an excellent piece (see: Medical Specialties Hit by a Growing Pay Gap) about how some highly trained medical specialists like neuro-ophthalmologists end up at the lower end of the pay scale because they don't perform procedures. Here's the "money" quote from the article about why procedures tend to be reimbursed by payors at a high level as compared to, say, physician time and expertise. Blame it on Medicare and the federal government (boldface emphasis mine):

But in the early 1990s, Medicare implemented a new system to set standard fees for physicians' services and procedures. The system's aims were to clamp down on prices and, ironically, narrow the disparity between the bread-and-butter office visit and more-expensive specialty procedures. Over time, private insurers have taken their cue from Medicare to set their reimbursements, too. But many health-policy experts argue Medicare's fee-setting mechanisms are making those disparities worse. Its formula still rewards the capital expenses of new technologies, and is slow to reduce those fees as costs depreciate and physicians learn to perform procedures faster. But at the same time, it hasn't significantly increased fees for lengthy and complex patient visits, which are much harder for doctors to make more efficient without harming patient care.

The WSJ Health Blog picks up on this pay-gap theme as well as physician reimbursement (see: Doctors Shun Less Lucrative Specialties) and then presents the best graph I have ever seen to illustrate this problem (see left). You just can't argue with these numbers. You are a physician, you perform procedures, and you double your income.

Now comes the interesting discussion. What's the most equitable way to compensate physicians?  For me, the only reasonable approach would be physician time with the patient plus physician training/expertise, as documented by years of formal training. I would probably factor in some measure of patient satisfaction (hard to do) and outcomes success rate (also hard to do) and perhaps a small kicker for capital investment. Suddenly you have a very complicated compensation program that everyone will immediately start to game and suddenly we will be back in the same mess.

Status and Challenges of Offshore Clinical Trials

I have posted a number of previous notes about the globalization of clinical trials and the contract research organizations (CROs) that provide lab support for such trials such as Covance and Charles River. Clinical trials are an important market for the clinical lab industry. A recent article about the globalization of clinical trials (see: MIT Study Quantifies Globalization Trends) provides some additional insights into this trend. I provide an excerpt from it below with boldface emphasis mine:

Outsourcing of biopharmaceutical clinical trials to China and India is growing at a substantial rate, but in real terms the much-ballyhooed nations are still "very minor players," [according to an MIT professor]. [The U.S.] commands a 48.7 percent share of total trial activity and has eight times the number of trial sites of second-place Germany....India, a growing global hub for trial-related technology, is also well positioned to become a major clinical trials player....Trial density, the proportion of recruiting sites relative to overall population, is greatest in the U.S., Canada, and several Western European countries....But it's becoming substantial in some Eastern European countries such as the Czech Republic, Hungary, and Estonia. Presumably, this makes the region increasingly able to offer a competitive number of sites suitable for global trials....Pooling data from ethnically and culturally diverse populations may become problematic with the march toward personalized medicine and pharmacogenomics...and at some point may even reverse the current globalization trend. Drug-naïve patients on vegetarian diets may also be differentially affected by classes of drugs commonly used in the Western world. Further, the integrity of the informed consent process may be jeopardized in nations where the physician-patient relationship is more "hierarchical."

Despite the possible cost advantages of conducting clinical trials offshore in less developed countries, I agree with the general drift of this article that the majority of them will continue to be conducted in the U.S. One reason is the challenge, as noted above, of conducting clinical trials in countries like India where the genetic character of the research subjects may differ from the majority of patients in the U.S. There are other scientific and ethical barriers to overcome with offshore clinical trials as reflected in the following 2004 article (see: Indian Guinea Pigs for Sale: Outsourcing Clinical Trials):

"When getting a subject's informed consent, some research is complex and it is difficult to convey the relevant issues," notes US-based bioethicist Ruth Macklin who has participated in the development of various international ethical guidelines for collaborative research in developing countries. Equally worrisome is the fact that "people may not distinguish between treatment and research. There is a false belief that sometimes research may have a direct benefit. Research does not provide individualized medical treatment, titrating doses according to the patient's need, for example."

As a former member of a hospital institutional review board (IRB), I found the review of the occasional offshore studies that came to the committee to be very challenging. The motivation of impoverished people to enroll in clinical research studies can be far different than subjects in developed countries like the U.S.

Virtual On-Line Visits (VOVs) Support Physician/Patient Interactions

I have published a number of previous notes about the efficiency of physician emails to patients, also referred to as on-line consultations and e-consultations. Here is one example: Doctors Slow to Adopt Email with Patients. Here's another note about the relevance of e-consultations for PCPs: More on Redefining the Role of the PCP. It turns out that a new term is also being used to describe physician interactions with patients: virtual on-line visits (VOVs). A recent article discussed this type of consultation (see: US doctors offer online consultations) and highlighted a web site, RelayHealth, that can be used to enable them. Below is an excerpt from the article with boldface emphasis mine:

When Dr Michelle Eads makes a house call, she no longer has to spend time in her car sitting in traffic....[She] checks on several of her patients by logging onto the internet and answering their questions online....Virtual Online Visits (VOVs) are more efficient and convenient since they don't require a telephone call, being placed on hold, missing work, arranging for a sitter, paying for parking....RelayHealth, a website that describes itself as a secure, private way of communicating with a doctor, hopes to overcome those anxieties. Last year, two major US health insurers began aggressively marketing RelayHealth to about 1 million doctors across the US....A study by the New York market research firm...confirms the increase in doctors' use of the internet to serve patients. Thirty-one per cent of family doctors are offering online consultation, up from 19 per cent in 2003....[Dr. Eads] uses the internet frequently for people complaining about upper respiratory infections, sinusitis and chronic disease management, including follow-ups for controlling hypertension and diabetes.'I still see patients every six months if they are well controlled, but the three-month in-between appointments are easily handled in this format,' she said. The cost of a VOV is 25 dollars ...while a traditional visit to a doctor's office costs 65 to 85....

Here's some background reading about RelayHealth copied the company's web site:

McKesson, the world's largest healthcare services company, has begun the assimilation of Per-Se Technologies,...a leading provider of financial and administrative healthcare solutions for hospitals, physicians and retail pharmacies. McKesson completed the Per-Se acquisition on Jan. 26, 2007....The acquisition [of Per-Se] also gives McKesson the opportunity to combine the connectivity assets from both companies into a new business known as RelayHealth. RelayHealth will expand on McKesson's current physician-patient communications business with a focus on helping to decrease administrative costs and improve care by connecting physicians and other providers, pharmacies, payors, and consumers.

So we learn that RelayHealth not only provides a vehicle for physician VOVs but also provides connectivity between physicians and pharmacies/payors. My quick tour of the service on the web site revealed it to be impressive. Of note is the fact that all electronic transactions are stored and retrievable, generating what is referred to as an interactive medical record. Not surprisingly, the drug-prescribing application is particularly well done.

Condom Manufacturer Promotes Safe-Sex Tour

You can't make this stuff up. The Trojan Company, a major manufacturer of condoms, has gone on the road with a bus tour to promote safe sex (see: Rubber Hits the Road as Trojan Campaigns for Sexual Health in America). The press release announcing the tour makes interesting reading. Below is an excerpt from it with boldface emphasis mine:

...[T]he Trojan Evolve tour will travel across the U.S. raising awareness regarding the poor state of sexual health in America and urging Americans to petition for change. The fact is, this is not a sexually healthy nation, and the Evolve tour is designed to address this head on by inspiring a positive sexual health movement and empowering Americans to change behaviors and opinions about carrying and using condoms. With primetime network television restrictions on condom advertising still in effect, the multi-faceted grassroots effort, which includes a 40-foot long interactive bus and 40-foot wide IMAX-style rollercoaster ride, kicks off its nationwide tour in the hometown of the U.S. Centers for Disease Control and Prevention (CDC)....[The tour] will crisscross America through November 2008 inviting people to evolve, by personally pledging to use a condom every time and advocating for comprehensive sexual education in schools by signing the Trojan Evolve Petition. Along the bus tour route, participants can also encourage friends to continue or change sexual health behaviors by recording video testimonials, which will be posted to the Trojan Evolve Web site....

I suspect that this press release was written by some twenty-something copy editor, but I find its upbeat tone mildly irritating. I do have the following comments and questions:

• Having grown up in a different era, I find myself burdened with a different definition for sexually healthy than the one suggested above. I definitely need to be reeducated.
  
• I am confused by the reference in the press release to the need to "evolve" and that the habitual use of condoms is somehow linked to this process. Biological evolution is the process of change over time in the heritable characteristics, or traits, of a population of organisms. When males are born with a condom in-situ, only then can we begin to talk about condoms and evolution in the same breath.
• I am very much looking forward to seeing some of the Trojan Evolve video testimonials that will be recorded on the bus tour. You can also click on the Trojan-produced video promoting the use of condoms at the company web site to see additional portrayal of the company's evolution theme, but with the young men portrayed as pigs.
  

Fantastic 1819 Anatomic Illustrations by Kyoto Physician Yasukazu Minagaki

The Tohoku University Library in Japan provides an online display of the painfully-real Kaibo Zonshinzu anatomy scrolls created in 1819 by Kyoto-area physician Yasukazu Minagaki. The style of these medical drawings is markedly different than the more sanitized approach favored in Western countries (see: Kaibo Zonshinzu Anatomy Scrolls Online).

More details about the these Japanese anatomic drawings are supplied at the Pink Tentacle (see: Kaibo Zonshinzu anatomy scrolls (1819):

Unlike European anatomical drawings of the time, which tended to depict the corpse as a living thing devoid of pain (and often in some sort of Greek pose), these realistic illustrations show blood and other fluids leaking from subjects with ghastly facial expressions. The fact that the bodies used in scientific autopsies in Edo-period Japan generally belonged to heinous criminals executed by decapitation adds to the grisly nature of the illustrations.

These works of medicine and art from 1819 are worth a look and somewhat shocking even for physicians who may have been trained using Gray's Anatomy, now available on-line. The online display of the drawings requires you to click the "left arrow" to navigate through the scroll.

The Musculo-Skeletal System as an Emerging Specialty Focus,

The New York Times on April 22, 2008, featured a full page advertisement for the Hospital for Special Surgery. The motto for the hospital, as seen in this ad, is "Specialists in Mobility." Also, according to the ad, the Hospital for Special Surgery is a "world leader in musculoskeletal research, linking laboratory science to state of the art clinical procedures." This caught my attention and caused me to think about the topic of specialized hospitals (see: Cardiology Morphs into Cardiovascular Medicine).

It's commonplace for various organ systems or patient categories to form the basis of a specialty practice in medicine. Think cardiovascular medicine, gastroenterology, pediatrics, and obstetrics/gynecology. Also increasingly common, as in the case of cardiovascular medicine, has been the development of specialized hospitals that offer both inpatient and outpatient care in that specialty area. These trend has evoked the ire of the execs of general hospitals by siphoning off many of the high-margin cases.

I find that the blending of orthopedics and rheumatology in a specialized hospital, as exemplified by HSS, to be interesting and relatively unique. First of all, it cuts across several medical specialty boundaries, including internal medicine, orthopedic surgery, and sports medicine. In this regard, such hospitals are analogous to multidisciplinary cancer centers. The hospital's research program is also cross-disciplinary, focusing on rheumatoid arthritis, autoimmune disease, and the design and testing of joint prostheses.

I am wondering whether we will see the development of other specialty hospitals and centers for, say, gastrointestinal or respiratory diseases in addition to the current major current examples of cancer, cardiovascular, children's, and women's hospitals/centers. In the case of the musculoskeletal orientation of HSS, one gets the impression that the orthopedic surgical procedures pay the rent and autoimmune diseases attract affluent donors to support the research programs. Good synergy.