Lab Soft News

Big Data: The Hottest New Thing in Computing Attracts Big Money

The hottest new thing in computing is big data. A Google search for this exact term yields 17,600,000 results. Below is an excerpt from a short article about the money raised by a company named 10gen that is a leader in this technology (see: Big Data Startup 10gen Raises $42 Million At A Half-Billion-Dollar Valuation)

If you aren't paying attention to a market called big data—and in particular a company called 10gen—then wake up! 10gen just raised a hefty $42 million—$73 million to date. Sources tell us its valuation is over half a billion dollars—in the range of $500 million to $550 million. The company wouldn't comment publicly on the valuation but does see itself "building a Red Hat-type of company" in the database market. This is upwards of a $1 billion opportunity," says 10gen president Max Schireson....10gen makes something called MongoDB, an open-source NoSQL database. NoSQL, a new approach to databases that's better adapted to the massive amounts of data websites generate, will be a $3.4 billion market by 2018....It's growing by 21 percent a year. While official comparative stats are hard to come by because all the NoSQL players are private, 10gen says it's got about half the NoSQL market wrapped up already. This is based on other indicators, such as how often LinkedIn profiles mention MongoDB.10gen has over 500 paying customers, including 5,000 customers for its database-monitoring service, it says. It also has partnerships with Amazon, Microsoft Azure, Red Hat, VMware and others. NoSQL is one of the technologies that is powering the big data phenom.  It is also the go-to type of database for Web and cloud applications.  It doesn't replace traditional databases like Oracle—it's a whole new way to deal with data. Big data lets applications cheaply and easily scoop up and analyze massive amounts of information from all sorts of sources.

I don't think that "big data" has had much of an impact on healthcare computing yet but that's probably because healthcare is not generally interested in the the cloud (see: The New Computing Paradigm: Multiple Devices Connected by the Cloud). What I do know is that healthcare generates a massive amount of information. Once some of it gravitates to the cloud, the notion of big data, MopngoDB, and NoSQL  may start to make more sense. Also interesting in the article is the fact that the size of MongoDB market is based in part by the number of people who mention it in their LinkedIn profiles.

::Update on 5/31/2012 @ 3:105p.m. ET.  See: A Wave of Analytic Innovation

Twenty Great Life Hacks That Most of Us Learn Far Too Late

I am a sucker for the various lists of "life hacks" that get posted on the web, particularly when they make sense to me (see: 20 Things I Should Have Known at 20). The list below, copied from the referenced note, resonates with me. 

1. The world is trying to keep you stupid.
2. Do not have faith in institutions to educate you.
3. Read as much as you can.
4. Connect with everyone, all the time.
5. Don’t waste time being shy.
6. If you feel weird about something during a relationship, that’s usually what you end up breaking up over.
7. Have as much contact as possible with older people.
8. Find people that are cooler than you and hang out with them too.
9. You will become more conservative over time.
10. Reduce all expenses as much as possible.
11. Instead of getting status through objects (which provide only temporary boosts), do it through experiences.
12. While you are living on the cheap, solve the money problem.
13. Learn to program.
14. Get a six-pack (or get thin, whatever your goal is) while you are young.
15. Learn to cook.
16. Sleep well.
17. Get a reminder app for everything.
18. Choose something huge to do, as well as allowing the waves of opportunity to help you along.
19. Get known for one thing.
20. Don’t try to “fix” anyone. Instead, look for someone who isn’t broken.

One of the items in the list that may seem to be the most trivial -- get a reminder app for everything -- may be one of the most important. Actually, having access to a reminder/do-list is a relatively simple matter. What's hard is keeping it up-to-date and comprehensive. That's really hard and requires dedication and commitment. 

I have finally discovered the secret of keeping my personal task list current. I have access to it in a floating window on my computer screen. It's always staring at me as a reminder of what I haven't yet done. I am fond of the task list that comes with Gmail. An added bonus with this particular app is that I can access my list from the browser on my smartphone so I can add items to it when away from my desk. The best thing about keeping a task list is one's sense of satisfaction when you complete a task and can then legitimately remove it from the list.

The New Computing Paradigm: Multiple Devices Connected by the Cloud

Forgive me for restating the obvious but the "new computing paradigm" can now officially be summarized as including the connection of various smaller devices (tablets, smart phones, iPods, cameras) via the cloud. Everyone knows this and has known it for at least a couple of years, except perhaps for the executives at HP, Dell, and Cisco. Here are some of the details in an excerpt from a recent article about this topic (see: As Computing Changes, Hewlett-Packard Struggles to Follow):

As the computer industry makes a radical shift to new modes of computing — in the cloud and on tablets and smartphones — Hewlett-Packard, a stalwart of the previous era, finds it hard to keep up. It is not alone in that struggle. H.P., along with well-established tech companies like Dell and Cisco Systems, is contending with a faster-than-expected move by consumers and businesses from personal computers and small racks of computer servers toward mobile phones and tablets that are connected to millions of servers, all lashed together in remote supercomputing “clouds.” The new systems are cheaper and more flexible, which businesses found appealing in a slow-growing economy....So far, however, the industry shift has rewarded upstarts like Amazon.com, which has become a premier cloud provider to business, and Apple, which reinvented itself with smartphones and tablets. The old guard in enterprise computing, particularly H.P., has struggled with a new technology order that squeezed profit margins and made many older products unattractive....

H.P. said it would cut its ranks by 27,000 employees, or 7.7 percent of a global work force of 349,600. Many of the jobs are in the United States. H.P. hopes to save as much as $3.5 billion a year from the restructuring, most of which it would put toward cloud-based businesses, like computer security and analysis of large data troves....H.P.’s results followed similar news from its archrival Dell on Tuesday....Dell reported a 12 percent decline in consumer revenue, and smaller declines in both business and government sales. Dell’s stock plunged 17 percent Wednesday on the earnings report....Earlier this month, Cisco reported a 22 percent increase in net income after its own corporate restructuring over the last year, but warned of falling demand, in part because of Europe’s faltering economy....

Software delivered over cloud computing is typically less profitable, since it is effectively rented cheaply, without a lucrative service contract....Of all H.P.’s competitors, I.B.M. has fared best in the transition to the mobility and cloud world. I.B.M. has bet billions on the cloud-based business of big data analysis. In its most recent quarter, however, I.B.M. reported flat sales but improved profits because of tight management. Ms. Whitman, who took control of [HP) last September, said [the company] had to reposition itself quickly, but also said it would have enough time, since its largest corporate customers would move gradually to full cloud computing. “We’re not lagging in the transition to the cloud,” she said. “The enterprise changes slowly.”

I have been blogging about cloud computing for more than four years. My first notes were posted in early 2008 (see: Cloud Computing in Healthcare: Key Questions to Ask; Finally, A Clear Definition for Cloud Computing). The first comprehensive, clear endorsement of cloud computing for the labs that I have heard was provided a few weeks ago by Sonny Varadan, CIO of PAML, at Robert Michel's  Executive War College in New Orleans. The explanation of how major companies like HP, Dell, and Cisco could miss the boat for so long is relatively simple: complacency, habit, and an unwillingness to tamper with the current, successful business model.

When Meg Whitman of HP says that the "largest corporate customers would move gradually to full cloud computing," I agree with her. This is doubly true for healthcare computing which always lags 5-10 years behind other "corporate computing." However, I hope that lab computing will be a little smarter vis-a-vis this technology and show the way. Some LIMS computing has been in the cloud for at least four or more years. I am looking forward to hospital lab computing moving in this direction soon. We need to be delinked from the shackles of the hospital servers -- it's too expensive and too strategically limited.

Is Google a Publisher or a Search Engine? Can Google Have It Both Ways?

The question of whether Google is a publisher of content or "merely" a search engine to point to content has arisen in Lab Soft News previously (see: Google as an Enabler and Protector of Global Information Exchange). Here's a quote from that note:

This [quoted] article begins to address some of the key questions that we are facing in the internet era such as the following: What is a publisher? What is a virtual publisher? What is content? What is a media company? Should virtual publishers be required to pay for content? How does protecting content and providing access to it differ from publishing it? What is censorship? To what extent do western democracies practice censorship? Is content search on a global basis more important than the creation of the original information? To what extent does open internet search destabilize totalitarian countries like China?

This same issue has arisen again and covered in a recent article in the NYT. This piece was prompted, in part, by an opinion paper posted on the web by Eugene Volokh who had been hired by Google to do so (see: Professor Makes the Case That Google Is a Publisher). Below is an excerpt from the NYT piece:

There are good reasons for Google to want to be considered a mere connector; like other Internet companies, it can beg off responsibility for what is transmitted by its users. That is the useful stance when it comes to rebutting claims of copyright infringement or libel. But when the issue is anticompetitive behavior..., Google has lately been emphasizing that it sees itself as a publisher, and it is appealing for different kinds of protections, in the realm of free speech...The company hired Eugene Volokh, an influential conservative blogger and a professor at the University of California, Los Angeles, to write a paper last month. In it, he argues that Google search results are protected speech....Competitors and some companies say Google’s search algorithms favor services owned by Google, a charge Google denies, but one that has drawn the attention of regulators in Europe and the United States....In September, Google’s chairman, Eric E. Schmidt, was called before a Senate antitrust panel to defend his company’s practices. The chairman of the subcommittee, Herb Kohl, Democrat of Wisconsin, put the question bluntly: “Is it possible for Google to be both an unbiased search engine and at the same time own a vast portfolio of Web-based products and services?” Mr. Schmidt’s response was measured. He noted that if Google stopped providing helpful search results people would start using other search engines. He also said that profit motives would not distort Google’s search results. “I’m not sure Google is a rational business trying to maximize its own profits,” he said....[The] message of [Volokh's] paper is that Google is a publisher and can favor its own material or even block another’s. If you don’t like it, tough luck. Try telling a newspaper what it should be printing. In one chapter, Mr. Volokh argues that some people “have allegedly come to expect that Google will choose search results based solely on supposedly ‘neutral’ computer algorithms, with no preference for Google’s thematic search results.” “But the critics cannot point to any such guarantees to customers,” he continued, “because Google makes no guarantees.”

It's pretty clear to me that Google wants it both ways: the "neutrality" of a search engine that is not responsible for search results and the free speech protection of a publisher that can favor its "vast portfolio of Web-based products and services" with its search algorithms. The company can avoid lawsuits using both models while at the same time optimizing its profits. I don't think that the regulators and politicians will allow it to enjoy the benefits of both sides of the argument. 

Last Chance for Free Admission to the API Strategic Summit

As mentioned in a previous note (see: Attend the Strategic Summit: Help Decide the Future of the LIS and Pathology Informatics), the Association of Pathology Informatics (API) is sponsoring an invitation-only, free Strategic Summit to be held on June 7-8, 2012, in Pittsburgh. The goal of the conference is to discuss the future of the LIS and pathology informatics in an era of powerful EMRs. Put another way, the lecturers and discussions will help to define the critical functionalities of best-of-breed LISs in comparison with the LISs that are embedded in enterprise-wide EMR solutions. A number of strategic questions will be addressed by the various speakers (see: Strategic Questions). 

The conference begins at 6:00 p.m. on Thursday, June 7, with a wine-and-cheese reception and evening lecture. On Friday, June 8, a total of 11 lectures will be offered, seven by well-known faculty members and four by the corporate underwriters of the conference: Cerner, McKesson, SCC Soft Computer, and Sunquest (see: Conference Schedule). This second day adjourns at 3:30 p.m. to allow most registrants to return home. A draft of a white paper, including an action agenda, will be developed post-conference by API members. This draft white paper will be reviewed and critiqued during a related follow-up strategic workshop that will be held at the Pathology Informatics 2012 conference in Chicago on October 9-12, 2012.

There is no registration fee for the Strategic Summit or the one-night hotel stay but registrants are responsible for their own travel costs to Pittsburgh. About four tickets of the original API allocation have not been spoken for. In order to qualify for a ticket to the event, please send an email to Nova Smith including a brief description of your lab or hospital position with a brief paragraph stating why you are interested in attending and what contribution you can to make to the discussions. Below is the contact information for Nova. It is possible that some of the corporate underwriters listed above may also have a few spare tickets. Contact those with whom you may have a relationship for more details.

Nova Marie Smith
Administrative Assistant
Association for Pathology Informatics
Journal of Pathology Informatics
P: 412-623-8382
F: 412-623-2814
Email: nms67@pitt.edu

 

Multidisciplinary Diagnostic Teams and Integrated Diagnostic Centers

The notion of integrated diagnostics focuses on the practicality and feasibility of closer collaboration, or even merger, of pathology, clinical lab medicine, and radiology (see: The Evolution of Integrated Diagnostics into Integrated Diagnostic Centers; Revisiting Integrated Diagnostics and the Integrated Diagnostic Report). The Integrated Diagnostic Center (IDC) is a physical or virtual facility where diagnoses are rendered for patients after referral from clinicians. I delivered a lecture recently at the AHIC conference in Toronto on this topic (AHIC 2012: Towards Integrated Diagnostics: Bringing Crucial Information to the Point of Care). You can review the lecture in PDF format (see: Integrated Diagnostics and Its Relationship to Digital Pathology: A Strategic Analysis). One of the primary goals of my presentation in Toronto was to emphasize the critical role that digital pathology will play in the emergence of the new merged specialty of diagnostic medicine. In this same context, I want to describe the role of multidisciplinary diagnostic teams working within these IDCs as an analogue of the multidisciplinary clinical teams that work so effectively within cancer hospitals.

For me, one of the most important innovations in cancer hospitals have been their deployment of multidisciplinary teams (MDTs) (see: Most Oncologic Surgeons Do Not Adhere to Cancer Care Standards). One of the key advantages of managing cancer patients with a multidisciplinary team is that the various medical specialists on the team are incented to downplay some of their natural specialized training instincts for the good of the patient.

I have been proposing that patients with complex diagnoses such as undiagnosed tissue masses be referred to integrated diagnostic centers. These centers would be staffed primarily by diagnosticians such as pathologists and radiologists. The rationale for the development of such centers is that diagnostic procedures and the integration of test and report results in this era of genomic and complex imaging procedures should be moved "upstream" to the diagnosticians themselves. This should result in the more efficient diagnosis of unknown masses or other complex diseases, ideally, in a matter of two to three days.

Both radiology and pathology are now so specialized that no one individual could function autonomously in the diagnosis of a patient with a newly discovered tumor. The members of the diagnostic team would therefore need to convene either physically or virtually at the end of each work day and jointly sign-off on the diagnoses for the most challenging cases. Part of the efficiency of such an IDC is that, behind the scenes, a series of computerized, work-flow algorithms will guide the patient through the most appropriate and relevant imaging studies, biomarker studies, and tissue biopsies in order to arrive at a final diagnosis in the shortest amount of time. These algorithms will take into consideration all previous positive test and studies in order to navigate quickly through the entire diagnostic process.

Consumption of Soda Begins to Decline but What Beverages Are Being Substituted?

I have discussed the high consumption of sugary sodas in previous notes and the role that these beverages play in our obesity epidemic (see: Federal Tax on Soda Pop Proposed: Can This Be Justified?; State Taxes on Soda Pop Gain Momentum; Does the End Justify the Means?). These notes have also raised questions about the wisdom of banning these beverages from school and/or taxing them to both force a reduction in consumption and also raise revenue. However, some of these changes seem to be having an effect as noted in a recent article indicating the soda consumption is starting to decline in the country (see: Soda Makers Scramble to Fill Void as Consumption Declines):

Cold, bubbly, sweet soda, long the American Champagne, is becoming product non grata in more places than ever these days. Schools are removing sugary soft drinks from vending machines at a faster pace, and local governments from San Antonio to Boston are stepping up effort to take them out of public facilities as the nation’s concerns about obesity and its costs grow....Last year, the average American drank slightly under two sodas a day, a drop in per capita consumption of about 16 percent since the peak in 1998, according to Beverage Digest, a trade publication. What began as a slow decline accelerated in the middle of the last decade and now threatens some of the best-known brands in the business. Coke and Pepsi are relying more than ever on the “flat” drinks and bottled waters in their portfolios and on increases in the price of sodas, forcing die-hard drinkers to pay more to feed their sugar habits....“The question is, Are we seeing a modest, multiyear decline that will bottom out? Or are we seeing the beginning of a paradigm shift away from carbonated soft drinks?” said ...a longtime observer of the industry....Health advocates are cautiously optimistic about the decline. “It is really important because sugary soft drinks are the No. 1 source of calories in our diets,” said [the] director of nutrition policy at the Center for Science in the Public Interest. “We get more calories from sodas and sugary drinks than any other individual food — cake, cookies, pizza, anything.” But [some experts] are worried about what may be taking the place of carbonated soft drinks in the American diet. They note the increasing appetite for energy drinks, loaded with sugar as well as caffeine, and sports drinks, which are not carbonated but may have as much sugar as sodas. In spite of [the fact that] consumers [are reducing their soda consumption], beverage companies have been making more money on carbonated soft drinks by raising prices. That move allowed revenue from carbonated soft drinks to reach a record high last year of $75.2 billion in the United States, according to Beverage Digest.

For me, the most alarming part of this article is that the consumption of sports and energy drinks is starting to rise. Increased consumption of energy drinks, in particular, seems to be a trend among the young to dose themselves with more caffeine. I launched a Google search for the term "energy drink" and was concerned to see on the first search page only "above the line" commercial links for various products and only laudatory reviews of energy drinks in the rest of the page. Nothing on the first page was critical of the trend or products. This suggests that we are still in the early, honeymoon phase and that the company marketers are still dominant. At some point, we will hopefully see less favorable coverage with a discussion of the empty calories in these beverages as well as a discussion of the health downside of these high caffeine doses.

Two Drivers for Medical Tourism: Public-Private Partnerships and Medical Insurance Participation

I have had a long interest in medical tourism, partly because I think that the U.S. health system would benefit from the foreign competition and also because, in some cases, the care delivered might be superior to care given in some U.S. hospitals. There are at least two key factors that need to be addressed in order for medical tourism to flourish in the U.S. The first is public-private partnerships in countries seeking to attract patients from the U.S. This topic was discussed in a recent article (see: Public-Private Partnerships for Sustainable Growth of Medical Tourism):

The Ministry of Public Affairs in British Columbia...defines PPP in the following terms: Public-Private Partnerships (PPPs) are arrangements between government and private sector entities for the purpose of providing investment in public infrastructure, community facilities and related services. Such partnerships are characterized by the sharing of investment, risk, responsibility and reward between the partners....

[and]

[The]Government of India (2003) budget for the first time announced...support [for] private sector medical tourism, and promoting India to developed countries as a world class-high-tech healing destination for low cost medical treatment and procedures. Combining tourism with world-class medical expertise became a government policy in 2003, when the Finance Minister, in his budget speech called for India to become a “Medical Tourism Hub” (PC 2007). Various international medical tourism accreditation bodies such as: International Society of Quality in Health Care (ISQUAH) has approved India’s accreditation process along with National Accreditation Board for Hospitals (NABH) certification body, of the Indian Government. Further, Joint Commission international to date have accredited 17 hospitals in India. Indian National Health Policy, which was drafted by Prime Minister’s advisory council on Trade and Industry, states that, “the treatment of foreign patients/expatriates is legally an “export” and the same is eligible for all fiscal incentives extended to export earnings” 

This part of the puzzle is fairly straightforward. Foreign countries need to create an environment which is comfortable for U.S. patients who may be nervous about the various medical and surgical procedures facing them. Red tape and bureaucratic obstacles need to be reduced and substantial capital investment needs to be made in the country's healthcare infrastructure in order to compete with U.S. hospitals. 

The second factor relates to expanded financial support for medical tourism by U.S. health insurance companies. No clear picture or trend is emerging here. Below is a quote from a recent article on this topic (see: Will health insurance providers adopt medical tourism?):

Lessons for the US insurers [regarding medical tourism]: In the USA there have been many high profile pilots and schemes launched. Some are sending people to other countries, but in very small numbers. The pilots have been a key driver in developing internal/domestic medical tourism. Some pilots sent nobody overseas, some are too new to assess the results, while others launched in a wave of publicity and have quietly died, as sometimes have the insurers and agencies that launched them. They have provided many valuable lessons for insurers across the globe. The real problem for US insurers is that health reform is a fast moving beast and it will not be until after 2014  - or perhaps even after 2018 – that the survivors will have adapted everything they do; until then, medical tourism may be an irrelevant sideshow to them.

I have come to the tentative conclusion that U.S. health insurance companies will never promote or support medical tourism in any substantial way in the short-term. Their relationship to various U.S. provider organizations such as health systems can be confrontational but, in may other ways, is quite cozy. All of the players understand the rules of the current game regarding services and reimbursement. And, as noted in the excerpt above, the rules may be changing with healthcare reform. I believe that all parties will wait until they understand how reform will help or hurt them and their bottom lines until they embark on any major changes to the status quo.

Hospital at Full Census; Surgery Patients Discharged Too Early?

We need beds. Discharge every patient you can. Most hospital-based physician will be familiar with this refrain. The problem is that it can lead to premature discharges of some patients, particularly post-op ones who may require closer monitoring and sophisticated nursing care. Revenue-driven surgery and poor planning result in some surgical patients being discharged too early concludes a pair of logistical studies conducted by researchers at the University of Maryland (see: Revenue-driven surgery drives patients home too early). Below is an excerpt from the article:

The studies show a correlation between readmission rates and how full the hospital was at the time of discharge, suggesting that patients went home before they were healthy enough. The researchers recommend better planning and other logistical solutions to avoid these problems ....“Discharge decisions are made with bed-capacity constraints in mind,” [said one of the study authors]. “Patient traffic jams present hospitals and medical teams with major, practical concerns, but they can find better answers than sending the patient home at the earliest possible moment,”[he added]. [The studies] found that patients discharged when the hospital was busiest were 50 percent more likely to return for treatment within three days....Surgeons and hospitals are incentive-driven to perform as many surgical procedures as feasible....“The hospital has to maintain revenue levels to meet its financial obligations. Surgeons are working to save lives and earn a livelihood. It’s what they do....“If the hospital says ‘sorry there are no beds available,’ there’s a lot of tension and pressure from both sides to keep things moving.” These problems are much more likely at large hospitals, which tend to provide more advanced, specialized surgeries not accessible at smaller, community institutions,the researchers say. Patients often have to travel a great distance for the procedures, so hospital delays become expensive for both them and the care providers. The study findings cover surgical discharge data from fiscal year 2007 covering more than 7,800 surgery patients who collectively spent 35,500 nights at the facility....Also, he suggests that hospitals increase the flexibility of where patients go post-surgery. Allowing them to be moved to units with empty beds, for example, could also lessen premature discharges.

All of this makes great sense to me. Now comes the interesting part. How are patients and their relatives supposed to convince a surgeon not to discharge a patient prematurely in the face of pressure from "upstairs". The latter often comes from hospital physician executives. The best argument, echoing the discussion in the excerpt above, is that the patient is not ready to go home and stands a good chance of being readmitted. This is an argument that will resonate with a surgeon if it is likely. A good surgeon, in fact, will have an understanding of which patients will do best at home and which should remain in the hospital for a longer stay. A patient's family should stand their ground and appeal a perceived premature discharge if the facts are on their side. Here's an excerpt from an article relating to premature hospital discharge (see: New Medicare Rules Protect Against Premature Hospital Discharge):

As a result of litigation initiated in 2003, hospitalized Medicare patients will now be better protected against being forced out of a hospital before they can be safely cared for at home or in a nursing home. The new regulations require that patients be given notice of their discharge rights on admission (although it can occur up to two days later) and again at least four hours before discharge. If patients or their families believe the discharge will be premature and not in a patient's best interest, they are entitled to an expedited review of the discharge decision. If they request an expedited review, the patient can remain in the hospital without charge at least until noon of the day following an independent agency's review. The independent review agency is called a Quality Improvement Organization (QIO), and the patient must get in touch with its staff by phone or in writing before the close of business on the day the hospital plans to send the patient home. The QIO demands that the hospital give the patient a detailed, written explanation of her medical condition and the basis for the proposed discharge. 

The Emerging Role of ACOs; How to Define and Reduce Unnecessary Services

The need to develop an Accountable Care Organization (ACO) is one of the leading priorities of most hospital executives but there continues to be ambiguity about what an ACO is and what it is designed to accomplish (see: Hospital Executives Search for the Formula for an Accountable Care Organization; The End of Health Insurance Companies by 2020?). A recent article in The Atlantic discusses emerging healthcare models and then provides more details about ACOs (see: The 5 Mega-Trends That Are Changing the Face of Health Care). Below is an excerpt from the article about emerging models with ACOs being one of them. Read the whole article if you have time.

As the sweeping transformation in health care takes hold, several models appear to be taking shape. Each has its strengths and weaknesses and each presents opportunities and risks, but the following three deserve serious analysis and represent different points on the risk spectrum:

• Bundled payments model: calculates total historical payments for the various components of a bundle and then discounts or at least holds constant that amount, placing the responsibility for cost and quality control in the hands of the collective providers.
• Accountable Care Organization (ACO) model: seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients.
• Capitation model: sends a fixed per-patient prepayment of premium dollars to a provider in return for medical services....

ACOs. For their part, ACOs are hardly proven, but in theory they should achieve results. The overarching idea is to get patients who aren't being treated in a coordinated manner into a system that can deliver care more effectively. The upsides to ACOs are:

• Physicians and other professionals have an opportunity to reap financial benefits of efficiency driven by quality.
• Hospitals that get involved can partially make up for declining volumes associated with higher quality and efficiency.
• Patients currently accessing services in a disjointed manner are likely to have a better overall health care experience in a coordinated system.
• Quality is likely to be enhanced because of coordination and aligned incentives.
• Providers will likely increase collaboration. Existing risk-bearing organizations can increase "membership," and many have already developed at least a portion of the infrastructure and have experience managing risk....

The ACO model, if more broadly accepted, could have a major impact on hospitals, especially because the overall goals here are to reduce unnecessary services and provide better overall health care, which would mean less traditional business for them. A prime issue is that costs--for labor, devices, supplies, equipment, and construction--aren't addressed. And the Affordable Care Act exacerbates this situation by creating additional taxes, such as those levied on device manufacturers and payers, that will be passed through to purchasers.

My general impression is that most hospital executives and, in fact, most healthcare professionals like nurses and physicians, don't have any idea about how to reduce unnecessary services. In fact, most of this group might have a hard time even defining unnecessary services. This is because most were trained and have practiced in an era of plenty where greater delivery of services was praised and elimination of services was criticized. Part of the dilemma lies in the fact that all services industries are highly dependent on labor costs (and new technology in the case of healthcare). Both sets of costs are difficult to ratchet down. In my opinion, part of the solution to the reduction of unnecessary services is engaging patients to take more ownership for their own health. Clearly, most of them need some advice about how to achieve this goal. Healthcare consumer education will thus be one of the major goals. Much of this will be accomplished via the web and social media but we have a long way to go to learn how to do it from both the hospital and consumer perspectives.