Changing face of the JP Morgan Conference

Posted on January 27th, 2014 in Uncategorized by Karl

My friend Krishna Yeshwant, partner at Google Ventures, comments on the changing face of the JP Morgan Conference in San Francisco.  It the last five years it has transformed from a pharma centric conference to a comprehensive healthcare conference with a robust track in HCIT.  To read the interview, click here:


Breaking the sound barrier in genome sequencing

Posted on January 24th, 2014 in Uncategorized by Karl

Twelve months ago, the cost for genome sequencing was $10,000 – down from $100,000 three years ago.  Today, Illumina announced they can do it for under $1,000.  This breaks the “sound barrier” on genetic testing.  Read the attached for more information.

Healthcare Innovation Needs a New Business Model

Posted on January 23rd, 2014 in Uncategorized by Karl

Healthcare Innovation: It’s All About The Business Model

Forbes, 1/22/2014 by Henry Doss

I have been talking with Dr. Brad Stuart on the topic of innovation in healthcare.  This is the third installment in that series. Our topic in this conversation is “accountable care” and the implications this movement has for cost control, for quality of care, and for fostering innovation.  In the first part of this series,here, I set up the health care issue as one that is as much about paradigms and conversations as it is about medicine.  In the second, here, I talked with Dr. Stuart about what he sees as some of the more critical high-level challenges in health care and his views about what we as a country should focus on as we continue our work to improve health care delivery.

Henry Doss:     Let’s start at the beginning.  Just what is “accountable care”?

Dr. Brad Stuart:     At it’s very simplest, accountable care is bringing all of the parts of a health system into one carefully integrated delivery process, focused on outcomes, not treatments.  And even though that sounds so very simple in the saying, it is really revolutionary in medicine.  In fact, I believe very strongly that the change to the accountable care business model will be the biggest large-scale health system innovation in the United States since Medicare was created in 1964.  And it will drive some remarkable innovations.

Doss:     It does sound pretty simple, and long overdue.  And, in fact, kind of obvious in a way.  What exactly is so revolutionary and innovative about this change?  Our health care delivery system needs a 180 degree shift.

Dr. Stuart:    Our clinical and business models in health care are upside down and there is a growing sense that we need to change things — quickly and significantly.  As a consquence, all of healthcare in the U. S. is undergoing a revolutionary paradigm shift, on a number of fronts.  Accountable care strikes at a foundational, fundamental flaw in how we view medicine.    The way we deliver health care today is really a 19th century model, grounded in assembly line mentalities and piece work payment systems.   In a very real sense, we are not paid or evaluated on the basis of patient outcomes, but on how well we deliver bits and pieces of the health care model.  Think about it like this:   It doesn’t matter whether a patient lives or dies, gets better or worse, is helped or not:  As long as a test or a procedure is done, a payment follows.   So, naturally, we tend to focus on doing the “pieces” well, but not paying a lot of attention to the whole human being.

Doss:     All of this sounds a little insensitive to the patient.  Do you see health care as essentially not operating in the best interests of patients?

Dr. Stuart:     Absolutely not.  In fact, I strongly believe that the vast majority of health care practitioners, as well as all the great people involved in the business of delivering medical care, are conscientious, highly motivated, caring people.  The challenge is the delivery system, the business model, not the individuals operating inside that business model.  That’s why I think we need to focus on changing the business model more than anything else.  I think the medical community and the patient will be better served in this new model.   And I think both will find it liberating.

Doss:     What has to happen, structurally, for accountable care to have this kind of impact?

Dr. Stuart:     Again, this may sound a little oversimplified, but it’s really just a matter of changing your point of view.  In the accountable care model, we will move  from paying for volume to paying for value. Doctors will have to stop doing whatever procedures and tests they can think of, billing for them, and getting paid whatever they charge. Instead, they will be accountable for the health and well-being, as well as the healthcare costs, of the population they serve. Healthcare will no longer be about seeing one patient at a time and forgetting about the rest. Providers will have to think about their community. They will no longer get paid by the piece.  And if we change our outcomes from volume to value, from piecemeal to holistic, I’m convinced we will see revolutionary innovations in how we deliver care.

Doss:     It sounds to me like the critical piece of this change involves shared risk.  Accountable care will drive the health care system toward a more balanced, risk-sharing system.

Dr. Stuart:     Yes, it does.   Remember, outside of accountable care, almost all the financial risk is held by the health insurance companies, Medicare and Medicaid. They pay all the claims submitted by hospitals, doctors and everyone else who touches the patient. This hides the real costs from patients, who feel they’re entitled to all the treatment they want in return for their health insurance premium. Still, patients and families wind up paying for things that aren’t covered by insurance, which in turn causes  about 60 percent of all bankruptcies in the US. But, in the accountable care model, patient and provider (and patients and communities) agree to operate in a shared-risk model.  And the bottom line is that the further the system moves in the direction of risk sharing, the more important savings will become, and the more providers will invest in and support innovation.

Doss:     How is it that structural changes in the health care business model will drive innovation?

Dr. Stuart:      Well, for one thing, a business model change of this magnitude is highly disruptive.  It will force the health care community to realize that the way forward is very likely just the opposite of what they’re doing now. This creates huge opportunities for innovation in healthcare.  It will force us to do a complete 180 degree turn in our thinking about some of the most basic things in health care.  I’m pretty sure that a great deal of innovation will come from that level of disruption and volatiity.

Doss:   Can you give me an example of something that might be innovative coming out of this paradigm shift?

Dr. Stuart:     Let me give you an example of something that needs to be disrupted in this shift.  In my view,  thinking about people as patients is a loser. “Patient-centered care” has become a mantra of health care reform. It sounds like a great idea, but it’s got a fatal flaw. Whenever I hear reformers and planners talking about “patient-centered care” I know they’re not talking about patients at all. They’re really talking about providers. They’re talking about things like how to design a new medical office building so patients will have a nice experience when they come in to see their doctors. But the conversation is really about the office building. It’s not about people and their real-world needs.   If we are deploying accountable care thinking, this fundamentally flawed paradigm is going to be disrupted — to good ends, I think.

Doss:     Next week we are going to talk about your area of professional interest, advanced care.  How does the challenge of accountable care relate to the challenge of innovative delivery of advanced care?

Dr. Stuart:     Again, it’s about changing the way you think about delivery.  To provide accountable care and live to tell the story, doctors and hospitals have to radically change their approach. Providers are used to sitting still and waiting for patients to bring clinical problems to them to solve. We are passive. So as people with chronic illness get sicker, they have no choice but to call 911 and show up at the hospital. This is the costliest possible way to treat patients, and the closer people get to death, the more this “care” looks like cruel and unusual punishment.  The accountable care model will help us to fundamentally rethink and re-engineer the way we deliver all of medicine.  But I think the biggest potential impact is in how we deliver advanced care.

Next week Dr. Stuart will be talking about innovation in his field of advanced care. Dr. Stuart has more than thirty five years of experience in internal medicine, palliative care and hospice, and is a nationally recognized innovator in healthcare.  He is co-founder and CEO of ACIStrategies.

Henry Doss is a student, musician, venture capitalist and volunteer in higher education.  His firm, T2VC, builds startups and the ecosystems that grow them.  His university is UNC Charlotte.

Grading the ACO Movement in 2013 – The Jury is Out

Posted on January 23rd, 2014 in Uncategorized by Karl

As we look back on 2013, feedback is trickling on how the Accountable Care (or ACO) Movement is faring with participating health systems.  Bottom line:  early ACO adopters say the ACO experience has been “rocky” but “informative”.   According to Modern Healthcare’s Melanie Evans, one third of all Pioneer ACO members exited the initiative in 2013.  The vast majority of those that dropped their Pioneer ACO membership switched to a shared-savings program – which has less risky financial incentives.  Most ACO health system administrators cited a lack of data and analytics to properly manage the process.  [I would argue that even if they had good data, the point of care tools do not currently exist to make that data (in a useful form) available to the providers at the point of care.]  Thus, ACO members are taking on risk, but they are effectively “flying blind”.  No wonder a third ACOs dropped out.

Should we give credit to the ACO movement for the slowdown in rate of health spending?  Data released by CMS this week, shows the slowdown started in 2008 and continued through 2012.  However, CMS’s actuaries outright reject the notion that the ACO movement is responsible for the slow rate of growth in healthcare costs over the last five years.  Instead, they credit the economic slowdown.

Total Accountable Care Organizations (TACOs)

Posted on January 23rd, 2014 in Uncategorized by Karl


Broadening the ACA Story: A Totally Accountable Care Organization

Posted By Stephen Somers On January 23, 2014 @ 11:59 am

Amid the bumpiness of Obamacare’s widely publicized technical launch, some in the media started taking the opportunity to laud the Affordable Care Act’s (ACA) largely untold story in reforming our “overpriced, underperforming health care system.” [1]  The New York Times’ Bill Keller [1] and Harvard health economist David Cutler [2], writing in the Washington Post, reported that progress was being made on multiple fronts in re-orienting the system to pay “for the value, not the volume, of medical care.” They pointed to penalties for hospital readmissions; the use of bundled payments; the development of Medicare and commercial accountable care organizations (ACOs); and a slowdown in health care cost growth at least partially attributable to these changes.

Within state-run Medicaid programs, a parallel phenomenon has been taking shape—the creation of ACOs tailored to the care needs of Medicaid’s beneficiaries, many of whom have multiple chronic health and social challenges. While ACOs for the broad range of Medicaid beneficiaries will be similar to the ACOs that already exist in the Medicare and commercial insurance sector, a new breed of Totally Accountable Care Organizations – TACOs – offer the potential to push accountability for Medicaid populations, including those with complex needs, to a new level. “Totally” refers to the expectation that these organizations will be responsible for services beyond just medical care (for example, mental health, substance abuse treatment and other social supports), as well as the aspiration that these organizations will assume accountability for all associated costs of care, ultimately, through global payment mechanisms.

Medicaid’s Unique Opportunities For Total Accountability

Medicaid already provides publicly financed health care to more than 60 million low-income Americans and will grow rapidly in the next few years as most states pursue the ACA’s expansion of coverage for up to 16 million childless adults. With its growth in purchasing power and sophistication, Medicaid is increasingly well positioned to drive improvements in the delivery system. It will be particularly motivated to do so for its high-need beneficiaries — those who are both “clinically at risk and socially disadvantaged.” [3]  For this highly vulnerable population, who may be part of the five percent of Medicaid beneficiaries accounting for 55 percent of its overall costs [4], the traditional fee-for-service (FFS) system typically produces lots of expensive volume, often for little value. Medicaid stakeholders are very interested in pursuing TACOs that offer the prospect of reducing avoidable emergency room visits, hospital stays, and institutionalizations for people with multiple physical and behavioral health conditions and social problems like homelessness.

In return for a global payment per patient, these totally accountable entities will assume responsibility for organizing, delivering, and paying for the whole range of physical and behavioral health care services. As TACOs evolve even further, these entities may eventually absorb responsibility for long-term supports and services for patients and—depending on partnership with other public sector agencies—the organization and delivery of housing, transportation, and other social services critical to patient health and well-being. It is widely accepted, after all, that these social needs are far greater drivers [5] of health status (and costs) than medical care itself.

Emerging TACO Pioneers

Valerie Lewis, PhD, who, with her colleagues at Dartmouth, has been chronicling key elements in the Medicaid/safety net array of ACOs, has reported on the widely variable capacity among both urban and rural versions in this emerging field [3]. Among the most sophisticated entrants in the Medicaid ACO arena, in terms of both the scope of services for which it is responsible and the depth of its financial accountability, is Hennepin Health [6] in Minneapolis.

Hennepin is the inspiration for the label “totally” in going far beyond the traditional ACO model for the highest-need subset of the Medicaid population in Minneapolis. Hennepin Health’s patient population [7] of low-income adults, ages 21-64, includes up to 60 percent with substance abuse and/or mental health needs, nearly a third with unstable housing, and 30 percent with more than one chronic disease.  To serve the “total” needs of these patients, Hennepin works with homeless shelters, the county jail, supportive housing providers, the public health department, and the whole array of physical and behavioral health services. Since Hennepin receives a global payment, it has the flexibility to create and pay for its own sobering center, because having individuals detox there is a lot less disruptive and expensive than having them do so in hospital beds or in the county jail.

Across the country, Medicaid TACOs are being built—like other more exclusively medically focused ACOs—on the strongest elements of the current local delivery system. Some are truly growing from the bottom up, like Dr. Jeffrey Brenner’s Camden Coalition of Health Care Providers [8] and its primary care teams, which identify and work with concentrations of high utilizers or “super utilizers” for whom the current system is failing. A number of states, including Colorado, Maine, Massachusetts, and Vermont, are building their versions of TACOs on top of advanced primary care medical homes (PCMH). New York is aggressively using its health homes program for high-need beneficiaries [9] to provide a holistic approach that fully addresses medical, behavioral health, and social needs. Other states with sophisticated integrated delivery systems like Minnesota or strong community-oriented Medicaid health plans like Oregon are pursuing their own routes to building TACOs.

Looking Forward: Implications For Supporting TACOs

To fulfill their promise, ACOs serving Medicaid populations will need to advance toward a more robust version of TACOs to fully address the needs of the program’s beneficiaries, particularly the most vulnerable subsets, while also addressing cost drivers. However, few are close to achieving the scope of services combined with the depth of financial responsibility needed. Hennepin Health is uniquely positioned to build a true TACO because it not only includes a partnership with a Medicaid health plan with the capacity to assume insurance risk, but it is also part of an integrated system of county-based acute and ambulatory service providers, which gives it special access to those responsible for organizing, delivering, and paying for many of the social services critical to its membership. As the payer most likely to reap the ultimate financial benefits, state governments are best positioned to drive this type of innovation.

As David Cutler noted [2], “The accountable-care movement — which aims to make providers more accountable for the cost and quality of care — has blossomed far beyond expectations.” Now is the opportune time to ride that wave and make sure that Medicaid’s ACOs are driving toward total accountability, particularly as the Medicaid-covered population is expanding. Innovation funding from the ACA, as well as leading-edge philanthropies like The Commonwealth Fund and Kaiser Permanente Community Benefit, are enabling states to build upon the strongest pillars of their community-based delivery systems to create ACO models that focus more keenly on the wide-ranging medical, behavioral, and social needs of their highest-cost patient subsets. Because the social conditions surrounding poverty are such potent determinants of health, lessons from these emerging TACOs in Medicaid will have important implications for serving all populations with similar challenges. The emergence of TACOs provides further evidence of the transformative energy generated by the ACA.

Article printed from Health Affairs Blog:

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URLs in this post:

[1] “overpriced, underperforming health care system.”:

[2] David Cutler:

[3] “clinically at risk and socially disadvantaged.”:

[4] five percent of Medicaid beneficiaries accounting for 55 percent of its overall costs:

[5] social needs are far greater drivers:

[6] Hennepin Health:

[7] Hennepin Health’s patient population:

[8] Camden Coalition of Health Care Providers:

[9] New York is aggressively using its health homes program for high-need beneficiaries: