Information Technology in Healthcare

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Ideal Medical Savings Accounts For Everyone: Encourage Patient Responsibility!

February 12, 2012

inConsumer Driven Health Care, Information Technology in Healthcare, Medicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

The third spoke in the future states wheel is Patient Responsibilty for their health and Healthcare dollars.

The Ideal Medical Saving Account would decrease the cost of the Healthcare System because it would dis-intermediate the Healthcare System’s complex and convoluted business model.

The Ideal Medical Savings Account should be an option for all consumers who have all types of insurance coverage. The Ideal Medical Savings Accounts would create competition for patients among physicians. It would create competition among healthcare insurers.

Medicare, Medicaid, corporate self-insurance plans, association healthcare plans, individual healthcare plans and ordinary healthcare insurance plans provided by employers could all offer the Ideal Medical Savings Account.

If MSAs were structured as my Ideal Medical Savings Account is structured the result would be a decrease in the cost of healthcare, a decrease in premium costs and an increase in healthcare quality.

The Ideal MSA must be paid for by pretax dollars as all other healthcare plans are.

If the government, individual or employer puts the first $6,000 of insurance in individual trusts for the consumer the entire healthcare and medical care supply chain would be disrupted by consumers.

An immediate argument is Medicaid patients are not smart enough to determine their own healthcare needs if they were responsible for the first $6000 of healthcare insurance coverage.

This is rubbish. It is condescending to patients on Medicaid. If the government is so worried they should provide education to help these Medicaid consumers make wise healthcare choices using available social media.

The entire goal of the Ideal Medical Savings Account is to provide incentives for consumers to become responsible for their health and healthcare needs rather than be entitled to medical care.

The mechanism for this reversal from a dysfunctional system’s business model to a functional system’s business model is patients’ owning their healthcare dollars and having financial as well as medical incentive to be responsible for their health, maintaining their health, and choosing the most efficient and effective medical care.

Consumers would become Prosumers (Productive consumers) of health care rather than passive consumers of healthcare.

This mechanism has worked in many industries using the Internet as a facilitator.

The Internet can become an extension of the physicians care.

At present there are many web sites offering advice to patients. The defect is they are not an extension of the physician’s care of the patient.

Physicians would be motivated through competition for the patients’ owned healthcare dollars to choose the sites for his patients that would be an extension of their care.

Physicians associations could create web sites for their members. Social networking between physicians and their patients could direct their patients to that site. This would be the meaning of an extension of the physician’s care.

Patient responsibility is the third spoke in my formulation of the future state business model of a functional healthcare system.

It must be remembered that the present state’s business model is dysfunctional. It must be repaired.

The future state must not be encumbered by any of the baggage of the dysfunctional present state business model.

If the future state model is made clear to patients, potential future patients and recovered patients (consumers) they will demand for this future state model.

Using social media consumers can drive the healthcare system to the future state business model.

It turns out everyone is better off and the system is more efficient and costs less for consumers.

The consumers would own the first $6,000. They would be responsible for the management of there healthcare dollars. They would also be responsible for choosing their physician.

I have found that when physicians and patients sign a patient physician contract the treatment results improve. Both physicians and patients have their responsibilities clearly defined.

The patient physician contract motivates patients to be responsible for their own care. Patients responsible for their care is critical to successful clinical outcomes.

If there were a financial incentive attached to this physician patient contract along with a potential bonus the results would be even better.

This was especially true in the treatment of Diabetes Mellitus.

In treating chronic diseases such as Diabetes, physicians must be the teachers, prescribers and coach. Patients must become the professor of their disease. Patients live and care for their disease 24/7.

Financial incentives would motivate patients to take an active role in their medical care.

Obesity is a major problem in America today. Patients and patient education is the only solution to the “The Obesity Epidemic.”

The only way to decrease obesity is by burning more calories than is eaten. Society must encourage exercise, and reducing intake. It turns out society encourages the opposite.

Mayor Bloomberg is doing the right thing in New York City. He uses simple transit Subway advertisements to increase awareness caloric intake. He has required each restaurant to publish calorie counts.

It is a simple educational message that everyone can understand. It is amazing how intelligent people misjudge their caloric intake.

Constant repetition of calorie counts of various foods along with estimates of calories burned can result is a cultural change for the need to burn more than we eat.

Companies such as FitBit are building simple products to help us achieve this goal.

Obesity contributes to the onset of many chronic diseases. The treatment of the complications of chronic disease result in eighty percent of the healthcare dollars spent for direct patient care.

If a consumer abuses his health and ends up spending the initial $6,000 he has no money left to put into his retirement account.

If a patient has a chronic disease and has excellent control of his disease he can avoid the complications of his disease. If the patients take the appropriate medical care avoids hospitalization and the emergency room for the year, the provider of his Ideal Medical Saving Accounts can afford to give that person a bonus for his retirement account.

This would add an additional financial incentive for consumers.

As a society we are smart enough to solve the problem of a dysfunctional healthcare system. The present course is unsustainable.

The future state’s business model with consumers responsible for their healthcare dollars and the patient physician relationship restored can achieve the goal of a sustainable healthcare system.

The opinions expressed in the blog “Repairing The Healthcare System” is, mine and mine alone

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The Second Spoke Of The Wheel: The Ideal Medical Savings Account

February 8, 2012

inConsumer Driven Health Care, Health Savings Accounts vs Medical Savings Accounts, Healthcare Insurance Industry, Information Technology in Healthcare, Medicine: Healthcare System, Stakeholder Mistrust

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Stanley Feld

"Dear Dr. Feld

If your ideal Medical Savings Account is such a good idea why has it not become more popular?"

The reason is simple. The Ideal Medical Savings Account does not exist as a healthcare insurance option. The healthcare insurance industry has obfuscated the purpose of creating financial incentives for consumers with the offer of Health Savings Accounts.

The Health Savings Accounts keep premium dollars in the healthcare insurance industry’s control at the end of the year. Consumers are able to use unspent money on healthcare deductible in the future.

The Ideal Medical Saving Account puts the money not spent in a separate tax-free trust for consumers’ retirement. The logic is to reward consumers for good health financially and to encourage consumers to be responsible for their health and healthcare choices.

The goal is not to reward the healthcare insurance company it is to reward consumers. The healthcare insurance industry is controlling the consumer’s money for its own profit.

Despite its faults HSA’s are becoming very popular. It is the fastest growing healthcare insurance product in America.

President Obama wants to eliminate HSAs. His goal is to increase government control over consumers’ healthcare choices. He does not want consumers to control their healthcare dollars. He wants to control consumers.

The healthcare insurance industry’s goal is to maximize its profit. It is not concerned about the consumer’s health. The more consumers in the healthcare system the more premium dollars the healthcare insurance industry controls.

Using the power of lobbying and the influence of lobbyists it has been able to rig the game against the consumer.

"Wendell Potter, former senior executive^[1] at Cigna turned whistle-blower, has written that the insurance industry has worked to kill "any reform that might interfere with insurers' ability to increase profits" by engaging in extensive and well funded, anti-reform campaigns."

"This is nothing new. However, as consumers (patients in all three categories) the Internet and social networking can empower us to have more influence over the politicians than lobbyists."

"After all, we are the people who give them their jobs. Some might say this is a naïve view. However, recent events have shown the effect of People Power and its ability to disrupt the establishment and its lobbyists.

The industry, however, "goes to great lengths to keep its involvement in these campaigns hidden from public view," including the use of "front groups." Indeed, in a 1998 effort to successfully kill the Patient Bill of Rights at that time, “the insurers formed a front group called the Health Benefits Coalition to kill efforts to pass a Patients Bill of Rights.

While it was billed as a broad-based business coalition that was led by the National Federation of Independent Business and included the U.S. Chamber of Commerce, the Health Benefits Coalition in reality got the lion’s share of its funding and guidance from the big insurance companies and their trade associations."

The question is why would the National Federation of Independent Business or the U.S. Chamber of Commerce do this? They either don’t understand the healthcare insurance industry’s motives or they received grant money from the healthcare insurance industry. Both groups are working against the benefit of it own people.

"Like most front groups, the Health Benefits Coalition was set up and run out of one of Washington’s biggest P.R. firms. The P.R. firm provided all the staff work for the Coalition. The tactics worked. Industry allies in Congress made sure the Patients’ Bill of Rights would not become law."^[2]"

Obamacare and the Democratic congress have also yielded to the demands of the healthcare insurance industry. President Obama’s goal is to control all medical decisions for patients to keep healthcare costs down. Most advocates of Obamacare overlook this fact.

President Obama’s individual mandated purchase of healthcare insurance would increase the number healthcare industry’s customers. Its profits would increase.

Medicare and Medicaid are totally dependent on the healthcare insurance industry for administrative services. This results in keeping the healthcare insurance industry in control of healthcare spending. The 2.5% overhead for Medicare and Medicaid continuosly repeated by government officials is completely bogus.

The healthcare insurance industry receives at least 30% of every Medicare and Medicaid dollar spent.

The administrative services costs are supposed to be no more than 15%. However, large sums of administrative costs are applied to direct patient care. Each administrative cost has a profit center attached to it.

These profits center increases the healthcare industry’s profits. In turn the salaries of the executives increase.

The Ideal Medical Savings Account eliminates all these layers of bureaucracy, profits and abuses.

It is a perfect opportunity for “People Power” to demand through social networks that the Ideal Medical Saving Account be added to healthcare insurance choices.

The Ideal Medical Savings Account puts the power back in consumers’ hands.

Neither traditional insurance plans or Medicare or Medicaid provide financial incentives for patient to be responsible for their disease nor their healthcare needs.

Financial incentive for all categories of patients (consumers) can serve to increase adherence to physician’s treatment instructions.

Financial incentives can stimulate consumers to be educated consumers of both healthcare and medical care.

Financial incentives can serve to incentivize patients to become professors of their chronic disease. Self-management can avoid many emergency room visits and hospitalizations.

Instant adjudication of claims can decrease many of the excessive administrative costs.

The Ideal Medical Savings Account is simple and transparent to consumers.

IMSAs revives the patient physician relationship. It drives the government and the healthcare insurance industry to the edge of the medical care transaction. It disrupts the hairball and will instantly disrupt the food chain that is failing under the weight of healthcare costs.

The Ideal Medical Savings Account is a perfect healthcare insurance product if deployed properly. Social networks must be formed to demand its availability in order to permit consumers’ (patients) to drive the healthcare system.

Social networks on other levels can force physicians to be more competitive.

The result would be a reduction in the healthcare system’s cost while eliminating administrative abuse, waste and fraud.

The opinions expressed in the blog “Repairing The Healthcare System” is, mine and mine alone

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It Is All about How You Look At Things

February 1, 2012

inConsumer Driven Health Care, Information Technology in Healthcare, Medicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

My son Brad Feld wrote in response to my blog“How Software Innovation Can Cause Creative Transformation Of The Dysfunctional Healthcare System”,

Outstanding blog post dad.

And I think your punchline is completely correct – the healthcare software innovators should focus 100% of their energy on the patient and the physician (their customer). That would quickly transform everything in the healthcare supply chain.

Can you imagine what would happen if the government subsidized Borders and Barnes & Noble? Yup – pretty easy to see that they'd be doing fine and "bookstores would be classified as a public good." What nonsense.”

Healthcare policy makers are trying to reform healthcare using a defective business model.

The business model of 1945 to 1965 was a model that put the patient and physicians in the center of care.

Post Medicare in 1965 the business model changed because lots of government money came into the healthcare system. The secondary stakeholder began to devise ways of taking that money out of the system before and after the money was spent on direct patient care.

The relationships between patients and physicians became distorted. A giant hairball of vested interests by secondary stakeholders came between the patient physician relationships.

Well-intended policy makers tried to fix the system by making revisions and updates to a broken business model.

These revisions only made the healthcare system more expensive and less effective in the care of patients.

The 2011 business model is a jumble. The secondary stakeholders control the healthcare system and interfere with the patient physician relationship.

President Obama’s healthcare reform law is making the healthcare system worse. It is pasting regulations and restrictions on top of a failed business model.

It does not consider a way to get back to the effective business model of 1945-1965 for the 21^st century.

It reminds me of Microsoft and Windows. Microsoft is pasting revisions on top of the DOS operating system of the 1980s rather than revising the operating system.

Obamacare has added complexity to the system. There are many bad ideas such as Accountable Care Organizations and pay for performance rules to name just two. It does not deal with tort reform or patient responsibility for their own care and their own healthcare dollars.

Rather than pushing the secondary stakeholders to the edges of the healthcare system, Obamacare gives these stakeholders increased control over patients and physicians and destroys the patient physician relationship.

The critical turn is necessary now.

The 2020 business model of Obamacare will increase the velocity of healthcare system collapse. The result will be an increased budget deficit. Healthcare spending can escalate beyond GDP in 40 years.

At this critical turn we must go in a sustainable future state direction. The business plan must be exchanged with a completely new business model. The new business model must be unrestrained by the present business model.

This is where software innovation comes in. Software must be built that redirects the model to a consumer driven healthcare system.

It has been a disaster for the government, healthcare insurance industry and hospital systems to control the healthcare system.

It must be controlled by consumer choice, responsibility and actions with consumers owning their healthcare dollars. Legislation must be written to provide consumers with choice, responsibility, and incentives for compliance.

Consumers are the only ones that can demand this option. Consumers changed the course of SOPA and PIPA. Consumers can change the course of healthcare.

The secondary stakeholders will not give up their power easily. It will only come as a result of the Internet and innovative software that teaches consumers about their power.

Steve Jobs did it with iTunes, iPods, iPhones and iPads. Apple is about to do it with TV. Jeff Bezo did it with Amazon and the publishing industry.

The 2020 business model in the future state must have the following advocates, software developers, healthcare policy wonks, CEO’s of large corporations and small businesses. Most importantly, people 20-50 years old who are ell must start becoming engaged now so they can have a viable healthcare system when they get older. All these groups must think about the future state without present government restrictions. Steve Jobs did it for Apple. It can be done for healthcare.

The components of the future state should be,

The Ideal Medical Savings accounts,
The Ideal Electronic Medical Record,
Patient Responsibility for their care and healthcare dollars,
Patient education as an extension of physicians care
A team approach to chronic disease management with the patient becoming a professor of their disease, the team leader and the physician the coach with his healthcare team assistant coaches,
Tort Reform
Integration of specialty care.

All of these components must be executed at the same time. Consumers must be taught to drive the system.

Skeptics who are try to hold on to power and protect the validity of past policies will fight hard just as the music industry, the publishing industry and the movie industry have.

In the end the skeptics will realize the virtues of Pareto efficency. All the healthcare industry secondary stakeholders will thrive, as the patient physician relationship once again will be revitalized.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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Janelle • February 4, 2012

Along the lines of a consumer driven healthcare system,there is a new web application that is free for families and a low cost for child care providers called MyGrowthCharts.com. Kind Regards.
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Some Innovative Software Opportunities In Medicine.

January 25, 2012

inChronic Disese Management, Consumer Driven Health Care, Healthcare Insurance Industry, Information Technology in Healthcare, Medicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

I have pointed out that all the stakeholders are to blame for the dysfunction of the healthcare system.

I have also explained the difference between the healthcare system and the medical care system.

In the past two weeks I have explained that both the medial care system and the healthcare system are ripe for disintermediation with innovative software just as the publishing system was dis-intermediated with amazon.com, the music industry with ITunes and the movie industry with Neflix.

John Goodman has recently written a series of articles on how physicians are trapped by the current healthcare system.

The core problem has developed over the last 40 years. The government and the healthcare insurance industry have created a huge payment hairball between patients and physicians.

ICD and CPT coding has created complications beyond belief for patients and physicians. The ICD 10 is more confusing that ICD 9.

ICD 9 contained 15,000 codes. ICD 10 contains 68000 codes.

Instead of closing the window for fraud and abuse it has opened it further.

The problems with coding can be dis-intermediated by innovative software with its focus on patients and physicians.

A retired physician wrote the following note to me after reading my posts about innovative software and the destruction of the patient-physician relationship. His narrative was in response to the WSJ article “Should Physicians Use Email to Communicate With Patients?”

The writer is a retired physician with 40 years of private practice experience. He has lived through the development of the dysfunction in the healthcare system.

“Stan

This observation has been on my mind for a long time. The health issues in the 4th section of the WSJ today January

23,2011 caused me to put the ideas down on paper.

D”

“In doctors’ offices all across the country, a scenario like this is being played out as I write these comments.

The patient has a complaint, the physician listens (or not), performs an examination (or not) makes a decision regarding the probable cause of the complaint, writes a prescription (or two, or three), offers some instructions regarding what the patient should be doing to help himself (or herself), says goodbye and asks that the patient return at some future date for reassessment (or not).”

This is an excellent description of the disconnect between the care of patients by physicians. Patients and physicians should have a relationship where patients are at the center of the physicians’ healthcare team. The physicians are coaches. The physicians’ team is the assistant coaches helping physicians treat patients.

“What happens next is where I’d like to spend a little time in this essay.

The written prescription/s may be hand-carried to the pharmacy, the doctor may telephone the prescription/s to the pharmacy, or more commonly these days, the prescriptions may be sent on line or by fax, with the doctor’s assistant doing the sending.

The government is now paying an incentive bonus to the physicians for e-prescriptions. Unfortunately 60% of physicians’ offices cannot afford the software.

This is a place for a fully functional ideal electronic medical record in the cloud.

“Now here is where the situation can get dicey. Up to 20% of all those prescriptions are never picked up by the patient. After an interval, they are returned to stock in the pharmacy. It is unlikely that the doctor will be made aware that this has happened.”

The e-prescription must be a two way street. The physician should be notified electronically by the pharmacy if a patient does not pick up a prescription.

The physician’s office should automatically contact the patient and explain the importance of the medication.

Other results can also happen. The patient picks up some, but not all of the prescriptions because of the cost versus what he/she can afford.

In the fully functioning EMR software can be included to enable the pharmacy to inform the physician.

Or the patient picks up all of the medications ordered. Once at home, the patient may or may not take the medications as prescribed.

The instructions from the doctor may be recalled incompletely or inaccurately.

The healthcare team can electronically reinforce instructions and goals for the medication using the Internet sites picked by the physician.

The physician’s healthcare team must be an extension of the physician’s care.

Freestanding organizations will fail if they are not an extension of physicians’ care.

The CBO recently revealed that President Obama’s pilot studies using freestanding chronic disease management organizations have failed to lower the cost of care.

My fear is that President Obama and his healthcare administrators will conclude that chronic disease management does not lower healthcare costs.

Effective chronic disease management of diabetes can lower the complication rate by at least 50%. Decreasing complications can lower the cost of care by 80%

The medications may not be tolerated by the patient, and as a consequence, he/she may elect to discontinue one or more of them, or may elect to take them in some manner other than as directed by the doctor.

The patient may not notify his physician of his difficulty taking the medication.

Social networking between physicians and patients and patients in that physicians practice could solve this problem.

Patients understand that most cognitive physicians are reimbursed for coded procedures. Advice over the telephone or email is not reimbursed. A mechanism for reimbursement must be developed for using social networking.

The medications may prove effective in alleviating the problem that caused the patient to see their physician in the first place, or they may not.

Most of the events described will not be known to the patient’s physician until the patient is next seen in the office, and maybe not even then.

E-mail could have malpractice liability in the current malpractice environment. This is one more reason Tort reform is essential.

In a perfect world, a lot of the issues raised above could be made better by a few simple moves. The pharmacy could make the physician’s office aware that the prescriptions were never picked up.

Someone in the physician’s office could call or email the patient 3-4 days after the visit, and inquire whether the patient is taking the medication,

Reinforcing the physician’s instructions, and inquiring whether the medications are helping the patient, asking if there have been any problems arising from the use of the medication, and passing what is learned back to the physician.

The reinforcement of the instructions can be very helpful, and the awareness of issues relating to the medication can lead to more timely resolution of problems the patient is experiencing.

It has always seemed to this writer that the doctor-patient relationship would be well served if we all started to use what I call “The Doctor Phil Question”, which goes like this: “How’s that working out for you?”

It is all about patients’ responsibility for their healthcare and their healthcare dollar. It is about consumer driven healthcare and the patient physician relationship.

As long as the government and the healthcare insurance industry continues to drive a wedge between the patient and physician the cost of healthcare will continue to rise.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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How Software Innovation Can Cause Creative Transformation Of The Dysfunctional Healthcare System

January 14, 2012

inInformation Technology in Healthcare, Medicine: Healthcare System

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Stanley Feld M.D.,FACP,MACP

Joseph Schumpeter (1883-1950) begins his “The Theory of Economic Development“ with the idea of circular flow.

“If any innovations and innovative activities are excluded you end with a “stationary state.”

Schumpeter's theory is that “the success of capitalism will lead to a form of corporatism. In turn corporatism will foster values hostile to capitalism. He contends this is especially true among “intellectuals.”

The intellectuals and the social climate must allow entrepreneurship to thrive. If not capitalism will be replaced by socialism in some form.”

The hero of his story is the entrepreneur.

We are seeing this now as corporations are trying desperately to hold on to their power using obsolete technology and suppressing entrepreneurship with the government’s help.

“There are a couple of bills (like PROTECT IP and Stop Online Piracy Act) coursing through Congress that if enacted threaten the entire Internet only to protect outmoded business models of the movie and music industries.

The Internet has provided people with information, a choice and a voice. It has stimulated entrepreneurship and the current software revolution.

The government is making a big mistake in attacking freedom. I do not think it will get away with it because of the power of the Internet.

The hero of my story about "Repairing the Healthcare System" will be the software entrepreneur.

Technology has caused legacy business models to be replaced by innovative software models. These innovative software models have reduced costs and provided more choice for consumers at a cheaper price.

Everyone agrees that healthcare costs are out of control and are unsustainable. The corporate takeover of healthcare and medical care is leading to the inability of physicians to relate to and treat patients as patients should be treated.

The healthcare system is heading toward collapse. Obamacare is hastening the collapse as President Obama tries to work his way toward a socialized medical system.

America cannot afford socialized medicine. A paradigm shift must take place. This shift will occur as a result of innovative software. The challenge is who will get there first.

Britain, Canada and Europe’s socialized medical systems are failing financially. These countries are changing their healthcare systems from government controlled socialized systems to private systems.

Entitlement healthcare systems do not work because patients are not responsible for their healthcare dollars. Patients overuse the system because they are not responsible for payment.

When governments are overextended financially they restrict access to medical care.

Secondary healthcare stakeholders are fighting to maintain the “stationary state” because they receive 90% of the healthcare dollars.

Secondary stakeholders use a hollow excuse for maintaining control over the healthcare dollars. They maintain that consumers are too stupid and too powerless to take care of themselves.

Software companies are trying to improve the healthcare system. They have failed because they are focused on the wrong customers.

Secondary stakeholders are a giant hairball between the patient/ physician relationship. This hairball must be disrupted.

Much of the software necessary to disrupt the hairball is available. It is not focused for the benefit of patients and physicians.

An innovator is going to come along and disrupt this hairball just as Steve Jobs disrupted the music industry.

Dis-intermediating software can only become viral and effective if it enhances the patient physician relationship.

Consumers are starting to realize that they must become responsible for their own medical care and control their healthcare dollars. The government is too unreliable.

Patients are the customers/consumers of heaslthcare. Consumers must learn to manage their health and medical care dollars wisely. They must be provided with education and financial incentives to become responsible for their own health and healthcare choices.

What are the areas in which innovative software can dis-intermediate the failing structures in the healthcare system?

Ideal Electronic Medical Record.
Ideal Medical Saving Account.
Chronic Disease Management.
Tort Reform
Patient Education as an Extension of Physicians Care.
Integrated Care Between Family Practitioners and Specialists.
Patient Responsibility: Health and Healthcare Dollars.
Consumer Driven Healthcare.

No one likes to be forced to do anything. President Obama’s Healthcare Reform Act is forcing patients and physicians to do things they do not understand or do not approve of. Americans are refusing to buy into his system.

In the words of the great singer/philosopher Leonard Cohen, ”Everybody knows.”

“Over the next 10 years, the battles between incumbents and software-powered insurgents will be epic.”

A software innovator with a prepared mind between the age of 20-50 years old is going to come along and initiate a software revolution in healthcare. It will improve medical care for all. It will decrease healthcare costs and increase patient satisfaction. It will restore the patient physician relationship.

I will be happy to help anyone who will listen.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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Healthcare’s Impending Software Revolution

January 11, 2012

inInformation Technology in Healthcare, Medicine: Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

It is clear to me why the healthcare industry has not experienced the same transformation resulting from software innovation that the publishing industry, the music industry and the movie industry have experienced.

After practicing Clinical Endocrinology for 30 years as the founding partner of Endocrine Associates of Dallas P.A. and as President of the American Association of Clinical Endocrinologists, I believe I understand the reasons the healthcare industry has not be able to break through and enjoy the economies of scale offered by the software revolution.

I have formed these opinions by dealing with local and national hospital administrators, healthcare insurance executives, pharmaceutical executives, healthcare policy wonks and government bureaucrats.

Most of these executives are focused on the wrong customer. Most are too busy trying to solidify their perceived position of power in the healthcare system.

Those executives who understand who the customer is have kept quiet in order to maintain or advance their position in various organizations.

The result is software innovators have been chasing the wrong customer. The result has been greater dysfunction in the healthcare system.

There are also many healthcare system issues making it very difficult to stay focused on the main problem.

I have been fascinated by my son Brad Feld’s insight into the software industry. His tutoring has helped me learn how to critically think about software development and its transformational potential.

My brother, Charlie Feld, has also helped me through his insight into pattern recognition and the use of information technology to solve the problems of various industries.

I have followed the progress of medical software innovation for the last three decades. I am still far from expert but believe I have a better grasp on the problem than most.

I have a good feel for the potential offered by this software revolution for the practice of medicine and how to use it.

If the software industry understood the physician mentality and understood the real customer, the needed breakthrough could occur.

The result would be a large decrease in the cost of healthcare.

Waste, abuse and overuse would be decreased and the therapeutic effect of the patient physician relationship would be restored.

I believe the medical software is available right now. It has to be manipulated and synthesized as Steve Jobs, Jeff Bezos and Mark Zuckerberg have done in their respective software areas.

Brad is not interested in healthcare system software innovation. He dealt with physicians and dentists when he ran Feld Technologies in 1985 while a student at MIT.

He built an interoffice and intra-office network for my practice Endocrine Associates of Dallas P.A. in 1985. He hired MIT students to write software with him and Dave Jilk.

The network these kids built was the sturdiest Medical Systems network in Dallas. The network lasted from 1985 until 2002. There are still remnants of this software in the practice today.

When he finished my software project he pledged to himself he would never deal with physicians again. He concluded that they are all a pain.

Not true. Physicians know what they want and need. They have an awesome responsibility for their patients’ lives and privacy.

Secondary stakeholders have frequently taken advantage of the medical profession and its intellectual property. Physician mistrust of secondary stakeholders is monumental.

Much of the “data collected” from information systems has been used against them even if the data is incorrect or incorrectly interpreted.

Healthcare policy has been formulated on inaccurate data and inaccurate conclusions.

These conclusions have been used to devalue physicians and to destroy the patient physician relationship.

Healthcare software companies are paid by secondary stakeholder to create innovative software. The software companies do not realize that the real customers are patients and physicians. These companies do not understand why they cannot get patients and physicians to cooperate.

When data collected is wrong, incomplete or misunderstood physicians protest. They are ignored. The typical response is that this is the only data available.

Healthcare policy should not be formulated on the bases of false data.

Is it any wonder that physicians are not interested in cooperating with the powers that be in the healthcare system’s use of inaccurate data?

The medical transaction must be between the patients and physicians. All of the secondary stakeholders have jumped into the center of this transaction to control the healthcare system. The secondary stakeholders only add value at the edges of the patient physician transaction.

Our health is our most precious asset. Americans are willing to pay as much as necessary for medical care. They want everything done especially if they are not responsible for paying for it.

If physicians do not think something should be done they can get sued. The knee jerk reaction is to do everything.

Physicians only receive between 5-10% of the healthcare dollars.

Where is the money going? Secondary stakeholders are ripping off the healthcare system as they undermine and undervalue the patient physician relationship.

Third parties have taken control of the healthcare system. They have assumed responsibility for the healthcare of patients. They are also in the process of dictating access to care. The present increased healthcare costs are unsustainable.

All the secondary stakeholders are like a giant hairball destroying the viability of patient physician relationships.

Innovative software used properly can disassemble the elements of the hairball and drive them to the edges of the healthcare system where they belong.

Proper software innovation can accomplish the goal of decreasing costs and increasing the quality of care by restoring the patient physician relationship.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Please send the blog to a friend

DannyHorowitz • January 12, 2012

Hi Dr. Feld. I don’t know much about existing healthcare software or endocrinology BUT, what do you think about things like fitbit (Brad/Foundry are investors) Is it possible that this is driving the revolution. Potentially massive collection of personal data will allow me to not just test measure and optimize my health alone, but with the help of an understanding doctor (expert) who is able to use this data to suggest additional tests/diagnoses etc.
Traditionally, doctors/patients spend little time together so the amount of data doctors have at their disposal is small. These devices allow for doctors to have significantly more data/information about their patients that will hopefully lead to cheaper and better care.
I’ll bet a lot of really good basic data collected by a device like fitbit and augmented with diet and energy levels can predict a potential thyroid problem. This should be automatically detected by good software/analytics. Then with a high confidence, you, the doctor can order a thyroid test, which will be inexpensive and whose price will go down over time. There is also a need for greater transparency in medical test pricing. Many practices mark up the price of blood tests considerably.
I guess I’m thinking the revolution will be driven by a) more better cheaper data (i.e. data collected by the patient and not via expensive unnecessary tests and short inefficient expensive doctor visits) and b) more transparency (with everything) and together this will lead to a closer patient/physician relationship, higher quality of care, more money flowing directly from the patient to the physician, knowledge of what the money is for, and possibly the ability to be better quantify the contribution of the doctor.
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It Is All About Patients and Physicians

January 8, 2012

inConsumer Driven Health Care, Information Technology in Healthcare, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP, MACE

Society is in the midst of an electronic revolution. Innovations in hardware and software have created greater shifts in our economy than the assembly line, mass transportation and electricity. We ain’t seen nothing yet.

The potential for economic growth as of result of this revolution is unimaginable.

Current business models have crumbled and have been replaced by software driven companies. Software driven companies are cheaper to run and have created innovative and easy to use products and services for consumers.

Marc Andreessen, founder of Netscape, has a tremendous handle on this revolutionary change. So does my son, Brad, and his good friend Fred Wilson.

Marc Andreessen wrote an excellent article in the WSJ on August 20th, 2011 entitled, ” Why Software Is Eating The World.”

“More and more major businesses and industries are being run on software and delivered as online services.”

Almost all industries have been affected. The hardware and software revolution have overturned many industry’s business models.

Brad Feld wrote a perceptive blog today defining some of the changes to be expected in the near future. He also warned of incumbent and political abuses to the technological advances that are being made by entrepreneurs.

Even the freedom of the Internet is being threatened by a congress that does not understand its potential and is driven by vested interests, not the preservation of freedom, creativity and innovation.

My hope is Congress will be unsuccessful in restricting these freedoms. There will be many more industries that will be disrupted by innovative software in the coming decade.

“Over two billion people now use the broadband Internet, up from perhaps 50 million a decade ago.”

Marc Andreessen expects, “at least five billion people worldwide own smartphones, giving every individual with such a phone instant access to the full power of the Internet, every moment of every day.

Amazon.com is a dramatic example of a company that has used innovative software to transform an industry. Twelve years ago Borders was the king of stick and brick booksellers. Borders had an effective software book distribution system for its increasing number of bookstores.

Amazon, with software that distributed books directly to the customers ate Borders’ lunch. Borders thought on-line book sales was non strategic. “People like to touch books before they buy them.”

How wrong can one be? Using the same software Amazon now sells everything at a lower price than most retail stores and on-line companies. Its software decreases overhead and in turn consumer prices.

Consumers are not stupid. They want the best product at the lowest price. Amazon produced and consumers responded.

Big box stick and brick retail stores that took over the local mom and pop businesses will fail unless they became hybrids.

The old business model bankrupted Borders.

Amazon didn’t stop there. Its Kindle digitized books and delivered them instantly at half the price to consumers with a greater margin for Amazon.

This demonstrates the genius of innovation. The creative uses of innovative software are staring us in the face daily. Most industries have a Blind Spot.

The existence of those people who want to touch the pages of books is fading fast. Jeff Bezo saw this Blind Spot.

Netflix copied Amazon with DVD movies. It destroyed Blockbuster. Netflix then switched from physically delivering DVDs by mail to both delivering DVDs and on-line downloads.

It would have worked if they put the consumer first. Netflix infuriated consumers with its pricing. It almost immolated itself. I do not think Netflix will recover unless consumers perceive that they are first.

Amazon, using a more sensible model, is going to take over the on-line movie business. Blockbuster, now owned by Dish network, doesn’t have a clue about the needs of consumers.

Dish, Direct TV and Cable are trying to adjust to the rapid pace of software innovation. I do not think they can because they are bogged down in bureaucracy.

They are simply not entrepreneurial.

This brings us to Apple, Steve Jobs and the entrepreneurial spirit. Steve Jobs turned the music industry on its ear with ITunes, the smart phone industry on its ear with the IPhone and the computer industry on its ear with the IPad and the Mac Book Air.

His method was to use innovative software that made the appliance work for the consumer. He does not make the consumer suffer as Microsoft does with constant software freezes.

He kept his eye on the consumers. He put the consumer first. It served his vested interest well.

Before is died he made a statement in which he said he finally figured out television.

Google is a close second to Apple but Google is hampered by a growing bureaucracy.

“The great incumbent software companies like Oracle and Microsoft are increasingly threatened with irrelevance by new software offerings like Salesforce.com and Android (especially in a world where Google now owns a major handset maker).”

I could mention many more companies that have served as disinter mediators of incumbent businesses by software innovation. These innovations have resulted in vast improvements in value to consumers, decreased costs and economic growth.

Why hasn’t healthcare in the U.S. been the beneficiary of this software revolution?

The reasons are clear to me having practiced Clinical Endocrinology for 30 years.

Healthcare is an industry with a gigantic Blind Spot. There is a good reason for healthcare’s Blind Spot.

Software developers in the medical space do not know who their customers are. Their customers are patients and physicians and the patient/physician relationship. The customer is not the government, the healthcare insurance industry or hospitals.

Once this is understood the software revolution in medicine will begin.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Please send the blog to a friend

Dave Chase • January 8, 2012

Stanley – I couldn’t agree more. This is the reason why the kernel of my startups architecture is opening a rich communication channel between physician and the individual (most of us don’t think of ourselves as “patients”). I was fortunate to have founded Microsoft’s health business many moons ago and play a role in the shift from mainframe to client-server based systems. However, this shift is not only a big architectural shift but the fundamental healthcare delivery model must shift as well. The biggest driver, for better or worse, is the shift that is happening from the “do more, bill more” reimbursement model to one that is focused on value and outcomes.
I can’t think of a more exciting time to be in the field. There is a wave of disruptive innovation that isn’t fully recognized right now — Gibson’s quote (“the future is here…it’s just unevenly distributed”) is apropos. One great example is Direct Primary Care — see http://www.delicious.com/chasedave/DPCArticles for more. There’s more where that came from.
Great to see experienced MDs blogging like this, btw!
Stanley Feld M.D.,FACP,MACE • January 28, 2012

Great comments everyone.
Thanks
Stanley Feld M.D.,FACP,MACE
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Our Sound Bite Society. Cain vs. Gingrich Debate

November 9, 2011

inInformation Technology in Healthcare, Innovations in Healthcare, Medicaid, Medicare, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System

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Stanley Feld M.D.,FACP,MACE

I missed the Cain vs. Gingrich debate on November 5^th because it was not well publicized by the traditional media. I watched the debate on the Internet on November 9^th.

All I have heard from President Obama’s special joint session of congress speech is you must pass this jobs bill right away. I did not hear any solutions to America’s complicated structural problems.

There is little mention that his American Jobs Act is a $450 billion dollar stimulus package adding to the previous one trillion dollar stimulus package that did not work. President Obama also said it will not cost the American public a dime.

On the other hand, Herman Cain and Newt Gingrich had a riveting 81 minutes debate discussing in detail what should be done about Medicare, Social Security, Medicaid, and jobs.

It was a truly remarkable debate. The three minutes response limitation on the candidates was suspended in the first three minutes.

Clear, concise and detailed explanations of each candidate’s positions were given. Both candidates were entertaining and serious. They treated Americans as intelligent humans who can make decisions for themselves once they understand the issues.

Their goal was to educate the people.

This Internet video is very worthwhile watching. It explains, why in their opinion, central government solutions have not worked. They explain what has worked in the past and what needs to be done to solve America’s problems.

All the traditional media said about the debate in the press is Gingrich won. There was no discussion of the details of the debate.

There was not one “got ya” question or response during the debate.

In my opinion neither candidate won the debate. The viewing American public won. Please watch this debate. It will not be a waste of time.

Our nation needs more of these frank discussions to educate the public about the problems we have and potential solutions to the problems.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

EMR • November 22, 2011

the new bill is huge and a lot of factors need to be considered before anyone can make an intelligent decision. Too bad noone fully knows the whole bill
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The Healthcare System and Managing Complexity

October 5, 2011

inDisinformation and the healthcare system, Information Technology in Healthcare, Innovations in Healthcare, Medicine: Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP, MACE

Many readers were confused by my last four blogs, It Is Easy To Forget, How To Manage Complexity, Aligning Incentives Is A Must In Creating An Efficient Healthcare System and How Home Depot Learned To Manage Complexity.

I have received comments like, What does this have to do with the healthcare system? Who cares about Mechanism Design? What does the healthcare system have to do with Pareto efficiency?

One person wrote; “Dr. Feld, I do not get it. None of this relates to the healthcare system.”

All of these blogs relate to the dysfunction in the healthcare system. The healthcare system has a larger “Blind Spot” than many large corporations in America.

My brother and I have been discussing his analysis of the Blind Spot in corporate America in detail. The subtitle of his book is “A Leader’s Guide To IT-Enabled Business Transformation.”

It dawned on me that his transformation model could be applied to the healthcare system. Everyone knows the healthcare system has to be fixed but no one knows what to do.

President Obama and Dr. Don Berwick are making the dysfunction worse as they impose their complicated ideas on the healthcare system.

A reader wrote in response to my Home Depot article,

“Yeah, this is good stuff–consumer oriented. Obama & those ox#70 professors he listens to don't get this at all.”

I often get comments that the Healthcare System is impossible to repair. It is too complex.

Medicine is going through a transformation. There is conflict between vested interests and between learning systems.

1. Stakeholders are fighting to protect their vested interests. The fight has intensified as a result of the transformation. The conflicts must be resolved.

2. Physicians continually learn through the experience of daily medical practice. The experience gained increases physicians’ medical judgment. This learning system is important for the physician-patient relationship. It promotes the confidence patients should have in their physicians.

As a result of the dysfunction in the system physicians are abandoning their medical judgment in the pursuit of defensive medicine and patients are losing confidence in their physician’s judgment.

Data should be accurate and informative for patients and physicians to improve care. Instead the data collected has been punitive to both patients and physicians.

3. Advances in medical science and medical technology represent complicated learning systems. New advanced techniques are developed in surgery, medicine, genetics and therapeutics.

Information technology offers a chance to enhance experiential learning but has not been deployed properly. Instead it has led to disinformation and increased stakeholder mistrust.

Healthcare insurance companies, hospital systems, and the government have installed complicated data collecting information systems to gather insight into the cost and quality of medical care.

In the past, much of the data has not reflected the true value of the care of physicians. The data has been used to the disadvantage of patients and physicians.

4. No one has understood the patterns of behavior that have resulted from these conflicting learning systems and vested interests. No one has figured out how to manage the complexity generated by these interactions in the healthcare system.

The Home Depot example of learning to manage complexity can be applied to the healthcare system.

The physician is the store manager. The patient is the customer. All the rest of the stakeholders should be the supporting cast.

Once everyone gets it, a sensible conversation can begin. Only then can the healthcare system be on its way to achieving Pareto efficiency.

Readers should think about their recent healthcare system encounters. I would guess many have walked away with an unpleasant feeling toward the healthcare system whether it was the encounter with the insurance company, hospital, government, pharmacy, or physician.

Navigating the healthcare system has become an unpleasant chore.

It is also unpleasant for all the stakeholders. Yet none of the stakeholders see their Blind Spot.

These unpleasant and inefficient activities are created by the complexity of the healthcare system. This complexity can be broken down into components parts. Only then can the complexity of the healthcare system be managed.

The most important asset all of us own is our health. Every effective effort must be made by the healthcare system to maintain our health. We as individuals must be responsible for maintaining our health. Individual responsibility can be achieved. When it is everyone will win.

Central control of our healthcare system with government imposition of rules and regulations to control patients’ freedom and physicians’ medical judgments will not work.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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