In Doctors' Declaration Of Independence, I highlighted a growing movement of doctors who are done with the status quo healthcare system; they want to be independent of an oppressive system that is at odds with why they went into medicine. The Story Behind Epidemic Doctor Burnout And Suicide Statistics details the abuse doctors receive in today's under-performing status quo that leads to the destruction of doctor well-being. It's simply common sense that abusing doctors as well as other clinicians isn't the path to achieving the Quadruple Aim that is evident in the best-performing organizations.
Naturally, a broad-based grassroots movement such as civil rights or unbreaking healthcare has many people playing a critical role to drive societal change. For example, Regina Holliday has been referred to as the health care's Rosa Parks. In The Big Heist film, we are highlighting the leaders of the movement to have health care realize its full potential. There are many clinicians who are leaders and entrepreneurs completely reinventing their field including strong doctor-writers such as Atul Gawande, Marty Makary, Eric Topol, Bob Wachter and others. However, the doctor who has established the voice that is reaching the broadest audience is Dr. Zubin Damania through his alter ego, ZDoggMD. Damania's childhood hero was Weird Al Yankovic and now he's the medical equivalent.
The following is an analysis of Transparent Pharmacy Benefits using a Health Rosetta template. It looks at what true transparency means for pharmacy benefits and reveals a major error in the current system that is likely costing employers more money than necessary each year. If relevant, share it with your benefits director, CEO, CFO or benefits consultant and encourage them to evaluate whether there is enough information to take action.
If the Health Rosetta concept is new to you, I'd invite you to read the introduction to the concept and rationale as well as the comparison between the status quo and the Health Rosetta. See also Value-based Primary Care, Transparent Medical Markets and ERISA plan checklist as examples of other sections of the Health Rosetta. The healthcare industry uses a variety of tricks to redistribute money from employers and taxpayers into their coffers. Highly effective benefits leaders use the Health Rosetta as the antidote to the plague of an under-performing healthcare system.
All over the country and across many different sectors, there are organizations applying the principles of the Health Rosetta. The following are a few examples of how living laboratories can be drawn upon for others to replicate and/or improve upon:
The great unbundling is coming to the cable industry and already happened to the newspaper industry. For decades the cable providers transformed the television industry, first as a substitute, and then ultimately as the disruptive force behind the demise of free television viewing. Since the 1990s bundled packages have become the pervasive force in delivering movies, live sports and music. By comparison, many newspapers were around for over a century and seemed as impervious as another local oligopoly/monopoly business -- hospitals.
If You Want to See the Future of Healthcare – Study the Cable & Newspaper Industries
It is worth studying what actions (or, more appropriately, inactions) newspapers took in the late 90s and early 2000s. Today, it’s remarkable that we literally hear the exact same hubris health system executives’ mouths that came out of newspaper executives’ mouths. The same dangerous zero sum game thinking newspaper executives had will lead to avoidable pain for health systems.
The writing is on the wall. Unbundling is here to stay...
My keynote presentation to leaders from most of the largest financial firms on Wall Street got me thinking about the shareholder value being held back by ineffective healthcare purchasing -- the second largest cost after wages for most organizations. Previously, I highlighted the tricks the healthcare industry uses to redistribute profits from companies to their coffers. In this piece, I will outline the antidotes that the most effective benefits leaders use to ensure their organizations maximize shareholder value by avoiding needless overspending on health benefits. As the earlier article pointed out and the table below illustrates, this can have a major impact on shareholder value.
As I've been working as a subject matter expert on The Big Heist film (think of it as The Big Short for healthcare), my talk to Wall Street leaders on how there are opportunities hiding in plain sight seemed apropos. A well-regarded author and business consultant, Ric Merrifield, has also provided advice to the film and had the following to say:
The Big Short, and Moneyball, had one major theme in common - in the face of a mountain of evidence, the evidence was ignored - in the case of baseball for over 20 years until someone got backed into a financial corner and had to take a big chance. Baseball kept ignoring the value of OBP relative to batting averages, stolen bases, and RBI. Wall Street and regulators didn't downgrade the credit ratings of the mortgage backed securities even when the mountain of evidence was presented to them. So why should we expect healthcare to be any different? Healthcare is in the same place at the moment. The healthcare mess in many ways is happening in broad daylight and there is no evidence of major change.
Healthcare incumbents are making the same mistakes that newspapers made when their future was uncertain and a multitude of new competitive threats emerged. They spent too much time looking in the rear-view mirror when they should have been looking through the windshield. Unfortunately, they are doing the equivalent of studying Sears to try to get a handle on the future of retailing.
The number one success factor for my last startup (Avado, acquired by WebMD 2 years ago) before moving to the VC side of the industry was our focus on studying the next generation healthcare payment and delivery models. Sadly, the vast majority of digital health startups are zombies because they followed bad investor advice and focused on getting their technology deployed in 'Sears' when they should have focused on 'Amazon'. It was clear to us that there would be a growing understanding that the catastrophic misalignment of health resources towards a "5-alarm" sick care system created the horribly under-performing status quo. Time proved that we made the right bet on the shift to value-based care model.
Other components of the Health Rosetta outline proven approaches to slaying the healthcare cost beast. This contribution to the Health Rosetta addresses the necessary items to have an ERISA plan that will ensure the Plan Administrator (the fiduciary) fully adheres to the fiduciary duties. Falling short can put the Plan Administrator at personal financial liability. At stake are millions of dollars for a moderate size self-funded plan.
As high deductible plans become mainstream, plan beneficiaries are paying closer attention to medical bills. We have already seen cases against large employers and the health insurance companies that are serving as their third-party administrator (TPA).
Naturally, one should consult with their own ERISA attorney. These should be considered general guidelines. Follow the link below to a leading ERISA law firm that contributed their expertise to this component of the Health Rosetta.
There is no surprise in the fact that there is a lot of M&A activity in healthcare. As one of few digital health entrepreneurs who has had an exit, I’ve received several urgent calls from entrepreneurs who have received unsolicited acquisition offers (that’s how the WebMD deal came to Avado). Now that I’m also an advisor to the healthcare practice of one of the leading mid-market investment banks (sub $500 million acquisitions typically) as well as a VC, it’s natural that I’m a resource for fellow entrepreneurs and it’s something I greatly enjoy. Even highly successful serial entrepreneurs see a limited number of transactions over their lifetime. The benefit I’ve received from working with an investment bank is it gives you a broader perspective than just your own transactions. I will share some of the considerations as you face this exciting, but daunting, experience
If the current trend continues, it means that the first graders entering the Allegheny County schools in the Pittsburgh area will collectively have $2 billion more available to their community to invest in education and services over the course of their school years. This is in stark contrast to how healthcare’s hyperinflation “tax” has redistributed money from education and middle class incomes to healthcare’s prolificacy. Ideally, the leaders in Allegheny County will follow the lead of the citizen in Orlando that reinvested money that would have otherwise been squandered on healthcare. In the process, he not only improved the health of his company and employees by saving 50% per capita on health benefits, they adopted a nearby neighborhood that was previously crime-ridden.
During today’s 60 Minutes, ‘Aid in Dying’ addresses what advocates call "death with dignity” and opponents call "assisted suicide." Dr. Eric Walsh of Oregon speaks about this controversial practice with CBS News chief medical correspondent Dr. Jon LaPook. CBS also speaks with the husband of Brittany Maynard whose final days received national attention in 2014.
As would be expected, there is controversy about the issue with strong feelings on both sides. Yet, in the five states where assisted suicide is legal, they represent just 0.2% of all deaths. Meanwhile, for the 99.8% of deaths that are “normal”, far too many deaths can only be described as ‘death without dignity’ and there’s little disagreement that our failing system strips humanity away from both patients and doctors. On the subject of dying, our healthcare system is falling far, far, far short of what we should expect.
Like many, I get an overwhelming volume of email. Since there are recurring patterns, I decided to set the auto-responder to deliver the message below. If you have any feedback on it, I'd welcome it.
Auto-responder Out-of-Office Message
With 100s of inbound email per day, it's impossible for me to be effective and individually respond to emails. I hope the following will expedite you achieving the result you had hoped when you sent me the email.
Business partners & Family/close friends: I'm doing my best to unclutter my inbox so I can respond to you as quickly as possible. Feel free to re-send the email with "priority" in the Subject line if you don't hear back from me in a timely manner...
Concierge customer service addresses a substantial challenge that exists for health consumers today – namely that the benefit and healthcare ecosystems are complex and costly to understand and optimally navigate. Current trends toward high deductible plan design only amplify the time and money that consumers invest as they attempt to make more intelligent decisions. Proliferation of point solutions that address 1-2 discreet consumer needs, such as scheduling, price transparency or provider finders, still leave the individual to synthesize information across disparate sources. Often, the member is attempting to access and understand information from these fragmented point solutions when she has an acute health need and is not at her best. In the moment of need, many health consumers are aren’t able to access the information and support they need, and incur avoidable costs of care as a result.
Concierge service provides a simple solution to the fragmented experience that many...
Earlier I wrote about how benefits advisors could save America. At the same time, I was stunned that a tech entrepreneur/investor who does writing on the side (me) was finding proven solutions to slay the healthcare cost beast that most benefits brokers didn’t know about. A conversation I had with one of the country’s leading consultants to benefits organizations explained the disconnect.
The key word is “broker”. He said those who are/were in the dark are just like stock brokers of old — they primarily care about the transaction happening not whether their client is getting the absolute best return. The following is his stinging commentary:
Employees should be outraged and plan sponsors should feel like Madoff has been managing their money — it is time for change and the incumbents are just not getting the job done.
With healthcare's trillion dollar disruption underway and private insurance being the single biggest chunk of healthcare spending, benefits consultants have a big challenge ahead of them. Particularly since the status quo of health benefits is performing so poorly. This is a key reason why business coalitions are organizing their annual conferences around the Health Rosetta. Since the article on the Florida Health Care Coalition published, I've had several benefits consultancies and third-party administrators (TPAs) ask me to speak at their meetings.
In those talks, I outline how the Health Rosetta is the blueprint for what wise healthcare purchasers should follow to maximize the benefit to their constituents. Whether it's a public entity in the UK or private companies in the U.S., there's a movement towards wiser healthcare purchasing. The 95 Theses for the New Health Ecosystem provides the guiding principles for how winning organizations across the entire health ecosystem will approach the overhauled health ecosystem and deliver the components of the Health Rosetta. Contributors to the 95 Theses include household names such as Bill Gates while others are well-known industry figures such as Dr. Eric Topol, Susannah Fox, Jonathan Bush, and Esther Dyson.
Healthcare has been the embodiment of the irresistible force paradox, a classic paradox formulated as “What happens when an unstoppable force meets an immovable object?” We know that technology and empowerment of the individual have been the drivers of immense change in virtually every corner of our lives…except healthcare.
There are many efforts ranging from startups to convening thought leaders at events to public and private sector initiatives meant to change this dynamic. It’s clear it will take a broad coalition of these efforts to make the change most desire in the face of immense forces to protect turf. It’s natural that organizations collectively generating trillions of dollars of revenue won’t give up without a fight. In fact, it’s entirely predictable that they’ll use every “FUD” (fear, uncertainty & doubt) tactic in the book…and already have. The key is to create the inoculation against that inevitable poison.
The Boomer parents of Millennials may have complained about their kids leaving messes around the house, however Boomers are leaving an exponentially bigger mess for their kids. Millennials will see their future stolen if the healthcare cost beast that Boomers have largely ignored isn't slayed.
Healthcare’s hyperinflation-driving fortress has been impenetrable to forces trying to disrupt it over the last couple decades. Whether through regulatory capture to protect the status quo or self-inflicted mistakes (e.g., HMO “gatekeeper” and denial of care debacle), healthcare has been remarkably resilient to forces that have driven change in virtually every other sector.
At long last, the gig is up and the fix is in (the good kind of “fix”). It’s coming from the edges and is largely unnoticed by incumbents who haven’t delivered any productivity gains in over 20 years (unless you measure productivity by getting out bigger bills).
Most pharma giants look an awful like IBM of the late 80′s and early 90′s. If you remember IBM of that era, that's not a pretty picture. Unfortunately, too many pharma are following the path of the railroad industry early in the 20th century missing out on a huge opportunity (i.e., mistaking which business they were in). True leadership will be apparent in the pharma leaders that channel Lou Gerstner and take action before its too late. In one of the great turnarounds in business history, IBM demonstrated how it’s possible for a large company to shift from a product-centric culture to a customer and service centered company. The handwriting is on the wall for pharma: They will succeed or fail based not on how many drugs they sell, but on how well their offerings improve health outcomes.
The marketing myopia of the railroad industry is well documented in the world of business yet most organizations makes the same mistake. Railroad businesses assumed they were in the “railroad” business, rather than the “transportation” business. Consequently, they missed out on countless opportunities to pursue growth in the auto industry. In contrast, IBM was able to use their near extinction that led them to bring in Lou Gerstner to reinvent IBM over a 10 year period. In some ways, Gerstner's predecessors acted more like Martin Shkreli than true business leaders -- they optimized for short-term profiteering over long-term success. IBM's turnaround put Lou Gerstner in the pantheon of turnaround CEOs: A 10x increase in IBM’s stock value. In contrast, most pharma companies aren’t spending enough time thinking like IBM.
If pharma leaders don't immediately see where they fit into the post-Copernican view of healthcare depicted below, they need to conduct a strategic look into the details of the post-Copernican, population health centered industry taxonomy...
As the $1 trillion shift from volume to value is rapidly becoming reality, health systems are responding. The first reality that hits health systems is that the old model of the hospitals as the center of the healthcare universe has led to a catastrophic misalignment of population health resources. Even patients who are heavy utilizers (aka Hot Spotters), spend 99+% of their lives outside the hospital.
The handwriting on the wall couldn’t be clearer for forward-looking health executives: They must develop a sound strategy for addressing that other 99+% of the patient’s life. The old -school, expensive way of accomplishing this objective is to acquire physician practices or post acute care facilities. That approach isn’t working very well with record levels of burnout and even suicide amongst doctors and little improvement in outcomes or cost reductions that will be the difference between winning and losing in the "no outcome, no income" era. It’s common sense that winning health systems will put a focus on the Quadruple Aim as an alternative. Fortunately, there are leaders such as Dr. Kenneth Adams, VP of Post Acute Care at Texas Health Resources (THR), who realize there is a smarter way to approach care after a patient leaves the hospital...
Several months ago, I came to the conclusion that the only way to make the wholesale change to the healthcare industry everyone I know wants is for the healthcare equivalent of a Super Size Me or An Inconvenient Truth documentary to be created. This was from someone who never had a moment in my life where I thought about making a film (more on the rationale below). To my astonishment, in the short interval since that "ah-hah moment, we have assembled a world class film-making team that includes an Academy Award nominated director/producer and a Peabody-winning director/producer not to mention talent on the business side of film-making.
Despite being in the early stages, we've already had unsolicited backers each committing $75,000 to $100,000 of their money to ensure this film is made.
I've been gratified by the number of people who've reached out to me asking how they can help. Ultimately, there'll be several ways but the first thing you can help with is identifying individuals, foundations or companies interested in the opportunity to be founding partners in the film. With a few more partners, we'll be on our way given a production budget likely to be only in the neighborhood of $1 million. For those of you who don't have that kind of money sitting around, we're expecting that we'll do a crowdfunding campaign so stay tuned. Generally, one raises 20-30% of the necessary funds to get all the details nailed down in terms of who'll be in the film, detailed script and more. At that point, it becomes crystal clear to the financial backers that the risks of making a great film are greatly diminished.
The working title for the film is...
