Coss Effective » Information

Medical Practice and 20% of Income from Cash

Tom — Sat, 03 Apr 2010 18:22:24 +0000

In regard to portability and ease-of-use, competing with a pen and piece of paper is difficult. We all know how a pen works, paper is lite and is easily moved about – there is no “down time” or “learning curve”; in addition, pharmaceutical and medical device companies will gladly give you all the pen’s you might desire.

The downside of pen and paper is that the information contained on paper doesn’t aggregate well. You can’t look back through it easily to assess what works and what does not. In earlier days when a family physician took care of you from cradle to grave, it wasn’t a problem; as long as the physician stayed alive, he or she was a biologic historical database of what went on in a patients life. Today, however, with highly specialized and fictionalized care, it’s a problem. So why not the sluggish acceptance of EHR’s in the private sector.

To the casual observer the perception is that costs are real, and benefits vague. These excuses are self-damaging and weak minded. Time to get busy.

In this piece regarding Electronic Health Records and Clinical Trials from Chris Thorman of Software Advice speaks to one legitimate benefit often talked about, but seldom realized. True, the use of practice data in clinical trials is limited, but it’s not zero, and it grows over time. Identifying subtle changes in treatments over time, or simply identifying patients for whom detailed clinical studies are appropriate, will contribute to improving efficiency of bringing new drugs and treatments to market. In so doing, a faster path to market results in a longer period under patent protection, and higher product lifetime valuation with lower costs.

In the end it looks like this: the medical practice of the future needs to begin now to design itself toward increasing its efficient and percent of total annual revenue from cash. This means providing services for which patients will pay cash along with discovering new means by which practices can contribute value and receive compensation outside the existing constraints of third party payment. This includes EHR’s, but also means a way patients can create appointments on their own schedule 24/7, along with a means by which medical practices can keep in closer communication with their patients.

There is no stability or efficiency in health care without successful and vibrant medical practices. It’s time for every practice to find an EHR that works for them and put it to use, along with systems and processesto build and manage closer relationships with their patients.

Repricing in America

Tom — Sat, 03 Oct 2009 22:31:16 +0000

I’ve been bothered in the best possible way by a comment made by Richard Davis, President and Chief Executive Officer of U.S. Bancorp. In almost a throw away fashion Richard told an audience of business executives in Orange County California, that the economy is going through a process of “repricing ” downward.

Clearly we know this to be the case in the housing industry, as those of us with houses have seen about 25% or more of the assessed value of the house disappear. As troublesome as this has been for many people, it has not stopped there. Just look around and you’re seeing it in the automotive business, grocery stores, and restaurants offering significant discounts. In the labor market, those getting new jobs are doing so at often dramatically lower salaries. Everything it seems is ratcheting down, finding a new market clearing level.

This deflation, or to be more positive, repricing, has consequences which favor highly efficient, low fixed overhead companies over those with large superstructures of bureaucracies. As we’ve seen, some companies can relieve some pressure by laying off labor, but those companies (I’m thinking GM) with lots of large buildings and large fixed expenses, can’t adjust sufficiently and quickly enough. For these large companies, it is exceptionally difficult to accommodate to downward price adjustments, hence they fail.

Companies which do succeed in these environments are new ones. These companies benefit by being new and not around so long as to have large fixed expenses, these are the entrepreneurs. The best way to grow our economy is for the US to have a brisk entrepreneurial bias in its policy decisions. In this Economy, as serial entrepreneur Ken Forbes, CEO of AppointYou in Aliso Viejo, California told me, it is easier to create a job than get one. This is the best time for the creative among us to leverage their comparative advantage of being lean, to get their products and services into the economy and make wonderful things happen for us all.

Thomas A. Coss

Improving Labor Efficiency in Healthcare

Tom — Sat, 05 Sep 2009 22:59:01 +0000

This site is focused upon efficiency as a contributing solution to the cost of providing healthcare services. Efficiency alone won’t carry all the water needed to address the cost of healthcare, but it will make a profound difference in the scope and amount of services provided per dollar spent. Last year I began a study based up some data going back over two centuries. In the early 19th century, over 80% of the US population was involved in agriculture…. they were farmers. By the beginning of the 20th century, that percent fell to 40%, and by the beginning of this century it fell to below 2%. This astounding increase in per worker productivity freed people to go into manufacturing at the beginning of the 20th century, leading to an amazingly robust century of innovation and improvements in the quality of life.

In 2008 I began looking into capital investment in heatlhcare as compared to other industries and found some interesting results. As expensive as healthcare has become, investments into improving the efficiency of the labor that provides those services has been poor. Per worker capital investment in healthcare is about 35% lower than it is in general manufacturing. How can we hope to lower the cost and expand the availability of healthcare if we insist on providing those services the same way they’ve always been done?

A more detailed explanation is available here until I hear: Improving Labor Efficiency in Healthcare.

Texting and Everything Else You Do In Life

Tom — Mon, 17 Aug 2009 20:25:48 +0000

Last June, the Senate Judiciary Committee began hearings on texting. Included in the discussion were executives from AT&T, Verizon along with othere the focus of which was the nature of charging for text messages. Though the hearings were interesting, the real headline is in the data surrounding texting itself

In 2008 over one trillion text messages were sent in the US. According to AT&T, texting grew from 2.4 billion in January of 2007 to over 31.1 billion in January of this year. The direct costs per text were estimated at approximately three tenths of one cent each, with an average charge to the telephone subscriber of 1 cent per text message. Approximately 420 text messages can fit the bandwith it takes to have a one minute conversation.

Why is text messaging growing so much? Well simply because it is efficient. The text message forces the sendor to be succinct (you have only 160 characters in which to get your point across) and it can be very quickly consumed. Over the weekend, by oldest daughter told me that she just heard a voice mail left by her sister 4 days ago. This isn’t to say that she’s disengaged, just that voice mail is not the preferred mean of communication. She went on to say that occassionally she’ll get text messages from her friends telling her to check her voice mail. Texting is simple, succinct, fast, and it’s semi-perminant. You can save a text message to refer to later on, not as easy in voicemail.

In a world in which information flows so effortlessly and at near zero cost, texting speaks more of the future than the past. Who know that email would become “so yesterday” so soon.

Tom

Jared Bernstein, Chief Social Worker to V.P. Byden

Tom — Sat, 13 Jun 2009 00:05:07 +0000

Earlier this week I was listening to an interview with Jared Bernstein, Chief Economist to Vice President Biden. The interview with Neil Cavuto of Fox News, was noteworthy by virtue the answers Jared was providing to some fairly straight forward financial questions. This provoked me to go to Wikipedia to look into his credentials and there I found my answer. Jared Bernstein is a handsome and articulate gentlemen, but he is in the end a social worker. Undergraduate in music (Base), Masters in Social work and Ph.D. in Social Welfare. The Wikipedia entry ends with : ”he has no degree in Economics”, yet he is presented as an Economist.

I mention this with no disrespect to Dr. Bernstein, but that words have meaning, and a Ph. D. in Social Welfare doesn’t mean a Ph.D. in Economics or that Jared knows the difference between an income statement and a balance sheet, or the cost consiquences of the policy decissions he and his boss may be suggesting. This is deceteful and misleading.

Risky Thinking Surrounded by Hubris

Tom — Fri, 08 May 2009 17:13:13 +0000

The banking and finance industries were among the first to make extensive investments in information technology. Perhaps no other industry has done more with detailed information technology. You can see that in your own experience of ATM’s and now web access to your accounts. Checks clear in a matter of hours and personal credit cards are accepted virtually everywhere in the world. If you were to think of industries in which there is an abundance of information from which sound decisions can be made, the finance industry would likely rank among the top, yet after all the detailed information across decades, the finance industry did not forsee the problems in which we now find ourself.

In the book the Black Swan, Nassim Taleb points to many failures of financial decisionmakers in their paying attention to details, in particular their propensity to depend upon exotic financial equations in providing them guidance in their decissions. The challenge we have in Dr. Taleb’s book, is that it was first published 2 years ago and described with great clarity what we are experiencing today. So what are we to make of this? What does the lessons of the current financial crisis have for those seeking similar metrics for the future of healthcare, namely Comparative Effectiveness measurements.

First, this is not to suggest that we shouldn’t look into the effectiveness of new products and procedures, but it is a warning to those that place such great hope that such analysis will save money. It may, but it very well may not. Truth be known, medicine isn’t much better than the financial industry at predicting the future, and we don’t have nearly the data that the financial industry has. Healthcare is arguably 20 to 30 years behind the banking and finance industry in regard to their information systems and the information they produce. Imagine the leap of faith required to think that medicine can do better than the financial industry with less experience, less information and an eminently more complex biologic processes. Just how are we to believe that?

Medicine profits heavily from surprise and we benefit by capitalizing on the unexpected. I think of small and powerful things like Folic Acid during pregnancy that lowers the incidents of neuro tube defects. Or a failed antihypertensive drug that later became Viagra and is now used with great success in the treatment of patients with pulmonary hypertension. In what possible way could these beneifits be discovered ex ante? In the end, it is the hight of hubrice to begin to think that we have all the data we require along with the ability to analize it, and in so doing apply Comparative Effectiveness metrics to lower costs while improving outcomes. This, ladys and gentlemen, is what they call in Basketball a “head fake”.

First $19 Billion and Then A Miracle Occurs

Tom Coss — Sat, 28 Feb 2009 18:13:00 +0000

Nothing quite describes the realities behind healthcare reform than this little cartoon. Most people when asked about their health care are relatively satisfied, only in general and often abstract areas is healthcare a problem. Is it expensive? Indeed it is, but compared to what? Healthcare is expensive because there are choices today that simply did not exist thirty years ago. The 50′s singer Bobby Darin wouldn’t have died at his young age, had he been born just ten years later. Today, heart valve replacements are bordering on trivial.

Now we re focused on the much needed improvement in information technologies in healthcare to do for healthcare what information technology did for manufacturing. However in the case of healthcare things are a bit more complex. There is a lot of talk about the Electronic Medical Record (EMR), but the big challenge remains: how?

We know the technolocy, and we’re pretty certain of the value in improving outcomes as well as population studies, but in the middle is actually getting it implemented and used part. In this space there are a lot of non technical issues such as culture, ease of use, understanding how the information is going to be used, security and many more. The implementation process, the part where people need to get engaged and participant, is the often overlooked stage, step 2 as the cartoon suggests. With $19 billion now headed into the healthcare information technology market, just how are we positioned with the implementation resources required for success. If healthcare IT companies aren’t scarfing up talent now, they will soon regret the delay.

Here is more on Capital Investment in Healthcare

Health Information Technology for Economic and Clinical Health Act – HITECH Act

Tom Coss — Wed, 11 Feb 2009 18:47:00 +0000

The Stimulus package passing through the Senate yesterday left untouched the nearly 136 pages of proposed legislation for Health Information Technology, over 18% of the immense 752 page document. To be more specific where specifics are rare, I’m referring to the ‘‘Health Information Technology for Economic and Clinical Health Act” or HITECH Act and its various components.

To net this out, the government is, as you know, big time into healthcare and growing bigger. Principally the legislation focuses upon the Electronic Health Record which many believe to be a critical element in reducing errors, saving time and improving outcomes. The legislation seems to be aware that there are many many moving parts to enabling the effective and confidential management of personal health information. Governing and standards committees will be formed and there are provisions for Comparative Effectiveness Research adding $400 Million to the effort.

This is probably the right legislation at the right time, still I’ll be keeping a diligent eye out as to unintended consequences, and you should to. I’ll be going through this in detail over the next few days, so check back and comment.

Tom

All The Pleasure of One Hand Clapping

Tom Coss — Fri, 26 Dec 2008 01:56:22 +0000

Earlier this month the California Health Care Foundation published Equipped for Efficiency: Improving Nursing Care Through Technology, and in so doing, misses the largest point. The piece provides valuable information in regards to opportunities for improving healthcare efficiency, but doesn’t address the bigger problem: How?

How can these or any technology aimed at making healthcare more efficient be funded? What are the criteria? It’s difficult to utilize financial tools like Internal Rate of Return, Net Present Value or even simple Return on Investment models, in large part because it doesn’t matter. That is, life will continue with or without these technologies and the standard mechanisms of competition are so greatly blunted by the fact that medicine continues to be driven by the preferences of physicians.

All the recommendations in this report are legitimate, but where is the business model and how is it validated. That is where the intellectual heavy lifting lies. We need to build the business case that is measureable, transferrable and trustworthy.

Details on the Healthcare Labor Force

Tom Coss — Mon, 17 Nov 2008 02:26:36 +0000

Since my last post some time ago, I’ve been working on a piece that I hope will better explain what is happening in the healthcare labor economy and its contrast to what is going on outside healthcare.

Certainly much has changed in the general economy over the past six months, and more recently some exceptionally dramatic and unprecedented changes. I’ve been keeping a keen eye out for any evidence that what I’ve written about in this blog has change, and I’m delightfully pleased that with regard to healthcare, the picture remains good or labor. Still this doesn’t mean that all is well. Health care remains exceptionally inefficient and something needs to happen.

This piece explains in greater detail the nature of the health care labor market over time and in comparison to other labor markets of which we are all familiar. In addition, I tried to provide some insight into what individual health care facilities and organizations can do to improve efficiency, lower costs and improve outcomes.

Now this sounds like a tall order which in aggregate it might be, still in small decisions and actions, it is not.

Capital Investment for Improving Labor Efficiency in Healthcare