Unholy Alliance Part 2

If there has been one thing I have been consistent about both during the thirty-five years I was a healthcare system CEO and continuing on to my tenure now on the beach, it has been my view that the information collected during the patient care process belongs to the patient and no one else. As a provider of care we maintain custody of that information but it is not ours to give away or sell.

That was the focus of a blog I published in November (Unholy Alliance) which discussed the arrangement which Ascension Health had with Google to share patient data (“Project Nightingale”). The Wall Street Journal ran an article exposing this arrangement and raised questions about it appropriateness, particularly since it was a secret endeavor done without patients’ knowledge.

The Wall Street Journal in a more recent article again explored this subject. WSJ related how some prominent healthcare organizations like Intermountain Health and the Mayo Clinic were considering or have struck deals to provide patient data, some of which might with a little effort allow individual patients to be identify. Kaiser apparently also did some consideration of a similar data sharing arrangement.

It is not just healthcare providers who see patient data as a desirable asset. Health plans think such information belongs to them to use as they see fit. There are no uniform safeguards to protect patient confidentiality.

Its gets more dismaying. Cerner, a major provider of electronic medical records to providers, seems to think that the information which flows through its servers is its data to use or exploit as it deems appropriate. Apparently they had second and third thoughts about such data monetization and decided–for now–not to allow access to their data trove to outside organizations. Cerner would better serve its clients by providing a more efficient and less expensive suite of software. That would be a major achievement to crow about.

Google and Amazon seem to be the most active in attempting to entice healthcare providers to allow them to aggregate such data and in the process provide addtional revenue to the providers. The sale of this patient data is always couched in language which suggest that the common good will be enhanced. Disease processes will be better defined and the efficacy of treatment modalities better understood. I have no doubt that is true but do not believe Google, Amazon or any of the nerd herd are trustworthy recipients of this data. Nothing in their past history is a confidence builder in this regard.

Google, whose self proclaimed mission is “to organize the world’s information and make it universally accessible and useful”, has a dismaying tendency to take action and then beg for forgiveness later. I get the impression sometimes that they would like to be the “University of Google” with the prestige that would give them. If so, hopefully they will have a football team which will be smart enough to keep their helmets on at all times.

All of this is beside the point if you accept the thesis that your personal health record belongs to you and no one else. It is not for sale to others. We in healthcare forfeit our patients’ trust if we enter into such arrangements with the likes of Google or Amazon or Apple or Microsoft—make your own list. Healthcare organizations need to be more forthright about this matter and assure those it serves that their data will not be sold to others.

This is an area which continues to attract the attention of politicians which can be a mixed blessing. Bottom line though is that my healthcare record is my business and it is not for sale without my permission. Take my information off the market.

Dinosaurs Can Evolve

Amazon, the slayer of dinosaurs like WalMart and Target, is suddenly finding that the dinosaurs are biting back and it hurts. That was the subject of several articles in the business press at the end of 2019. I believe this revival of the erstwhile retail dinosaurs has some parallels to healthcare.

Until recently, Amazon has been a devastating competitor in the retail space. Online ordering and the absence of costly stores has allowed Amazon to grow very quickly. Free or low cost delivery made purchasing from Amazon even more attractive. WalMart and Target with their many stores found competing against Amazon difficult. A new paradigm was rising.

That is until WalMart and Target took a look at their business and how Amazon was leveraging online ordering to their disadvantage. Amazon, they realized, did its order fulfilment from massive warehouses located around the country. Could that seemingly insurmountable strength be a weakness?

WalMart in particular and Target to a lesser extent began online order fulfilment using the inventory in their thousands of stores. If necessary, orders could be shipped from the store or, even better from a cost viewpoint, customers could pick up their online purchases at local stores. This past holiday season, both WalMart and Target made it very easy to do such pickups. These dinosaurs had in effect mini-warehouses much closer to the customer than did Amazon. The dinosaurs suddenly became more formidable.

Amazon is now beginning to open stores to assert its presence. I frequently visit a bookstore they have in Walnut Creek, CA. I also visit another Amazon store in Berkeley which only stocks the best selling items in a number of categories. Amazon also owns Whole Earth Food stores (better know as “Whole Paycheck” due to their high prices and air of genteel nonsense— they make you feel good as they shamelessly pick your pocket). Amazon is looking more and more like the dinosaurs it thought it had replaced.

So what is the parallel with healthcare? For years the mantra has been that hospitals are dying. The first book on that subject that I can recall dates to the early 1980s. The author of that book is now a senior citizen pundit who no longer necessarily believes in the death of hospitals. The thesis underlying the hospital death notices was that technology would reduce the need for hospitals and services would be provided in less costly outpatient locations. Outpatient locations with their lower cost were to be the Amazons of that healthcare era.

Except, all the hospital doomsayers were wrong. First of all, technological advances also led to increased use of hospitals for some diseases. More to the point, like Walmart and Target, hospitals did not roll over and bow to the pundits’ outpatient gods. Hospitals big and small morphed into healthcare systems. In many locations, hospitals are the central focus of a campus and are surrounded on their sites or nearby by various outpatient centers they own.

Hospitals are like WalMart Super Centers. Easy to find with all that a customer (or patient) may need. That convenience plays a huge role in allowing hospitals to adapt to changing circumstances. Hospitals did not die. They evolved and in the process made care more accessible.

This reality is hard for many to accept. There are entrepreneurs still trying to form urgent care companies and imaging center companies. The economics work fine as long as they can find venture capital companies dumb enough to fund them. The dumb guys do exist. The fact is, though, that none of these companies have amounted to much or moved the needle in terms of healthcare cost.

Hospitals in their new form, like WalMart and Target in retail, have become effective competitors with self-proclaimed disrupters. The lesson here is to never underestimate the ability of dinosaurs to evolve.

The Price is Right, Right?

Come on down! Guess the price of a MRI procedure and it will be yours to have. Who wouldn’t want to spend twenty minutes in a tube surrounded by a magnetic field?

And behind one of the three doors is a CAT scan worth–well, the price depends on where you get it.

Price transparency for healthcare services has reared its head again on both sides of the aisle in Washington. King Trump, strike that, I meant President Trump, has proclaimed that contracts negotiated between health plans and healthcare providers should be made public so that all can see what prices are contained therein. That proclamation is already being litigated so don’t hold your breath about seeing contract details anytime soon.

Meanwhile, the Impeachment Queen, strike that, I meant Speaker of the House Pelosi, along with many other members of both parties think that the posting of prices by healthcare providers is a dandy idea which will lead to decreased healthcare costs. Their woked enablers in the healthcare parasite community, strike that, I meant healthcare punditry community, are nodding their heads as if they know what they are talking about.

I will leave the sanctity of contracts issue to the lawyers who also have to make a living. The other proposal, though, that the posting of prices by healthcare providers will make a significant difference in where patients choose to obtain services reveals an abysmal ignorance. The medical term is “hogwash”. It is very contagious.

In an emergency or urgent situation, no one stops to check a price for a service. You need the problem taken care of immediately. Most hospital admissions nowadays come through the emergency service or from a doctor seeing a patient in the office and determining that hospital care is urgently necessary.

Outpatient services are a different matter. Most can be scheduled and therefore there is time to shop for the best price if a patient is so inclined. Despite that, most patients do not shop. They rely on their provider to make the necessary referral to an outpatient site. Imagine, they trust their doctor!

It has been possible for many years in California to shop outpatient services provided by hospitals by going to a state-run website where hospitals are required to post all of their prices. You are talking about thousands of prices as hospitals must have prices for everything in order to meet federal mandates. There is little evidence that many patients access the price website and even less evidence that the website influences where the patient obtains a ordered procedure.

When your doctor suggests a test needs to be done, he or she usually has a place in mind that experience has shown will produce an accurate and timely result. For instance, the ordering of a MRI by a provider at a specific location may reflect confidence that the equipment used is up-to-date and the specialist interpreting the test has a good record of accuracy.

Another example would be a surgeon who recommends a procedure which can be done at an ambulatory surgery center where he has privileges and where he trusts that the nursing staff will be competent. Do the politicians and pundits really think a patient is going to shop that service? Maybe the patient can find a cheaper place for the surgery but he will also have to find another surgeon.

Shopping for healthcare services is not the same as shopping for a TV. If Costco has the same TV at a cheaper price than Best Buy, there is no reason not to buy it at Costco. Plus, you can get a hot dog and soda for $1.50 plus tax at Costco which would seal the deal for me.

I have no problem with the posting of prices, mandated or voluntary, by healthcare providers. I have a huge problem with the self proclaimed “experts” who think that will reduce the cost of healthcare. The interplay of third party insurance, government regulations, technological advances and patient preference plus many other factors drives healthcare costs. The posting of prices will not affect these drivers of cost.

Whenever the issue of prices and costs came up before I hit the beach, I would look at this framed quotation from the 19th century English writer John Ruskin which hung in my office:

“There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey.”

So King Trump and Queen Pelosi and your various enablers and court supplicants, come on down. The price is not always right.

I Got Hugged

Recently as I was leaving NorthBay Healthcare’s fitness center where I regularly work out, I was stopped by an oncology nurse who works in the cancer center located in the same building. She told me that it was her last day before retiring and was it ok for her to hug me?

That request gave me pause. Would it be appropriate for me to let her hug me? I knew the nurse slightly as I did many employees before I hit the beach. I had run into her occasionally as I meandered around NorthBay’s various service sites. I knew her to be a very dedicated nurse. Why would she want to hug me?

I got real and put away my fears of being accused of acting inappropriately. I no longer was in a position of authority and if she wanted to hug me, why not? So I opened my arms and accepted her hug.

She thanked me for having supported the cancer center from its inception and through its growing pains. I thanked her for her long term tenure and her commitment to giving patients the very best in care. I wished her well as she joined me on the beach.

I spent several days mulling over the hug. The whole incident left me a little puzzled. I eventually realized that she was recognizing me for having done something that in her mind merited a hug. She made me feel good.

I always felt that recognizing the people who served our patients, no matter their job description, was the right thing to do. As do most organizations of any size, we had a formal recognition program which included an annual employee recognition program. I suspect, though, that such programs alone are insufficient to convey to staff that their efforts are appreciated and that they are not faceless inputs into the patient care process.

I don’t have answers to what more we can or should do to better recognize the contributions of staff to an organization’s mission. I think more ideas are probably needed. We need more metaphoric hugs to recognize staff.

As we approach the holiday season, things tend to get hectic and we forget to recognize people and their efforts. It is natural but wrong.

All I know is that I got hugged and it felt very good. I hope everyone gets a “hug” in the workplace when they have earned it.

Unholy Alliance

The Wall Street Journal and other news sources reported last week that Google and Ascension Health, a Catholic organization which is one of the nation’s largest non-profit health systems, had entered into an alliance which would provide Google with access to patient data. The project is known internally within Google as “Project Nightingale”. It was more or less a secret endeavor.

The usual gobbledygook ( not a disease although it sounds like it should be) spewed forth from both Google and Ascension like the poor possessed girl in “The Exorcist”. People paranoid like me of Google were concerned. Not to worry says Google. Trust us.

Ascension, having also kept this matter more or less a secret from its patients, resorted to a convoluted explanation similar to what a small child would say when he was caught with hands in the cookie jar. Trust us too!

Politiicans weighed in with their own concerns. Increasingly, the motives of these large Silicon Valley companies are being questioned. Critics are raising issues of privacy and intrusiveness. Information is power and the Googles of the world seem to relish using that power. So do politicians and they don’t like to share power.

Stripped to its basics, it seems this unholy alliance between Google and Ascension had the noble goal of using Google’s strengths in aggregating data and applying artificial intelligence to gain new insights into disease and the care thereof.

I understand Ascension’s motives in working with Google. It seems consistent with their mission of providing health care in the most effective and efficient manner. Purity of motive does not, however, justify betrayal of trust of those you serve.

I, like our elected officials, am very suspicious of Google’s motives. Clearly, Google sees a way to monetize access to patient data. Who benefits the most from this access–the patient or Google? Easy question to answer.

Why is it that when I go to the doctor or use a health system’s services, my health data, even if provided in a manner where my identity is disguised, becomes a product for others to use for profit? It’s my information and my privacy which is being violated.

Yes, there are apparently in the Google/Ascension alliance all kinds of safeguards built into the information aggregation process. The information is safe until it is not safe. Hackers are probably already at work trying to crack this treasure trove of data.

The most basic question, though, is why is my personal data for sale?No matter how pure the motives are on the part of Ascension or how much profit Google foresees access to that data will provide, patients gave neither of these organizations the right to open up their private life for a greater cause.

If this unholy alliance is going to continue, it is time for them to seek permission from patients for access to personal health data even if the information is “deidentified” and since such data has apparently some value, perhaps even pay for the privilege of using it.

The Antidote

Over time there are “rules” or collective wisdom which govern organizations in any field of endeavor. Some are universal and beneficial such as treating employees in a fair and consistent manner without regard to national origin, race, gender or sexual orientation. You generally cannot go wrong with the golden rule of treating others as you would like to be treated.

There does develop over time within enterprises in a specific industry a collective wisdom which can be pernicious and with which no one takes exception because that is the way things are or should be. This is the playground for many consultants.

We have in healthcare several harmful beliefs which I believe lead to harmful results to the organization and the people it serves. Trigger warning! This may cause you to have an attack of the vapors, particularly if you make your living by helping health care organizations with these beliefs. Consultants beware!

The first harmful belief is that given the high proportion of patients on Medicare you must find a way to at least break even financially in serving these patients. Failure to do so will, so to speak, result in financial failure. This mantra about breaking even with Medicare has been repeated relentlessly. It is nonsense.

The federal government is a price-fixer when it comes to Medicare payments. Take it or leave it. The rules for reimbursement for Medicare are ever changing and what is paid for services rendered is determined by the needs of the federal budget and the whims of politicians and bureaucrats. That is why under the payment scheme for Medicare inpatients there is a specific payment for care given to people who suffered burns while water skiing. There are ten thousand or so such examples, some even more nonsensical.

Given the absurdity of the Medicare payment system and the political skullduggery which occurs every year, very few organizations will ever break even from Medicare. It is OK to howl now if you are a consultant in this area and I have triggered a deep sense of insecurity. You know I am right. Financially, Medicare is rigged—- heads you lose and tails the Feds win.

The second harmful belief is that the health plans you contract with are your partners in healthcare. Together, you can deliver cost effective care to the masses. Just agree to reducing your compensation by 30 to 40 million dollars and we are partners. Sign here.

For-profit health plans have three month attention spans. They periodically promote the idea of “partnering” with providers as a ploy to reduce what they pay for care rendered to patients. Partnering with for-profit health plans is like swimming with sharks.

The health plans refer to what they pay hospitals and doctors as their “loss ratio”. From the health plans’ perspective, if they must pay you 80 cents out of every dollar of premium revenue they coerce, strike that, I mean collect from employers and individuals, they have a loss ratio of 80 percent. The other 20 per cent covers their costs and profits.

If you look at non-profit health plans, they typically have loss ratios that are 90 percent or higher. They pay more of the premium dollar for actual care and would seem to be more economically efficient than their for-profit brethren who typically have loss ratios in the lower 80 percent range.

I once fell for the contention that healthcare providers and plans should be allies. It took me years to get my organization out of what was a very one sided and financially harmful arrangement. For-profit health plans are short sighted and driven by the need to deliver quarterly reports pleasing to their shareholders. Fine and well but healthcare providers do not need these kind of allies. We have a different mission.

The final harmful belief is that healthcare providers can achieve financial success by reducing costs. The bean counters love this belief and there is a kernel of truth contained in the belief. There are financial norms for some things. If most organizations can do something with just five people and you are doing it with ten people, it is probably worth a look at your processes. This is low hanging fruit and their are many fruit pickers called consultants who can help you.

What is harmful is the belief that all fruit picking is beneficial. Often times in healthcare, you see the cost reductions in areas that are delivering services to people and providing revenue. The services may be part of an array of services, each by itself looking like a financial loser. When you take a look at the total array of such services, you see that the service being cut back makes it possible to operate other services at a positive gain.

I realze I am getting in the weeds here but my experience has been that when you reduce or eliminate a service to cut costs, there are unexpected consequences which hurt the enterprise as a whole. It is a harmful belief that an organization in financial difficulty or anticipating such can find salvation by cutting revenue producing services. Greater attention needs to be given to increasing revenue by developing new services for patients.

These harmful rules have lead many healthcare providers down a path which ends in serious financial difficulty. Cutting costs, whether it is pursuit of a mythical Medicare break even point, partnering with health plan sharks or just doing it without regard to process changes will not result in long term success. You cannot cost cut your way to success. Attention to growing revenues in addition to prudent process improvements is the antidote to these three harmful rules.

A Really Big Boo Boo

When I started this blog a year ago this month, I gave fair warning that I found much of what passed for conventional wisdom in health care to be not very wise at all. Pundits run wild. Consultants develop fixes for problems you did not know existed. Management theories get confused for reality. Desired outcomes get mistaken for assured outcomes. Wistful thinking is no way to run an organization.

A frequent result of this process is that people who have success in one area of endeavor think they can duplicate their genius in health care. Remember Theranos which promised to completely change the paradigm for clinical laboratory tests? The founder’s trial starts next year. I am betting she is good for at least five years at a federal resort.

In “A Big Boo Boo” which appeared in this space on November 27, 2018, I critically questioned the wisdom of peripheral players in health care such as sloppily run drug store chains getting into the health plan and drop-in clinic business. Most of these outfits cannot even keep their stores looking presentable.

Well, at least so far in the case of what I called “boo boo” clinics in ragged looking drug stores, I appear to be correct. Walgreen’s has announced that it will close its 157 in-store boo boo clinics. Truth be told and all modesty aside, I first predicted this outcome when I was writing a blog for NorthBay Healthcare before I hit the beach.

Walgreen’s idea was that by opening these boo boo clinics, access to care would be improved and patients would save money. Also, there would be a handy pharmacy to fill prescriptions next to the clinic and you could buy candy and soft drinks on the way out. In one trip you could get fixed and then start the journey to your next ailment, sort of like a health care perpetual motion machine.

Studies are beginning to show that boo boo clinics and the like do not save money for patients. They are not profit centers in any way for the drug stores. They are losers.

Walgreen’s now hopes to find suckers–oops, I mean other health care providers–to rent the vacated boo boo clinic space so that the new operators can lose money while Walgreen’s happily continues to fill prescriptions and sell candy and soft drinks where the real profits are.

Meanwhile, CVS continues to try to figure out the health plan business while operating boo boo clinics in its stores. A prediction–they too will tire of the losses and will get try to get back to straightening the shelves in their stores and occasionally cleaning their floors.

Some pundits refer to what Walgreen’s and CVS are doing as a “funnel” strategy where a wide net is cast at the top of the funnel and as customers cascade down the funnel the enterprise has multiple opportunities to provide services and goods. The hope is that being many things to a customer will result in efficiencies and cost savings. This is also known as a pipe dream.

In the year or so before I hit the beach, I invited a physician from Silicon Valley to speak to my managers about innovation and disruption in health care. He had very specific ideas about where disruption and innovation would occur but to my surprise he made it clear that operating boo boo clinics and urgent care centers were not disruptive innovations and, because they could not be run efficiently at scale, would not move the needle in terms of health care costs. He said these kinds of clinics could only be effective in solving particularly local problems of hospitals such as decanting demand from overrun emergency services. I wish I could remember his name.

A mistake outfits like the drug store chains and others make is to view the provision of health care through a purely transactional prism. Health care is much more than that. It is an interpersonal transaction based on mutual trust. That is a completely different kind of “business” than peripheral health care companies are in. Their lack of understanding is profound.

Walgreen’s has discovered it made a really big boo boo with these drop-in clinics. They had a similar and costly experience with Theranos’ magic lab test machine. Hubris instead of common sense will do that every time. As the great academician Professor Harold Hill said in “The Music Man”, you have to know the territory.