Hospitals’ Soft Underbelly: The Capital Conundrum

Tax-exempt hospital systems without fortress balance sheets and top quartile operating performance will be capital constrained in the future healthcare economy, even if tax-exempt debt continues be cheap and accessible. Stating the obvious: operating a hospital is a capital intensive activity. Historically, hospitals have required about $1 of invested capital to generate $1 of hospital revenue. As hospital systems contemplate changing their facility-based fee-for-service models into health enterprise models responsible for managing populations of patients and being at risk, capital will need to be deployed into new areas….

For less than top tier rated hospital systems, these capital demands create a capital conundrum: building both balance sheet strength in the form of increased days cash on hand and reduced leverage, while also spending capital that is not financeable with tax-exempt debt and very difficult without extraordinary operating margins.

Carsten Beith, Cain Brothers Industry Insights; March 30, 2015

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Apple ResearchKit is Open Source, But is it “Open”?

researchkit

For now, the answer is “we don’t know”.

But… the question is very important and worth tracking over the coming months. Let’s not assume that open source will equate to “open”.

7 Questions Are Shaping the Patient Digital Health Platform Ecosystem — HIN Article

PDHPHIN

My article “Seven Questions Shaping the Patient Digital Health Platform Ecosystem” is published in the February 2015 issue of Healthcare Innovation News.

You can download a copy of the article by clicking here.

Accompanying PowerPoint slides are available here.

Table of contents for the series--The Patient Digital Health Platform (PDHP) Ecosystem

  1. Patient Digital Health Platforms…A First Take
  2. Will Apple’s Strategic Beachhead Be Doctors, Not Patients?
  3. PowerPoint — 7 Questions Shaping the Patient Digital Health Platform (PDHP) Ecosystem
  4. 7 Questions Are Shaping the Patient Digital Health Platform Ecosystem — HIN Article
  5. Apple ResearchKit is Open Source, But is it “Open”?

The “Shake the Winter Blahs” Edition of Health Wonk Review

origin_12957195

It’s the middle of winter. Feeling blah? Need some stimulation? You’ve come to the right place!

Welcome to The “Shake the Winter Blahs” Edition of the Health Wonk review. For the second time, it’s my honor to host HWR — providing you summaries and links to the best recent writing in the health blogosphere. Let’s go!

Federal Health Policy

At the Health Affairs Blog, Princeton professor Uwe Reinhardt jumps off from the recent controversy about Jonathan Gruber’s remarks describing the American public as “stupid”. He writes that Gruber’s apologies were appropriate. The post is descriptively titled Rethinking The Gruber Controversy: Americans Aren’t Stupid, But They’re Often Ignorant — And Why.

As an American, (I think) I’m relieved to know that I’m not stupid, just ignorant.

PowerPoint — 7 Questions Shaping the Patient Digital Health Platform (PDHP) Ecosystem

PDHPs HU 11, San Diego

I hope you’ll enjoy reviewing my slides from my December 3 presentation at the 11th Annual Healthcare Unbound Conference.

The presentation is formally entitled: “Patient Digital Health Platforms (PDHPs): Epicenter of Healthcare Transformation?”…

…but more informally, I pose and address 7 key questions — the answers to which will shape the future of the PDHP ecosystem.  The answers aren’t all that clear yet because it’s very early and because most of the companies involved haven’t yet shared a lot of details about their plans.

The 7 questions about the emerging PDHP ecosystem are:

1) What’s the “Healthcare Platform Void”

2) How will the emerging PDHP ecosystem reshape the planet?

3) What’s the central issue? It’s about DATA!

4) Will PDHPs converge with mainstream healthcare?

5) How many platforms?

6) What are some “secondary” issues?

7) Why are PDHPs about much more than just healthcare?

You can download a copy of the PowerPoint slides here.

For additional perspectives on PDHPs, take a look at my previous blog post: Patient Digital Health Platforms…A First Take.

 

Table of contents for the series--The Patient Digital Health Platform (PDHP) Ecosystem

  1. Patient Digital Health Platforms…A First Take
  2. Will Apple’s Strategic Beachhead Be Doctors, Not Patients?
  3. PowerPoint — 7 Questions Shaping the Patient Digital Health Platform (PDHP) Ecosystem
  4. 7 Questions Are Shaping the Patient Digital Health Platform Ecosystem — HIN Article
  5. Apple ResearchKit is Open Source, But is it “Open”?

ACO Lessons Learned: Revisiting the Timing of Downside Risk

acn14

The editor and publisher of Accountable Care News have been generous in allowing me to republish my article from the November 2014 issue.

Click here to download a .pdf copy of the article. It’s in-depth — about 2,000 words.

Here’s the article in a nutshell:

One of the most critical aspects of the Medicare Shared Savings Program (MSSP) ACO has been around the timing and certainty of requiring mandatory downside financial risk for physician and hospital participants. Provider protests cajoled CMS to backing off an initial stance of “firm and unwavering” for ACO mandatory risk requirements in 2011.

The issue is being revisited in major 2014 MSSP reg revisions which are in process. A central lesson we are learning about ACOs is that clinical transformation is a long and difficult process, and thus CMS (and all payers) should continue to be “firm but flexible” in the timing of requiring downside risk. There are many advantages of a stance of “firm but flexible”, and while the shift in wording might seem subtle, the implications are profound.

11th Annual Healthcare Unbound Conference, San Diego, December 3-4

 December 3-4, 2014 

San Diego, CA

Technology-Enabled Consumer Engagement & Behavior Change

 Register by November 17th to receive a $100 early bird discount.

 

The Healthcare Unbound Conference will focus on technology-enabled consumer engagement and behavior change.

 

Technologies to be discussed include wearables, mHealth, remote monitoring, eHealth and social media.

Moving beyond just a “cool technology” focus, this event will offer practical approaches for healthcare stakeholders and digital health companies. The program will address the reasons that the sustained adoption of digital health technology is below expectations and what can be done to change that, showing examples of successes and also highlighting lessons learned from failures. The conference is based on the premise that technology by itself is not the solution; the solution must be a combination of process (services), technology and business model (be it all combined in one company or via a network of partners) providing the end-to-end solution.

Conference Chairperson:

Vince Kuraitis, JD, MBA, Principal, Better Health Technologies, LLC

Speakers Include:

Marian Bartlett, PhD, Co-Founder & Lead Scientist, Emotient

James Brady, PhD, FHIMSS, CPHIMS, President, HIMSS Southern CaliforniaChapter & Area CIO, Kaiser Permanente

Eric Brown, President & CEO, California Telehealth Network

Nilesh Chandra, Managing Consultant, PA Consulting Group

Rebecca Chiu, Business Development, MedHelp

Darrel Drinan, President/CEO, PhiloMetron Inc.

Proteus Duxbury, Chief Technology Officer, Connect for Health Colorado

Skip Fleshman, Managing Partner, Asset Management Ventures

Derek Footer, President & Managing Partner, HardTech Lab

Bret Harris, Sr. Manager Business Development, Indiegogo

Royan Kamyar, MD, MBA, Founder & CEO, Owaves

Teri Louden, President, The Louden Network

Stein Lundby, Senior Director of Systems Engineering, Qualcomm

David Luxton, PhD, Research Health Scientist, Naval Health Research Center & Affiliate Associate Professor, Department of Psychiatry and Behavioral Sciences, University of Washington School of Medicine

Marlene M. Maheu, PhD, Executive Director, TeleMental Health Institute, Inc.

Gregg Masters, MPH, Founder & CEO, HealthInnovation Media

Mark Oswald, Global Head of Enabling Technologies, Janssen Healthcare Innovation

Melissa Palacios, RN, BSN, PHN, Project Manager of Telehealth and Innovative Outreach Solutions, Population Health Department, Sharp Rees-Stealy Medical Centers

J. Summer Rogers, CEO, nPruv

Jakka Sairamesh, PhD, Managing Director, Corporate Strategy and Analytics, The Advisory Board Company & CEO, 360Fresh, Inc.

Patricia Salber, MD, MBA, CEO, Health Tech Hatch & Founder & Host, The Doctor Weighs In

Nick Semple, Managing Consultant, PA Consulting Group

Steven Steinhubl, MD, Director, Digital Health, Scripps Translational Science Institute & Cardiologist, Scripps Clinic

Chris Talbot, Senior Director, Business Development, Qualcomm Life

Gunnar Trommer, PhD

Jim Welch, Executive Vice President, Product Development and Customer Fulfillment, Sotera Wireless

__________________________________________

 For additional information, including sponsorship/exhibition opportunities, please contact TCBI. Email: info@tcbievents.info  Tel: (310) 265-2570 

Quick Links
Conference Website
Find us on:

 

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Supporting Publications

Bronze Sponsor

ThoughtLeaders: Prognosis for Medicare and Commercial ACOs

Today's Topic

A number of pundits are citing the systemic failure of ACOs, after additional Pioneer ACOs announced withdrawal from the program – Where do you weigh in on the prognosis for Medicare and Commercial ACOs over the next several years?”

Republished courtesy of MCOL

mark lutes

lutes Mark Lutes Chair, Board of Directors, Epstein Becker & Green, P.C.

Certainly, if we dial back the rhetoric and the expectations for immediate system -wide transformation, we can expect accountable care organizations to make a contribution to incentivizing more efficient care. Shared savings methodologies are a significant contribution to the arsenal of provider incentive systems. However, they are not magical. Like other incentive systems that have been implemented over the decades since the federal HMO Act was passed, shared savings methodologies are going to enjoy their greatest success where the participating providers have a large percentage of their professional income subject to (hopefully coordinated) value based incentives.

There is also no magic to calling a network an ACO as compared to the nomenclature of IPA, PHO, or PPO. The alchemy governmental and commercial payors seek, in contracting with any such network, is alignment around efficient quality care. The likelihood of the alignment succeeding flows in part from the adequacy and timeliness of the data available as well as from the ability to lock in and incent enrollees — each deficiencies in the current MSSP design. Also, as in any provider or other personnel incentive system, the carrot must be attainable and the “juice must be worth the squeeze.”

Therefore, as we prepare to comment on the next round of CMS’ MSSP and as we negotiate commercial shared savings arrangements, we will be well served to always move the programs in a direction in which they give participating providers the tools for success and in which they will be credible motivators. Most importantly, policy makers, carriers and self-funded employers will be most pleased with the efficacy of shared savings if they work together to align large percentages of payment streams in support of shared savings. If the shared savings tool is not applied in a context where it is worth the effort for providers to vary from the volume based mind-set, we will be asking and expecting too much of and from it.

henry loubet

henry loubet Henry LoubetChief Strategy Officer Keenan

The recent withdrawal of nearly 40% of the Pioneer ACO participants is indicative of significant concern but does not represent the systemic failure of the model. While these Medicare ACO programs did not perform as well as hoped, there were many factors affecting savings and quality improvements including geography and diversity of the populations served. A recent article published by the Brookings Institute analyzes the two-year results in some depth and that many of the ACOs continuing to participate in the Pioneer ACO program are achieving notable success. In the California marketplace, Brown & Toland Physicians and Monarch HealthCare were among the better performing ACOs in the study.

ACOs continue to demonstrate great promise on the commercial side. Anthem Blue Cross and Blue Shield of California have been leading the way in California in taking the ACO model to the next level. For more than 20 years, the delegated/capitated model of health care delivery has been in existence in California, and it is not surprising that two of the largest health plans have been behind the development of successful ACO structures. Anthem’s ACO has seen increases in HEDIS quality metrics and patient engagement. Blue Shield continues to expand the geographic reach of its ACOs, adding a number of new medical groups to the program. ACO efforts between CalPERS/Dignity, Hill Physicians and Blue Shield can also be classified as successful ACOs. In addition, the Kaiser Permanente integrated care model that ACOs emulate has been in existence here since the 1940s.

Certainly adjustments to procedures, the structure of incentives and improved alignment between the cost and quality of health care are needed to achieve the highest objectives of the Accountable Care model. These changes take time and some organizations will be able to improve their performance better than others. Far from being a systemic failure, the ACOs that have shown dedication to the model are showing that the program is having some successes and have demonstrated that improvement in financial and quality outcomes are possible within a reasonable time horizon.

Population Health POV — “It’s About Patient Data”

phn

As a member of the Editorial Board of Population Health News,  I was asked to provide some personal perspectives for the October 2014 issue.

Here’s a quick sample:

Optimal population health will depend on obtaining and applying the “right” data — data to analyze individuals and populations, discern patterns, predict high risk/cost patients, enable needed behavior change or interventions and measure and monitor progress.

You can read the full interview by clicking here.

Editorial Advisory Board–Population Health News

Peter Edelstein, M.D.
Chief Medical Officer
LexisNexis Risk Solutions, Atlanta, GA

Frederic S. Goldstein, M.S.
President and Founder,
Accountable Health, LLC
Chair, Board of Directors
Population Health Alliance, Washington, D.C.

Thomas R. Graf, M.D.
Chief Medical Officer, Population Health and
Longitudinal Care Service Lines, Geisinger Health
System, Danville, PA

Paul Grundy, MD, MPH, FACOEM, FACPM
Global Director of Healthcare Transformation, IBM;
President, Patient- Centered Primary Care
Collaborative (PCPCC), Hopewell Junction, NY

James (Larry) Holly, M.D.
CEO, Southeast Texas Medical Associates,
Adjunct Professor, Family & Community Medicine,
University of Texas Health Science Center, San
Antonio School of Medicine; Associate Clinical
Professor, Dept. of I.M., School of Medicine, Texas
A&M Health Science Center, Beaumont, TX

Vince Kuraitis J.D., MBA
Principal and founder, Better Health Technologies,
LLC, Boise, Idaho

Al Lewis
President, Disease Management Purchasing
Consortium International, Inc.; Founder and Past
President, Disease Management Association of
America, Wellesley, MA

David B. Nash, M.D., MBA
Dean, Jefferson School of Population Health,
Thomas Jefferson University, Philadelphia, PA

Tricia Nguyen, M.D.
Executive Vice President, Population Health, Texas
Health Resources; President, Texas Health
Population Health, Education & Innovation Center,
Fort Worth, TX

Jeremy Nobel, M.D., MPH
Medical Director, Northeast Business Group on
Health; Instructor, Center for Primary Care,
Harvard Medical School; Adjunct Lecturer, Harvard
School of Public Health Boston, Mass.

Samuel R. Nussbaum, M.D.
Executive Vice President, Clinical Health Policy,
Chief Medical Officer, WellPoint, Indianapolis, IN

Jaan Sidorov, M.D., MHSA
Principal, Sidorov Health Solutions; Chair, Board of
Directors, NORCAL Mutual Insurance Company,
Harrisburg, PA

What Types of Business Models are Commanding the Highest Valuations? Implications for Healthcare?

valuationQ. What Types of Business Models are Commanding the Highest Valuations?

A.  “Network Orchestrators”

Source: Dion Hinchcliffe, presentation at Salesforce Dreamforce conference, October 14, 2014

Where are there opportunities for “network orchestrators” in healthcare?

• ACOs
• Patient centered medical homes
• High-value health insurance networks
• Care management/population health management vendors & implementers
• Health information exchange networks
• …many others

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