Aetna, Cigna, Wellpoint Recreating Their Business Models

Major U.S. health insurers, including Aetna Inc., Humana Inc. and WellPoint Inc., are retooling to become more than just health plans, in the wake of the federal health-care overhaul that is changing the rules for the industry’s core business.

Diversification plans, touted in meetings with investors this year, include stepped up acquisitions and partnerships that will allow the companies to employ doctors directly, deliver health-information technologies, and participate in new hospital-doctor groups known as accountable-care organizations.

Wall Street Journal; May 12, 2011

Does this make sense? Absolutely!

Lesson for Healthcare: Disrupt Your Own Business Model Before Someone Does it TO YOU

Healthcare needs positive role models for innovation…and we have a real-time mentor in Netflix.

If you have a Netflix subscription, you probably identify with the company as providing a convenient DVD rental service — order on the web, the DVD arrives by mail, send it back in the handy pre-paid envelope when you’re done.

Today’s ReadWriteWeb describes Netflix’ latest letter to shareholders and explains how the company is preparing for the demise of DVDs:

We’re Building a REALLY BIG Health Internet!


How big a network will the Health Internet (aka National Health Information Network) be?

My BOTE (back-of-the-envelope) calculation is that this network could consist of about 301 million nodes.  Here’s my math (pls. clarify or amplify):

  • 300 million individuals in U.S.
  • 700 K doctors
  • 5 K hospitals
  • 295 K — other B2B healthcare entities

Very rough…but I hope you get the point.

So let’s put into perspective press releases from Google or Microsoft announcing that they have developed new “partnerships” (i.e.nodes in the network) for Google Health or Microsoft HealthVault. As an example, today Google announced partnerships with APWU Health Plan and Harvard Pilgrim Health Plan.

Table of contents for the series--Healthcare Crosses the Chasm to the Network Economy

  1. Intro to a New Series
  2. What’s a Network Industry? Is Healthcare One?
  3. We’re Building a REALLY BIG Health Internet!

Medicare Health Support (MHS) Claims Another Victim: LifeMasters Files for Chapter 11

Updated 6:10 pm, September 14, 2009

One bad deal can ruin your day.

Today, LifeMasters filed for Chapter 11 bankruptcy protection.  According to its press release:

“The Chapter 11 filing is the most efficient path for the company to restructure liabilities that are a result of Demonstration Projects previously performed under contracts with the Centers for Medicare and Medicaid Services (CMS), ” said George D. Pillari, President of LifeMasters. Mr. Pillari, named President of LifeMasters today, is a Managing Director of Alvarez & Marsal Healthcare Industry Group, LLC and had been working with the company and its board as a restructuring advisor prior to the filing.

During the last four years, LifeMasters participated in three CMS Demonstration Projects aimed at testing certain disease-management techniques in fee-for-service Medicare and Medicare/Medicaid dually eligible populations. Eight other disease management, health insurance and pharmaceutical companies also participated in these projects. LifeMasters’ involvement in the CMS projects ended earlier this year.

CMS contends that LifeMasters, like other participating organizations, was unable to demonstrate success based on CMS’ study design and measurement methodologies. Similar to its claims against other Demonstration Project contractors, CMS contends that LifeMasters is required to repay to CMS any fees earned in excess of savings generated during the multi-year projects. “Rather than endure a costly and time-consuming legal path to challenge CMS, we have chosen to restructure our CMS and other liabilities through the Chapter 11 process,” Mr. Pillari added.

LifeMasters expects no disruptions in its services to clients and believes it has ample cash on hand to emerge from Chapter 11 as a viable health improvement company.

A Modern Healthcare article contains a link to the bankruptcy filing:

  • In one checkbox, the company estimates it has $10 to $50 million of assets
  • In another checkbox, the company estimates it has $100 to $500 million of liabilities (to all creditors, not just CMS)
  • It lists CMS as it’s largest creditor — $125 million

What happened? First let me acknowledge that I don’t have first-hand specifics of the current bankruptcy filing.  However, many bread crumbs have been dropped along the trail…

Microsoft HealthVault is a Serious Business Strategy. Will Google Health Become More than a Hobby?

Google Health…please stick around….but please also get your stuff together.

Over the past few days, several of my respected colleagues have written excellent blog posts essentially asking “Does Google Health have life?”

I share their observations and sentiments.  I see Microsoft HealthVault as a serious business strategy while Google Health is more like a hobby (one of probably hundreds at Google).

Are there reasons Google should stick around healthcare? Absolutely!  Off the top of my head, I can think of five:

  1. Google brings unique competencies to health care information seeking.
  2. Google Health is doing a good job on a shoestring budget.
  3. Healthcare is ripe for disruptive innovation.
  4. Microsoft needs competition.
  5. Microsoft HealthVault and Google Health are more complementary than competitive.

Let’s take these one at a time.

Adieu, LifeCOMM

“Qualcomm pulls the plug on LifeComm”  announced Brian Dolan of mobihealthnews recently. 

As demonstrated by e-CareManagement blog readership, there has been a lot of interest in LifeCOMM.  My first blog post on LifeCOMM in 2007 has been single the most commented on post and the second most widely read blog post.

It’s taken me a while to sift through my thoughts and feelings about saying “Goodbye” to LifeCOMM. At first I was deeply disappointed, but after further reflection think that LifeCOMM wasn’t the right type of platform for today’s consumer mobile health market.


My first reaction was one of disappointment.

Cerner Disses Google Health. Surprised?

Vince Kuraitis and David C. Kibbe, MD, MBA

We’re not.

From the Kansas City Business Journal :

Google Inc. has approached Cerner Corp. about a partnership, but Cerner officials don’t sound eager to entangle themselves with the Web-search Goliath.

That’s because the proposed partnership relates to Google Health, the personal health record site launched earlier in May in beta form.

The overture hasn’t led to substantive talks, Cerner President Trace Devanny said, because Cerner doesn’t see much value in Google Health or HealthVault, a similar site that Microsoft Corp. launched in October.

Cerner CEO Neal Patterson referred to the sites during a May 23 shareholders meeting as "electronic shoeboxes," requiring consumers to do much of the data importing and updating.

Why is Cerner dissing Google? Let’s take a look at Cerner’s current business model:

Healthways Fights an Uphill Battle on Medicare Health Support Phase II

Earlier this week Healthways issued a press release describing their progress in pursuing a Phase II Medicare Health Support (MHS) project.   Read Dr. Jaan Sidorov’s blog commentary for additional background.

In brief, Healthways position is that the Centers for Medicare and Medicaid Services (CMS) is statutorily required to expand into Phase II of MHS if Phase I is “successful”. While I’m very sympathetic with Healthways predicament and their frustration with CMS, I’m not optimistic that their tactics are likely to work.

In making the case, Healthways CEO Ben Leedle quoted the legislation authorizing MHS.

For a moment, let’s get legalistic and look closer at this legislation.  What exactly is CMS required to do? (I’ve put the more relevant wording in bold).

Next Generation Disease Management, ala Google


Google Wants to Index Your DNA, Too Business Week; April 18, 2008

A few years ago I remember reading a vivid description of how much information is contained in one person’s genetic code:  a stack of phone books high enough to reach the top of the Washington Monument.


NYT Provides More “Enlightened Ambiguity” on Medicare Health Support

While not providing anything close to the “final answer”, The New York Times does a good job summarizing the onoging Medicare Health Support (MHS) fracas.  To borrow from one of my colleagues, it’s more “enlightened ambiguity” about the ultimate fate of the MHS beached whale. 

Medicare Finds How Hard It Is to Save Money, The New York Times; April 7, 2008

For One Company, Role in Medicare Experiment Has Hurt Stock, The New York Times; April 7, 2008