The Three Rules Movement

We recently came across a website that is supporting a book by two Deloitte Consultants.  The book is The Three Rules by Micheal Raynor and Mumtaz Ahmed and here is a link to the site.  Here is another link to a radio interview on Bloomberg Radio. 

In short, it highlights for us the need to have companies focus on being better before cheaper. Our world today seems to be run by lawyers looking out more for risk mitigation, HR people who are looking for the exact specs on their job postings and finance personnel who are looking more at cost avoidance than revenue generation. Somewhere in all this advancement the last 4 years, industry and corporations focus less and less on the customer.  We believe this is very true in life science companies and to some degree we now see it in healthcare entities as they try to figure out how they are going to manage the US healthcare reform act.  

We are interested in your thoughts. Let us know what you think of the rules and the book.  

The Data Miners' Date With The Supremes

And so it happened: The Supreme Court spent 70 minutes on Tuesday (4-27) hearing arguments about why Vermont’s data mining law should stay on the books, and why it shouldn’t.


This was a big deal – the major media outlets covered this event, all with a different take, which is always welcome and interesting. What we found especially remarkable was that none of them, and we read many stories, interviewed a Vermont physician. It was apparently the doctors themselves who initiated the legislation: When they found out their prescription data were being sold to the likes of IMS, they asked their legislators to write the legislation.


Most of the outlets quoted Justice Antonin Scalia, Chief Justice John Roberts and even Ruth Bader Ginsberg, who questioned the reasoning behind the legislation. They didn’t think it had much to do with protecting the First Amendment rights of the physicians, as Vermont’s legal staff claimed.


“The state is interested in promoting the sale of generic drugs and correspondingly to reduce the sale of brand-name drugs,” Justice Ginsburg said, according to the Washington Post. “And if that’s the purpose, why doesn’t that run up against what this court has said — that you can’t lower the decibel level of one speaker so that another speaker, in this case the generics, can be heard better?”

Critics of the law – which include many large physician groups and the New England Journal of Medicine -- contend that data mining “violates medical privacy” a core precept of the physician-patient relationship. They assert the data are private and that the law “advances state interest by closing gaps in medical privacy and protecting the patient-physician relationship from intrusion by sales people, who tend to promote newer, less-tested and more expensive brand name drugs.”


Which is fine: Except that the law also says that a physician can exclude his data, if he wants it that way.


Does pharma use this data to sell? Of course it does. Can a physician shut his door to a drug rep? Of course he can. Let us not forget that the transparency rules are in place.


We find it curious that industry critics have such little regard for physicians’ intelligence and willpower. 

Healthcare Costs: Let the Sadists Rejoice

As politicians and other policy makers try to curb the costs of healthcare, the people who make their living from saving lives are no doubt trying to figure out how not to lose income without looking like heartless jerks. Odds are they also are trying to figure out how to take money from each other.



The folks in the boxing ring: drug makers, hospital owners and insurance companies.


The heavyweight is the hospital owners, even though their slice of the pie has shrunk 10% between 1980 and 2009, to 32.6% from 42.7%, according to the The Cost of Caring: Drivers of Spending on Hospital Care, from the March 2011 American Hospital Association. That’s 32% of $2,330.1 billion. [I BELIEVE THAT’S A TRILLION?]

And, just to complete the reporting, the drug makers’ and insurance companies’ slices have gotten lots bigger: drug makers’ take has doubled, to 10.7% from 5.1%.

As for the insurance companies, “since 1999 [to 2009] premiums have gone up a total of 131 percent, far more rapidly than workers’ wages [up 38% since 1999] or inflation [up 28% since 1999], according to a Kaiser Family Foundation study. 


It’s difficult to see how any of them will lose money. While insurance companies will likely continuing trying to control patient hospital stays, our population is getting older. You know the rest of the story. According to the AHA article, of the Medicare patients who had heart failure and died between 2000 and 2007, 80% were in the intensive care unit during the last six months of their lives. The per-patient bill hovered around $36,000.


Then there are our lifestyle issues. More people are obese, have diabetes, are hypertensive, have cancer …..


And then there is technology, and more and more of it. It may get people back to work quicker, but it also costs money: “The average spending per heart attack case rose from $12,083 in 1984 to $21,714 in 1998.”


And we’ve all read the stories about hospital staffing shortages.


As costs continue to rise, the country’s 1,000+ private insurance companies, let alone self-insured employers, will surely continue to scrutinize every procedure. But hospital administrators aren’t stupid: the losses they incur from patients who don’t pay, as well as from Medicaid, Medicare and the uninsured will be absorbed somewhere: How many hospitals have closed their maternity wings?


A law of physics applies: Every action has a reaction.


Paul Krugman, in his Times Op-Ed column last Friday, (April 22) wrote in support of the Independent Payment Advisory Board, an expert panel that would set spending limits for Medicare. Mr. Krugman says, “We have to do something about health care costs, which means that we have to find a way to start saying no.”


We? There is no we regarding healthcare. For the economic sadists among us, this is pure joy.

ACOs and Fierce Communication

So here’s a question to ponder while you’re reading our carefully honed prose: How do you attract patients to sign up for an accountable care organization?

Last week, Cigna announced that its two ACO pilots were doing, at least preliminarily, what they should be doing: improving patients’ health and saving money. The giant insurer is so happy with the results that it is planning a national expansion of its ACO program this year.

Here’s why they’re happy: At its multi-specialty medical group practice division in Phoenix, the average annual savings per patient was $336; ambulatory surgery was down 11%; preventive care visits, overall, were up 3%, and up 12% for adults. And, its partner in New Hampshire is “closing gaps in care 10% better than the market.”

A few years ago, Cigna jumped on the ACO bandwagon. The goal: “Achieve the ‘triple aim’ of improved quality, lower medical costs and improved patient satisfaction by creating a care model anchored in the principles of the patient-centered medical home that also builds in accountability by rewarding physicians for results.”

In its press release Cigna says its collaborative ACO model is big on communication. Its doctors and nurses speak frequently with its customers’ doctors and nurses, “to help with coordination of patient care.” Cigna’s program also includes disease management programs and lifestyle management programs, including stress management.

Cigna doesn’t say how its customers reacted to the idea of participating in an ACO. That notion is even more interesting for Medicare patients. How will Medicare—by law, mandated to start pilot programs by next January—attract its seniors, normally an independent, privacy-loving lot? According to the new healthcare law, the pilot ACOs will take care of all the healthcare needs of at least 5,000 Medicare patients for three years, minimum.

FierceHealthcare says the success of these ACOS will require “fierce communication strategies,” like physicians doing things they don’t normally get paid for—contacting patients by e-mail, instant messaging and so on.

But as usual, it comes down to communication. We somehow doubt that it will matter what the medium is: word of mouth, Twitter, radio, smoke signal. If the ACO healthcare providers are communicating among themselves, sharing information about a patient’s well-being, and that patient’s health is improving, along with his quality of life, then that patient will spread the word.

And that can be pretty fierce, don’t you think?

Elected Officials: Poor Profiles of Courage

A while back I started to receive an e-mail newsletter from an organization called The Healthcare Channel.  Much of it covers topics relevant to healthcare, particularly in Washington D.C. My reason for raising awareness about its work is a recent article below, which concerns the unlikely confirmation of President Obama's pick for Medicare chief, Donald M. Berwick, M.D.

My take: This article encapsulates a huge problem we have in this country. Our elected officials, on both sides of the aisle, need to wake up and realize this country is dysfunctional because they lack the courage to make difficult decisions.

While this blog has never been overtly political, we have discussed politically created unintended consequences, such as the Physicians Payments Sunshine Act. I think what is happening here as part of Dr. Berwick's confirmation process is a travesty that will have a negative impact on our country's ability to solve our healthcare crisis. I know the qualities of a man like Dr. Berwick's and believe this is someone we need to help us create change. His willingness to do what is in the best interests of the country has always been one of his hallmark traits. While I am sure his presumed replacement, Marilyn B. Tavenner, a nurse, has many great qualities, I am not sure Congress has really given Dr. Berwick a fair shot to try and make change happen.

As always, I am interested in knowing your thoughts.


Rising Calls to Replace Top Man at Medicare
By Robert Pear
The Healthcare Channel

WASHINGTON — Members of Congress, including Democrats, have urged the Obama administration to search for another Medicare chief after concluding that the Senate is unlikely to confirm President Obama’s temporary appointee, Dr. Donald M. Berwick.

Dr. Berwick’s principal deputy, Marilyn B. Tavenner, has emerged as a candidate to succeed him. Lawmakers of both parties said Monday that Ms. Tavenner, a former Virginia secretary of health and human resources with extensive management experience, could probably be confirmed.

In a letter to the White House last week, 42 Republican senators urged Mr. Obama to withdraw the nomination of Dr. Berwick to head the Centers for Medicare and Medicaid Services, which runs insurance programs for more than 100 million people. If those senators stick together, they could block confirmation.

Mr. Obama bypassed Congress and appointed Dr. Berwick while the Senate was in recess last July. The appointment allows him to serve to the end of this year.

The president has nominated Dr. Berwick three times, most recently in January. No confirmation hearings have been held, and none are scheduled.

Reid Cherlin, a White House spokesman, said the president would not withdraw the nomination. “The president nominated Don Berwick because he’s far and away the best person for the job, and he’s already doing stellar work at C.M.S.,” Mr. Cherlin said.

It is not clear whether the White House will fight for the nomination or press the Finance Committee to hold a confirmation hearing, which could provide Republicans another opportunity to criticize the new health law.

Dr. Berwick, a pediatrician and a health policy expert, was hired to run Medicare and Medicaid. In recent weeks, the White House has expanded his portfolio to include federal regulation of private insurance.

As a co-founder of the Institute for Healthcare Improvement, a nonprofit organization in Cambridge, Mass., Dr. Berwick advised hospitals on how to save lives by upgrading care and reducing medical errors.

He became caught up in the partisan battle over the new health law. Republicans challenged him to explain comments in which he had discussed the rationing of health care, praised the British health care system and urged health care providers to reduce the use of ineffective procedures near the end of life.

At a hearing of the House Ways and Means Committee last month, Dr. Berwick said, “I abhor rationing.” Representative John Lewis, Democrat of Georgia, told Dr. Berwick, “I love your testimony, not just like it but I loved it.”

Republicans were hostile.“In your testimony, I see nothing but platitudes,” Representative Charles Boustany Jr., Republican of Louisiana, told Dr. Berwick.

Representative Geoff Davis, Republican of Kentucky, said Dr. Berwick’s answers bordered on equivocation. And Representative Tom Price, Republican of Georgia, told him: “You missed your calling. I think you would make a great lawyer.”

Several people who work with Dr. Berwick at the Medicare agency said they were disappointed that the White House had not done more to promote him. “Everybody here admires Don and the work he’s done, but he is not going to be confirmed,” a supporter said. “That’s inevitable. The Republicans will block him. There’s not a lot of optimism that the White House can do anything about it.”

Ms. Tavenner, a nurse, worked for more than two decades at the Hospital Corporation of America, first as a nursing supervisor, then as a hospital executive and eventually as president of the company’s outpatient services group.