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What is Your Competition?

October 19, 2015

This post marks a bit of a renaissance for the cHealth Blog. I took a record sabbatical from blogging from mid June to early October because I was focusing my energies on writing a new book, due out at the time of our Connected Health Symposium, October 28-30. I hope to see you at the event and please stay tuned for more details about the book in the coming weeks.

I was privileged to be invited to an interesting meeting earlier this week, participating in an advisory board for some work done by a prominent policy institute. The topic of the project and the meeting was focused on bundling of care model innovations. The room was filled with notable, experienced individuals, all who have had experience disseminating care delivery innovations.

iStock_000005340466_MediumWe met for a full day and I am sorry to say the amount of time allocated to connected health was only about five minutes. We discussed innovations that send care providers to the home, innovations that moved the hospital into the home, innovations in palliative care in the home and innovations involving the restructuring of the medical practice. All were chosen because there was high quality scientific literature demonstrating that these strategies could lower costs. I can’t say the innovations we discussed didn’t involve connected health, but my favorite type of care model innovation was, at best, a footnote in the discussion.

I meet with a lot of early stage entrepreneurs. Among the questions I always ask is, “Who is your competition?” How they answer tells me a lot about how they are viewing the market. Some say, “We really don’t have any competition.” That tells me that they either have an innovation that the market really doesn’t appreciate the need for yet (like the original iPad) or more likely, they are focused on what they perceive to be different about their product or technology, not the problem they are trying to solve. One rule of thumb I always remind entrepreneurs is that, when disseminating a new innovation, if people perceive a problem and pay for products to solve it, that is what forms a market. So, rather than focus on what makes an innovation unique, it is more productive to focus on what problem the innovation is solving and how others are solving it presently. This can be very helpful in crafting a communications and marketing strategy.

But getting back to the care model innovations meeting, I was struck by how ingrained the use of human interaction is in solving healthcare challenges. To whit, at Partners Connected Health, we recently queried a group of hospital presidents about increasing their use of telemonitoring for congestive heart failure (CHF). We knew each hospital’s CMS readmission penalty and devised our sales pitch around how telemonitoring is an efficient tool enabling a one-to-many care model, leveraging each nurse across 100 patients (or thereabouts) and predictably lowering readmissions, as well as achieving an overall decrease in total medical expenses. These audience members had a significant interest in efficient care, as their payment is at risk depending on outcomes and efficiency for this CHF patient pool. We perceived our logic to be air tight and expected everyone to sign on to adopt more telemonitoring.

Perhaps you won’t be as surprised as I was about the relative lack of enthusiasm. We heard a number of different reasons why to not invest in telemedicine further. Among the most salient (from the perspective of this post) was the comment by one executive that her hospital has a robust cardiac management program that bringing patients into the clinic for follow up. Another cited the use of care managers visiting the home to do medication reconciliation.

I expect the picture I’m trying to paint is coming into focus for you now. In healthcare, our biggest sunken costs are in facilities and labor, so we build financial models around making use of those resources. For instance, if you’re a bit overstaffed in nursing, it may make sense to deploy nurses to patients’ homes. Likewise, bringing patients in to your facility helps offset the cost of depreciation on that asset.

We started the journey of connected heath adoption 20 years ago. The first barrier we had to overcome was skepticism about quality. Then came the cry of “How do we get paid?” (This is why there has been an uptick of interest directly proportional to the adoption of value-based reimbursement and overutilization penalties.) Then providers implored, “But it needs to be part of my workflow.” Today, almost all EMR vendors have integrated telehealth or a roadmap to offer those integrations.

happy pharmacy

So, the next phase of our journey will be integrating connected health into the deconstruction of facility-based care as we know it. Consumers now have many options for receiving their care, including at the local pharmacy or via a virtual video visit. Providers will come on board with these new care delivery models. And, it is imperative that those of us who advocate for connected health be at all of the meetings and involved in the key decisions so that connected health is presented as a viable option to solving today’s healthcare challenges.

Our competition, at this point, is the business-as-usual approach: “the way we’ve always done it, by one-to-one human interaction.” Overcoming inertia is harder that presenting an airtight sales pitch.

This explains the lineup of care bundle innovations from the advisory board meeting I referred to above. They are innovative in that they move the locus of care, in most cases, to the home. Perhaps that’s the state of progress at this time. We take the one-to-one interaction and move it out of the facility and into the home. That only disrupts one of our major fixed costs.

I expect you can tell I’m puzzled. I’d love your thoughts on the matter.

21 Comments leave one →
  1. October 19, 2015 11:20 am

    Once again Joe is completely accurate with his assessment. i would add that connected INTERVENTIONS and not just connected TOOLS are what will really make the difference. Our approaches (at Canary Health), specifically using technology-enabled evidence-based interventions first proven effective in person (e.g., diabetes prevention and chronic condition self-management) are the way to bring clinical and business results that matter. The decades of research documenting the effectiveness of the particular in-person approach can be transformed into engaging and effective self-management support interventions and deployed at a low enough cost and hassle factor to transform healthcare delivery.

    • October 19, 2015 12:00 pm

      Thank you for this. Your experience is incredibly valuable!

  2. October 19, 2015 1:34 pm

    Hi Joe, great article. I suspect part of the answer lies in how the entities are paid. If actually full risk, then yes, it is illogical. But if they are still paid for visits, then….

    I also think there is a deeply ingrained sense that “in person” is better quality than on a screen, even if the same interaction can be had. It is rooted in the mythical lore that the laying on of hands is essential to care and also in the true lore that people like to be cared for by people when they don’t feel well. It is a complex cultural change that sometimes ignores the data that disproves the historical approaches.

    • October 19, 2015 3:36 pm

      mythical is the operative word here.

    • October 22, 2015 12:15 am

      Spot on, Lisa. Follow the money and see how the entities are paid. Connected Health is largely a cost avoidance purchase. If organizations are not taking on a significant amount of risk, then they have little/no financial incentive to adopt technology that will prevent costly complications due to poor health or chronic disease.

  3. Ethan permalink
    October 19, 2015 1:46 pm

    As a MD/MBA candidate, this article really hit home. I have consistently heard how healthcare needs to “innovate” to address costs and other shortcomings but how can anyone expect a real solution when decisionmakers refuse to consider anything that goes against what they consider to be a fundamental component of medicine. It is time for medicine to move away from just doing what the literature shows and adopt a tech start-up mentality of solving problems we don’t know we have.

    • Robert Belsole MD permalink
      October 19, 2015 2:26 pm

      It really has little to do with being against what decision makers believe to be a fundamental component of medicine but rather related to billing and collections. Chronic conditions such as type 2 diabetes can actually be followed over a properly designed connected web mediated system than visiting nurses and enabled clinic visits. Delivering health care needs to move away in part from a ” q week(s), month(s)” mentality!

      • Ethan permalink
        October 20, 2015 7:42 am

        That is very true, I was definitely oversimplifying the problem. How medical care is billed and reimbursed is a HUGE barrier to innovation within the healthcare system!

      • October 22, 2015 1:33 pm

        True!

    • October 19, 2015 3:37 pm

      An interesting perspective. Thanks

    • October 19, 2015 3:37 pm

      Very helpful to hear this from your perspective.

  4. October 19, 2015 5:08 pm

    Joe,
    Thanks for the very intriguing discussion on how to get new technologies accepted in medicine. I have been involved with three new medical technologies and getting them to market. They are PET (Positron Emission Tomography), DermLite (skin cancer detection) and Veinlite (vein access device). PET took about 25 years for it to be accepted and become a clinical tool. DermLite took about 15 years and Veinlite is slowly getting there. Getting these technologies accepted required a tremendous amount of educating and retraining of the clinicians about the benefits of these new technologies. It is a slow and frustrating process. Even the mainstream technologies such as computerized EKGs, CT and MRI took a very long time to become mainstream. So, the one piece of advise I would offer to the new innovators in medicine is count on at least 10 or more years to get the technology accepted by the clinicians. This is not a consumer market, which readily accepts new technologies. This a very conservative market that will view the new innovations with skepticism until proven different. In their defense, they are skeptical because the decisions they make can sometimes mean life or death to their patients.
    Nizar Mullani

    • October 20, 2015 12:36 am

      Great insights from a true innovator and pioneer! Thanks

  5. October 21, 2015 12:07 pm

    Great comments ! As you say: “In healthcare, our biggest sunken costs are in facilities and labor, so we build financial models around making use of those resources” .
    I agree totally with you on this point that the behavior of all healthcare stakeholders can be best understood by understanding how everyone gets paid and digging deeper to understand where the money flows as this will help agitate for change and make sure telehealth innovators build solutions that motivate everyone to improve care delivery but still make money. As one of the founders of a telehealth start up company, we have found that self insured employers are the only real group in the US focused on investing in scalable technology and prevention solutions but they must be turnkey and integrated. Employers are really the only group in US healthcare feeling real financial pain (their workers are sick from chronic diseases such as diabetes and heart disease that cost the employer a lot each year). The Iora Health story is fascinating as they are focused directly on helping employers and going around traditional insurance payments and are a truly different model accenting care coordination and prevention with docs and health coaches working in teams. When you think of it, most US healthcare stakeholders have built very good business models from “fixing broken bodies” due to complications of chronic diseases. Underneath all this and driving broader stakeholder behavior is a dysfunctional US billing code system we rarely talk about (why is that?) administered solely by the medical specialist professional organizations and the AMA which is itself a specialist oriented organization. Can’t blame the medical specialists for trying to be very successful business-wise since 1983 when the CPT code system was handed over to them by the Regan administration. But they have stifled primary care and the flow of medical students into primary care and overall this redirecting of the US healthcare spending to sickcare has had terrible consequences for patients seeking a preventative focused system. We are now seeing various efforts for going around this billing code nightmare starting to happen following the Affordable Care Act but as you say it is a very difficult road for innovators now with proven telehealth and prevention oriented solutions for our chronic disease patients that don’t map onto the billing code system as investors wont come in early when there is high risk and potentially game changing telehealth startups can get stuck in the “valley of death”

  6. Kirby G. Vosburgh permalink
    October 22, 2015 11:08 am

    Hi Joe,

    Why is it so hard to implement new technologies like telemedicine? Since coming to Boston 15 years ago, I have struggled with this question, and have several supporting reasons for the reluctance of practitioners to change the established system. Lest any of this appear negative, I am a strong supporter of telemedicine from personal experience In addition, I have been trying to do this sort of procedural change on the device side for more than a decade, with the emotional and career scars still unhealed. Some points that come to mind:

    1) The current process, as bad as it is, is how the practitioners treat the patient. They can go on autopilot, even in very complicated cases, because they know all the standard things that can go well or poorly, can spot outliers easily, and thus are able to provide consistent care efficiently. When a new process such as telemedicine is dropped into the middle, significant uncertainty in “how was the patient managed?” creeps in.
    2) No matter what the purveyors say, there are significant costs to implementing new technologies in old workflows.
    3) Related to this, we all recognize that current care practices have inefficiencies. Many of those are patched over every day by dedicated human effort. If the new procedure doesn’t recognize the current augmentations and work-rounds by the nursing staff, the receptionists, the coders, and so on, the “improved” workflow may not be as good as the old workflow.

    A “worst case scenario” for this was reported in JAMA recently on the lack of value of Computer-Aided Diagnostic secondary reading of mammograms. I had a modest part in the launch of this technology and business some 20 years ago, and the technical case for value was strong. But, using the metrics of long term patient outcomes in normal clinical practice, it doesn’t seem to help enough for some level of the system to drive behavior to gain the value in practice.
    4) The quality of systems (particularly information systems) is occasionally oversold. Just a few experiences as a patient will show how screwed up these really are, and the willingness of patients to trust them to be more integrated into their care deteriorates rapidly. For me, a particularly annoying feature of CVS Caremark is that they can’t send me an email with a medication name, just a prescription number, and a request for my action, but they supply no listing relating any of my 9 daily meds to the numbers. I had to make up my own from the bottles in the medicine cabinet. And don’t get me started on Patient Gateway, or how I tried to get my quarterly blood draws done at BWH.
    5) Many people have discovered that as primary care has become more team structured and automated, the PCP seems to lose his or her primary role of “being on the patient’s side.” As a patient, I have found myself more and more responsible for tracking my own health. But if I have an issue with the IT side of things, my PCP can’t help. The question for telemedicine then is, which caregiver is responsible, and do they have the authority to adjust the system to improve it?

    There probably are some more…hope some of this helps..
    Kirby

    • October 22, 2015 1:34 pm

      Thanks for your thoughtful analysis

    • Robert Belsole MD permalink
      October 28, 2015 12:05 pm

      Most health delivery people know little of the advantages of telemedicine and regard it as something to be used by patients who have no easy access to care. During the “Q x wks” visit, they stare into a computer asking the right questions, providing minimal “hands-on” and some form of next step. i.e blood work, imaging, medications. Most quickly condemn doing the same thing over a connected environment because of many factors including reimbursements. They profess the absence of safe guards (things falling through the cracks) but have accepted the EHR which for the most part is a bigger problem that has been developed and forced upon us with promises not yet fulfilled and used frequently improperly to justify charges.

  7. November 1, 2015 12:03 pm

    thoughtful commentary!

  8. November 7, 2015 10:56 pm

    Dr Kvedar,

    Thanks for the intriguing post. I agree with a lot of the already said comments: Lack of true financial incentives and reimbursements are a big barrier in the fee for service world.

    Many many providers know that for a lot of the cases we see, especially in the outpatient setting can be managed virtually.

    I invite you to look at managed care systems and see their implementation of virtual care. As a patient safety/quality improvement fellow at kaiser, because of the integrated system, video visits are easy to implement. For example, while I am working in the outpt clinic, I can do a telederm consult from my room: patient comes in with a rash that I don’t know about, I have my MA take a photo, upload it into the EHR, and within 10 minutes the regional dermatologist on call has a diagnosis for me. If I want to follow up with a patient after a same day appointment, I can easily book them a virtual care appointment.

    Also, look at the VA system! Doing some incredible pilots on their populations for virtual visits.

    A big barrier I see, however, is the lack of coordination of IT services + EMR + connected health “stuff” to make the information meaningful, usable, and actionable. While there are services being built and set up, I seek a fully capable/integrated solution, not multiple piecemeals…

  9. November 8, 2015 9:39 am

    I am aware of some of the amazing things Kaiser is doing in this area. Thanks for bringing these to the fore.

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