Walgreens, the country’s largest drugstore chain, announced on April 4th that its 330+ Take Care Clinics will be the first retail store clinics to both diagnose and manage chronic conditions like asthma, diabetes, high blood pressure, and high cholesterol. The Nurse Practitioners (NPs) and Physician Assistants (PAs) who staff these clinics will provide an entry point into treatment for some of these conditions, setting Walgreens apart from competitors like Target and CVS whose staff help manage already-established chronic illnesses or are limited to testing for and treating minor, short-lived ailments like strep throat.

A one-stop shop for toothpaste, prescription drugs, and a diabetes diagnosis? The retail clinic phenomenon has its appeal: it allows patients convenience and better access to care through longer hours and more locations than our health care system now provides. Walgreens leaders bill their latest offering as a complementary service to traditional medical care. They envision close collaboration with physicians and even inclusion in Accountable Care Organizations, according to reporting by Forbes’ Bruce Japsen (though it’s not clear how the retailer would share the financial risk or savings in such a model).

But the Walgreens announcement was met with skepticism by physician groups like the American Association of Family Physicians (which has responded defensively in the past to non-physicians’ growing roles as primary care providers). And there are certainly causes for concern, at least based on what we know so far: Such expanded clinics exacerbate the fragmentation in our already piecemeal system. Providers at retail store clinics don’t have access to patients’ medical records, so they might repeat prior efforts or miss key details in caring for these patients. Per standards set by the American Medical Association, retail clinic providers must establish continuity of care with a patient’s primary care doctor if he has one – this usually takes the form of a faxed note, which can’t compare to real-time communication within an integrated network. Providers at retail clinics are obliged to adhere to rigid protocols for evaluating and treating medical issues, but good chronic care management is customized to a patient’s particular lifestyle and needs. In short, chronic care, more so than one-off medical treatment, is best delivered with consistency by a coordinated team of providers (including NPs and PAs but also primary care doctors and specialists) who have gotten to know the patient over time and have built a relationship of trust.

The idea just might work if established health care systems with specialty providers forge meaningful partnerships with retail clinics – for example, with shared access to electronic health records and staff members who move between settings. If, in other words, the retail clinics are true extensions of the primary care home. It’s hard to say if a retail clinic could or would want to meet these criteria.

While those of us working in more traditional health care settings may have legitimate reservations about how Walgreens-brand chronic care will be delivered, we have to acknowledge that it addresses a need that we are not fulfilling. Walgreens made a savvy business move by targeting a growing population of aging Americans with diabetes and cardiovascular disease and offering services that are truly important and underused. We can and should learn from how their experiment plays out: Who will opt for this care? Will Americans use it as a stopgap between visits with their primary care doctor or only when they don’t have one to begin with (according to the Salt Lake Tribune, nearly half of current Take Care users don’t have access to one)? Will they come back a second time? What will they like about it? Which locations and hours will be most popular? Will the appeal of cheaper care (compared to paying out of pocket) fade as more Americans are folded into insurance plans? If we can better understand how these nontraditional clinics address gaps in the system, we can work with retail clinic providers more effectively and fill those gaps with truly coordinated chronic care.

Most experts agree that primary care needs to be re-invented.  There are a lot of promising ingredients of practice redesign:  better scheduling, electronic medical records with patient portals, redesigned clinician workflow, and work sharing.  Linda Green’s intriguing article in the January Health Affairs simulates a strategic combination of these changes and argues if they all happened at once, we would have no primary care physician shortage.

Even if we make much more effective use of clinical time and energy, however, Green’s formula isn’t going to get us far enough fast enough.  The baby boom generation of physicians is fast nearing its “sell by” date.  In 2010, one quarter of the 242,000 primary care physicians in the US were 56 or older.  One in six general internists left their practices in mid-career.  Many more hardworking clinicians delayed retirement due to the 2008 financial collapse.

Few manpower specialists have noted the cohort effect likely to manifest itself shortly.  A continued economic recovery and, more importantly, a recovery in retirement plan and medical real estate asset values will lead as many as 100,000 physicians of all stripes to leave practice in the next few years.  We will be replacing a generation of workaholic, 70-hour-a-week baby boom physicians with Gen Y physicians with a revealed preference for 35-hour work weeks.  During this same period, we’ll be adding 1.5-1.7 million net new Medicare beneficiaries a year and enfranchising perhaps 25 million newly insured folks through health reform.  “Train wreck” is the right descriptor of the emerging primary care supply situation.

Green suggests that this demand pressure could be accommodated with a much smaller replacement cohort of primary care docs if we:  increased each physician’s patient visits slots to 28 per day; enabled more same-day scheduling; had physicians practice in pods of 3-8 docs where any doc in the pod could see one anyone else’s patients; leveraged patient portals to substitute electronic visits for in-person ones; and plugged in physician “extenders.”  Implementing all these innovations across the entire health system has the effect of doubling physicians’ patient panels to more than 5,000 and, voila, no physician shortage.

Real-World Problems With The Model Green Lays Out

Several of these redesign elements aren’t going to be well received either by physicians or their patients.  I’ve visited real-world group practices organized this way.  They reminded me of nothing so much as “I Love Lucy’s” famous chocolate factory assembly line.  It was exhausting simply watching the physicians sprint through their days. You wanted to install oxygen carrels for them to catch their breath.  Gen Y docs aren’t going to practice 28-slot days, with intensive “break times” to answer their emails and make phone calls.  Neither are Gen Y nurse practitioners.

And without the sustaining influence of genuine relationships with their patients, the new generation of primary care physicians are likely to burn out even faster than their boomer elders did.  Moreover, aging patients will need relationships with physicians who understand the context for their chronic disease risks and can motivate them to manage those risks.  Even though they will like on-demand scheduling and e-visits, baby boomer patients, in particular, aren’t going to embrace a “bullpen” approach to their primary care coverage.  Twenty-eight-slot physician work days staffed by physician pods is an inferior primary care product.

In Group Health’s Factoria medical home practices, panel sizes went the other way, shrinking to 1,800 rather than growing to 5,400.  Visit times were doubled, to about 30 minutes, not halved.  Previous Group Health primary care practice redesigns improved physician productivity, but at a terrible price:  increased turnover and markedly reduced professional satisfaction.

The Factoria redesign leveraged Group Health’s successful patient portal, physician extenders, and better scheduling and resulted in improved clinician morale and patient satisfaction.  And, most importantly for Group Health’s business model, the redesign markedly reduced emergency visits and hospital costs per-member per-month.  Similarly, the widely cited ProvenCare Navigator model developed at Geisinger Clinic achieved panel sizes of about 2,500, less than half of Green’s 5400 panel target.

The Limitations Of Potential Strategies To Increase Productivity

Better use of nurse practitioners.  Leveraging physician extenders is a key to making more “medical homes” work properly.  Here too, however, there are cohort problems.  The current nurse practitioner population is even more “boomer intensive” than the physician population is.  In 2008, 63 percent of nurse practitioners in the US were over the age of 45, and 15 percent over the age of 60.

While Green suggests that nurse practitioners have been growing faster than population (e.g. faster than 0.8 percent a year), that growth won’t be anywhere near enough to offset the impending retirement of the baby boom NP cadre, many of whom work a lot of unpaid overtime completing their documentation tasks.  And many of the new NP’s are being snarfed up by the expansion of federally qualified health centers and by non-traditional care providers like the Minute Clinics.  There won’t be many left over for redesigned primary care practices.

Electronic health records.  Green’s optimism about the potential productivity improvements from electronic health records might also be misplaced.  Despite, or perhaps because of, the pressure from meaningful use to automate office practices, physician offices added 162,000 workers from 2007 to 2011, even with a 10 percent shrinkage of visit volume.  Many of these new hires were medical secretaries, physician assistants, and the like.

If there are productivity offsets for practicing physicians from automating medical records, they are hard to detect.  Most physicians I’ve talked to about their EMR conversions are spending less time with patients and more time feeding their EMRs coding information and complying with new Medicare documentation requirements.   The result:  richer coding and more dollars from fewer patients.   Unless documentation requirements are reduced, it is not clear that the EMR will actually make it easier for physicians, or other clinicians for that matter, to see more patients.

A Potential Way Forward

There are potential solutions in addition to the ones Green identified.  They include payment models that markedly consolidate payment transactions (bundling or partial capitation), and more targeted documentation requirements focusing more tightly on patient safety and outcomes.  We can also, per Green, reduce “unnecessary” visits by markedly improving patient communication and leveraging texting, email and social media linkages.

Green does not address the market barriers to adequate primary care physician supply.  Presently, primary care physicians earn about 55 percent of the income of their procedure oriented colleagues, a number that will be barely dented by the Affordable Care Act’s nominal increase in Medicare’s evaluation and management payments.  Unless you’re a trust funder, or someone with no medical school debt, selecting primary care as a specialty doesn’t make a lot of economic sense.  Primary care docs will still be paying off loans in their sixties.

To surmount this problem, we must markedly increase per-hour compensation for primary care physicians, or they will continue selecting life-style friendly subspecialties instead.  We’ll all have great skin, but we’ll be waiting three months to see a primary care physician.

This problem isn’t going to wait for Commissions, Blue Ribbon panels and learned pontification.  And it isn’t going to be wished away by clever economic modeling.  Despite Green’s optimism, we are going to experience a horrendous shortfall of front-line caregivers in the next decade.  Medicare beneficiaries whose physicians retire in the next ten years are going to have great difficulty replacing them.  Making more intelligent use of caregiver time is an urgent priority, but it is not going to be enough to meet the rising demand for primary care services in the next 20 years.

     A seasoned colleague recently told me that some PowerPoint presentations have no power and make no point.

But sometimes, a picture really is worth a thousand words. Or maybe — in the case of any meaningful discussion of health reform, thanks to its density and complexity — it might be worth 10,000 words. Hence our handy little exhibit.

This picture captures the 10,000 words it would require to explain with technical precision where President Obama’s Affordable Care Act fits relative to all health reform plans. It places “ObamaCare” along an ideologically scaled continuum of all serious reform options developed, debated and discarded or ignored since the 1980s.

They are all here: from the single-payer, centrally controlled models popular with those who detest corporations and the influence of money in medicine — two actual, not imagined “government takeovers of health care” — to two free market, laissez-faire models favored by those who detest regulation and the heavy hand of government in medicine.

On the far left, the federal (or provincial) government is the main insurer, owns most hospitals, and employs most doctors. This pure form of single payer seems to be supported or reviled in equal measure — especially by the nation’s physicians. As a model for nationwide reform, it is like religion — people either believe it will be health care’s Messiah, or the anti-Christ, and no one will convince them otherwise. This model is the foundation for many of the systems in Europe, and the systems in Canada, Australia, New Zealand, and Singapore. Unbeknownst to many in their care, there are actually two working systems based on this model in the U.S. today: Kaiser and the Veterans Health Administration.

The second model, Medicare-for-All, differs from the pure form of single payer by retaining the current independence of most hospitals and doctors. This model jettisons private insurance companies, while an all-encompassing Medicare program pays for covered care delivered by today’s crazy quilt of providers: large and small groups, for-profit, religious-affiliated, independent, academic, the works. This is what Medicare beneficiaries have today — except for the 27 percent who opt for Medicare Advantage plans offered by private insurers. It is supported by those who believe it would bring the relative efficiencies, fairness and low administrative costs of Medicare to all, and reviled by those who think Medicare works like hell. Because there are oceans of data to support both views, this too is ultimately a matter of secular faith: government, good; government, evil.

Next is “managed competition,” the basis for the plan proposed by President and Hillary Clinton. This model is built on the current system of multiple private insurers and providers, but highly organizes and regulates both, mandating employers and individuals to participate and requiring everyone, with or without current coverage, to give up what they have and commit to one of several competing vertical insurer/provider entities. This model is based on managed care theories developed in the ’70s and ’80s, and when proposed by the Clintons in the early ’90s, was popular with much of the Washington technocracy and vilified by conservatives.

Most Republicans and health industry critics attacked “Hillarycare” as cumbersome, over-engineered, and hyper-bureaucratic. It was destroyed in the court of public opinion by an insurer-funded TV ad campaign — “Harry & Louise” — that people remember better than any details of the plan itself. Modified versions of this model exist in Germany and Israel, and in a handful of U.S. markets (e.g., San Francisco and Portland, Oregon, sort of) with vertically integrated providers who compete with Kaiser.

To the right of “Hillarycare” is President Obama’s Patient Protection and Affordable Care Act, known as “PPACA, “the ACA,” or “Obamacare.” It retains most of the features of the current employer, insurance and provider systems, but expands all of its current dimensions by mandating that most of the uninsured participate in it, unless their incomes are low enough to qualify them for an expanded version of Medicaid.

Obamacare requires insurers to compete for customers through health insurance exchanges, deeply misunderstood and thus easily politicized creatures, as I discussed here last week. Obamacare outlaws insurers’ discrimination — and price-discrimination — against people with prior health problems. And it standardizes insurance coverage by market to focus insurer competition on price and service rather than plan design. Because Obamacare requires insurers to cover all comers — and does away with caps on those with catastrophically expensive medical situations — it is funded by mandated participation by almost everyone, either directly or through employers. It is based on principles of market competition developed by conservatives and proposed by Republicans as an alternative to Hillarycare.

To the right of Obamacare are two versions of free market models — containers for the “replacement” options crafted by or pointed to those who want to “repeal and replace” Obamacare. Both shift all purchasing decisions about coverage and plan design to individuals and insurers, believing this will reshape markets and drive efficiency in pricing and overall medical resource use. Most versions do not require anyone to purchase insurance, nor any insurer to cover anyone.

The two models differ mainly with regard to how health insurance and non-covered medical expenses are treated by the tax code. Proponents of the model on the far right believe that market distortions created by the tax deductibility of health insurance and expenses are enormous, and the extra political mile it would take to eliminate these well worth the effort in terms of marketplace correction and health system self-reform.

The first of the two models on the right actually expands the current system of tax deductibility of health insurance and direct medical expenses to individuals and the self-employed. Its architects believe this would level the playing field for insurance purchasing, ease out the distorting role of the employer from the system, and convert much of what is covered today by health insurance to health savings accounts and cash payment. The model would allow small businesses and individuals to pool together to buy whatever coverage they wanted across state-lines — the “Association Health Plans” often put forward by Republicans — a modified version of which is included in Obamacare as the “Multi-State Plans.” We have a version of this model in the US right now in miniature: dentistry.

The model on the far right also seeks to reduce the role of the employer in health care, but is structured on the belief that a better, faster way to get there is by removing the tax deductibility health care spending. Its proponents believe this would extract employers from the system in short order, convert health insurance into something resembling auto and homeowners insurance, and maximize the power of market forces to control health care spending in general. Under this model, everyone is free to purchase whatever mix of insurance and services they want and can find, from whatever organization will sell it to them, at whatever price the market yields. Modified versions of this model exist in China and India on top of threadbare single-payer systems incapable of serving the needs of their large and growing populations and emerging middle classes.

The proponents of both models on the right believe their inherent pricing efficiency would drive the marketplace to very high deductible insurance plans while converting routine medical care to a cash-and-carry system. Both models would subsidize the uninsured and others priced out of these markets with either a “premium support” or “voucher” program — two ideas that sound similar but play out very differently as health care costs increase.

The core economic reform mechanisms of the two models on the right show up every few years by newcomers to health care from the business sector, usually after a jarring personal encounter with the health care system. The latest entry is David Goldhill and his Catastrophic Care: How American Health Care Killed My Father — and How We Can Fix It. The subsidy mechanism — loaded with dangerous ammo for semantic and political branding wars over “premium support” vs. “voucher” — is the economic fulcrum in Congressman Paul Ryan’s proposal for reforming Medicare.

The above illustration of health reform plans along a political continuum reveals one of the more bitter political ironies of our time: President Obama’s health care reform law is based, for the most part, on right-of-center ideas.

This may have escaped the notice of most journalists and pundits and, for obvious reasons, the president’s legion of political opponents. But it is an odd and awkward fact for those in the trenches of health policy who care more about reforming the health care system — if only in hard-fought, belated baby steps — than they do about the purity of models, the promotion of a broader ideology, or the mud-slinging and name-calling that has come to define our national politics.

That Obamacare is a right-of-center plan, especially when viewed relative to all viable alternatives, explains why it has so little political support from either side. Liberals hate Obamacare because it is not single-payer, and feeds tens of millions of newly insured people to what they revile as a money-gobbling, profit-obsessed health insurance dragon. Conservatives hate Obamacare because it is the heavy, stupid hand of Big Government choking whatever air is left out of the current, dysfunctional health insurance market. That, or because they cannot see beyond their political rage at President Obama to recognize their own ideas at the core of his health reform plan.

Ideologically, this makes Obamacare a political orphan. And Washington, D.C., even back in the days of decorum and actual policy discussions, has never been kind to political orphans. How else to explain why the president (e.g., in his inaugural address, State of the Union speech) makes almost no mention of what could prove to be his signature domestic achievement — even as tens of thousands of Americans working for health insurers, hospitals, physician practices and other health care organizations grind away at its implementation.

Perhaps this is because Obamacare, which will affect to some unknown degree nearly one-sixth of the U.S. economy, has been reduced to a broken political piñata. Another seasoned colleague recently told me that the reason I do not understand the disconnect here is because the health reform “debate” has nothing to do with the substance of Obamacare as policy and everything to do with its politics.

Those interested in understanding where the plan fits into decades of earnest struggle with this difficult and important subject — rather than scoring political points against the president — would be well advised to consult this one PowerPoint slide.

I really like Twitter. Its scrolling 140-character tableau of news nuggets fit perfectly on my hand held device, lap top and home personal computer. It’s easy to glance at between tasks and the advertising is blessedly minimal. I control the content by following and unfollowing other Twitter accounts with a simple click or a touch.

But why, physician-skeptics may ask, is Twitter any better than traditional web browsing, email, list-servs and handheld apps? I thought about that and am pleased to offer my Top Twelve reasons why every doc should include Twitter in their informatics medical bag.

1. Lit Headlines: The major medical journals use Twitter to efficiently describe their latest content with links.

2. Fame: Traditional print authors are publishing more and more about less and less. Getting peers to follow your original and insightful tweets is the new route to attaining status as an expert. I have more than 500 daily followers vs. how many actually read the average peer-reviewed article?

3. News Junkies: Some of your like-minded peers are freely aggregating and retweeting relevant headlines with links for your perusing efficiency. They can be indefatigable.

4. Kool-Aid Immunity: Did you know your Chief, Chair, VP, lead administrator or Dean wants to control all your communication? Twitter is an easy way to step out of the information bubble and monitor contrary news about that EHR, medical device, performance standards, your institution’s business partners, the competition and more.

5. Efficiency: Twitter trains you to be both brainy and brief. If you can’t fit it into 140 characters or less, you’re wasting your readers’ time.

6. Messaging: The “@” allows you to interact with established and potential colleagues outside of your institution’s email system. Thanks to this function, I have met some wonderful colleagues.

7. Medical Conference Tweets: View formal and informal updates and insights about that conference you’re attending from not only the meeting organizers but other attendees.

8. Community: Like-minded colleagues are not only clustering in listservs but in Twitter.

9. Room for Diversions: Efficiency makes it guilt-free to include non-medical content.

10. Speed: It’s astonishing how quickly Twitter users spot and link just-released reports that take days to appear on the web and weeks to appear on print.

11. Searches: Yes, traditional literature searches and Google have their advantages, but the “#” function can find links to information resources that you might otherwise miss.

12. I am on Twitter.

I recently came across the following article written by Westby G. Fisher, MD, who is a board certified internist, cardiologist and cardiac electrophysiologist practicing at NorthShore University HealthSystem in Evanston, IL and found it to be so insightful and so in line with my thinking, that I just had to incorporate it into the BACMM Blog in its entirety below:

"The new “fiscal cliff” legislation hailed by some as a “one-year doc fix” of the scheduled 26.5% sustainable growth rate (SGR) cut that was scheduled to take effect on January 1,  2013, has passed the Senate and House as part of the American Taxpayer Relief Act ( HR 8 ) goes to President Obama for his likely signature.

But was this “one-year doc fix” really a fix? 

Not at all.

In fact, once again Congress has failed to resolve the ever-present sustainable growth rate cuts that repetitively surface year after year by kicking the proverbial can down the road another year.

The cost of the one year patch will be $25.1 billion dollars over 10 years and will be paid for almost entirely by health care cuts in other areas.

- Hospitals (increasingly doctor-employers now, remember?) will see audits of their billings increase as efforts to recoup some $10.5 billion of “overcoding” charges are seen as the largest source of revenue for the one-year “fix.”

- Hospitals will also see an extension of lower Medicaid payments to hospitals that treat a high number of uninsured or low-income beneficiaries, known as “disproportionate share hospitals” to find savings of about $4.2 billion.

- Another $4.9 billion offset will be applied to the lowered bundled payments given for patients with end-stage renal disease – some of the sickest people receiving services from Medicare.

- Also another $1.8 billion will be “saved” to offset the “fix” by reducing payments for multiple procedures that are performed on the same day with patients. Look for more ICD-9 (or ICD-10) code changes for the new year.

- Also, look for an even greater crackdown on imaging studies as another $800 million has to be found to pay for the “fix.”

- And there’s more: the complete list of payments for the “fix,”drawn almost exclusively from health care alone, can be found at http://crfb.org/sites/default/files/fiscal_cliff_deal_summary_table.jpg.

- Finally, doctors can expect revenue to stay flat result of this “fix” from Medicare, meaning that the payments received will not address costs imposed by annual inflation. (You well-paid primary care doctors, are you listening?)

So you see, the “doc fix” is in for another year alright; one that is assured to get even harder to really fix next year.

President Obama has won reelection, and his administration has asked state officials to decide by Friday, November 16, whether their state will create one of Obamacare’s health-insurance “exchanges.”States also have to decide whether to implement the law’s massive expansion of Medicaid. The correct answer to both questions remains a resounding no.

State-created exchanges mean higher taxes, fewer jobs, and less protection of religious freedom. States are better off defaulting to a federal exchange. The Medicaid expansion is likewise too costly and risky a proposition. Republican Governors Association chairman Bob McDonnell (R.,Va.) agrees, and has announced that Virginia will implement neither provision.

There are many arguments against creating exchanges.

First, states are under no obligation to create one.

Second, operating an Obamacare exchange would be illegal in 14 states. Alabama, Arizona, Georgia, Idaho, Indiana, Kansas, Louisiana, Missouri, Montana, Ohio, Oklahoma, Tennessee, Utah, and Virginia have enacted either statutes or constitutional amendments (or both) forbidding state employees to participate in an essential exchange function: implementing Obamacare’s individual and employer mandates.

Third, each exchange would cost its state an estimated $10 million to $100 million per year, necessitating tax increases.

Fourth, the November 16 deadline is no more real than the“deadlines” for implementing REAL ID, which have been pushed back repeatedly since 2008.

Fifth, states can always create an exchange later if they choose.

Sixth, a state-created exchange is not a state-controlledexchange. All exchanges will be controlled by Washington.

Seventh, Congress authorized no funds for federal “fallback” exchanges. So Washington may not be able to impose Exchanges on states at all.

Eighth, the Obama administration has yet to provide crucial information that states need before they can make an informed decision.

Ninth, creating an exchange sets state officials up to take the blame when Obamacare increases insurance premiums and denies care to the sick. State officials won’t want their names on this disastrous mess.

Tenth, creating an exchange would be assisting in the creation of a “public option” that would drive domestic health-insurance carriers out of business through unfair competition.

Eleventh, Obamacare remains unpopular. The latest Kaiser Family Foundation poll found that only 38 percent of the public supports it.

Twelfth, defaulting to a federal exchange exempts a state’s employers from the employer mandate — a tax of $2,000 per worker per year (the tax applies to companies with more than 59 employees, but for such companies that tax applies after the 30th employee, not the 59th). If all states did so, that would exempt 18 million Americans from the individual mandate’s tax of $2,085 per family of four. Avoiding those taxes improves a state’s prospects for job creation, and protects the conscience rights of employers and individuals whom the Obama administration is forcing to purchase contraceptives coverage.

Finally, rejecting an exchange reduces the federal deficit. Obamacare offers its deficit-financed subsidies to private health insurers only through state-created exchanges. If all states declined, federal deficits would fall by roughly $700 billion over ten years.

For similar reasons, states should decline to implement Obamacare’s Medicaid
expansion. The Supreme Court gave states that option. All states should exercise
it.

Medicaid is rife with waste and fraud. It increases the cost of private health care and insurance, crowds out private health insurance and long-term-care insurance, and discourages enrollees from climbing the economic ladder. There is scant reliable evidence that Medicaid improves health outcomes, and no evidence that it is a cost-effective way of doing so.

 Jagadeesh Gokhale estimates that expanding Medicaid will cost individual states up to $53 billion over the first ten years. That’s before an emboldened President Obama follows through on his threats to shift more Medicaid costs to states.

Neither the states nor the federal government have the money to expand Medicaid. If all states politely decline, federal deficits will shrink by another $900 billion.

Now is not the time to go wobbly. Obamacare is still harmful and still unpopular. The presidential election was hardly a referendum, as it pitted the first person to enact Obamacare against the second person to enact it. Since the election, many state officials are reaffirming their opposition to both implementing exchanges and expanding Medicaid.

If enough states do so, Congress will have no choice but to reopen Obamacare. With a GOP-controlled House, opponents will be in a much stronger position than they were when this harmful law was enacted.

As both the private and public sector aggressively shift healthcare incentives from a “do more, bill more” to a value and outcome based model, healthcare providers ignore patients role in driving outcomes at their own peril. It is generally understood that patients forget 80-90% of what they are told at the doctor’s office. As incentives no longer reward outcome over activity, this is a disaster financially for health professionals. This will require healthcare leaders to think in a different way. One has to be in denial to think that healthcare reimbursement isn’t entering a deflationary period yet it’s not all
doom and gloom for forward-looking healthcare organizations. In fact, it’s a massive opportunity to leapfrog competitors.

As the founder of the Institute for Healthcare Improvement, Dr. Don Berwick stated:

“The health care encounter as a face-to-face visit is a dinosaur. More exactly, it is a form of relationship of immense and irreplaceable value to a few of the people we seek to help, and these few have their access severely curtailed by the use of visits to meet the needs of many, whose needs could be better met through other kinds of encounters.”

Smart Doctors Recognize Their Inefficiency

If one were to observe a doctor for a month, you would find that doctors have their own FAQ for various conditions, diseases, prescriptions, etc. They are essentially hitting the Replay button hundreds of times a month. Smart doctors are recognizing that there is a better way. The patient and family benefits greatly when the doctor has a mini package of curated content (video, articles, etc.) that is developed for the patients. This is predominantly a manual process today (e.g., writing down web addresses in an appointment or emailing them afterwards).

Modern Patient Relationship Management systems automate the content   creation/curation process and allow patients to digest the content on their terms. For example, many patients are embarrassed to ask the doctor to repeat something they didn’t understand so they walk away confused. This has been a boon to health information sites such as WebMD — patients fill gaps of information by going to “Dr. Google“. Most clinicians realize that communications is the most important “medical instrument” yet time pressures don’t allow them to spend a great deal of time with patients. Thus, they must come up with other ways to enable effective communications. Like Salman Khan’s experience, doctors realize that an asynchronous communication method can often be the most effective way to convey unfamiliar material.

Doctors’ Success Hinges on Transactor to Teacher Transition

The health professionals who will gain an edge will return to the roots of medicine. The etymology behind the word “doctor” was derived from the word ‘doctoris’ that means teacher in Latin and is an agent noun derived from the verb docere which means to teach. The doctors who are the best teachers are most likely to guide their patients to the best outcomes.

The old incentives have driven doctors to a transactional model as the systems
reward moving patients through as many transactions (tests, procedures, appointments, etc.) as possible. 75% of healthcare spend is directed towards chronic disease and the decisions that most influence outcomes are made my patients (or their families). Health professionals who were rewarded for repeat patient visits in the past will be penalized in the future for that same thing.

Imagine if you sent your children to a school and you found out that 80-90% of the students were failing. You’d yank your kids out of that school in a heartbeat. Now imagine we’re talking about healthcare. It becomes clear why health professionals will need to become effective teachers once again. Doctors already naturally do this today, however the evidence would suggest that it is inefficient and largely ineffective if 80+% of what a patient is told is forgotten.

Medicine Can Learn from Bill Gates’ Favorite Teacher

From millions of students and parents to Bill Gates, the Khan Academy has impressed
many and inspired some teachers to flip the classroom lecture/homework model on its head as described in the video below. Doctors are now recognizing similar value in videos for their patients.

Technology has brought a human element back into the classroom making it more interactive and tuned to specific kids’ needs. Why limit this to students? Why not use this model to help improve health outcomes? In fact, we may not have a choice with the ever-increasing shortage of primary care physicians. One can look to what happened after Romneycare was implemented as a preview of what is to come with Obamacare since it’s a virtual carbon copy. The shortage of primary care providers greatly increased. Simply trying to put primary care physicians on a faster hamster wheel isn’t the solution. In fact, that is part of the problem.

One of the nice things about Khan Academy is learners with different skill levels can watch the videos in different ways. Some may get it just watching it once while others may want to replay the video over a few times before a concept sinks in.

Doctors as Teachers

There are many examples of doctors already taking steps in this direction. Even before financial incentives fully take hold, these passionate doctors want the best possible outcomes for their patients. In the process, they are also getting the residual benefit of marketing since some of these doctors get 20% of their new patients from social media and videos such as these.

Perhaps because Dr. Wendy Sue Swanson was a teacher before she was a  pediatrician, she was naturally drawn to using videos and blogs to benefit her patients’ families. Dr. Swanson shared the reaction she gets from patients. “I’ll launch into something in clinic and a family will say, ‘Dr Swanson, you don’t have to explain that, I read your blog post/saw your video, etc!’ We start at a different place. A place that feels easier to connect, more informed, and one with more respect for our mutual vantage points.”

Dr. Ryan Neuhofel explains the Hemoglobin A1c lab test and why it is so important  when monitoring diabetes. “Dr. Neu” as he likes to be called is part of a rapidly growing innovative model of primary care that has been given rocket fuel by a clause in Obamacare.

Dr. Natasha Burgert has written about how social media has changed her medical
practice. Here is how she describe the benefit to her practice and patients.

Investing time in relevant and complete posts actually saves me time in the long run. Questions I am repeatedly asked, like “How do I start solid foods?“, can be answered quickly and completely by directing them to my site. This saves face-to-face clinic time for more specific concerns for their child. I can actively communicate, acknowledge, and positively influence the choices that my families make for their children between the checkups. My anticipatory guidance can be repeated, reinforced, and repeated again.

Dr. Burgert was recently interviewed by Dr. Mike Sevilla on his Family Medicine Rocks podcast. She shared how even though her practice still operates with paper-based records, they are using social media tools to help inform their patients. Dr. Burgert was also on CBS Morning News sharing how her social media activity is impacting her patients.

Of course, the benefit of doctor videos aren’t limited to primary care. Specialists such as Orthopedic Surgeon, Howards Luks, also have been realizing the benefit of videos. As Dr. Luks states, “Every patient who sees my videos prior to their visit says. ‘OMG it’s you, you’re just like you are in the videos.’ Very powerful. It humanizes your practice.” The video below is an example of Dr. Luks’ video explaining Achilles tendon ruptures.

Bit by bit, there is major change underway. Many doctors, particularly in primary care, are unhappy about the way they have been practicing and are unleashing their own creativity. Here is how one describes how these current delivery model changes:

So much of our present care delivery is rote and could be practiced online or provided via video/blog/text. And that the ‘real medicine,’ the service and the relationship or helping people in moments of anxiety and indecision are rare and undervalued. That oddly enough, there is simply no time in the day to do what matters most. Or if we get the opportunity to forge a real partnership, it comes at the cost of making somebody wait, and running late. So yes, we’re headed in the right direction by making these changes.

Naturally, startups are building from this foundation and innovating beyond simply using YouTube. For example, clear.md has made it easy for doctors to create repackaged video. As Salman Khan has shown, it doesn’t necessarily take radical new technology to reinvent or re-imagine change. Rather, it is imperative to make creative use of existing technologies in order to thrive in the future.

Personalized medicine is the future. It is where the science is going. It is where the technology is going. It is where doctors and patients will want to go. Yet unfortunately for many of us, this is not where the Obama administration wants to go.

First, the good news. Biosensors that can be worn on clothing or jewelry, or held against the skin by a Band-Aid-like patch, or inserted beneath the skin are capable of monitoring a whole host of chronic diseases. Among the technologies that have been, or soon will be, developed are devices that can continuously monitor the blood glucose levels in diabetics; the rate of breathing, blood oxygen saturation, etc., of asthmatics; and the heart rate and other parameters of patients with heart disease. There are even heart attack and stroke attack detectors. In some cases, personalized devices can activate  therapies. A wearable, automatic insulin pump can be coupled with a blood glucose measuring device to create a virtual artificial pancreas.

The science of genetics is also about to explode. There are as many as 1,300 genetic tests currently available that relate to about 2,500 medical conditions. Gene tests can predict your probability of getting particular types of cancer, whether you will respond to routine chemotherapy or whether there is a special therapy that only works on people with your particular physiology. The days when experts argued over whether men should get a prostate cancer test could be long gone. A simple test can tell if you have a high probability of contracting the disease, or a low one.

We’re not that far away from the day when:

Sequencing the personal genome will take an hour and cost perhaps $300, or less than an MRI. It is not too much of a reach to postulate cell-phone-sized analytical devices able to test for 500 biomarkers that cross the body’s more than 50 organs in a single drop of blood. All this is great news. Unless you happen to be in traditional Medicare. Or in Medicaid. Or unless you acquire subsidized insurance in a health insurance exchange. Or in some cases, even if you get health insurance from an employer.

So what exactly is personalized medicine?

It means gathering specific physiological information pertaining to individuals, compiling that information into a digestible and actionable form, and presenting that compiled information to the individuals themselves (and to their doctors or other designated agents), in order that they may decide what action to take on behalf of their own well-being.
 
Today, individualized medicine…is feasible for the first time in history. It is feasible because of the fortuitous convergence of several technologies, including the Internet, ubiquitous wireless communication, massive data processing power, new physiologic sensors, the power of genomics, social networking, and smartphones (i.e., personal information and communication systems)…This remarkable technological convergence has made it possible to devise systems with which people can control their own healthcare in ways that were unimaginable a decade or two ago.
 
In the area of gene therapy, progress has been slow, but in some cases remarkable.  For example, there is now a genetic test that can determine with uncanny accuracy whether a patient’s eye cancer is curable or fatal. In another path breaking example, consider the case of Dr. Lucas Wartman, a young physician who developed adult acute lymphoblastic leukemia, a disease that is usually rapidly fatal, and for which there is no effective treatment. After his colleagues at Washington University worked round-the-clock for many days using the university’s 26 sequencing machines and a supercomputer:

They discovered a single gene mutation in his cancer cells that was producing a protein that appeared to be stimulating the cancer’s growth. It turned out that a new drug existed that was targeted specifically at shutting down the offending protein, a drug that to that point had been used only for kidney cancer. When they administered the drug to Dr. Wartman, his cancer went into complete remission. 

Now for some bad news. In an interview with CNN the other day former White House
health adviser Ezekiel Emanuel called “personalized medicine a myth.” According to his own center’s summary of the interview:
 
He characterized excited public discussion of the potential of population-wide individual gene-based medicine as “hyperbolic.”He said tailoring medical treatments to individual characteristics of each patient is both overly optimistic and cost-prohibitive and likened the process to buying a custom-made suit versus one off the rack.
 
But if custom-made suits fit better and look better, what’s wrong with that? Ditto for health care. And if individualized care is better and more promising care, how does Emanuel know it would be cost-prohibitive? Even more puzzling, given the spectacular results with eye cancer, why would anyone — especially an oncologist —react so hostilely?

The answer is: ObamaCare’s entire approach to cost control is premised on the idea  that we are all alike. And if we aren’t alike, everything they are doing doesn’t make sense.

There were two interesting developments in the field of social networks for healthcare practitioners last week. The first was the publication of a paper in JAMA “Variation in Patient-Sharing Networks of Physicians Across the United States”. The second was the sale of Sermo Physician Network to WorldOne for an undisclosed price. Sermo had raised $40+m in venture capital prior to sale, making a bet that social networking for physicians could drive value to pharmaceutical and financial firms based on disclosing interactions between members of the network.

If physician behavior and prescribing activity are key to your healthcare business, I think it is important to understand the relationship and differences between these two events.

Sermo bet hard on the Facebook model – physicians would interact on social networks,
share knowledge and insight, and third parties could benefit from getting access to those interactions concerning their products or services. Sermo had also begun expanding its revenue model by providing paid content and sponsored education programs to network members, trying to capture “digital” dollars from life science companies. Pharma companies are desperately trying to gain advantage through digital advertising campaigns to influence physician prescribing behaviors, and multi-channel marketing efforts including the development of web sites for branded medications.

These companies also struggle to understand how useful these branded websites are by linking on-line activity to increased sales – linking eyeballs on websites to increased prescriber activity. Return on investment is difficult to measure and pharmaceutical companies traditionally rely on labor-intensive surveys to gain insight into how these digital marketing efforts are working.

The paper in JAMA, and the related editorial, do a great job breaking down the
challenges and opportunities for building businesses or marketing efforts dependent on understanding physician behavior. Here’s the gist of their findings – it’s not about SoMoLo , it’s about big data. Physicians tend to work in isolation, they influence healthcare primarily through the individual patient-physician encounter. It’s difficult to track how physicians interact with each other and the greater healthcare system because there is no true healthcare value chain in the US. Physicians are busy, they don’t tend to spend a lot of time with on-line or mobile networks. And they tend not to like
surveys, even when you pay for their time and opinions.

In a recent interview with Larry Miller, CEO of Activate Networks , Larry told me that patient referrals constitute 50% of interactions between physicians, with the remaining 50% being composed of collegial interactions, friends and coworkers, and associations within practice groups or hospitals. To quantitatively measure real physician interaction and influence you need to map the flow of patient data through the system, through insurance claims data, clinical data (electronic medical records) and patient labs to create a physician-to-physician interaction network. Larry calls this an“experiential,
community level network” that has much greater value than an on-line social network influence model, and Activate Networks is seeking to capitalize on this model using a big data analytics approach.

The authors of the JAMA papers recognize that the ideal way to understand true  physician networks is most likely a combination of social relationships and shared patient interactions. They also correctly point out that understanding how various aspects of networks are related to better care and lower costs could be central to enabling accountable care and successful healthcare reform. To drive quality and decrease costs, we need to understand where standards of care exist and how physicians influence those standards. Physicians care, payers care, and patients care. Pharmaceutical companies desperately care. If you have ideas on how to link these kinds of quantitative and qualitative insights, I have clients that would like to talk with you.

“Change, before you have to…” Jack Welch

We live in a society that loathes uncertainty – particularly the unintended consequences that sometimes result from a catastrophic event or in the case of PPACA, landmark legislation. Wall Street and the private sector crave predictability and find it difficult in uncertain times to coax capital off the sidelines when the overhang of legislation or geopolitical unrest creates the potential for greater risk. Despite our best energies around forecasting and planning, some consequences, particularly unintended ones – only reveal themselves in time.

In the last decade, employers have endured an inflationary period of rising healthcare costs brought on by a host of social, political, economic and organizational failures. There was and remains great anticipation and trepidation as Congress continues to contour the new rules of the road for this next generation’s healthcare system. Optimists believe that reform is both a way forward and a way out of a mounting public debt crisis and a bypass for an economy whose arteries are clogged by the high cost of medical waste, fraud and abuse. Cynics argue reform is merely a Trojan Horse measure that offers an open invitation for employers to drop coverage and for commercial insurers to “hang themselves with their own rope” as costs continue to spiral out of control —  leading to an inevitable government takeover of healthcare. 

Meanwhile, leading economic indicators are flashing crimson warning signs as recent stop-gap stimulus wears off and long overdue private/public sector deleveraging results in reduced corporate hiring, lower consumer confidence and increased rates of savings. The symptoms of a prolonged economic malaise can be felt in unemployment stubbornly lingering around 9.2% and a stagnating US economy that is struggling to come to grips with the rising cost of entitlement programs. Across the Atlantic, the Euro-Zone is teetering as Italy and Spain (which represent more credit exposure than Greece, Portugal and Ireland combined) stumble toward default. Despite these substantial head winds, US healthcare reform is forging ahead – – right into the teeth of the storm.

Closer to home, states have begun to debate and propose legislative amendments to their own versions of reform as they attempt to reconcile a declining tax base with the soaring obligations of Medicaid and collectively bargained pension and long term care. Should Congress finally agree to allow an estimated 28% of fee reductions in Medicare provider reimbursement to become law, the private sector could see as much as a 400bps increase in core medical trends resulting from cost shifting – pushing trends back into the mid-teens. Hospital systems, providers and healthcare agencies are bracing for cuts and potentially looking to the private sector as a source for more dollars. All of this is building at a time when certain industries are nearing a “point of failure” – – an inflection point where healthcare spend as a percentage of revenues and operating profit will either consume earnings or completely erode employee take home pay.

Many are looking ahead to 2012 as a “burning bush” year – a seminal presidential and
Congressional election where political results will help clarify the direction of reform – pivoting toward the reinforcement of employer sponsored healthcare as catalyst for market based reforms or merely a cementing of the incentives that seem to encourage the deconstruction of employer based coverage. With 33 Democratic Senate seats up for reelection and 10 GOP spots up for grabs, the entire composition of our government could change – or perhaps not. In the interim, the fiscal year 2012 will continue to show 44 states projecting budget deficits totaling $112B.

A recent controversial McKinsey study forecasted that as many as 30% of employers
or 54m individuals covered under private healthcare would be “dumped” into public exchanges as of 2014. This number is in sharp contrast to the 12.6mm assumed by the CBO (approximately 7% of 180mm privately covered individuals.) The influx of 41.4mm unbudgeted insureds – all eligible for federal subsidies of as much as $5,000– would upend the initial CBO estimate of $ 140B deficit reduction over 10 years and result in an increase in public debt in just six short years. The ensuing debt arising out of PPACA over the periods 2020 to 2030 could easily eclipse $ 1T of additional public debt.

Any economist can confirm that all unsustainable trends eventually end. Rising   premiums, public to private cost shifting, perverse and unaligned incentives for care, rationing and a host of other stop-gap issues are all doomed to be replaced by a system that either drives efficiency through market reform or through the single payer procurement of healthcare. It will take at least five more years and three election cycles for this marine layer of debate to lift. Unlike 1996, there is graveyard silence arising from the private sector. Employers seem to be stuck in one of the several stages –– often attributable to the dead and dying.

Denial — “This can’t be happening, not to me.” One could argue that this generation of business leaders has drawn the short straw when confronting the decisions we will need to make to keep our businesses viable in a period of sustained high unemployment and economic stagnation. Many larger employers are nervous regarding reform but somehow feel that reform is more likely to happen to other people –smaller employers and the individual marketplace.

These firms do not want to believe that the myriad unintended consequences associated
with reform could impact their bottom line. Denial has been a principle ingredient and willing accomplice to healthcare cost inflation in the last decade. For many employers, the inability to confront the fact that many of their own business practices –insistence on open access PPO plans, less medical oversight and utilization review, limited appetite for employee disruption, inability to dedicate the time or resources to assess the health risks embedded within their own population of employees – – has them resigned them to a cycle where premiums are increasing faster than wages and corporate earnings. While
costs continue to rise, many employers have simply focused on stop-gap year over year cost shifting. Others prefer to abdicate to commercial insurers who have failed to drive affordability and improved access. It comes down to believing you can make a difference and a willingness to confront the hard choices – choices that could fundamentally drive market-based reforms.

Anger — Many find themselves simmering with resentment, hunting for villains whose feet they would seek to lay all blame: “It’s those damn insurance companies!” “It’s that Socialist in the White House!”” It’s the failure of regulators to do their job in managing the complexities of the healthcare delivery system. “It’s the big hospitals!” “It’s the drug companies!” It’s the rich and their lack of empathy” “It’s the poor and their lack of personal responsibility” The list of culprits could fill a thousand postal office walls.

A polarized Congress, pariah hungry media and a workforce unwilling to understand  that access does not equal quality means that change cannot happen without some  noses getting out of joint. Yet, we understand clearly that if we want to reduce our exposure to the coming storm of public to private cost shifting, we must engage and move on from our own anger. As 35m additional Baby Boomers increase the double the ranks of Medicare to 70mm by 2030, total health spending will near 30% of the GDP and Medicare costs are expected to eclipse $ 32,000 per enrollee up from $12,000 in 2010. Facing the magnitude of these suffocating entitlement costs, we will either embrace private sector, market-based reforms that fundamentally realign the current delivery system or we will default into a more regulated, lowest common denominator system that will rely on rationed access and reimbursement as a means of controlling cost.

Bargaining —”I’ll do anything for a few more years.” The third stage involves the hope for postponement. The lion’s share of stakeholders in healthcare can be found milling in this no man’s land of indecision. While hope is not a strategy, a surprising number of firms are clinging to the dream of “repeal and replace” legislation. Others are merely expecting Washington to do what it does best – prolong debate and delay implementation long enough to afford them enough altitude to pass the problem on to someone else. The tea leaves do not look promising for fundamental legislative intervention that would disrupt the momentum of reform. Repeal is unlikely. Employers must understand that 2014 will require certain decisions. Fundamentally employers will have one of four choices:

• Take the Money And Run– Do I drop coverage, pay the penalties associated with moving employees into the public exchange and pocket the difference?

• Drop Them But Ensure A Safe Landing– Do I drop coverage, grossing all employees up to my current level of subsidization so all might afford coverage in the public exchanges?

• Create a Consumer Plan of Your Own– Do I move to a private exchange or defined
contribution approach to financing my medical benefits to cap expenditures but remain involved as a sponsor of my benefit programs?

• Control Your Own Destiny– Do I continue to offer group based private insurance believing that employer sponsored health coverage is more likely to experience lower trends if properly managed and that medical coverage remains a fundamental part of my company’s ability to attract and retain employees.

Depression — “What’s the point?” The problems we face as a nation and in business can feel overwhelming. We have the misfortune of having to confront $38T in underfunded Medicare liabilities, $14T in public debt, and a potential double dip economic recession arising out of any number of black swan events –– credit defaults abroad, domestic hyper-inflation or a slowing of Chinese GDP. It seems inevitable that
we must head into a period of profound austerity. Facing the potential of sustained uncertainty can burden any decision maker to the point of inaction. While some period of reflection is healthy to any organization, people must take a position, plan around the certainty of change, grieve over the passing of an epoch and move forward with a renewed conviction to address the challenges that lay ahead.

Corporate depression may manifest itself in a lack of willingness to engage in the discussions or conduct financial modeling required to understand what scenarios will best benefit your organization. It is a strange period where we express grief knowing that the traditional employer/employee social contract has changed forever in a hot, crowded, global marketplace.

The  sense of urgency to explore alternatives to traditional employer sponsored coverage will led by retail, agriculture and hospitality while professional services, technology and collectively bargained public sector plans may feel more obligated to remain on a course of employer sponsored coverage. Planning prior to 2014 is essential to be position a firm to react to opportunities that may present themselves. Should a key industry competitor choose to discontinue coverage and use operating overhead reductions to drive down prices, what will you do? Many have promised to not be first but not be third in line to change.

Acceptance — “I can’t fight it, so I better prepare for the inevitable.”2014 will mark the beginning of a movement toward or away from employer-sponsored healthcare. It is more likely that most will be carefully weighing election results, the first two years of public exchange performance and the actions of their competitors to determine a course forward.

2014 is forcing discussions over the will of the private sector to drive market-based reforms, and the review of decades-old beliefs regarding direct and indirect compensation plans. Employers that have navigated these phases of change and are now aggressively accepting the new normal of healthcare and will most likely end up as self insured, in touch and aware of their own population risks, directing patients to primary care based system that reward providers based on quality and efficiency and are committed to driving healthier behaviors and personal compliance with to reduce chronic illness. Employers will realize returns on these efforts as aggressively managed plans will likely experience lower single digit medical trends. These firms will be reticent to abdicate management of healthcare costs to a public exchange but instead focus on
educating and activating their workforce to the personal and corporate dividends of change.

Some employers may convert to defined contribution plan designs such as cafeteria
plans to allow for a more diversified workforce to allocate finite dollars to purchase coverage that make most sense for their unique needs. Health benefits may become part of an overall defined contribution approach to retirement and benefit planning –affording each employee to allocate their dollars to their circumstances and in doing so, accept their circumstances more freely because they have choice in where they spend their dollars.

Reform is a process and like many of the vagaries in life, every person and each business will react differently to the stimulus of change. Every problem is a disguised opportunity and with it, comes the added dividend of using change as a catalyst for reassessing your strategies to attract and retain employees. It’s about making decisions by commission rather than omission. And, the sooner an employer navigates these stages of change, the more likely it is that healthcare reform will happen for them – instead of happening to them.