SA Ignite

The excitement is in the air, learning a ton, and would love to talk with you!.
Come visit us at booth 14219, Hall G (downstairs).

On the way back from a 3-week family tour of China and Taiwan, where between visiting the sites, reuniting with old friends, and eating with the locals (always a Top 3 for us!), I fit in some learning from healthcare and health IT insiders in both markets:

China:

• Current main thrust of healthcare reform is to increase coverage and access for rural areas.  Last month, the government almost doubled the cap on catastrophic coverage, but medications are still self-pay. The increasing wealth gap, and potential resulting social unrest, is a constant worry for the government and many citizens.  Approaches such as telemedicine are being looked at to expand access to rural areas.
• Although there is near universal (government + private) health coverage in metro areas, providers are concentrated at hospitals, which typically each have 10x the patient volume of U.S. hospitals!  There are few primary care clinics, which is something the government is making moves to change.  Big forthcoming opportunities in primary care delivery and coordinating care between emerging clinics and hospitals.
• The nouveau riche are targeted by ultra-high-end wellness and primary care clinics often founded by foreign companies.  Business is booming and at least one is looking to franchise its model to additional metro areas.
• Most hospitals have gone to electronic billing, though EHR adoption is still in its infancy.  Almost all EHR vendors are domestic, and the space is highly fragmented.

Taiwan

• 99.5%+ universal, single-payer coverage with one of the best cost-outcome ratios in the world. High patient satisfaction, though pervasive overuse of the system.
• Fee-for-service still predominant, though universal insurance smart card enables enforcement of policies such as no duplicate CAT scans for a patient in a 3-month period, unless the patient wants to self-pay.
• Each public hospital is allocated an annual budget which it cannot exceed, leading to rationing for those who cannot self-pay.  Nevertheless, costs are escalating.
• The government is fostering the development of a standard for clinical health information exchange among hospitals. Currently, only insurance and billing history is shared. Hospitals still view clinical data as a patient-retention asset to be closely guarded.  As a result, v1.0 of the HIE standard will cover only ~5 out of 100 candidate clinical data fields that are being considered.
• Government and private efforts to boost medical tourism to Taiwan.  Routine operations regularly 3x-4x lower cost with equivalent or better outcomes. Improving information systems fostering medical tourism is also being looked at.
• In public hospitals, cultural rifts between physicians versus administration (often long-term government bureaucrats) can be particularly acute, making change management, such as EHR adoption, more difficult.

For health IT opportunities that may mirror some of what’s happening in the U.S. now, wise to keep an eye on Taiwan in the 1 – 3 year timeframe and China on the 3-5 year horizon.  Both countries are closely watching what transpires in the U.S. with Meaningful Use and health reform.  This could mean attractive opportunities for those who may be so adventurous At the same time, differences from the U.S. in the healthcare ecosystem and government priorities should never be underestimated, and likely the level of understanding of such differences and how to approach them will determine winners from losers.

It’s those rare eras when there’s a shared sense that tectonic plates are shifting and colliding.

This was reinforced at last week’s Health Evolution Partners Leadership Summit in Laguna Niguel. The quality of discussion and networking was unparalleled. Among several hundred attending, luminaries from across providers, payers, government, health IT, and investors: Michael Dell (Dell), Todd Park (HHS), Mike Roizen (Cleveland Clinic), Peter Neupert (Microsoft), Carolyn Clancy (AHRQ), David Brailer (HEP), and many more. Most I met through random chance were C-level decision-makers touching upon areas within our focus. Fantastic.

Two themes in particular struck me:

1) Disruptive models for primary care delivery.  Professor Arnie Milstein from Stanford led a fascinating discussion among the CEOs of four companies seeking to disrupt the way primary care is delivered: Iora Health, Teladoc, One Medical Group, and Qliance.  Professor Milstein assumed the role of an actuary working at a private payer and Carolyn Clancy (Director of AHRQ) as the payer CEO.  The other CEOs had 5 minutes to pitch why the payer should fund care their particular care delivery models. Among the statistics that were cited was a 30% – 50% reduction in emergency room visits by redirecting patients to the alternatives.  Company positioning ranged from trying to augment existing care models (Teladoc, through adding telephone consultations) to seeking to displace existing primary care delivery entirely through ground-up re-engineering of IT systems, workflows, HR practices, and service levels (think concierge).  Both fee-for-service and capitation models were proposed.  At the end, the “payer actuary” and “payer CEO” came away impressed by early or small-scale success metrics, but had lingering questions about the scalability and cross-region applicability of the models presented.  The role-playing motif really helped in getting to the nuts-and-bolts of the leading-edge care models without being confined to marketing spin. Kudos to Dr. Milstein, I’m a big fan

2)Payers taking diverse approaches to reinventing themselves. The conference’s opening panel “A Tectonic Shift for Health Plans” generated significant buzz such that  people were still discussing in the days after.  The moderator, Jeff Margolis (Trizetto), was laser-focused on having the payers (Optum/UnitedHealthcare, Humana, and Aetna) crystallize in simple terms how their organizations must adapt to payment reform, ACOs, and staying profitably relevant in changing times.  Optum cited its investments through Ingenix and others reflecting its early belief that information systems, analytics, and risk-management expertise would be where payers would ultimately play.  Hence, ACOs actually fall within their existing vision and strategies.  Humana stressed how its weighted focus towards the older population colors its adjustments towards ACO and staying competitive.  Aetna’s on-going acquisitions in health IT (Active Health, Medicity) reflect its belief that it cannot compete on the basis of provider  network size with the Big Blues, but must differentiate through services and capabilities. A physician leader at Kaiser stood up and accused the payers of “kibbitzing” around by avoiding the elephant in the room in his view: only physically-integrated systems built to drive population wellness have proven to lower costs and increase quality in any large ways, i.e. you should all become like Kaiser.  To which, the panel response was: Amazon didn’t have to become bricks-and-mortar Barnes and Noble to do quite well for itself.  Virtual integration (where ACO is but one model) has proven to work in other realms so long as incentives are aligned.  Either way, time will tell, as the devil is often in the details of implementation rather than in the broad brushstrokes of strategy.