Healthcare: The Next Tech Boom?

As the healthcare landscape is changing and encountering a generation of aging baby boomers, the need for innovation and efficiency is rapidly increasing. Healthcare is facing a challenge to provide expanded services to an aging population with a decline in Medicare reimbursements of up to 35% by the year 2015. As a result, a healthcare technology boom is in the making as providers and payers are turning to technology to better coordinate care and explore new delivery alternatives.

Technology companies like Google, HP and Intel are investing millions of dollars in research and development to invent new smart devices and other technologies. These devices range from advanced sports equipment that will measure muscle contractions to programmable coffee mugs for Alzheimer’s patients. Digital Connect magazine estimates that U.S. revenue from digital home-health devices could quadruple to exceed $2.1 billion by 2010. These smart devices will play an increasing role in orchestrating patient wellness at home and hospitals. New possibilities are created such as monitoring blood pressure and sending the information in real-time to a physician. Another new possibility is to build a network of wireless medical devices to be used at home, clinics and hospitals.

In addition to smart devices, consumers, providers and payers are exploring new self-service options and online health alternatives. Kaiser Permanente has begun rolling out self-service kiosks designed to speed the physician office visit check-in process at 60 medical clinics in Southern California. And, in April of 2008, Kaiser also announced that more than 2 million members are actively using their personal health record which offers appointment scheduling, prescriptions, eligibility, lab results and email communication with physicians. Furthermore, in January of 2009, Cigna and Aetna will pay for online visits in attempts to improve efficiency and prevent costly problems. Medem, a provider of online services for physicians, serves 70,000 physicians and expects the number of e-visits to exponentially grow over the next few years.

Healthcare is heading toward an exciting wellness movement with the help of a momentous technology revolution. Smart devices are creating new possibilities that were non-existent before and consumers are taking action into their own hands by using the internet. Care providers and payers who embrace innovative technologies will find new ways to provide better care and position themselves as leaders in the industry.

Get Your Wart Removed at Wal-Mart

Soon you will be able to walk into your local Wal-Mart and receive simple medical procedures such as wart removal. But it isn't just Wal-Mart who is offering medical services; retail clinics are spreading throughout the country at other retailers such as CVS, Walgreens, Publix and Krogers.

Why are they doing this? And why should you consider going to Wal-Mart the next time you have a bad cold instead of going to an urgent care center? These are a few questions I'll examine in this post. First let's start with understanding the basics about retail healthcare.

What is retail healthcare?

• Each clinic is typically staffed with nurse practitioners who provide diagnoses and prescriptions located inside retail stores, including drug and grocery stores, and mass merchandisers.
• Clinics offer a limited menu of simple medical services (skin conditions, vaccines, common illnesses and wellness/prevention) on a walk-in basis.
• Clinics are open during extended hours and weekends. Price for a visit ranges from $50 to $75
  

What is the business model?
In-House Model

• CVS, Target, and Walgreens have their own clinics
• Higher cost strategy but better control

Exclusive Operator Model

• Publix only operates with the Little Clinic
• Easiest to manage

Multiple-Operator Model

• Multiple operators are more complex but provides greater flexibility to match local market needs
• Wal-Mart works with 8 providers

Who are the Providers/Retail Clinics ?
CVS

• 200 clinics
• Purchased 120 Minute Clinics for $170M
• Considering 2,500 clinic target over long run

Walgreens

• 250 clinics
• Acquired Take Care Clinic

Wal-Mart

• 76 clinics across 12 states
• Contracts with: Simply Retail, Redi-Clinic and QuickHealth

Publix

• 8 clinics
• Contracts with the Little Clinic
  

System Advantages

• Low cost option for uninsured patients
• Significant cost savings for patients and health plans
• Better quality of care for simple procedures
• Retail clinics divert low acuity ER business
• Convenience of not scheduling with physician offices

Retail clinics are very high in customer satisfaction. Customers are ‘very satisfied’ or ‘somewhat satisfied’ with the following:

• 90% care received
• 85% staff
• 83% convenience
• 80% cost

There are many benefits to retail healthcare. These clinics are good for America because they will increase price transparency and promote competition among providers. In addition, they will alleviate ERs of long wait times and provide new options for the uninsured. More importantly, retail clinics are important because they provide an opportunity for you, the patient, to receive better care for simple procedures.

McCain Has the Best Healthcare Reform Plan But It Won't Work

Conclusion
McCain is the best candidate with a healthcare reform plan to modernize healthcare. His plan emphasizes the individual, rather than the employer which Clinton and Obama's plan do. McCain's plan will work similarly to car insurance. Instead of seeking health insurance from your employer, you will be able to shop from whomever you like. This is good because it will increase competition from insurers, spark product innovation and enable the member to take personal responsibility for his/her health.

Although I believe these are the right steps to bring healthcare into the next generation, the plan will ultimately fail because individuals cannot take care of themselves. Moving away from employer based insurance would likely result in an upward enrollment trend of high deductible products and HSA's. Individuals would become cost conservative by saving on copays and out of pockets by seeing the doctor less often. This would create an unbalance and lead to adverse health effects, reversing the efforts of preventive care. Late detection would lead to increased catastrophic events and eventually higher costs.

McCain's approach will start out on the right foot but will deteoriate over time. I am a firm believer of consumerism and invidual choice. In fact, McCain's plan is perfect for me, someone who is self-reliant and well informed. However, for the average person with medical conditions and pain, I'm doubtful of their ability to make informed decisions.

So who should be responsible for managing care: doctors or members?


You can find more details about the McCain plan, summarized below.

Goal

• Provide access to affordable health care for all by paying only for quality health care, having insurance choices that are diverse and responsive to individual needs, and encouraging personal responsibility.

Approach

• Remove the favorable tax treatment of employer-sponsored insurance
• Provide a tax credit to all individuals and families
• Increase incentives for insurance coverage; promote insurance competition
• Contain costs through payment changes to providers (e.g. reform the payment systems in Medicare with a preventive focus)

Action Plan

• No mandate for coverage
• Reform the tax code to eliminate the bias toward employer-sponsored health insurance, and provide all individuals with a $2,500 tax credit ($5,000 for families) to increase incentives for insurance coverage
• Families should be able to purchase health insurance nationwide, across state lines, to maximize their choices, and heighten competition for their business that will eliminate excess overhead, administrative, and excessive compensation costs from the system
• Insurance should be innovative, moving from job to home, job to job, and providing multi-year coverage.
• Allow individuals to get insurance through any organization or association that they choose: employers, individual purchases, churches, professional association, and so forth.
• Give American Veterans the freedom to choose to carry their VA dollars to any provider
• Require any state receiving Medicaid to develop a financial "risk adjustment" bonus to high-cost and low-income families to supplement tax credits and Medicaid funds.
• Promote competition among providers by paying them only for quality and promote use of alternative providers
• Change provider payment to encourage coordinated care (e.g., pay a single bill for high quality heart care rather than individual services).

Impacts to the Member

• Increased consumerism, decision making and personal responsibility
• Lower premiums and increased cost savings
• New innovative products: multi-state, multi-year, job to job
• Better access to provider costs and outcomes data
• Decline in employers offering health benefits
• Lower utilization – good (reduce unnecessary visits) and bad (adverse health from late detection)

Impacts to Payers

• Payers with robust self-serve internet capabilities will thrive. Those with poor technology will play a “catch up” game and enter a downward membership spiral.
• IT will focus on building internet sites with new individual insurance capabilities.
• Product Developers/Managers will be pressured to invent new products geared to the individual while finding price balances with employer sponsored plans.
• Increased enrollment in high deductible and HSA products
• Phase out of self-funded products

Impacts to Providers

• Providers who do not communicate outcomes and cannot coordinate care will be adversely affected.
• Increased coordinated care that is outcomes focused (single payment)
• Increased price/cost transparency
• Shift to alternative providers (e.g. chiro)
• Providers will use more technology to communicate patient outcomes
• Providers will battle the new payment approach

I Hate Needles and Blood Tests!

With so much technology today, why do we continue to use pain inflicting needles for blood withdrawal?

Although someone in the world might enjoy the needle, a majority of us would certainly appreciate a less painful approach. And perhaps, pay more for avoiding the needle -- I certainly would.

A majority of patients strongly dislike having a needle piercing their skin because it causes discomfort and pain. This is even more challenging for a young child or elderly person who can be more sensitive. In addition to pain, a mistake could happen when the lab technician draws your blood. The technician might draw an insufficient amount of blood, drop a vile, wrongfully insert the needle or use a dirty needle. The point is -- what other testing alternatives are available for diagnostic blood tests?

The various non-invasive blood test alternatives available today are:

• Saliva Samples (drugs, DNA, HIV, more)
• Electromagnetic Sensors (diabetes patients)
• Stool Occult Tests (colon)
• Breathe Test (lungs, asthma)

I'm sure other forms of testing exist but I'll use this list as a starting point for discussion.

Benefits

Let's take the saliva sample as an example. Imagine going into the lab for a routine blood test and instead of nervously waiting in a cold chair with your sleeve rolled up, the technician only takes a sample of your with saliva with a cotton swab. The anxiety goes away. The process is simplified. The pain is non-existent. And it's probably a lot quicker than drawing blood.

What if technology advanced and you could use non-invasive lasers to perform diagnostics? The technician just has to push the button on the machine. The data is automatically uploaded onto the computer and the results are completed near real-time. Then the lab sends the results electronically to you and your doctor. Imagine knowing you were allergic to pollen before your doctor did. You could spend time researching the various allergy medications and procedures before your next doctor appointment to have a better conversation on how you should deal with pollen. Furthermore, you read up on temporary solutions before your next doctor appointment. And most importantly, the test was painless!

Conclusion

I am not a doctor but I am someone deeply committed to modernizing healthcare. The next leap forward has to be driven by you, the member. Although I believe Hilary or Obama will lead us into healthcare reform, it is the members' voice that will ultimately take us into the next generation. Non-invasive blood tests are just one example of how we can improve the system by providing everyone a better and less painful experience. It is also another example of how we can empower the member by giving them more information.

What will healthcare look like in 2020?

My first blog! This is exciting.

As a healthcare consultant for the last 5 years and someone who's heard healthcare become a pressing issue, I realize that we are in a pivotal moment in time. This is the time when healthcare moves into the next generation. People are demanding change: the government, consumers (members and employers), and health plans. The agenda is sizzling and the topics include:

• Universal coverage
• Lower premiums and deductibles for the insured
• A possible shift toward individual or employer mandated insurance
• Tax credits or subsidies to supplement health insurance costs
• Increased consumerism or cost transparency through the use of HSAs & HRAs and high deductibles
• Reforming the U.S. system to look like Canada, England or Cuba

These are all pressing topics and frankly no one has the right answer to fix our problems. I don't intend to discuss these potential solutions in this blog, but I would like to know is:

WHAT PROBLEMS DO YOU HAVE WITH YOUR HEALTH INSURANCE?

I have consulted with major health plans throughout California and I can tell you there is a major initiative to modernize the way you look at, perceive and receive health insurance. In an era of computers and technology, health insurance and healthcare is playing a catch up game. Health insurers are making a valiant effort, although it may seem slow, to give you more information on a more timely basis and in a more simplified format.

However, there are still holes in the system needing patches. For example, I can go on the internet and find hundreds of reviews for a local restaurant, where I may spend $20 for a meal. This site may even give me $$$ scales to reflect cost or *** ratings to indicate quality. Yet, finding a review for a primary care physician or a pediatrician is almost impossible to find on the internet. A doctor visit is much more personal and expensive than dining at a restaurant. I should be able to find pertinent and resourceful information at the click of a mouse. Why is finding a good doctor only through word of mouth? This is one pet peeve I have about healthcare. What are yours? What do you expect your health insurance company to offer in the year 2020?