@jayparkinson

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The Road to Wellville: Design Observer by Jay Parkinson
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I just finished reading Atul Gawande’s latest article in the New Yorker, Testing, Testing: The healthcare bill has no master plan for controlling costs. Is that a bad thing?

He draws parallels to the history of agriculture in America:

At the start of the twentieth century, another indispensable but unmanageably costly sector was strangling the country: agriculture. In 1900, more than forty per cent of a family’s income went to paying for food. At the same time, farming was hugely labor-intensive, tying up almost half the American workforce. We were, partly as a result, still a poor nation. Only by improving the productivity of farming could we raise our standard of living and emerge as an industrial power. We had to reduce food costs, so that families could spend money on other goods, and resources could flow to other economic sectors. And we had to make farming less labor-dependent, so that more of the population could enter non-farming occupations and support economic growth and development.

The economic similarities sure do make sense. Food was bankrupting us. And a hundred years later, after many pilot projects:

"What seemed like a hodgepodge eventually cohered into a whole. The government never took over agriculture, but the government didn’t leave it alone, either. It shaped a feedback loop of experiment and learning and encouragement for farmers across the country. The results were beyond what anyone could have imagined. Productivity went way up, outpacing that of other Western countries. Prices fell by half. By 1930, food absorbed just twenty-four per cent of family spending and twenty per cent of the workforce. Today, food accounts for just eight per cent of household income and two per cent of the labor force. It is produced on no more land than was devoted to it a century ago, and with far greater variety and abundance than ever before in history.”

The government acted as a 20th Century platform to enable our farmers to do their jobs better. This is a perfect example of Government 2.0 existing in the 1.0 world…the government as platform.

I’ve been saying for quite some time that this should be the age of experimentation with the government acting as VC fund for hundreds to thousands of these pilot projects that foster disruptive innovation.

One major difference between today and 1903 when the government started to move in the agriculture space, is that they had decades to solve the problem with successful results over 100 years later. I personally don’t believe we have this kind of time in healthcare. In the next 10 years, insurance premiums will rise over 160% and even more so the decade after that. It doesn’t take long to understand that very few people will be able to afford those costs in 10 years.

So how can we put these experiments in hyperspeed? How can we learn what we need to learn in just a few years? And how can we empower those doctors and hospitals who want to experiment with payment and delivery processes with the tools, the time, and the money to do so? Can we take lessons from agile development and apply them to healthcare delivery? Can we create a Gov 2.0 platform to analyze new payment and delivery methods to quickly understand if they’re working and whether or not they’ll be profitable in the near future? Can this platform quickly and fluidly organize doctors into virtual groups to provide new collaborative ways of delivering healthcare? Can this platform gather the requisite data to make sense of success or failure?

But then again, it’s been quite a challenge building Hello Health. One of the biggest challenges has been concurrently building new technology to power new ways of delivering healthcare. Building smart, high quality, robust, and secure software takes serious time. And learning through real life healthcare delivery that we need to redo something or rethink something that took months to develop has been frustrating. We’ve done our best and we’re going to shine, but it’s been very, very difficult. After being open for nearly a year and a half, things are getting better and better. But how long did it take Amazon to figure out their technology and their physical processes? How long did it take them to do the same thing we’re doing in healthcare? How many times was Bezos laughed out of VC pitches because he had what sounded like an impossible idea? How long did it take Amazon to be profitable?

Seven years.

Delivering healthcare to a large population of people in totally new ways paid for by totally different methods is uber complex, much harder than selling books online. Large scale pilot projects in healthcare have traditionally been much shorter than seven years. Why? Multiple reasons but mostly because pilot projects to rethink healthcare have been half-baked and small grant funded. Also, the amount of money people are potentially losing through experimentation is too large to risk a seven year investment and there’s little incentive to buck the system and create new ways of paying for or delivering healthcare. All of the healthcare success stories we have in America— like Kaiser, Geisinger, and Intermountain— evolved from thoughtful leaders that bucked the traditional system because they knew tradition didn’t make sense. How can we foster this kind of innovation in physicians all over the US who know things are broken and there’s got to be a better way?

Healthcare experiments and pilot projects need to be rethought. We need the government to foster new platforms that markedly reduce communication overhead, much like Hello Health and the NHIN are doing. We need the government to create innovative new ways to act like a VC fund, much like Rafe Furst is trying to rethink funding:

Inspired by Nassim Nicholas Taleb’s book The Black Swan, some friends and I have begun to rethink how to most effectively fund innovation, whether it be purely for profit, not-for-profit or social entrepreneurship.

As it stands today, the market for venture seed capital is broken. Most individual angel/seed investors will only do on average one deal per year. Their portfolios lose money 40% of the time due to insufficient diversification. Even premier angel groups like the Band of Angels say they only do about 8 deals per year. Our math and simulations say you need to do 125 to achieve good diversification. On the other side of the table, only 14% of innovators who want seed funding will find it. Those that do will spend about 6 months looking for money instead of building their businesses. All-in-all this is a sorry state of affairs for a market where the overall annual return is roughly 25%.

To address the gap we are working on four new models which complement one another:

  1. Black Swan Fund - Index-style equity investment for startups needing $250K - $1M, prior to a VC round or cash flow positivity.
  2. Equity Micro-Funds - Smaller versions of (1) for startups needing $25K - $100K.
  3. Nano-Investments - One-off, option-on-equity investment for pre-startup pilot projects lasting 1-3 months needing $5K-$25K.
  4. Personal Investment Contracts - One-off, lifetime equity investments in individual superstars at the beginning of their careers.

Feeding a population is a bit simpler than delivering healthcare. The strategy the government used 100 years ago in farming needs to be leveraged today, but updated with today’s potential. We don’t have another 100 years of financial solvency to deal with healthcare. Forty five thousand people are dying every year due to lack of insurance. One million people have been forced into bankruptcy. There is a healthcare famine in America today that needs to be solved quickly.

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A clinic with two doors-- the future of healthcare in America.
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Equal rights for all races, genders, and sexual orientation. Do not litter. Don’t drink and drive. Give money to charity. Etc, etc, etc.

Why do these things? Because it’s the right thing to do as a society. The vast majority of us do these things because we care about other people. We want to help others. We don’t litter because it makes the world ugly. We don’t drink and drive because we could kill ourselves and others. We eat local and buy Priuses because it helps the environment.

There is a strong history of branding an individual problem in order to change our behavior to benefit society. The Don’t Mess With Texas campaign is credited with reducing litter on Texas highways 72% between 1986 and 1990. Smoking in public has been markedly reduced because it harms other people. Just watch Mad Men to see how society has changed. We now look at the world in a more connected way. We behave differently because, through marketing, we now know that the way we behave makes a difference in the world.

Vaccines work because of herd immunity. In diseases passed from person-to-person, it is more difficult to maintain a chain of infection when large numbers of a population are immune. The higher the proportion of individuals who are immune, the lower the likelihood that a susceptible person will come into contact with an infected individual.

Not getting vaccinated is therefore a social problem, like driving drunk, littering, equal rights, and smoking around children. For every person who does not get vaccinated, more people in our society are at risk of serious illness or death.

In 1904, there was a Supreme Court case called Jacobson vs. Massachusetts. Massachusetts at the time had a law mandating smallpox vaccination. Jacobson didn’t want to be vaccinated. He sued. The court ruled against Jacobson:

“in every well-ordered society charged with the duty of conserving the safety of its members, the rights of the individuals in respect of his liberty may at times, under the pressure of great dangers, be subjected to such restraint, to be enforced by reasonable regulations as the safety of the general public may demand.”

They ruled it was in the public’s interest for the state to enforce the law. It was a top down, creepy implication that in order for the public to be protected, we should all be required to risk death as a complication of a vaccine. While I don’t agree with this top-down approach, we’re smarter today. And vaccines are much, much safer today than injecting powdered smallpox scabs. They ruled properly, but mandates aren’t the answer.

Making vaccination a social cause is the answer. Doing things for others makes us feel really good. Getting vaccinated not only protects me, but it protects the herd of awesome people around me, so none of my friends or strangers die a preventable death.

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What they should have been taking away all of this time — and have increasingly begun to — are the concepts of the constant beta and agile development," he says. "Marketers need to abandon the time-limited campaign online and start to think of it as a constant application of a rigorous discipline. They should think of their marketing the same way that Facebook puts out a new feature every two weeks, tweaks it, changes it, and re-releases it. It’s not a coincidence that’s brought Facebook 400 million users and Twitter 40 million. We’ve been applying them to Kashi.com for three years now and have seen results beyond anything that a single campaign could do on its own.
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The other night I met a really awesome general surgeon here in NYC at my regular haunt, Hotel Delmano, to discuss Hello Health and what it means to surgeons. His name is Dr. Evan Goldstein and his practice is Tribeca Surgical. Should you need a surgeon, you’d be hard pressed to find one better than Evan. He’ll give you his email and mobile number and communicate like a normal human being. On top of that, he’s got passion and a desire to do his part to fix this healthcare insanity from the ground up.

I asked him what his most common surgery is he performs. Answer: Hernia repair. I then asked him how much it would cost him to perform the surgery. Evan operates at two places here in NYC. One is the typical major academic institution. The other is a lovely, small, highly focused surgical center that can operate at a fraction of the cost of the major institution. The turnaround time between cases at this “focused factory” is about 10 minutes. Turnaround time at the bloated mess facility is about an hour and a half. When he operates on someone at the large institution, the hospital bills a person’s insurance company about $5,000 for the procedure. If you don’t have insurance, you’ll get a bill for about $20,000 for the procedure.

Contrast this $20,000 with the bill you’ll receive from him when he does the surgery at the small center: $2,500 for an uninsured person. How can this be? It’s called personalized service minus the bloat from a physician who gives a damn about you. Large hospitals are like antiquated factories that were built to produce anything. They’re like a car parts factory that was built 50 years ago to produce 50 different parts— grossly inefficient with assembly lines that snake all over the place. Compare this to a car parts factory built a few months ago designed exclusively to efficiently produce 3 parts with highly consistent quality.

That’s the network we’re building with Hello Health. The doctors who care, the doctors who want to do the right thing, the doctors who know there’s gotta be a better way, the doctors who truly love being doctors and want to help their patients be well, the doctors who don’t want the hassle and the bloat…they’re coming out of the woodwork to find us, to meet us for beers, and to say I want to join you.

This is the future healthcare system. A bottom up network of doctors and patients who care about relationships, simplicity, affordability, and a better experience.

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…those who have the ability to imagine new services, new opportunities and new ways to recruit work [are] being retained. They are the new untouchables. That is the key to understanding our full education challenge today. Those who are waiting for this recession to end so someone can again hand them work could have a long wait. Those with the imagination to make themselves untouchables — to invent smarter ways to do old jobs, energy-saving ways to provide new services, new ways to attract old customers or new ways to combine existing technologies — will thrive. Therefore, we not only need a higher percentage of our kids graduating from high school and college — more education — but we need more of them with the right education.

Thomas Friedman - The New Untouchables

“our schools have a doubly hard task now — not just improving reading, writing and arithmetic but entrepreneurship, innovation and creativity.

Bottom line: We’re not going back to the good old days without fixing our schools as well as our banks.”

(via rahmin)

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What would happen if everyone was required to spend up to 10% of their salary out of pocket on healthcare before insurance kicks in?
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I’ve been an avid Google fan for quite some time. I pretty much love almost everything they do. I would pay a pretty penny every year just to use gmail, reader, calendar, and docs.

And over the years, it’s been fascinating to watch them try to become social. Google’s greatest hits (search, gmail, and maps) were made for me in my own personal silo. I used them one on one and loved it. Then Reader came along and I love it. I use it one on one and it feeds me with 95% of what I need to know throughout the day. Docs came along and, from the beginning, offered me a social, shareable document that made working with others easier. And that, to me, is its best feature.

Then Google started to try to tack on the social web to almost everything— Google profiles, maps, I now have followers and viewers in Reader, I can subscribe to other’s calendars (although not so intuitively), etc.. But all of these experiences aren’t very intuitive and sort of suck. Why? Because they were tacked on after people started using them as one on one silos.

On the other hand, I love tumblr. It has become my source of information, replacing my obsession with Google reader. I feel like I personally know the people I follow and who follow me. It has become my innernet friend that augments the in-person relationships between meetups over a beer. From the very beginning, it was designed from the ground up to be social. Social wasn’t tacked on to tumblr. It was its’ heart and soul.

I had this in mind from the get go when I designed the Hello Health platform with Ghava. I read the super helpful book, Designing for the Social Web, by Joshua Porter, which got me thinking about what health professionals would need and/or like to “share” when communicating, documenting, and going through their daily routines. What are Hello Health’s social objects and what can users do with those objects? From there, we designed Hello Health from the ground up to be a secure, social platform for health professionals, patients, and medical information. I know that doctors and patients in a new healthcare network/system born in 2009 will benefit from being securely social. Value will be added for patients if they see a doctor in LA who has access to the last visit that patient had last week who visited a doctor using Hello Health in NYC. This will prevent unnecessary repeat tests and ultimately save that patient money from their health savings account. Value will be added for doctors who have access to as much information as possible about the patient they are currently seeing. They can practice higher quality medicine when presented with all the information needed to make good decisions.

What does this mean to the Health IT world? Obama appropriated $20B to trying to get more doctors to use electronic medical records (EMRs). The feds will pay doctors to “meaningfully use” EMRs. And now one of the main stipulations of “meaningful use” is that the EMRs the feds will pay for must be able to “share information.” Essentially, the feds are asking EMRs to be social. And this is what the best one looks like:

Ha. Good luck. If Google can’t do it in a meaningful way, I guarantee the Health IT world won’t come close. Regulating from the top down that EMRs become “social” is absurd. EMRs were born over 20 years ago, and they still look and function like 20 years ago. That’s why the government is regulating goddamn software. Patients’ lives are at stake and doctors are using this unusable crap. Regulations won’t come close to solving practical usability. There’s a loophole in every regulation. EMRs will “support” shareability, but it’ll be done so poorly “shareability” will be rendered almost useless. And taxpayers will be out $20B, a pathetic healthcare IT industry will be up $20B, and doctors will be stuck with a social network tacked on to 1985.

Do the Feds have to regulate Facebook? Flickr? Tumblr? Of course not. They are social because there is value in being social. The present sickness industry values secrecy, not openness. Secrecy means more profits. Secrecy means owning valuable, profitable data. Secrecy means locking users in to one proprietary piece of crap software. Secrecy means not being responsible for poor quality.

Very little, if any, of healthcare will change unless consumers stop supporting the current business model of the US Healthcare Industry and unless the Feds stop mandating that consumers support this business model. That’s fine though. In just a few years, nobody will be able to afford healthcare and they’ll surely be looking for affordable, alternative ways to feel better.

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My buddy Noah Brier, ingenious man that he is, created a website called Brandtags. It’s super simple and this is what it does:

and then it spits out the tags associated with that brand:

Is this a problem for Mayo that people associate Mayo with cancer just as much as they associate it with health?

I’d say this is a problem for them and the rest of the traditional healthcare world. They’ve created such an empire that revolves around sickness, if they want to be a main player in the space that focuses on your wellness, they are going to have to fight against their own self-created stereotype.

The sickness industry is rapidly becoming unaffordable. The wellness industry will replace it which I believe will lead to two different industries:

  1. The wellness industry that caters to the consumer and is focused on maximizing your health for the first $5,000 per year you spend out of your own pocket. This industry will do everything it can to retain your business by keeping you well and out of the sickness industry. This will include management of acute problems (broken arms, sinusitis, etc) and chronic problems (depression, asthma, diabetes, etc). The goal of this new market will be to cost-effectively deliver efficient, affordable healthcare (for under $5,000 per year) to keep you out of the sickness industry. Because once you leave, it’s likely you won’t ever come back due to some expensive, chronic illness you’ve developed. They’ll want you back. They’ll cater to you. They’ll want to be found by you. This is the section of healthcare where we can innovate because it’s unregulated, cash-based, and deals with simple transactions. Wellness brands will arise and look and feel more like the Apple Store than an ER. Over 80% of people in America do not actually use $5,000 per year of healthcare, therefore, this is a market that will cater to 4 out of 5 people in America. It currently doesn’t exist simply because people haven’t known that it could exist and thrive against the traditional healthcare industry. But now that the traditional healthcare industry is essentially unaffordable to so many Americans, this wellness industry will disrupt much of what the sickness industry is currently doing badly.
  2. Once you spend over $5,000 (or if you are covered by Medicaid) you will enter the sickness industry. That will continue to look and function the way it does— an ever-increasing money pit. As we’re witnessing, the industry is not able to be top-down regulated due to all the special interests chasing these massive profits.

That’s just a theory, but I think it’ll come true.

And btw, here are the other healthcare brands on Brandtags:

  • American Cancer Society
  • Blue Cross Blue Shield
  • Elsevier
  • Johnson & Johnson
  • Kaiser Permanente
  • Pfizer (“boner” is the most common word people associate with Pfizer!)
  • Proctor and Gamble
  • Tylenol (aspirin is the most common word associated with Tylenol)
  • Walgreens
  • WebMD
  • Weight Watchers
  • Zyrtec
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I’ve been thinking a ton about the fact that patients aren’t the real customers in healthcare. Very little has been designed for you— the user of healthcare. When you visit a hospital’s website, do you get the same feeling as using Kayak to purchase a plane ticket or tumblr to create your first blog and start publishing within 30 seconds? Do you feel more knowledgeable or more empowered? Nope.

Healthcare talks to you in two ways. They choose from a few different stock photos of smiling old people, male doctors, and photos of their institutions. And then they have two different messages:

"We care about you."

and/or

"We’re the best."

Visit Hopkins, Mayo, Ronald Reagan UCLA Medical Center, Cleveland Clinic, Mass General, and the Ohio State University Medical Center.

They’ll also throw in the obligatory syndicated health information in “diseases A to Z” because they think you’ll go to your nearest hospital’s website to search for health information rather than your Google search bar.

And these are the top institutions in the country all saying and doing the same thing. Do a random search for some rural hospital somewhere in America and you’ll find the same messaging. It may be tweaked with something like “We’re the best (for Western Maryland)” but of course don’t forget “We Care about you.”

Do they think that people respond to this messaging and these uber helpful tools providing generic syndicated health information? Or is this just a symptom of ridiculously unimaginative groupthink?

The main problem lies in the fact that all of healthcare tries to do all things for all people…and their messaging reflects that generic nothingness.

Healthcare needs to be made cool, engaging, unique, transparent, and personalized. We need to drag it out of pre-Mad Men era messaging, Marketing 101, and 7th grade health class and make the experience one that’s as awesome as buying a computer from the Apple Store or a hip replacement from Bumrungrad.

I can guarantee that in the next 5 years there will be an entire healthcare ecosystem that springs up from the periphery that truly speaks to you and lives up to the same expectations you have from Apple or Kayak. It won’t come from the establishment. It will come from a network of people who simply want something better for themselves and for you.

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I spent Tuesday night with a very distinguished group of high profile people involved in various aspects of healthcare at the Healthspottr dinner to coincide with the Health 2.0 conference in San Francisco this week. It was a discussion amongst the 20 or so people about “payment reform.”

There was a ton of bickering, ideas galore, and solutions that worked for one of the four groups of healthcare (patients, doctors, insurance companies, sickcare delivery networks), but surely not for everybody.

There were talks of bundling, high deductibles for all, and blah, blah, blah and even more blah.

At the end, we all got 2 minutes to say what we got out of the discussion.

Here’s mine:

Fixing healthcare is like asking the government to create a company that solves every problem for everybody. Healthcare will not be solved from the top down. Peripheral players with classic disruptive innovation will join forces along a shared ideology to fix healthcare from the bottom up by creating a highly networked, transparent, decentralized, and consumer-centric alternate healthcare System. Over time, the better experience, the higher quality care, and the effectiveness of this System will replace the current misaligned mess.

My duty as an innovator is two-fold:

  1. Obsessively focus on creating a kick ass solution for a small segment of the population who want Hello Health. We can’t try to solve the entire problem. We must know who our customers are and who they aren’t. And we must deal with those who don’t understand and criticize us for ignoring the poor or the old, the offline, etc…and all the other things we fully already realize. But we can contribute to laying the foundation for something better with the ultimate goal that our efforts will gradually expand to all those people we’re currently ignoring.
  2. Obsessively explore, meet, and align ourselves with all of the other peripheral players who share our common goals of focused solutions for delivering and paying for healthcare in a decentralized, networked, aligned system that delivers healthcare, not sickcare, to true consumers. There are some fascinating, smart people out there creating elegant solutions for various aspects of the healthcare problem, including how healthcare is paid for. We all know we can’t do this on our own and there is such a passionate drive to work together because we all got into this out of frustration and anger that people are suffering under this healthcare industry and it’s simply not right.

I am ridiculously optimistic given the remarkably intelligent and driven people I’m connecting with on a daily basis who are building this soon to be incredible solution out on the periphery. There’s a ton of awesome stuff we’re doing in the background with Hello Health and we have the funding, the passion, the talent, and the connections to truly serve as a magnet for an honest, high quality, affordable healthcare solution Washington will never create.

I’m honored to be a part of this and I can’t wait to see the future.

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I’ve talked to many boardrooms about awesomeness.

Beancounters feel challenged and threatened by it, because it feels fuzzy and imprecise.

Yet, it’s anything but.

Gen M knows “awesomeness” when we see it — that’s why its part of our vernacular.

It’s a precise concept, with meaning, depth, and resonance.

The Awesomeness Manifesto - Umair Haque - HarvardBusiness.org

Have to agree there.  Many (previously uncapitalized) attributes are nominally “fuzzy” but will be accountable in short order…

(via ethanb)

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How American Health Care Killed My Father by David Goldhill in The Atlantic

and

The Cost Conundrum by Atul Gawande in The New Yorker

These are the two most important articles of the past year on health care. Please take the time to read and digest them…

It’s an unfixable mess that will only be solved by complete restructuring from the ground up— the top down bureaucracy that satisfies the main players of the entrenched industry will only let you down.

Stop arguing or even thinking about “reform” and contribute as best you can, as collective individuals, to something totally different and new.

Now get to readin’…