Reform by any means necessary.


It isn’t important that the President gets the public option, it’s important that he passes reform that makes health care more obtainable by more people and more affordable. If there are other ways to get there than the public option so be it.

I happen to think Dick Armey made a good point today on Meet The Press. We need to allow people more choices of private insurers. We need to take away the monopoly that insurers have. Natural competition will lower costs.

If I could push for one element of the public plan it would be to standardize how we share medical data. If we were able to have a way to easily take our medical information with us from one doctor to another, it would lower administrative costs considerably and in turn make health care more affordable and attainable for everyone.

More choices of insurance doesn’t always mean more variety in actual plans purchased. Insurance is sold by brokers. They make a commission. If one type of plan, like a high deductible with a tax deductible Health Savings Account that rolls over from year to year, may be good for their client, it’s in that broker’s best interest to criticize those plans and sell them a more expensive plan to maximize their commission.

And standardizing how we share medical data is, in theory, a great idea. I fully support this. However, to understand the problem, you gotta understand the business model of Health IT:

The internet has changed everything for consumers. But there is literally one web-based company selling healthcare IT to independent physicians. The rest is closed, proprietary Windows 95 looking things. However, there is an abundance of computer programs to help hospitals and providers bill insurance companies. Acquiring them often costs about $25,000 per physician per year. They are simply billing engines focused on maximizing their reimbursement by making a visit or procedure seem to the insurance company more complex than what was actually delivered. Insurance companies often counteract electronic reimbursement submissions by downgrading the reported complexity (and therefore the reimbursement). It’s a cat and mouse game that eventually leads to the most important problem of all – computers are way too expensive and there is no return on their investment with the current business model for individual and small group doctors, which are the majority of physicians in America. Therefore, 17% of our GDP runs on handwritten notes because only 1 in 10 doctors use computers in their practice.

There is very little demand for Health IT. The systems are way too expensive. They look and function like Windows 95. Their usability sucks because the problem these systems try to solve is a billing problem– not a communication, data portability, and helping doctors be better doctors problem. They’re meant to maximize reimbursement but only have a return on investment for large institutions who can buy this ancient technology in bulk. Therefore, a higher fraction of doctors who work for large institutions use these systems. The business model that’s still currently in use is from the 1980s. A technology company comes in and customizes a siloed system for every customer they have. They also charge a multi-million dollar per year support contract to continue customizing, fixing, and making it more siloed and less interoperative. But most importantly, the entire industry is functioning with a business model that went out of vogue 20 years ago, prior to the internet. This is best understood by the following article:

“Newcomers to the health IT business, whether individual reporters or giant companies like Microsoft, often find themselves in a time warp. It’s always 1986 in the health IT business. By that I mean there is an enormous and growing ecosystem of consultants, suppliers, software, service and peripherals outfits the likes of which has not existed in the mainstream PC business for over 20 years.”

Healthcare is like the travel industry prior to the internet. And the profiteers strategy is to eliminate the internet, and it’s efficiencies from the entire industry. Kayak, Travelocity, Orbitz…those are all about transparency. And the travel industry has been revolutionized. Interestingly enough, spending on travel since these sites were created has increased.

There are two massive business models that need to be disrupted:

  1. Purchasing health insurance needs to be as easy as car insurance is today. We need to eliminate the concept of the health insurance broker.
  2. The business model of Health IT needs to be disrupted with technology rooted in 2009.

How much would it cost Facebook to develop 500 applications specific to healthcare and sign up all 11 million healthcare workers? Damn near nothing. And I can assure you, a ton cheaper than the $20 billion Obama has appropriated to furthering the cause of Windows 95 Health IT. That was a mistake and I’m afraid we may pay dearly.

Healthcare needs to be Kayaked and Facebooked. And that’s just the beginning.