If you were the real customer of healthcare:
Receiving healthcare, making appointments, reserving tests, creating a team of professionals to look after you would be as simple as Equinox has made visiting their gyms and communicating with them. They want to be found by you. The healthcare industry feels otherwise.

Making healthcare more efficient simply leads to lower revenues.

I had breakfast with Mark Graban on Sunday morning. He is a senior fellow at the Lean Enterprise Institute and author of the book Lean Hospitals: Improving Quality, Patient Safety, and Employee Satisfaction. It’s always a great time talking with him. He and I think a lot alike and I really envy his knowledge of lean healthcare. For those unfamiliar with Lean, here’s a basic summary:

Eliminating waste along entire value streams, instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business systems. Companies are able to respond to changing customer desires with high variety, high quality, low cost, and with very fast throughput times. Also, information management becomes much simpler and more accurate.

He mentioned a situation where his team worked with a hospital to implement some lean strategies. And through these strategies they saved the hospital $300 per patient.

This means that the hospital’s revenue decreased and the hospital made $300 less money per patient. It saved Medicare $300 per patient, but the hospital was financially penalized.

In any other industry, this would be a strategic advantage that would make you more competitive and more profitable. The opposite is true in healthcare. Implementing waste increases revenue. Decreasing waste decreases revenue.

There is also a term called Evidence-Based Medicine:

The average person imagines that medicine has always been “evidence-based”, but there is quite a difference between the older ways of thinking about evidence and the systematic approach to evidence that is now considered the state of the art.

In the past, if you were a medical student, resident, or practicing physician trying to find answers to a specific problem, and your attending or your consulting physician said “this is your answer” you assumed it to be true.

What has changed is that we now ask who or what is the authority for the evidence. We are now more systematic about deciding when something is authoritative.

The most important characteristic about the new approach is that the evidence is scrutinized in standard ways, leading to more accountable and transparent clinical recommendations.

Unfortunately much of current medical practice still uses the “it’s true if I say so” approach, so a lot of medical practice is not evidence-based by current standards.

Evidence-based medicine (EBM) is very lean. It’s the ideal medical care– nothing more, nothing less. A radiology department at a hospital in North Carolina recently implemented EBM in order to optimize their CT scan usage– this decreased CT scans by 30%. This also decreased their revenue by 30% and, again, made them less competitive and less profitable. Medicare saved money. The hospital lost money.

This is the business model of healthcare in America. This is how it works. No matter who pays, private insurance companies, “public option,” Medicare, blah, blah, blah…it’s all just backwards nonsense. The business model of healthcare is fundamentally broken at its core and is unfixable unless incentives are aligned for all those who pay for and deliver healthcare profit from lean, efficient, consistent, evidence-based, focused, high quality healthcare to a population of individuals. This could happen if allowed and fostered by the federal government. This would involve deregulating these new business models and protecting them from the insurance companies that would threaten them with legal action for infringing on their monopoly enabled by the federal government.

They even go after individual doctors who are trying to create new business models for healthcare delivery and payment.

Are new business models that disrupt the status quo protected from the established players? Is that provision in any of the healthcare bills?


Ontario’s EHealth operation bled $1B

Even in a “socialist” healthcare system like Canada’s where they have the authority and freedom to command, they have failed to implement electronic health records from the top down.

I think this mostly stems from the level of waste and fraud that happens in government, but also has much to do with the fact that healthcare IT simply sucks. It’s built by people who don’t understand simplicity nor can they imagine anything other than Windows 95. It’s a shame…

Britain has the same problem. They’d like to establish a national Health IT platform to connect hospitals and doctor practices but they simply can’t politically do it.

Hence the problem with the top down approach.

Meanwhile, 300 million people are now on Facebook. It grew organically from the bottom up because it was useful, easy to use, fun, and free.

Ontario’s EHealth operation bled $1B

Reflecting on last week’s family vacation:

  • It was the first time my entire family (ma, pa, brother with his wife, me) was together…and we all had iPhones. My pop just got one. I showed him the essential apps. I taught my dad how to text. My brother taught him why– when you don’t want to listen to every little detail about my ma’s day, but for when you need a quick answer…you just text. My pop immediately got that. And the men had a good laugh and a drink.
  • It was the first time I didn’t need to bring a camera– I had the iPhone 3GS. I’m happy with 95% of the photos. The other 5% of the time, I wish I would have had a real camera. But it’s not worth carrying for 5% of the time.
  • My mom said that having her own camera on a family vacation felt empowering. My pop has always been the cameraman. Memories had always been viewed by her from his perspective. Now we all had cameras and could capture the moment from each individual perspective. That made me happy.
  • I saw Inglorious Basterds. It was awesome and renewed my faith in today’s movies. It was just me and my pop at the 10:20 show. It was his first Tarantino movie. I’m glad he asked my mom if he could go with me and she said yes.
  • I visited Cap Rock in Joshua Tree. Gram Parsons, after he overdosed in the Joshua Tree Hotel not too far away from Cap Rock (see the pic above), and his body was being shipped back to New Orleans for the funeral…his friends got a hearse and stole his body from LAX, drove it to Cap Rock, and doused his casket with 5 gallons of gasoline and blew him up just underneath Cap Rock. This happened back in 1973. They don’t have funerals like they used to.
  • Never go to Palm Springs in the summer– especially if you want to experience a daytime temperature less than 113 degrees and/or see anyone younger than 60.
  • Try to enjoy every second you have with your family. All of a sudden you’re 33 and your parents are in their 60’s. Even when it’s 113 degrees in the shade…but not so bad because it’s dry heat. And so is an oven. It’s worth every moment.
  • And sure as hell don’t let your father beat you in golf. That bet you made back when you were 16 about kissing all four of his cheeks if he ever beats you…that’ll hold forever.

Health insurance companies are exempt from the Sherman Antitrust Act

And the best solution Washington can come up with is mandating that we all purchase products from a private industry that is exempt from the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by the United States federal government.

I’m not a lawyer, but are federal health insurance mandates constitutional, especially when the private companies we’re forced to purchase from have federal protection from being a monopoly?

Health insurance companies are exempt from the Sherman Antitrust Act