Monday, February 27, 2006


RFID - I have to write one more observation about HIMSS06. There were alot RFID companies there. I have been following RFID for a few years now and I was surprised to see so many new companies with RFID solutions. If you haven't been initiated yet, here is a brief description. Basically, the hospital tags its equipment (and people too) with RFID chips and then sensors placed throughout the facility "ping" the tags and locate the tagged object. While RFID was developed for tracking inventory, hospitals can use the technology to locate medical equipment, patients, and staff.

I really believe that this technology can lower costs and help to re-imagine the care process. All of the RFID companies have ROI analyses that show how much hospitals save from improved utilization of assets. As with a number of other technologies, I am not sure if an ROI can really capture the total value of its use. I see a great value in giving front-line healthcare providers the ability to quickly access the location of the tools they need to do their job...and in some cases, the patients they need to do their job on. RFID is one of those technologies that can actually change the care delivery processes. Instead of searching for an IV pump or wheelchair, a nurse or aide can just look it up. The time that was once wasted with manual searching can be replaced with activities that actually add value to the patient. Further, I imagine that front-line healthcare workers will feel more confident about the care that they can provide with this information at their finger tips.

As I mentioned, I have been watching this technology develop in healthcare for a number of years and it seems to be catching on. Nonetheless, RFID is still in its infancy stages in healthcare, but I was encouraged recently by the news that Eclypsis and PanGo were joining forces to integrate RFID into a clinical information system (EMR). This is an exciting partnership and it very well could be the future for hospitals. So look for RFID coming to a hospital near you.

Monday, February 20, 2006

Medicare Part D

Medicare Part D - Even before the program was up and running, I heard rants about Medicare's prescription drug plan. Critics claimed that the plan is too confusing, that it wouldn't save seniors any money, and that it would actually make people worse off. I always suspected that these claims were premature and, finally, there is an economist (i.e. - someone smarter than me) that agrees. Geoffrey Joyce, of the RAND Corporation, says that it is too early to pronounce Part D DOA in his commentary, entitled "A Simple Rx for Part D". Mr. Joyce even gives seniors some advice on enrolling and selecting a plan. Truly, it will be at least a year before we can know the effectiveness of Part D. So if you hear criticisms before then, I would be skeptical.

Speaking of RAND...I did receive a comment last week on my recent post about HSAs. The commenter, Lag2, asks if I had ever heard of the RAND study on health insurance, which shows that consumers reduce both appropriate and inappropriate care when they have increased cost sharing. In the spirit of dialogue, I would like to respond to Lag2's comment.

I have heard of the RAND study, though I recall it being some time ago. If I am wrong on that, please let me know. Regardless, my claim in the post is that HSAs are such a radical new product in the insurance marketplace that we can't assume how individual's will respond. Though I don't remember the details of the RAND study, my assumption is that the experimental groups had higher co-pays. That is not the whole story with HSAs. Along with a greater "out of pocket" cost, HSAs offer a financial incentive for longer-term health management. That is a dynamic that has not been studied.

Monday, February 13, 2006

HIMSS 2006 - A Photo Journal

Today was the first day of HIMSS and for the 5 people in healthcare who aren't here in sunny San Diego at the conference, here are some pics from my Razor phone. The exhibition hall was incredible. There are hundreds of vendors, and the big ones, like Epic, spend major money on "booths". Epic's has a fireplace. A few, Like Eclipsys pictured here, even had a balcony with private meeting rooms. The award for best swag (that is vendor speak for little give aways) goes to Misys. They have a brand new Corvette with their name painted on it. How is that for advertising?

Monday, February 06, 2006


HSAs…Wise? – One of the central pieces of President Bush’s healthcare reform package is HSAs. This experiment in coverage has been slowly, but surely gaining momentum over the past few years, despite many critics cries that they are the wrong answer for our health system. Now I don’t know if they will have the cost lowering effects that the President claims they will have, but I do think that they will continue to grow in popularity and that they will have a positive impact on our health system.

I believe HSAs will grow because of one unavoidable fact about the employer-based system. While employers derive benefits from covering their workforce, it is the individual who is ultimately interested in her own health. Early adopters have shown that people are willing to take their healthcare spending decision into their own hands. Critics may argue that it is the wealthy and healthy that have opted for HSAs. This may be true, but there hasn’t been a critical mass of employers offering these plans as of yet. As more employers offer these plans, the less wealthy and healthy will have the opportunity to weigh the costs and benefits for themselves. I think critics will be surprised at the choices that people make. While there will certainly be some apprehension about converting to an HSA (they are new and different), the incentive to “take the risk” is substantial. Instead of the employer paying a premium to an insurance company (a benefit the employee may infrequently use and almost certainly undervalues), the employer would be paying the employee to manage their own health. Something more and more of our citizenry want to do anyway.

And how will HSAs benefit our health system? I actually see HSAs as an evolutionary change in health coverage. Again, critics claim that high healthcare utilizers won’t choose these plans. That conclusion makes two assumptions. The first is that the current coverage options will be available. There is no guarantee of this. Insurers have been developing consumer-driven plans like mad and it is only a matter of time before employers start offering them and before HSAs start replacing plans that are higher cost to employers. This is going to change the calculus of health care coverage. When a full-coverage PPO is not an option, then the good old “it’s covered” approach to healthcare decisions won’t be sufficient anymore. The “risk” of HSAs may look a little different in this light.

A second assumption is that employers have an obligation to subsidize healthcare costs (and therefore always will). To the surprise of some, my strongest reason for supporting HSAs is not that they create a more efficient market-driven healthcare system. I think that there could be benefits from a more market-driven healthcare system, but I have a firm belief that, as a society, we have become too dependent on someone else paying our healthcare bills. If I utilize healthcare services, I should pay for them. They benefit me and my family. This doesn’t mean that I believe a heart surgery should put a family in the poor house, but lets recognize who is truly responsible for the paying the cost of care – the individual who utilizes it. To the extent that they benefit my employer and my employer wants to help subsidize the cost, great. To the extent that society is improved when its members (especially those with less means) are healthy and productive, then let the government chip in with our tax money. To the extent that the cost of catostrophic risk can be minimized through high-deductible risk pools (i.e. - insurance), then lets do that.

I believe the time of corprately micro-managed healthcare decisions is coming to an end. HSAs make the patient the payer and the ultimate decision maker. That is how it is in almost all other facets of our life and that is how it should be in healthcare. There are certainly other fixes our health system needs, but this is a re-alignment that needs to happen.