Where are the chances for change in health care—top-down or bottom-up?

by Andrew Oram

This was originally published on O’Reilly Media’s Strata blog, October 11, 2013.

Everyone seems to agree that health care is the next big industry waiting to be disrupted. But who will force that change on a massive system full of conservative players? Three possibilities present themselves:

Top-down change: from the US government
In the view of those proposing this scenario, the HITECH and the Affordable Care Act hold the potential to accelerate everything reformers want: complete digitization of useful data, more patient engagement and control, open pricing and adherence to quality measures, the spread of sensor-rich telemedicine, and evidence-driven treatments based on crunching input from millions of cases. The job of the various departments in Health and Human Services—notably the Office of the National Coordinator (ONC) and the Center for Medicare & Medicaid Services (CMS)—is to play the demanding taskmaster, setting high goals and using its payments to keep the industry on a ruthless forward march.
Change in place: from the major players themselves
Treatment facilities, insurers, and EHR vendors all assure us, with hands held over their hearts, that those hearts hold the reform agenda dear. They boast about busy they are with data gathering, new patient portals, health information exchanges, and the embrace of patient centered medical homes. They insist—with some logic—that they will lose business and profits if costs continue to rise, and that reform is just as necessary for their survival as it is for the survival of the increasingly sick and aging population we are turning into.
Bottom-up change: from patients and new entrants
The proponents of this scenario express cynicism—if not open disgust—for established players ranging from individual clinicians up to government regulators. While these nicely ensconsed players dicker over the next ten billion dollars to allocate, patients will take their health into their own hands by hoisting wearable devices and sharing data in peer-to-peer fashion to find better ways to live. Walk-in clinics will gradually undercut insurance-driven care in the classic destructive innovation discovered by Clayton Christensen (a major researcher now in the health care field as well).

I’ve seen plenty of evidence to support each of these three scenarios, and I think that your position in the system and personal philosophy, more than any evidence, probably determine how you’ll cast your vote. In this article I’ll list some of the activities in health care that illuminate the chances for each scenario to come alive, drawing on the recent Strata Rx conference put on by O’Reilly Media.

Can the doctors heal themselves?

Many reformers, notably Clayton Christensen, have declared current hospitals and other health institutions irreparable—too caught up in the treatment and payment models they have used for decades. Other people in the health care field are equally committed to change, determined to do it through the health institutions themselves. I believe, from what I’ve read and heard of Dr. Eric J. Topol, that he falls in this category.

Another leader I would place here is Jonathan Bush, cofounder and CEO of athenahealth. The vibes I pick up from him react very negatively with government regulations. He believes the market can bring about reform, one of the solutions in his keynote at StrataRx.

In a five-minute Ignite! talk, Lisa Maki suggested turning the high cost of health care into an opportunity for change. Maki seems to be an adherent to the same market-driven point of view as Jonathan Bush, believing that converting health care into a market with transparency and patient choice can bring about the change. Makie held up the PokitDok site as a way to help patients find out what they’re spending.

Two talks by representatives of the Department of Health and Human Services at Strata Rx could have health care reformers—along with anyone interested in a more collaborative and responsive government—on their feet cheering. So long as shutdowns don’t cripple agencies’ plans, there’s a lot government can do to stoke the health care revolution.

Bryan Sivak’s speech paid homage to the power of independent developers, open data sets, and "power to the patient." He marked the milestone of HHS releasing 1,000 data sets, which they are seeking to combine with other people’s data. And he announced a pilot test bed at hospitals and other data users so developers can test their apps on real systems. This will reduce the risk of deploying apps, which very important to these naturally conservative institutions.

Claudia Williams continued this theme by highlighting the value of data to patients and describing the contributions of BlueButton Plus, a tool that tries to standardize patient access to data, and Direct, an HHS project to make secure data exchange simple.

HHS is not intent, of course, on changing the health care field purely through its own dictats (notwithstanding the paranoid fears of a few fringe commenters). Rather, it hopes to provide tools for change in collaboration with private actors, who have always contributed to projects such as BlueButton Plus and Direct. That, together with incentives for improving quality and providing payment for outcomes, will hopefully create a new environment where the drive and intelligence of the private sector can find a way forward.

The trouble with ACOs

Not a single trouble, actually, but many. Let’s look first at what an ACO is: a collaboration among providers and possible payers to give patients integrated care. Several models for ACOs already exist, of which the biggest is Kaiser Permanente (I don’t include the Veterans Affairs system because of its unique characteristics). CMS now defines ACOs in detail for reimbursement purpose.

Many aspects of ACOs—trying to keep patients in the system, rewarding physicians for outcomes while trying to minimize treatments—hark back to the much-maligned managed care of the 1970s. But nowadays we have better tools to do integrated care: better data, telemedicine, and so on.

ACOs are a kind of practical compromise with the fragmented health care system the US suffers from now. Instead of trying to get institutions throughout the country to share data and treat patients in an integrated manner, ACOS attempt to create the same effects on a smaller scale, through contractual and organizational ties among providers in a single geographic area.

So already we can see problems with ACOs. The very things they need to succeed are things that work much better on a national level, not a local level:

John Halamka has said that very few ACOs are profitable yet(3:00 into the Halamka interview video). What I’ve heard from other people forming ACOs is that the heavy requirements imposed by CMS to qualify as an ACO takes up a huge amount of management time. These requirements are entirely understandable, because CMS wants to make sure ACOs do all the things a good health provider should do, along with reporting back what they’re doing.

But I sense that providers focus entirely on the wrong level. Instead of thinking about smart use of data to achieve the regulatory goals, they concentrate on the logistics. They are building an infrastructure that meets formal organizational and reporting requirements, with an empty core.

Can Health Information Exchanges save us?

Health Information Exchange (HIE) as a general concept is an unadulterated boon. It just means that one member of a care team can get information gathered by others—and the patient is a member of the care team in this case. With guarantees in place to make sure data goes only to people who ought to get it, HIE as a concept will enable thousands of new computer apps and improve care.

As organizations, though, HIEs haven’t fared well. Most observers blame their high failure rate on refusals of doctors to share data because they don’t want to lose their patients. But HIEs also haven’t proven their value yet.

Only recently have they had access to standards for data exchange, such as BlueButton Plus and Direct, described by Claudia Williams in a Strata Rx keynote, so that they don’t have to reinvent the wheel with each provider. And just recently, they’ve gone beyond marketing themselves as basically a replacement for fax machines, offering the analytics that can reduce costs and make care better.

A doctor from New York City told me it has 5 HIEs—one in each borough—that do not exchange data. At Strata Rx, Sam Rogers reported some of the problems of trying to share records in the United Kingdom, which has a national health care system but a fragmented medical record system. The data contains redundancy and unwanted variations. Now the national Health Care System is trying to impose a common record, but no major hospitals have joined yet.

As for patients, HIEs exclude them altogether. Some battle-hardened health reformers even see HIEs (the institutions, not the concept) as something of a conspiracy against patients, allowing doctors to meet government regulations to engage in data exchange while maintaining power over records. A form of HIE based on personal health records could be simple and secure, allowing the patient to decide who gets his data.

Michael Dillhyon of Swiss HealthBank described it as a personal health record with an unusual set-up as a cooperative society, or a Genossenschaft in Swiss legal parlance. This frees it from the conflict of interest that leads commercial entities to use individuals’ data for marketing and other activities that users mistrust.

All institutions from providers through governments have a lot of work to do to demonstrate that they can take health care to the next level (and save the world economy along the way by reducing costs). Currently, lots of experiments are underway, some bubbling up from small institutions and some driven by HHS. Perhaps we will know which factors drive change when some of these isolated efforts coalesce.

Author’s home page
Other articles in chronological order
Index to other articles