UC Berkeley Haas School of Business | Groups

Electronic Health Records (EHRs) are all the rage these days. Beyond meaningful use, I suspect that EHRs are hot in part because Silicon Valley dreamers are frustrated with our unsustainable curve of spending on healthcare. There is not a silver bullet for bending this curve. It takes courage and actions. Some solutions are politically hot potatoes, such as allowing more bright young men and women to enter medical schools and serve a profession desperately in need of supply. Others are ethical dilemmas, such as whether we should divert medical resources from end-of-life care toward the care of younger populations. Since Silicon Valley geeks can’t change any of that, they focus on what they can change: the way information is handled in medical practice.

Lucky for us, this is a big deal. If you have shadowed a medical practitioner, or even been seen by a busy specialist, you will understand why. I work in the ophthalmic medical device industry. Ophthalmology and optometry have become data intensive. The advance in imaging technology has drastically improved the quality of care. As one renowned retinal specialist put it, “I don’t need to meet my patients anymore as long as I have their reports.” Longitudinal data is essential in diagnosing chronic diseases such as glaucoma, where progression is measured on the order of decades. Therefore, the accurate and efficient transfer of medical information, in this case, eye imaging reports, becomes extremely important because patients don’t necessarily stick with one provider. The tendency in the U.S. for top doctors to have their own private practices doesn’t help the data sharing either.
At HIMSS 2011 there was much insight to be gained… for those able to see past the multicolored booths, neon lights, walking golden suits of armor, contortionists, magic shows, free beer, luminaries gathered behind closed doors to forecast the future. Just after dawn on Monday morning, several of these luminaries gathered in the Peabody Orlando Hotel for a panel hosted by Intel Corporation to address the future of Accountable Care Organizations (ACOs). Among these experts were Eric Dishman, Intel Fellow and Global Director of Health Innovation & Policy, Michael Young, President & CEO of Grady Health System, Dr. Steven Waldren, Director of the Center for Health IT for the American Academy of Family Physicians, and Aneesh Chopra, CTO of the United States.

At the outset Chopra voiced the question begged in any discussion of ACOs. Will America solve the healthcare value crisis by traveling back to the ‘90s HMO risk sharing model, or by encouraging a bold, grass-roots, provider-centric transformation? Fundamental changes in our incentive system can enable the delivery ecosystem to meet the country’s need, Chopra asserted, as a more aligned payment and information infrastructure shifts the focus from volume to innovation, from billing to value, and from silos to collaboration. Here, Chopra says, the Center for CMS Innovation can take a lesson from private-sector technology management and create an innovation pipeline founded on experimentation, prototyping and scale. Moreover, relative autonomy from Congress will encourage “a safe place in data-driven evidence-based prototyping,” within which the Innovation Center can catalyze intelligent ACOs.
Much ado has been made about Accountable Care Organizations lately, between the comments from AHIP, the AMACHIME, not to mention pundits criticizing the programs as ‘fiascos’. History may judge this turmoil as baby steps towards progress, but among the debate around patient centered medical homes, retrospective attribution, performance reporting and shared risk, is a connection that is under-discussed: The underlying criticality of reliable health information exchanges as a necessary, though not sufficient, condition of effective ACOs. Certainly, other causes of reluctant initial enrollment in the Medicare Shared Savings Program, such as reimbursement risk and consumer engagement, must be addressed to successfully transform care delivery. But even among ACO pilots with commercial payers, a connectivity arms race is amassing between providers and payers maneuvering to control a key lynchpin of accountable care: information.
Last week, four UC Berkeley MBAs flew 8,700 miles to Bangalore, India, to innovate mHealth business models for the country’s remote hinterland. As part of a course in international business development, the Berkeley team is consulting with Foundation Research on Health Systems (FRHS), a not-for-profit NGO operating in Dehli, Ahmedabad and Bangalore. In operation since 1989, FRHS has been developing surveillance programs leveraging health information systems to monitor and care for women and children in rural India, focusing on strengthening the existing health system across the country. It seems intuitive that mHealth could augment the effectiveness of India’s healthcare given the rapid penetration of mobile devices and infrastructure disparities between densely populated cities and the rural countryside. Equally salient are the significant opportunities for business and social change if mobile app developers can meet the needs of hundreds of millions of rural inhabitants. Thus, it is in this promise for better patient access to care that the developing world holds valuable lessons about bringing health innovations to new markets.
Health reform offers a significant step forward for preventative care, as long as the system can meet increased capacity demands. With higher reimbursement and subsidized primary care coverage for patients, the government is actively incentivizing patients to seek preventative health measures and medical students to consider family medicine over higher-paying specialty practices. However, physician shortages and capacity-constrained infrastructure pose a risk to expansive primary care in the US.

Fortunately, the Affordable Care Act offers cost sharing measures, such as waivers of coinsurance and deductibles, for eligible patients seeking primary care and prevention services, starting for all new plans initiated after September 2010.

Unfortunately, in 2010, the Association of American Medical Colleges forecasted a need for a 12 percent increase in family medicine physicians to meet the growing demand for services, despite declining rates of medical students choosing primary care. Understanding the need for this carrot, health reform authors built incentive structures to attract physicians to family medicine, including a 10 percent Medicare boost in primary care payments. Still, the network of physicians is significantly lacking and poses a risk to the emphasis on expanded prevention services.
On March 22nd and 23rd, the Institute for Health Technology Transformation (iHT2) Summit in San Francisco held their seventh annual conference, bringing together local health system executives, health IT vendors and policy pundits.

After two days of panels and workshops addressing a broad range of HIT topics, the final panel, “New Models and Practical Approaches: Developing an IT Strategy for the next stages of Meaningful Use” attempted to tie these disparate topics together from a health system perspective.

Represented on the panel were the San Francisco Department of Public Health, California Pacific Medical Center, Anthem and NorthBay Healthcare, yielding substantial organizational diversity across providers and payers from the private and public sectors.

Despite the panel’s title, the conversation focused less on Meaningful Use and EMR Incentives, instead addressing the perennial challenges of vendor selection, interoperability, resource allocation, return on investment and innovation.
At the 5th annual UC Berkeley-Haas Business of Health Care Conference, 250 students, academics, industry professionals and pundits gathered at the Haas School of Business to discuss healthcare innovation. With topics ranging from genetic testing and medical devices to former California HHS Secretary Kimberly Belshe’s talk on the state health insurance exchange, the Conference was an opportunity to network with thought leaders and forecast the future healthcare environment. Among the many student-run panels, three on accountable care organizations (ACOs), mHealth and health information exchange (HIE) examined how systems and technology may evolve to build the future backbone of healthcare – if, that is, we can enable a business case for innovation.

In a panel entitled “Accountable Care Organizations – Doing More With Less,” Arnold Millstein of Stanford University presented his framework for establishing innovation in healthcare delivery. Dr. Millstein’s framework creates a parallel to the super-efficient automobile, winner of the recent X-Prize, for how nimble entrepreneurs can create innovative designs despite being under-resourced. Indeed, Dr. Millstein’s pilot programs have shown real cost reductions in the market place using collaborative approaches in ambulatory settings with fragmented provider networks when consumers (in this case, large employers), stepped up and flexed their purchasing muscle to demand quality. Ironically, at contract renegotiation time, the networks in these pilots decided they deserved more than 50% of the established cost savings, causing the long-term arrangement to break down. What is the secret, Dr. Millstein asked his panel, to enable ACOs to sustain improvements in healthcare value?