Internet and Health Care - A random walk down Healthcare IT

iPod Touch as a Cash Register

2012-10-12T23:42:00.000-07:00

Apple has finally started shipping the 2012 update of their iPod Touch, a little more than a month after announcing it. Some technology blogs are asking if the iPod is still a relevant product, implying that the segment of people who still want standalone MP3/music players are declining and not worth addressing. I would however, argue that iPods are relevant, especially in the form of iPod Touch to the small businesses that are using Groupon.


Groupon Merchant app running on an iPod Touch

How has Groupon made the iPod Touch a cash register? Groupon has an iOS app that merchants can use to scan the bar code on a Groupon printout or directly from the customer's Groupon app. That is a brilliant app that solves multiple problems:

If the customer prints out a Groupon and relies on the merchant to enter it into their terminal manually, it is prone to error and fraud, costing the merchant money. There are even articles online about how easy it was to cheat the original Groupon process. Having an app that instantly redeems the Groupon addresses this loophole.
The merchant's business location or flow may not allow a PC or laptop to be setup to accept and redeem Groupons. Having Wi-Fi and a few iPod Touches with camera for scanning is very doable for restaurants and some other establishments.
Groupon could then extend its services to compete with Square and other point-of-sale payment technology, which it did just this week. Now merchants can accept credit cards on iPhone and iPod Touches using Groupon's merchant solution.

Groupon App for Merchants

Putting aside the question of why Groupon wants to integrate so tightly with merchants' business process (which I will address in a later post), it has been successful in getting many small businesses to experiment with Groupon and run the occasional instant "Groupon Now" deals. At every merchant that I have redeemed Groupons (granted it is a small sample and limited to the Pacific Northwest), I see them using an iPod Touch.

This observation invites the question, how much is business use contributing to iPod Touch sales? After all, many iPad are being used cash registers in combination with Square. iPod Touch is just the mini version of iPad (at least until Apple releases an iPad Mini as rumored). Urban Outfitter has just proven the point by replacing all cash registers with iPad and iPod Touches in September 2012.

Allscripts explores sale to private equity

2012-10-01T20:49:00.001-07:00

Allscripts continue to make news after its board and executive reshuffling this year. Last week, Bloomberg broke the news that the company had hired Citigroup, Inc to explore a sale to private equity. Allscripts did not confirm or deny this news and exploration of sale does not mean the company has found a buyer or will actually go through with it.

Allscripts Stock Chart: Sep 27, 2012 - Oct 1, 2012

The narrative on the street is that Allscripts is trying to get away from public scrutiny of its financial performance and strategy by going private. Earlier this year, M*Modal also went private by selling itself to private equity. MDRX stock price went up from $10.83 on Friday to $12.80 at the end of Monday after the news come out. Businessweek published an online article that has an analyst discussing the potential sale price.

Curiously, the health IT blogosphere is quiet about this news/rumor after 2 business days of business press swirling around it. People in the health IT space must be keenly aware of Allscripts problems. I expect them to provide some analysis of the latest development. On my part, I have been surprised by the volume of organic Google searches for keywords such as "Allscripts problems", "problems with allscripts ehr" and "allscripts fail" that reached this blog over the last few months.

Regardless of whether Allscripts ends up going private, I would advise the executives at Allscripts to monitor these word-of-mouth indicators and really invest in customer success and customer satisfaction issues. There is no Yelp.com for enterprise software but there are tools that can do a similar job.

If you are an Allscripts customer, I would be curious to hear how well they are supporting you and if Allscripts is

ready and able to support your Meaningful Use Stage 2 initiatives
able to provide what you need for Accountable Care Organization (ACO) activities

These are areas of significant time and resource investments for clinical organizations in the next few years. If you are the CIO of an organization, you would want to make sure your EHR vendor can help you reach your goals.

Meaningful Use in the age of "I will see the doctor now"

2012-09-10T20:57:00.002-07:00

This week, the HIMSS blog published an article titled Health IT is “I will see the doctor now”, which serves up a different perspective on what Meaningful Use actually means to consumers. I wrote a post about how a few specific MU Stage 2 requirements may alter our experience in doctors' offices. Brad Tritle's opinion, as he expressed in the HIMSS blog, is that consumers don't care about Meaningful Use. They want to see their doctor when they want, cheaper and more conveniently. Health IT's goal should be to deliver to the consumers' needs.

It is important for us Healthcare IT practitioners to step back from the project plans and endless meetings to think about what healthcare consumers are looking for, and what the end goal of Meaningful Use is. As this HealthIT.gov video illustrates, consumers with increasingly busy lives and shifting health care need more than a single family physician to take care of their needs. They also want the various medical professionals who help them to have access to their medical history. In addition, consumers are asking for access to nurses and doctors via the phone, email, web and walk-in clinics.

If we consider the healthcare consumers' needs, then the Meaningful Use requirements of

Implement EHR and enter structured data for every patient encounter;
Integrate with Health Information Exchange so a doctor can pull up a patient's health history without having to wait for X-ray images and paper medical records to be mailed over (or faxed over);
Install clinical decision support and analytics functionality so we can detect medical errors and deliver more efficient care;

may actually have a point to them. As we say everyday in the consumer product sector, solve the problem by starting with the customer experience. That usually leads to a solution that your customer will use, rather than one that maybe overly complicated and too expensive to operate.

Allscripts and American Well teaming up - is telehealth coming of age?

2012-09-04T20:59:00.001-07:00

Allscripts announced in August 2012 that it is teaming up with American Well in a pilot program with University of South Florida (USF) Health. The pilot program will offer remote healthcare services to a retirement community northwest of Orlando. This is a fascinating development in many ways, not the least is whether providers and healthcare consumers are ready to embrace telehealth as a way to deliver and receive medical care.

For a number of years now, some pioneers have been working tirelessly to promote telehealth as a way to deliver healthcare to folks to rural areas. I had the opportunity to take a health IT class with Peter Yellowlees MD at UC Davis who specializes in telemedicine. Dr Yellowlees discussed at length what has been tried with remote facilities in Australia and the US and the efficacy of such programs. A constant challenge, however, has been that payors (health plans) have not been willing to reimburse for telehealth services.

It appears that the landscape is changing. Allscripts' CEO Tullman claimed that "40 state Medicaid plans reimburse for telehealth services and 16 states mandate private insurer coverage for telehealth – including four states which have passed such laws since March". In addition, the Accountable Care Organization (ACO) movement which requires providers to figure out a way to deliver not only cheaper but also better care opens up opportunity for telehealth, which is great at delivering maintenance care to people in remote areas who don't have ready access to healthcare providers and are usually in less than idea health conditions.

I applaud Allscripts' push for innovation in this and other areas (it is also trying to build a healthcare "app" ecosystem). After recent execution missteps, Allscripts is trying hard to distinguish itself from its more stodgy EHR competitors such as Epic and Cerner. This announcement will probably get other telehealth vendors such as the ones below to look for EHR partners:

The availability of telemedicine will benefit many healthcare consumers who now has to pay a standard visit rate just to get a prescription refilled or a simple follow up visit. At the same time, running a pilot with a group of patients who live in close proximity and have access to good telecommunication infrastructure is only one step in this direction. Tom and Jane who live 50 miles from the closest clinic may not have a fast enough internet connection or a functioning webcam to make the telemedicine viable.

Meaningful Use Stage 2 - What to expect as healthcare consumers

2012-09-03T20:47:00.000-07:00

The Center of Medicare and Medicaid Services (CMS) announced the final rules for the second stage of Meaningful Use Requirements for Electronic Health Records (EHR) on August 23, 2012, six months after it published the preliminary rules. Hospital administrators, health IT vendors and physicians have been closely watching the emergence of Stage 2 requirements, so this announcement was much awaited by them. For healthcare consumers, it passed without much notice. Nonetheless, I would like to highlight a few changes that will start happening in your doctor's office due to these new requirements.

Before we get into the details, these are not requirements that doctors will have to meet to continue practicing medicine. The CMS has offered up financial incentives for physicians to implement EHRs to digitize their medical practice. If they meet the specified requirements in 3 stages, they would qualify for Medicare reimbursement incentives, up to $44,000 per doctor. After the incentives have been doled out through 2016, the Medicare reimbursement rate will be cut for the physicians who do not meet the requirements. This is a carrot and stick approach, with significant financial penalty down the road, but nobody goes to jail for not following these EHR Meaningful Use rules.

The main goals of Meaningful Use Stage 1 were

For physicians to adopt a certified EHR and start recording patients' health information in structured data so they can be queried effectively by computer programs.
Make data sharing easier among doctors who care for a patient.

Doctors used to write their encounter notes in whatever form that they deemed sufficient for later reference. These "unstructured" notes made it difficult for computerized Clinical Decision Support tools to help the doctor with quality and patient safety issues, such as detecting drug-drug interaction problems when prescribing a new drug.
With Stage 2 of Meaningful Use (MU), the bar for recording structured data has been raised. At the same time, additional requirements were added to move the physician workflow in a direction that hopefully will improve patient outcomes. I expect some of these MU Stage 2 requirements will change our physician visit experience noticeably. Let's review the notable ones:

Doctors are required to record patient demographics for 80% of the unique patients in structured data format. The data elements include

Preferred language
Gender
Race
Ethnicity
Date of birth

Doctors are required to record and chart - that means plot a graph - the following vital signs for up to 80% of their patients

Height
Weight
Blood Pressure
Calculate and display BMI
Plot and display growth charts for patients 0-20 yrs old

Record the smoking status of 80% of patients
In Stage 1 of MU, doctors were required to have the tool to allow patients to view their health information online within 4 business days of their encounter. In Stage 2, the doctors are required to have 5% of their patients actually use the tool (typically a web portal).
A new requirement of doctors providing clinical summaries to 50% of the patients within 24 hours.
Another new requirement states that 5% of the doctor's patients have to be recorded as using the secured electronic messaging function of the doctor's certified EHR.

What do I think about these rules and their impact to patient experience? The doctors are going to insist even more (if they have not already) that you provide demographics, vital signs and smoking status during your visit. If you are one of the internet-savvy patients, you will be encouraged to use the doctor's web portal or even mobile app to discuss issues with your doctor, access your health record and visit summary.

As Dr Ashish Jha (MD) said in his blog post, Meaningful Use is not going to fix the cost and quality problems in our healthcare system. However, it moves the US Health IT infrastructure and physician workflow forward. With an interoperable infrastructure and deeper patient engagement, we would be closer to fixing our problems than otherwise.

As a healthcare consumer, I am cautiously optimistic that doctors and hospitals will stay engaged as we go through this significant transformation of healthcare technology. I would love to have my health data available to me digitally. Our current process of disseminating only cryptic health insurance Explanation of Benefit (EOB) forms but not the clinical summaries indicate where we have been misdirecting our patients' attention and infrastructure investment. That needs to change.

Is Responsive Web Design a long term mobile strategy?

2012-08-27T22:04:00.000-07:00

I attended a talk hosted by Mobile Portland today on the choice of Responsive Web Design versus native app. A local startup, Athlelepath, talked about their experience and decision in building their website using Responsive Web Design. The talk by the front end developer of the company, Christian Reed, was thought-provoking for those of us who are considering the trade off between mobile web vs native app for our online business or website.

Athletepath: Small Screen Experience

Athletepath: Wide Screen Experience

Athletepath, whose business is to "improve how athletes interact with race result", started out with a website for wide screen browsers (i.e. your desktop and laptop). As their business was to enable race directors, participants as well as the spectators to get access to race results, they had good to reason to get on mobile devices quick. Their reason for using Responsive Design as their mobile web solution was that it enabled them to get to market with limited resources and quickly.

With Hicksdesign as their inspiration and resource, they built out their responsive design mobile website. From there, they expanded their site features from a single pane site to a multi-pane site depending on the width of your browser. Looking at Athletepath on a small screen provides a different experience from a larger screen, but you don't have to download an app for your phone or tablet to use it.

Would he continue with mobile web as the long term mobile strategy for Athletepath? Reed said they are going to build out native apps. While a mobile website can address its user experience under limited cell phone coverage by using app cache or mobile storage, he felt the business had to go to native app to provide the next-level functionality. At the same time, he said you need to have mobile web support for those people who do not want to download your app.

Based on the experience of this startup, it sounds like the advice for a Mobile Strategy is

Build a mobile web experience whether you intend to release native apps or not
If you are building native apps, build iOS first but don't forget Android. Building and maintaining two native apps for any startup is very expensive. Are your customers primarily repeat customers who access your service on mobile devices?

What say you?

A Beginner's Guide to Page Value in Google Analytics

2012-08-20T21:47:00.000-07:00

I recently met a number of people who are managing blogs or website for small businesses. They want to learn more about Page Value in Google Analytics. This is usually treated as an advanced topic but it does not have to be that. Anybody can benefit from understanding the concept of Page Value. Then you can decide if you want to use it by implementing the necessary setup. If you are an advanced user of Google Analytics, this article probably isn't useful for you.

Where can you find Page Value in Google Analytics?

Let's first look at where you can find Page Value in your Google Analytics console. It is under Content and then Site Content. Whether you look at All Pages or a subset of the pages in a segment, by default Google Analytics shows Page Value in the right most column (see attached image).

Figure 1: Page Value in Google Analytics

As you can see, the Page Values in this figure are all $0.00. The reason is because I have not assigned a Goal Value or configured Ecommerce Tracking functionality for this blog. Now, if you are still trying to figure out what Page Value is, your Page Value column is probably showing all $0.00 too. Let's talk about what contributes to this Page Value metric.

Calculating the Page Value Metric

You might have seen this formula, that for a page

Page Value = (Transaction Revenue + Goal Value) / Unique Page Views for the page

To understand this, you need to learn two other concepts:

Transaction Revenue
Goal Value

Transaction Revenue

If you have an e-Commerce site, like Amazon.com or the consumer self-pay healthcare services marketplace that I manage, you should use the Ecommerce Tracking feature in Google Analytics to understand how purchasers vs non-buyers are behaving on your site.

Part of implementing Ecommerce Tracking is to construct a shopping cart (or shopping basket if you are English) with items when a customer gets ready to buy from your site. Each item type (e.g. a white 16GB iPad3) in the shopping cart has a price and quantity. You submit the Google Analytics Ecommerce transaction with additional parameters when the customer completes a purchase. There is a transaction revenue that you can calculate from the sum of (item price x quantity).

Each page that the user visits in the session before reaching the "Thank You" page is assigned the value of this Transaction Revenue.

Goal Value

On many websites, the webmaster or business owner wants the user to complete a certain task, e.g. submit a registration form to download a white paper or vote on a certain issue. Usually, the URL of the page that the user sees when she completes such as task is assigned a Goal Value in Google Analytics, e.g. $100 or even $0.10.

In fact, there are four types of Goals that you can configure in Google Analytics

URL Destination
Visit Duration
Page / Visit
Event

You can see a more detailed explanation on the Google Analytics Help site.

The point for you to remember is these Goal Values are meant to be set with business value in mind. For example, if you can convert 1 in 50 registered users into a paying customer and each paying customer is worth $10,000 to the business, the Goal Value for the registration "Thank You" page should be $10,000 / 50 = $200.

An Example Calculation for Page Value

Using a very simplistic example, a user visits a site, starting from the home page. He visits 3 pages before completing the purchase worth $200 and sees the "Thank You" page. This session is illustrated in the figure below:

Figure 2: A Simple Purchase Session

Remember that

Page Value = (Transaction Revenue + Goal Value) / Unique Page Views for the page

The Page Value of "Shopping Page a" = ($200 + $0.10) / 1 = $200.10.

In a single session, regardless of how many time the customer visits "Shopping Page a", the unique page view count is 1. Only when you consider traffic data from multiple sessions by different customers will the unique page view count be greater than 1.

Splitting the American health care dollars

2012-08-09T23:18:00.000-07:00

There has been much discussion about American health care being too expensive and unsustainable. In response, the Center of Medicare and Medicaid Services (CMS) started piloting Accountable Care Organizations (ACO), which are healthcare organization characterized by a payment and care delivery model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients. Private health insurers have also begun to experiment with various model that has its goal partly in controlling the cost of care.

Amongst all these changes, you may be curious as to how the physician community looks at this new wave of compensation reform, after having gone from Managed Care (HMO) to PPO in the last 30 years. An article on the American Medical Association website titled How to split the health care dollar shed some light on the internal discourse among doctors.

The author said that physicians need to decide when and how they would make changes in how they practice and get paid. Opting out of this round of payment reform and staying with fee-for-service is not really an option. Being an early mover may in fact allow a doctor to participate in the design of the new framework.

The author expressed optimism that the payment reform this time around will be different from past attempts because the stakeholders now have more data and analytic tools to help them distribute the health care dollars efficiently while driving better quality of care.

Unfortunately, small practices do face the issue of being excluded from participating in new payment models. Nevertheless, the author said there are options other than selling out to large groups or hospitals. Small practices can participate in other systems that might be regional alliance, independent practice association, etc.

Other innovative options for doctors to stay economically viable in a small practice include becoming a super-specialized clinician or a concierge practice. In fact, I have also seen clinics turning into Direct Pay practices for the general public.

At the end of the day, what advice did the author dispense to her physician readers? She essentially said things are tough right now but doctors have to participate in and even drive this change in payment scheme. Eventually, it will be better for their business.

Let's hope for the sake of patients and the health care system, we do get to the end of the rainbow, where the quality of care is improved and the cost to provide care is lowered. Do you share this optimism?

What do health care consumers want?

2012-08-07T22:44:00.001-07:00

In the United States, consumers have a lot of choices. The supermarket shelves are full of different brands of milk, cheeses and crackers. On Amazon.com, I just found 42,937 results from a search for "running shoes". Consumers have also been trained to be quite savvy in choosing among these multitude of options. Most of us have no trouble picking something to buy on Amazon.com or finding an airline ticket on Kayak.com. When it comes healthcare, however, we are just starting to learn what health care consumers want and how to meet their needs.

PwC's Health Research Institute (HRI) surveyed 6,000 consumers around the US and produced a report titled Customer experience in health care: The moment of truth. The report is informative and thought-provoking for those of us in health care IT and health services marketing. Following are some of what it says about health care consumers:

Consumers have the same top priorities in choosing a doctor as in deciding where they would buy their clothing, i.e. convenience and speed. Pricing appear to be less important when it comes to choosing a doctor.

Only 8% of respondents said pricing is the most important driver in choosing a healthcare provider

Health care customers are significantly less willing to report positive experiences than customers of other retail businesses.

Only 44% of health insurance customers will share positive experience within 1 month of receiving service

Consumers rely heavily on personal recommendations in choosing doctors.
Health care consumers are much less forgiving than retail consumers in giving a return business if they were dissatisfied by their experience.

The fact that health care consumers value convenience and speed is further supported by the popularity of retail clinics. The use of retail clinics have gone up 74% since 2007 from 9.7% to 23.5%, according to HRI. This is the rise of On-Demand Healthcare. Besides locally owned retail clinics, we certainly have seen Walgreen's Take Care Clinics and CVS' MinuteClinic proliferating. This may not yet disprove the theory that people want to establish a relationship with their doctors, but it certain shows that a growing segment of the population is fine with not having a relationship.

This report also points to a challenge that Yelp.com and Groupon does not face in marketing restaurants. Consumers value personal recommendations and peer reviews when choosing a physician, but they are less willing to review doctors. A scan of Yelp, HealthGrades.com and Vitals.com shows that the percentage of doctors who get reviewed is much lower than the percentage of restaurants or auto repair shops that have reviews. As there are inevitably some fake reviews in the mix, this makes the small number of physician reviews less valuable and trustworthy. It isn't helpful for consumers who are trying to decide which doctor is right for them.

With all that said, what health care consumers want is becoming increasingly important, as the HRI report points out. Consumers are pushed to share a higher portion of their health care costs and make choices that they have not had to make in the past. Consumers are also becoming more savvy about using the web to research and learn about their treatment options. Will health care providers, insurers and health services marketers rise up to meet their needs?

Handling (not provided) in Google Analytics

2012-07-31T23:07:00.001-07:00

Ever since Google started shielding the keyword of organic searches of people who are logged into their Google accounts, webmasters and SEO practitioners alike have been trying to figure out how to deal with this data black hole. For those of us who don't live in Google Analytics, this means webmasters cannot figure out what you typed into the Google search box to get to their site. Google did this by making SSL Search (https://www.google.com) the default experience of signed in users.

Keyword = (not provided)

Google said this was to protect the privacy of their users and it should only affect a small number of the internet visits. For those affected visits, the webmaster only sees (not provided) as the Keyword rather than specific search phrases like sports car or San Francisco hotels. If the percentage of site visits that shows (not provided) as search keyword continues to grow, it will have a very serious effect on online marketing tactics.

In March 2012, LunaMetrics reported that (not provided) has reached 23% of organic Google Keywords. In the month of June and July, the site that I manage saw up to 26% of the organic Google search traffic with (not provided). This is obviously a growing trend.

There is no way to get what is hidden behind (not provided) from Google. However, Search marketers and webmaster still need to know how their sites are performing in attracting organic traffic, whether their effort to attract non-branded traffic with SEO is working. Following are a few tactics that have been discussed:

To understand the proportion of branded to non-branded searches in the (not provided) group, extrapolate from the reported organic keywords. This article from the WordStreams blog discussed this tactic and its shortcomings.
Use the Landing Pages to guess what the (not provided) traffic was looking for. This requires that the site owner to know what kind of keywords are bringing traffic to those Landing Pages from reported keywords. Then the site owner has to assume that the same pattern exists in the (not provided) traffic.
The SEOmoz blog has an article describing a strategy to understand branded vs non-branded traffic in the (not provided) pile. It assumes traffic to the home page "/" as branded. It also acknowledges that this assumption may not be correct.
Use Google Webmaster Tool, which still reports keywords, but then you will not be able to tie keywords to conversion events in Google Analytics.

Should you be worried about growing percentage of (not provided) traffic? Firefox has now defaulted to sending searches to Google through an HTTPS connection. This is a browser that has 20% market share.

Part of me says regardless of whether you know the search keyword, a site owner needs to provide compelling content and functionality that keep people coming and buying (if it is an eCommerce site). Another part of it me says as a site owner, I am already at the mercy of Google and Bing's changing search algorithms. I need the most amount of data I can get to (a) know that I am bringing the right kind of traffic to the right pages; and (b) assess how my SEO effort is contributing to the success of the site.

Where do you stand and what are you doing to deal with (not provided)?

The Problem with Healthcare Analytics

2012-07-27T23:53:00.001-07:00

Is there a problem with healthcare analytics as a business? Chilmark Research published a blog post titled Healthcare Analytics: A Call for Clarity. This article put forth the idea that the healthcare industry has abundant data but could not derive value from it because their software vendors failed to define their products correctly. Based on what I see in the healthcare business, the lack of clarity has to do with the consumer of these analytics tools, not the software vendors.

Health Care Lacks Clarity

The healthcare business is in such a flux that it isn't sure where it should focus on to generate value. The pay-for-service system is moving towards Accountable Care Organizations (ACOs). The groups piloting ACOs are still figuring out if they could indeed control cost and deliver better care at scale. Large hospital systems that implemented Electronic Health Records are scrambling to complete the BI capabilities to receive Phase 2 of the EHR Meaningful Use (MU) Incentives. Many of them do not have the vision or funding for post-MU BI capabilities, yet.

Without a clarity of requirements, the only angle analytic tool vendors can use is to sell a technology platform (e.g. SAP Business Objects) and then deploy consultants to custom build Business Intelligence dashboards after the installation. If you are looking for the best analytic tool for health care, the answer is "it depends on what you need". It is challenging for a BI expert from another industry to recommend the right tool without first understanding healthcare and the challenges facing a particular healthcare delivery organization.

Big Data is a Concept, Not a Tool

Industry analysts do not helped matter when they confuse "big data" as is implemented by Google, Yahoo, Netflix and the like with how healthcare organizations use their data to derive value. Most of what the internet industry has gathered is anonymous data, or preference information that is tied to a particular computer or browser. They have a huge and fast growing amount of data, which they want to use to serve you the right advertisement or media content. That is how they get paid. However, there is not a huge penalty if the data-driven decision is incorrect in a small number of cases. As much as Netflix wants to be right about recommending a movie to you, one recommendation that you disagree with probably does not cause you to unsubscribe.

The health care industry has a lot of data too. For doctor's offices and hospitals, they have clinical notes from each patient encounter. If the internet industry can use your data and online behavior to recommend things to you, why can't the computer do the same with health recommendation?

In many cases, the notes about a patient made by various doctors sit in different doctors' offices and databases. The government is encouraging the build out of Health Information Exchange so such siloed data can be exchanged easily. However, the project is only starting now and long term funding for such project is uncertain.
Physicians are worried about the accuracy of Clinical Decision Support systems. They don't want to let the computer make automatic decisions. We are not even close to providing health advice by running a patient's full digital health record through a data clinical decision support system, let alone automated diagnosis and prescriptions.
Financially, there is little incentive for the health insurance system, the competing hospitals and independent doctors to want to invest their own money to make patient data connectivity happen. This is a classic tragedy of the commons as each stakeholder perceives that they won't be the ones benefiting from the investment.
From a regulatory perspective, health care has a lot more constraints on the use or dissemination of data. Looking beyond privacy, there is HIPAA and then there are restrictions on marketing to patients using their health data.

Opportunities for Health Care Analytics

Not too long ago, Healthcare Analytics used to be about running a more profitable or successful insurance business. The health insurance and managed care industry used to look at analytics the same way factories and the manufacturing firms look at their production statistics. It was about how to standardize the workflow and process claims with less error and lower cost. There was little reward for them to study population health data or use claims data to drive quality improvements.

However, increasing cost of healthcare is burdening the system to the point that health insurers, hospitals, independent doctors, patients and the government are all pushing for cost reduction measures that requires data and analytic technology. The following trends are emerging:

Using Health Information Exchanges (HIE) as a platform to mine data for public health and research. If HIEs are successful, a lot of patient health data will pass through the system. It is very doable to keep the data anonymous but still able to analyze the cause and effect of the various events and health issues the population experiences. It will help us uncover more efficient ways to treat illness and keep people healthy.
Using the latest internet technology to engage patients and encourage them to stay healthy. People are spending more and more time online. Healthcare organizations can deploy engaging features that people see regularly on Facebook, Google, Amazon and other popular consumer websites. For example, if the health guideline states that women should get a bone density scan when they reach 65, the health organization can show this guideline to people who appear to behave like woman around 65 years old (using analytic data), and give them a Call to Action to book a screening appointment. The beauty with such promotions is that they do not have to be precise. A 25 year old seeing this advisory message will be annoyed but not hurt by it.

The Last Word on Clarity in Health Care

In the US, health care is a business. Hospitals are businesses. Health insurers are businesses. Even the HIEs are businesses. They all need to make money to sustain their operations. Being a business, each organization will not want to invest money in healthcare analytics technology, unless it can make a Return on Investment (ROI). As the health care industry works through this period of change, I believe clarity will be in short supply. Technology vendors can make money by understanding healthcare and a particular client's problems, then deliver solutions for each of these problems. The "build once and sell everywhere" model won't work in healthcare, yet.

M*Modal to be Acquired by Private Equity Firm owned by JP Morgan

2012-07-11T09:30:00.000-07:00

News came this month that NASDAQ traded company M-Modal Inc agreed to be acquired by One Equity Partners, which is a private investment arm of JP Morgan Chase & Co. If you are not familiar with M-Modal, it is a provider of clinical documentation services and Speech Understanding solutions. As a provider for clinical documentation technology, MModal competes with Nuance Communications, whose technology also powers Apple's Siri digital assistant.

Is the news that MModal sells itself a harbinger of something bleak in the healthcare IT space? Usually, a growing technology company does not sell itself to private equity. These transactions typically happens when the company has some inherent management issues or has reached a plateau in its market growth. Plus, there is a buzz among commentators that $14 a share is low for comparable deals. It leads me to speculate issues specific to the company.

Let's examine some facts about MModal the company

Based on its 2011 Annual Report (10K):

As of December 31, 2011, we had more than 12,000 employees across five countries. Most of our employees are MTs and MEs involved in the production and quality assurance of clinical documentation.
On January 27, 2011, we changed our name from CBaySystems Holdings Limited to MedQuist Holdings Inc… Effective January 23, 2012, we changed our name to MModal Inc.

According to Pittsburgh BusinessTimes:

Squirrel Hill voice recognition company M*Modal was being acquired by Tennessee-based MedQuist Holdings Inc. (Nasdaq: MEDH) in a deal valued at $130 million. M*Modal had an annualized revenue of about $24 million.

According to marketwatch.com:

The projected earning (EBITDA) for 2012 is under $130 million.

I know about MModal the startup that was based in Pittsburgh and spun out of Carnegie Mellon University's research labs. It had some promising technology to transcribe structured clinical documentation that could be directly integrated into EHR. However, the technology was very much a work in progress a couple of years ago. There were question on whether they could effectively compete with Nuance, which has a lot more money and resources.

Fast forward a few years, MModal the startup was acquired by a old world manual transcription service company, MedQuist. MedQuist probably hoped to stay relevant when many of their physician clients moved to EHR and needed to record structured documentation to receive EHR incentive funds from the government.

However, I speculate that this merger created a company that did not realize how much it needed to invest to bring the clinical speech technology to market. Being a body shop for medical transcription services, MModal-MedQuist also did not have the executive team to sell this new technology to its existing hospital clients. We can see in the news that they replaced some executives and hired a Chief Information Officer, Chief Legal Officer and Chief Medical Information Officer (new role) just in the first half of 2012.

In short, I believe the road ahead for MModal is rocky. It was able to grow revenue the first quarter of 2012 but its technology isn't embedded into any major Electronic Health Records software. Rather, it has to rely on selling to individual hospital and clinical organization. This is a hard road to go down. Hospitals that are at the forefront of implementing EHRs have done it, and probably want to focus on ICD10 or other critical projects next. The ones that have not, probably would not choose transcription technology as the next thing to invest in. Is this how MModal's future will play out?

Some Established EMRs Fading?

2012-07-04T02:50:00.000-07:00

The EMR market in the US has entered a new phase now that people start looking past Phase 1 of the Medicare EHR Incentive Program. The early EMR adopters have pretty much been picked up. As with any software product, that means a harder sales process to the non-early adopter customers, and the replacement market starts to become important. What happens now to the EMR market in mid 2012?

Courtesy of Michael Lake's monthly HIT Trends update, I came across a June 2012 KLAS report titled Ambulatory EMR Perception 2012: Market Splitting Under Adoption Pressure, which addresses this question. It turns out that the EMR market is following established patterns in the software business:

Replacement of EMRs constitutes up to 50% of the deals. This is an increase from 30% last year. Allscripts, GE and McKesson are the most replaced vendors. Most cited reason for replacement is product performance, at 44%.
There is a democratization in the small practice market. 88% of the new buyers in this segment consider solutions that are not the leaders. These buyers emphasize cost and usability rather than dominant market share.

The purpose of this post isn't to review the KLAS report data. Instead, I would like to assess the EMR marketplace based on this market update. I believe we are seeing despite early dominance of established EMR vendors, the market and the EMR solutions are maturing. Practices are willing to consider less prominent vendors, opening up opportunities to innovators and more usable solutions.

According to this report, Allscripts, GE and McKesson all suffered from product issues which led to customer defections. That is typical when the market starts moving fast and the established vendors have legacy platforms and strategy that could not keep up. I am not sure we can read this as saying any of the vendors are failing, at least not yet.

On the other hand, if you are an EHR buyer, you need to recognize that

A vendor with a large market share is no longer a safe bet as significant number of practices like yours are replacing their EHRs. Many of the EHRs being replaced hold large market share. You need to go back to the basics - understand what you need and look for those features.
You may need to rip out the EHR that you are buying now in the not-too-distant future. Figure out the data migration strategy not just from paper to electronic but also from this EHR to others. Also, do not spend next 5 years' IT budget on your EHR implementation because you may need to do it again. Don't believe me? Google "Replacing EHR" and see what everybody is saying about the topic.

Allscripts Struggles with EHR Integration

2012-06-17T21:36:00.001-07:00

Allscripts, a one time high-flying EHR vendor, announced that it failed to meet revenue expectations and replaced a number of its executive management staff in June 2012. Is this an execution problem limited to Allscripts the company or is it indicative that EHR adoption has reached a plateau, so other vendors will see tougher times ahead as well?

A separate news article indicated that competitors such as Epic, Cerner and eClinicalWorks are not experiencing sales problems that Allscripts saw, so let's consider this an Allscripts problem. It executed a number of mergers in the last few years to build a large product portfolio in Health IT. Allscripts bought hospital EMR vendor Eclipsys in 2010 and dominant practice management system for small to medium size practices Misys. In addition to the ambulatory EHR that Allscript already had, these mergers gave them a product for almost every type of doctor offices. This enabled Allscripts to achieve top 3 positions in the various practice-size segments in 2011.

However, even back in 2010, cracks were showing in the Allscripts fortress. Following were some anecdotal observations that I gathered while visiting physician offices in Chicago

The user satisfaction with Allscripts products were low. Support was considered poor and implementation expensive. The doctors who were migrated to Allscripts Myway from a deprecated free e-Prescribing solution were longing to go back to their old eRx product;
Allscripts has both acute care as well as ambulatory care EHRs but they did not integrate well. Apparently that is still a problem today according to the news that came out this month. If their own EHRs do not connect well, they would have bigger problems connecting with Epic, eClinicalWorks and other systems. As hospitals and practices consolidate as well as Accountable Care Organizations forming, integration of clinical and practice management systems become critical. Allscripts needs to address this problem or it will fail in the market.

Having been in the trenches of EHR implementation and integration, I know how hard it is to solve this problem in a clinical environment. The biggest stumbling block typically isn't the technology but rather the political environment and regulatory compliance requirement that the care delivery organizations have to contend with. Allscripts as a software vendor needed to be agile to support the success of its customers.

Allscripts has a hard problem to solve but they also have an experienced team and the resources to solve it. The fact that they stumbled (CEO Tullman said, "... ADX 1.0 [software that integrates Allscripts’ acute and ambulatory technologies] was released some time ago and met the technical requirements, but it didn’t meet our clients’ needs ...") indicated that they failed in connecting product management and product marketing with customers. Hopefully their head of solution development, Cliff Meltzer, can turn this around.

My advice is for Allscripts to go back to building product for their users. It is easy in a B2B environment to lose sight of the need of the end users because the "customers" who sign on the dotted line are either the executives or the procurement team. These stakeholders tend to focus on a checklist in the RFP, rather than the day-to-day experience of using the software since they don't use it. It looks like Allscripts got too good at playing the RFP game and ignored their end users. Would you agree with this assessment?

Can Direct Pay Health Care Stem Rising Costs?

2012-05-23T19:35:00.000-07:00

Rising Cost of Healthcare Led to High Deductible Plans

At 16% of the GDP in 2008, US healthcare costs is the highest among the OECD countries. Employers, as the payors of most of the health insurance premium, have been dropping coverage or cutting back health benefit levels. This gave rise to High Deductible Health Plans (HDHP, aka Consumer-Driven Health Plans, CDHP) which increases the dollar amount the covered individual has to pay before insurance coverage kicks in.

Often an employer offers HDHP in combination with a Health Savings Account (HSA), so employees can put aside pre-tax money for healthcare expenses. The minimum deductible amount before HSA can be offered often becomes the HDHP's deductible amount. For 2013, IRS has set this minimum threshold to $1,200 for an individual and $2,400 for a family. For some employer-sponsored plans, the deductible has been set closer to the upper limit of $6,050 for an individual and $12,100 for a family.

Doctors Respond by Offering Direct Pay Medical Practice

As a result, individuals and families become responsible for a growing portion of their healthcare expenses before insurance will pay for anything. While this is happening, some doctors have chosen to move to a Direct Pay model because billing and collecting from insurance (including Medicare and Medicaid) have become such a burden that they would rather opt out of the system. They charge a cash price and get the payments from the patients rather than work with insurance:

Some offer lower cost medical services to everyone who pays out-of-pocket - Portland and Seattle providers work with Sprig Health to list their services and prices. Zoomcare makes their basic office visits available for a cheaper price if you pay cash. Their cash price is 30% lower than what they would charge insurance.
Some other doctors set up Direct Primary Care clinics that charge a monthly subscription fee to provide primary care services - Qliance in Washington State charges $50 a month and up. MedLion operates similarly in California.

A New York Times article on May 22, 2012 discusses how a trucking company uses the Qliance plan in combination with their health plan with $5,000 deductible. This benefit combination allows the company to lower its healthcare costs while still provide good health benefit.

Risks that May Prevent Direct Pay Success

These innovations are transforming how health care is purchased and delivered, hopefully with a result of lower costs and better health outcomes. However, there are a few issues that may choke off these innovative ideas before they have a chance to flourish:

PPACA may make the practice of buying healthcare out-of-pocket impractical.

The Patient Protection and Affordable Care Act (PPACA) requires that preventive care services be covered by insurance and individual states mandate certain minimum coverage limits. Real high deductible plans (e.g. $5,000 or above) may become illegal for small group plans. If the deductibles are lowered, people will have a lot less incentive to subscribe to a Primary Care plan or pay out-of-pocket for their incidental care. Many observers expect to see rising insurance premium as a result of increased service utilization.

Employers may continue to reduce what they are willing to contribute in health benefit.

With the Direct Pay model, patients have to pay out-of-pocket for healthcare. Currently, some employers are willing to pay for a Direct Primary Care subscription or reimburse some out-of-pocket expenses (using HRA) as they increase the health plan deductible. These funding may dry up in the future. When that happens, will patients pay their own money for necessary preventive or sick care? If not, those Direct Pay medical practices will not survive.

Doctors cannot see Medicare and Medicaid patients while practicing Direct Pay.

Medicare and Medicaid require that a doctor charges Medicare patients the lowest price for any service. However, the doctor can charge a Direct Pay patient less because he does not need to go through insurance billing and collection, which often reduce the doctor's take up to 50%. Practically, this means a doctor can't offer attractive Direct Pay pricing if he or she sees Medicare patients. Many doctors are not yet ready to turn away patients covered by Medicare and Medicaid.

Why Should We Care?

PPACA has been written to expand health insurance coverage but it does not have the teeth to bring down the growing cost of health care. We need to allow innovative models such as Direct Pay (including but not limited to the Direct Primary Care clinics) have a go at lowering the cost of healthcare.

The goal of extending coverage and providing preventive care in PPACA is commendable and valuable. However, some of the mandates in the law may force us to stay on the track of uncontrolled healthcare costs, which will lead to higher insurance premiums and eventually unaffordable and thus lower coverage. That would defeat the purpose of PPACA. Do you agree? Does your political leaning (left or right) influence how you feel about this issue?

Walmart's Mobile Commerce Strategy

2012-05-21T20:56:00.002-07:00

A few months ago, Walmart expanded its mobile development team by purchasing Small Society, an iPhone app development consulting firm in Portland, Oregon. The @WalmartLabs team in Portland hosted a talk to introduce this development and spoke about their assessment of the mobile commerce space.

This was an informative session. However, as I listened to the presentation and audience Q&A, I couldn't help but refer to news in March 2012 that Best Buy was being turned into Amazon's showroom. This happened despite news that Best Buy deployed a mobile app to better engage with consumers just 3 months ago. Walmart said it was trying to provide an integrated shopping experience for its customers. Skeptics might say it was more of a defensive posture against Amazon's bar code scanning mobile app, which already did great damage to Best Buy.

Given that @WalmartLabs has been on an acquisition tear recently, will it be focused enough to execute a coherent eCommerce strategy, or will it just oscillate between catching Amazon in innovation and safeguarding its big box stores' business? Even with a clear strategy, the evolving landscape of mobile commerce will make it challenging for @WalmartLabs to execute.

Footnote:
Some recent @WalmartLabs acquisitions

April 18, 2011 - Kosmix
September 13, 2011 - OneRiot
November 9, 2011 - Grabble
January 6, 2012 - Small Society

Is health care ready for business intelligence?

2012-03-31T22:00:00.000-07:00

In speaking to a friend who works in the business intelligence and performance industry space, I get a glimpse that health care still isn't quite ready for business intelligence. This remains true even though companies like Microsoft, IBM and others have been selling BI solution to healthcare for years. For example, this "BI for Healthcare" deck from Microsoft was from 2009.

The problem with healthcare isn't that data is not being collected but more that there is too much data. The data is often unstructured and siloed on different systems. As a result, many health care BI projects have to start with a gigantic Extract, Transform and Load (ETL) phase with no near term ROI in sight. More often than not, organizations settled by having custom reporting solutions bolted onto their back office databases. This results in systems that do not support data exploration and will not answer new business questions without costly customizations.

With the announcement of Meaningful Use Stage 2 requirements, the need for better Business Intelligence tools as well as expertise become that much more acute. Previously, BI and reporting in health care was focused on

Manage rising costs
Improve medical outcomes
Improve patient satisfaction
Adhere to regulatory compliance (e.g. HIPAA)
Attract and maintain medical staff

Meaningful Use requires much more collection and reporting of structured medical data with the advent of Stage 2. The idea was these requirements would drive health care delivery organizations to measure and improve medical outcome using better tools and processes, thus enabling them to be efficient and effective.

However, most healthcare systems are going after customized BI solution to solve MU requirements and regulatory compliance rather than keeping the long view that they are preparing a flexible innovation engine for the future. They have not always successful even at this goal, as shown by a Pacific Northwest medical group that failed to qualify for over $200 million of MU incentive payment.

As for the vendors, IBM, et al. are into building custom solutions. Off-the-shelf BI solutions for health care are rudimentary at best. There is a real risk that the current wave of health care BI implementations will fail to deliver long lasting value to Independent Delivery Networks (IDN), doctors and patients. That would be a real shame.

How much did you spend on health care last year?

2012-01-23T23:24:00.000-08:00

Do you know how much you spend on health care last year?

More specifically, do you know the amount you spent on health insurance and doctor visits. It appears that many people are very aware of how their insurance coverage (or lack of) affects their health care expenses, as the comment thread for this blog post illustrated. However, if you haven't paid attention to the numbers, the answer may surprise you.

Let's run some scenarios to see how much you would have spent:

Research has shown that on average a person goes to the doctor 4 times a year. Now let's analyze the scenarios in which this person is

insured with co-pay and co-insurance but not a high deductible,
insured with a high deductible plan, and
not insured at all.

Insurance Status	Summary of an example plan	Out-of-Pocket Cost for 4 doctor visits	Total Annual Expenditure
Conventional Health Insurance	Premium of $250 biweekly. Deductible $500. Copay $30	Copay: 4 x $30 = $120 Doctor bills $120 x 4 = $480 Deductible reached, so insurance pays $100 of the $600.	Premium = $250 x 26 = $6500 Out-of-pocket = $500 Total paid = $7000
High Deductible Health Plan	Premium of $30 a month. Deductible $1500. Coinsurance 20% up to the max out-of-pocket $3000	Doctor bills $150 x 4 = $600 Deductible not reached, so insurance pays $0.	Premium = $30 x 12 = $3600 Out-of-pocket = $600 Total paid = $4200
Uninsured	No plan and no premium to pay. A savvy patient would negotiate for cash price for doctor visit	Cash Price $110 x 4 = $440	Total paid = $440

First thing you may notice is that the uninsured pays less for his health care in this case than both the insureds. Now, I am not here to advocate people to get off health insurance and live off the grid. A single serious health problem or accident is enough to bankrupt most people who do not have insurance.

On the other hand, any savvy consumer of healthcare should notice two points

The price you pay for doctor visits with insurance can be higher than what you pay if you offer to pay cash. In other words, cash price is often cheaper.
If you have a deductible, you want to review your health insurance policy. For just a few visits a year, you may save money by not using the insurance card. You can also save a few trees by not generating endless trail of Explanation of Benefit (EOB) statements.

How does this work?

By paying cash, the person with conventional insurance pays $440 out-of-pocket rather than $500, so her total annual health expense is $6940 --- $100 less for the year.
The person with high deductible can pay $440 out-of-pocket. That means he pays a total of $4040 for the year --- $160 less.

You may now demand to see a list of clinics or websites that offer doctor visits at cash prices. After all, I can't get off making a claim that conventional wisdom is bunk without substantiating it.

If you are in Portland, Oregon, check out Doctor Visit at Sprig Health and ZoomCare. Both offer medical services at cash price but they operate rather differently. Doctor visit at cash price ranges from $95 and up. With insurance, you will pay $120 and up.

It is time to use these resources and take control of your healthcare expenditure by making informed choices. Don't you agree?

Further proof of EHR market concentration

2012-01-16T22:01:00.000-08:00

According to an article on ModernHealthcare.com, few EHR vendors dominate payments. The author analyzed data released by the Office of the National Coordinator for Health Information Technology (ONC) and came to a conclusion similar to the report by SK&A that I quoted a couple of weeks ago, i.e. there is significant concentration in the EHR market.

According to the article, up through November 2011, 21,697 providers have qualified for Meaningful Use payments via Medicare or Medicaid. Of these providers who received the federal incentive payments,

28% use EPIC
9% use eClinicalWorks
7% use Allscripts
5% use AthenaHealth
5% use Community Computer Service

21k providers is fewer than 2.2% of the 954,000 physicians in the US. Some of these 954,000 are not practicing or seeing Medicare patients, so they would not be eligible for Meaningful Use payments. Even then, these figures tell us that the EHR market is still far from being saturated. Despite that, the folks who are trying to build and sell EHRs will have an uphill battle.

Without significant market share, you wouldn't be able to secure VARs to do selling, installation and maintenance work for you. If you have to staff your own team to do that for doctors around the USA, you better figure out how much margin your business will have left at end of the day.

Increasing Risk of Health Data Breach in 2012?

2012-01-11T10:43:00.000-08:00

According to a prediction by the idexperts group, 2012 is a year that will bring increasing data breach and regulations. Among 11 trends they predicted, the top 5 are

Healthcare organizations will not be immune to data breach risks caused by the spread of mobile devices in the workforce;
Class-action litigation firestorms are imminent;
Social media risks in healthcare will grow;
Cloud computing is not a panacea; technology is outpacing security and creating unprecedented liability risks; and
Growing reliance on business associates will create new risks.

I would not disagree with this assessment, but I believe there is a good amount of self-marketing in the release of this white paper. With more practices adopting EHR and using e-Prescribing, the likelihood of sloppy practice leading to data breach is higher.

However, we have already seen numerous data breaches reported by health care delivery organizations (i.e. hospitals and clinic groups) as well as health insurance companies. Pretty much every risk factor cited by this report has been in existence for over 3 years. There is no tsunami of data breaches that will hit us out of nowhere in 2012.

Rather than claiming that data breach will hit everyone in 2012, it is more important for every organization that handles patient data to review their processes and stay vigilant. If you have a computer system dealing with health care data and you don't know what data security, PHI, HIPAA, business associates and intrusion tests are, you need to find some help. Otherwise, the thing to do is to stay up-to-date rather than to panic and spend money without a clear ROI.

How the internet is changing our visits to the doctor

2012-01-08T21:07:00.000-08:00

The internet has changed how we buy books, consume news, make travel arrangements, do our jobs and lots more. However, it has not done much to how we get medical care. Unless you have a close doctor friend, you need to make an appointment even to get even the smallest medical advice. Like it or not, some high tech start-ups are out to change that.

To start with, more people in the US are going without health insurance. They are avoiding a trip to the doctor if at all possible. Even people who are insured are researching their own symptoms on websites like WebMD. A few conversations I had recently pointed to other start ups that aim to help consumers research their own medical questions:

Health Tap - A startup in Palo Alto, CA that gets physicians to answer questions for free. Any consumers can sign up to ask questions. Physicians can vote on each other's answers. The hope is that it not only engages physicians but also help rank answers from various resources. This company just got Series A funding late 2011.
Wellsphere - This is a community website where the general public can ask health and fitness questions and answer them. Its future looks to be the least compelling among these 4. Ron Guntman who started Health Tap was apparently CEO of Health Tap for a few months in 2011.
AskTheDoctors.com - This site is based in Canada and claims to want to make medical information available to everyone for free. You can ask any questions and get them answered by real doctors.
MedlinePlus - This is a site managed by the US National Institute of Health. It provides information on health care topics and drug information for anybody.

Comparing the traffic these sites receive and their monetization model:

Website	Alex US Rank (Jan 8, 2012)	Monetization Model
Medline Plus (NIH.gov)	187	A site run by the US government. The data is available for free and offers great value for both health care providers and consumers. The government can't make money off this site.
Wellsphere	10,651	Part of Remedy Health Media. It isn't clear how this site makes money. There is no ad on the site. The parent company is probably scratching its head too.
Health Tap	39,776	Free for consumers. No monetization yet. No ad on the site. Probably going the advertising path like WebMD and Epocrates.
AskTheDoctor.com	87,656	Shows Google Ads. With the amount of traffic, the site probably makes some money but unclear if it makes enough to be interesting. The site owner needs to decide what they want the site to be. The way the Google ads are shown doesn't cultivate trust for this site.

For health care consumers, these are all valuable resources whether you intend to search first and see a doctor later or to avoid seeing a doctor entirely. However, it is not clear how a commercial site can monetize these consumer eyeballs, beyond what WebMD has already done.

If it is about building a network of loyal physician users and advertise to them, the market already has entrenched players like the Physician Desk Reference, Epocrates and the numerous microsites that each pharmaceutical brand owns.

So, are these sites just jumping into a Red Ocean? What do you think?

US EHR Adoption and Market Share in 2011

2012-01-01T20:25:00.000-08:00

In 2011, the adoption of EHR in the US picked up significantly as the HITECH incentive is paid out. As we enter 2012, SK&A reported that all US medical practices are reporting an EHR adoption of 40.4%. Solo practices are lagging the larger groups at an adoption rate of 30.8%. I personally saw a number of large health care delivery organizations in Portland, Oregon installing EHR in the 2nd half of 2011. Interestingly, they were all installing Epic. That is proven out in the data below:

1-3 clinicians - eClinicalWorks 14%. Allscripts 11%. Epic 6%. GE 6%. NextGen 5%. (9 companies = 60% share).
4-10 clinicians - Epic 16%. Allscripts 15%. eClinicalWorks 12%. GE 7%. (8 companies = 72% share)
11+ clinicians - Epic 25%. Cerner 16%. Allscripts 16%. NextGen 6%. eCW 6%. (8 companies = 83% share)

It looks like there is already significant market share concentration for all the market segments. The winners are the same ones who dominated when CCHIT ruled the day.

Even though as high as 35% of the physicians are expected to replace their current solution, they will likely buy from one of the vendors above. It will be very hard for smaller and unknown players to emerge from obscurity, except maybe Practice Fusion, which stands out by being free and already Meaningful Use certified.

In the enterprise software sector, Oracle and SAP still rein supreme, with Salesforce.com being a successful "later comer". If history repeats itself, I expect to see many smaller players exiting the EHR market in the coming years.

Note:

Thank you to Michael Lake for providing some valuable market data in his monthly HIT Trends Report.
I previously worked on building a SaaS-based EHR, so I know a thing or two about the resources needed to build, market and support an Electronic Health Records. I would love to hear if you feel late comers can still beat the established players in 2012 and how.

Notable health care startups and investments in 2011

2011-12-31T21:00:00.000-08:00

2011 is coming to a close in a few hours on the west coast of the United States. This is a year during which a number of companies received investments to launch or continue their work in

changing the access to health care and
how consumers paying for health care.

Following is a list that I gathered along the way:
Subscription-based Clinics

One Medical in San Francisco and NYC - Received a $20 million in Series E investments in 2011. They charge $149 for an annual membership and offers appointments for a fixed price but also accepts insurance.
Qliance in Washington state - Received a $3.1 million investment in December 2011. They offer unlimited visits for a monthly fee from $49 to $89. This year Qliance has going after employers and organizations (e.g. unions). It appears that they found people are still looking to employers as the "payor" for their health care.

Appointment Booking Service

ZocDoc in NYC - Received a total of $75 million in Series C investments in 2011 from DST Global and Goldman Sachs. This company provides booking of doctor appointments but leaves the payment to the patient, doctor and insurance company. It is expanding to major metro areas around the US.
Health in Reach - A DEMO 2010 participant, this company graduated from the Rock Health incubator in 2011. It offers doctor visits with prices, thus enabling access by the uninsured. Interesting to watch but seems to be slowing down towards the end of 2011.
Sprig Health - A company funded in Portland, Oregon offering access to doctors, dentists, naturopaths and therapists with appointment times and prices. Launched in 2011, it is gaining visibility and adoption by physicians as well as patients in the Pacific Northwest. Disclaimer: This is the company I work at.

Mint.com of Health Care

Cake Health - Based in San Francisco and also graduate of Rock Health in 2011, Cake Health has been getting press. Would it go the way of Mint.com, i.e. go big and then get acquired by a threatened established player?
Simplee - Another company in the bay area. They are going after the same market as Cake Health.

Besides the challenge of user acquisition, it will be interesting to see how Cake Health and Simplee monetize their users. Marketing health care services, whether it is health insurance or medicine, maybe more complex than marketing financial services.

With the challenges we see in rising cost of health insurance, avoidance of care due to economic hardship and poorer health of the US population (compared to the OECD), the US needs innovations to lower the cost of health care, improve population health and help consumers manage their increasingly complex health care bills.

In 2012, some of these companies may go under, but others will hopefully prosper. Who do you think will be the survivors?

Why is it so hard to know the price of health care?

2011-10-28T20:03:00.000-07:00

Apparently, the U.S. Government Accountability Office (GAO) embarked on a project to find out the prices of healthcare services, interviewed a number of eight federal, state and private insurance companies and anonymously contacted healthcare providers, but without much success. This state of affairs really makes it clear that our healthcare system is neither a "free market" nor a working system.

The article, titled Health Care Price Transparency: Meaningful Price Information Is Difficult for Consumers to Obtain Prior to Receiving Care, essentially said the system we have makes it next to impossible for most people to know how much a medical procedure or office visit will cost. This does not matter whether they are insured or not. As a result, it contributes to overuse of care and widespread dissatisfaction with the healthcare system.

In addition, the tangled web of agreements among physicians and insurance create pricing secrecy. There is also an arms race in the form of Revenue Cycle Management tools (doctors use software to improve their reimbursement rate while insurance defines increasingly stricter rules of rejecting claims), which neither enhanced quality of care or reduce the overall cost to the healthcare system.

Fortunately, we have a number of people who are trying to contribute to cost transparency in healthcare. Some do it out of a sense of justice while some others believe there is a business in delivering healthcare with clear prices. I found a journalist, Jeanne Pinder, who is trying to do her part in bringing health care price transparency with her site ClearHealthCost. She writes about a number of other initiatives in this area.

Commercially, I should point to the startup I am involved in, Sprig Health. Introduced in Portland, Oregon, we work with providers to make their services available with a clear price. With Sprig Health, Patients pay upfront to book appointment for the services they need with no EOB (the confusing and dreaded Explanation of Benefit forms), with some caveats on having to pay additional for prescriptions or additional tests if required. This also means Sprig Health becomes not only a place to book your doctor's appointments but also a perfect resource to find out about cost of health care services.

As somebody who participate in the US healthcare system, you have a voice. The cost of healthcare and health insurance will keep going up for the foreseeable future, do you feel the effort above will help contain the cost of healthcare? Do you have any suggestions?

CareCloud receives $20.1M in Series A funding

2011-10-03T23:11:00.000-07:00

News came this week that CareCloud, the SaaS-based Revenue Cycle and Practice Management company has just received $20.1M funding from Intel Capital and Norwest Venture Partners. I guess this proves that regardless of all the froth among EHR vendors, the real money is still in revenue optimization.

Having spent some years building and marketing EHR, my assessment of the market is that big EHR vendors will maintain their dominance. Late entrants will not get traction and it will be more apparent now that we have reached the last day to attest EHR Meaningful Use for 2011. Practices that could be enticed by the MU incentives have already jumped in. The late adopters will be that much harder to convert and win over if you don't already have significant market share.

As for the Practice Management market, CareCloud had some innovative user interface when I checked them out. The fact that a new player in RCM is getting traction, however, also attests to the fact that our healthcare service reimbursement model remains woefully inefficient. CareCloud will make probably up to 6% from the receivables that they manage for hospitals and medical practices. That is not a small amount of money. Is it time to consider other options for paying for healthcare? What about cash-based pricing and payment for episodic and preventive care?