Carter Consulting Partners Blog

Why Microsoft's OLE is still sought after

2011-01-09T16:09:00.000-05:00

In a strange sequence of events over the past week, I was asked to put together a proposal to support Microsoft's OLE (Object Linking and Embedding) technology for a web-based tool set. For those of you wondering what OLE is used for, it is the enabling technology that allows you to copy and paste bits of content from one application to another while still being able to use that content from the original application. For example when you copy/paste a graph from Excel into a Word document but you can still edit the graph in Excel (it isn't just a picture), either "in-place" (i.e. - use the Excel interface while you are still in Word) or "out of place" (i.e. - use the Excel interface in its own window but when you close Excel your updates magically appear in the original Word document). All of that happens using OLE. And there is a lot going on behind the scenes to keep track of it all.

It's an area in which I have a significant amount of practical expertise so it wasn't that much of a surprise that I was asked about it, but as I did the research on what would be needed to put it all together, I started to think (again) about why this difficult infrastructure is still in use. With .Net and all of the other technologies that Microsoft has rolled out as their next generation platform, OLE persists and is becoming more and more difficult to support as C++ continues its steep decline as a language of choice.

In my opinion, the key point that will eventually force Microsoft to support OLE into the future is the user experience. When implemented properly OLE is an absolutely fantastic user experience. You can embed all sorts of content from all sorts of specialized applications into your daily productivity tools, generally Word, Excel and PowerPoint, and it all "just works" when you click on it, putting you in the best environment for the job of editing the content in question. And Windows users have come to expect their programs to work that way. Taking this piece of workflow optimization that has become such a key part of how people work is not going to be easy.

Most of the documentation that is written by Microsoft on this suggests that the AxHost object can be used to host ActiveX controls as a workaround to writing C++ code to support OLE, because OLE is not supported in any .Net language (C#, VB, etc.) but AxHost is incredibly buggy and there are all sorts of issues with window focus and other minutiae. Basically, it's a non-starter in terms of a solution and the best example of this is that the OLE support in the Office apps is all still written in C++.

So I think OLE will persist because users will demand it and software developers will be pressed to continue to find ways of supporting it. It certainly seems like I will be refreshing my knowledge on the subject. I'd be interested to hear what other developers/architects/etc. think of this. And if you need some help with OLE.. just let me know.

On-demand IT Channel Expertise with CTX Resources

2010-09-30T18:18:00.000-04:00

The web site and formal business launch of CTX Resources happens this week. As a CTX Associate, I am part of a team of consultants who specialize in building Marketing and Sales Partner Channels in the IT industry. As anyone who has started a new business, or tried to quickly grow an existing one will tell you, partner channels give your business and your product visibility and broad market exposure more quickly, and with more credibility, than a big marketing budget will ever get you. Particularly if you work with a strong, established partner and the channel is set up and operationalized correctly.

That is exactly, and exclusively, what CTX Resources was set up to do. While my independent practice will continue to be the backbone of what I do and how I work with my direct clients, I am excited to take part in some new projects through CTX Resources, with a new group of loosely-affiliated colleagues. Setting up strategic partnerships is really what I enjoy most and what I do best, so the more of those projects I am involved in the better my skills, and the results my clients see, will be.

Challenges in Software Design - And Business Models

2010-09-29T21:06:00.001-04:00

Software in the cloud, Software as a Service (SaaS), hosted applications... whatever you like to call them, these new software delivery models are far easier for users than any of the alternatives. The restrictions that plagued the model early on, like performance, minimal functionality and concerns about security have mostly been addressed. And you really only need to point to Google Docs when somebody tells you a fully-functional software application can't be deployed across the web.

But for all of the burden that is taken off the user community in terms of installation, upgrades, etc. the work is simply shifted to the provider of the service. And that fact alone presents some serious challenges to software designers as the cloud emerges as a revenue stream for enterprise software services.

I think it all boils down to this: Until recently the business model of most software companies was that they sold programs. For all intents and purposes, they sold CDs or DVDs. And if it was an enterprise software package, then they sold consulting too. But their business model was collecting money in exchange for software.

The SaaS model totally changes that, though. What you are selling is really a service, not a product. And the issue compounds itself when you realize that if you make changes to the "product" without carefully considering them, you may be directly impacting your revenue model because, in the cloud, they are one and the same. Of course, if you are just setting up a centralized instance of a product that was designed for a fixed install and pushing the client installer over the web, then you still have the convenience of a clean break between product and revenue.

This became very clear to me today when I met with one of my clients. We are designing, implementing and rolling out a web-based application available exclusively in the cloud. In our last meeting we "finished" the software design and by the time we met this week, the implementation was essentially complete. The only component that still needed to be implemented was the piece that will calculate service charges based on user activity. So we sat down this morning to review the design of that piece and realized that it ran counter to how the software was actually working.

So we had this great work flow designed and implemented and then realized that how we thought we were going to generate revenue through it wasn't actually going to work given the way we had written the code. Well, it would have worked, but it would have been clunky and therefore defeated the whole premise of cloud software: getting something valuable that works great and doesn't cost much. As it turns out, once we had reconciled all of the differences between the two models, all that was required to make it work were some permission changes in the existing software.

There are a couple of things to learn from all this. Firstly, when working in the cloud, business managers and techies have to spend a whole lot more time in the room together at design time. Secondly, if you keep a high hiring bar and find talented software designers, even when they don't implement exactly what you asked for, they design software flexibly enough so that you won't be backed into a corner when you need to make some structural changes.

I'd love to hear about your challenges with software design in the cloud, revenue modeling in the cloud, and most interestingly, the intersection of the two!

Does Your New Business Really Need Funding?

2010-09-26T14:15:00.000-04:00

I work closely with entrepreneurs across the country. This past week I met with a colleague in Los Angeles and we were discussing a common client and how to help them get funding to grow the business. The client already has a positive cash flow and a solid business model, but is in need of funding to enable rapid growth. We had divergent points of view, but both were interesting and merited additional discussion.

The key question: What is best for the business owner? I will lay out the two sides of the argument, please comment and let me know your thoughts.

What it all really comes down to for a new business is Marketing. And indeed what most of the invested funds are going to be primarily used for in this case was Marketing activities. The owner, with the help of a consultant, has taken the business relatively far down the road of obtaining Angel funding and they are being considered by a few different Angel groups.

I had been asked to put together a direct sales plan as part of the growth strategy and after looking at the business asked if they had considered the possibility that no funding was needed. To me the fact that the current Marketing plan was working didn't mean that it was working as well as it should be. I recommended that the marketing mix be diversified without increasing total spend and that some Partner Channels be identified and built at low cost. My analysis indicated that this alone could achieve their growth objectives.

I can put together a team of very experienced people who will plan and execute the needed changes to the Marketing activities in return for a 15-20% equity position in the company. When you compare that with the 40-50% equity position that is on the table for Angel capital, how could that not be considered? Furthermore, the consulting team would definitely be invested in the client's objectives since they would be compensated only with equity.

My colleague looks at it a little differently. To be clear, it isn't that we disagree on the strategy itself, it's that we disagree on where the real value is relative to where the perceived value is.

To me, the owner retains far more equity and operational control using my strategy while meeting objectives with a team-based approach that can be iteratively optimized. This stands in contrast to parting with significant equity, quite possibly giving up a controlling interest in the company to obtain Angel funding.

To my colleague, I am selling intellectual capital in return for equity which is a very hard sell as opposed to operating capital in return for equity. His argument is that it is far easier for an owner to part with equity in return for cash than it is to part with equity in return for ideas.

What do you think?

New Technology for One U.S. Hospital

2010-09-12T18:15:00.000-04:00

One of my most active clients right now is Meaningful Use Technologies (MUST). The core mission of MUST is to bring Hyundai Arcron's established Electronic Health Record (EHR) product to market here in the U.S. MUST is well-positioned because they have an exclusive right to market and sell the product in the States and because they have the sales force to get the job done.

Even still, it is not very easy to get attention in a multi-billion dollar market unless you get creative, particularly when prospects need to fly to Asia or the Middle East to inspect a reference site. Now having said that, myself and the principals of MUST have personally been to several of Hyundai Arcron's reference hospitals, and they are big (2000+ bed in some cases), extremely modern healthcare facilities that have been operating in an entirely paperless work environment for over a decade. So the issue isn't that the product isn't up to the task of serving as the information backbone of a hospital here at home, it's more that references are easier to check when they are on the same continent!

So MUST has created a "reference site program" that will be rolled out in a series of webinars this week. MUST will choose one hospital to receive a significant financial incentive to be the first U.S. installation of the Hyundai Arcron HIS system and serve as a local reference site. We think that this will be a great way of introducing the American hospital community to the great Hyundai Arcron product, and to the benefits and advantages that it has over current offerings.

If you are interested, join one of our webinars this week or apply for the reference site program.

Hyundai Arcron begins EHR webinar series in US market

2010-09-02T19:44:00.000-04:00

Meaningful Use Technologies is excited to announce our partnership with Hyundai's Arcron division to introduce our U.S. EHR and Health IT products. Additional information about this partnership and the Hyundai Arcron HIS products may be found at http://www.hyundaimedis.com/htm/au/mp.asp or directly at our website http://www.MeaningfulUseTech.com

We would like to invite you to a 1 HOUR informational Webinar to introduce you to this ground breaking system that has been fully deployed and operational in Asia and other parts of the globe for over 15 years.

Tuesday, September 14 at 11:00am Eastern Standard Time
OR
Wednesday, September 15 at 3:30pm Eastern Standard Time

This system is currently being used in:

Samsung Medical Center in Dubai
Samsung Medical Center Kangbuk in South Korea
Chosun University Hospital in South Korea
The Armed Forces Medical Command in South Korea (Implemented in 1999)

As well as dozens of others worldwide.

During this informational webinar you will learn about:

1   The current status of the product in the U.S.
2. How Hyundai Arcron and MUST can help your organization meet it's goals for EHR, meaningful use criteria and capitalize on the subsidy requirements
3. Certification process and status
4. Benefits of working with Hyundai Arcron and MUST over others in the competitive landscape
5. Future landscape and next steps: Invitations to overseas EHR FAM tour, Establishment of Regional Partners/Consultants, Collaboration and Integration
6. Questions and Answers with other professionals

For those interested in attending one of the 1 HOUR INFORMATIONAL WEBINARS, please simply contact Ms. Shannon Mason as per below and she will disseminate the web log in instructions and toll-free audio conference call information. Space is limited so we are asking if you could kindly express your interest in participating in this webinar by September 9.

If you are not able to participate in either of the webinar dates and would like to schedule a private conference, please feel free to contact Ms. Mason directly so she may send the presentation material and schedule an alternate date.

Best Regards,

Shannon Mason, MBA
SVP, Sales and Marketing
Meaningful Use Technologies, LLC
800-262-8839 X703
Shannon@Must-LLC.com

www.MeaningfulUseTech.com

What Matters Most

2010-08-19T11:33:00.001-04:00

I'm keeping very busy this week, but you really, *really* need to read this article. Great stuff for any business trying to get anywhere: http://www.kaushik.net/avinash/2010/06/win-web-metrics-line-sight-net-income.html.

Meaningful Use Technologies wins strategic partnership with Hyundai Medis to market Electronic Health Record solution

2010-08-14T10:23:00.000-04:00

Hyundai Medis, a part of the global Hyundai Group conglomerate, recently selected my client Meaningful Use Technologies (MUST) to be its exclusive marketing and sales partner in the US for its Electronic Health Record (EHR) solution. For more details, see the press release.

Carter Consulting Partners was able to leverage its global network of contacts to identify Hyundai Medis as the right strategic partner for MUST.

Contact us to learn how Carter Consulting Partners can help your business identify strategic partnerships to grow your market presence.

Jeff Carter Joins not-for-profit Pay It Forward Advisors as a Founding Member

2010-08-13T16:23:00.000-04:00

[The following is a transcript of the video above.]

Hi I'm Jeff Carter, Principal and Founder of Carter Consulting Partners. Today I wanted to talk a little bit about a new organization that I have formed with some of my well-respected colleagues called Pay It Forward Advisors which is a not-for-profit advisory service for small businesses.

So you might ask how is that different from what we do at Carter Consulting Partners now. Well, our main goal in terms of what we do at Carter Consulting Partners is to work with businesses to identify a long-term set of objectives and an action plan to meet those objectives without really increasing existing budgets so fitting inside your current budget and really optimizing your business' performance.

With Pay It Forward Advisors it's a little different. There are a lot of businesses out there that are looking for funding and either don't get it or don't need it. Our objective with Pay It Forward Advisors is to work with business owners who currently have a round of funding or more as part of their business plan and either help them position their business to get that funding within our network of contacts, or help them reposition their business so that they can meet their objectives without needing funding.

I think it is going to be a very successful and really fun venture to work on with all of my partners. So if you are interested in learning more about Pay It Forward Advisors or learning more about Carter Consulting Partners and how we might be able to help you please feel free to contact by writing me at jeff@cartercp.com.

Thank you.

Tough Choices: Monetization of Assets That Require Additional Investment

2010-08-03T19:53:00.000-04:00

Starting a new business is never easy. But selling something that you have put your own hard work into is sometimes even more difficult. I have a client that has a great, extremely valuable, asset that they worked hard to create. The issue is that this asset will require a significant amount of additional investment to develop into a sustainable business.

I have been working closely with them to develop a detailed business plan that risks capital only once certain milestones have been met and that sets very objective criteria for determining success. In the course of this activity it has become clear that a significant amount of capital, and an enormous amount of work, will be needed to operationalize this business beyond 2010. Bad news, right? Well, not exactly, but it makes you think about a number of different factors and it is these subjective decisions that get early-stage business owners into trouble because they become emotionally attached to a decision that should be made objectively. Let's look at a few examples of the issues that my client and I are trying to get clarity on to create a path forward:

As stated, the capital investment needed would be significant. We can go to the market for that, and this business would certainly get funded. But is that the direction in which the owner wants to go? Getting funding generally entails selling a significant equity position, particularly when your business is small and there aren't lots of other options. If you're in business to make your own decisions and be your own boss, this is unlikely to be a good option unless you can find investors that you really want to bring in as partners.
The operational component of the business, which is in this case very nicely distinct from the intellectual property component, could be taken on through some sort of partnership or joint venture where the partner has the assets to bring the operation online. There are significant profit implications to this approach, and not in a way that is good for the current owners, especially when viewed against the pro-forma numbers we would generate if we did everything ourselves.
A sale of the intellectual property itself is definitely something to consider in this case, though it is very difficult to fight through the feeling of "ownership" that business owners have in these types of situations. However it is the fastest way to generate a fixed ROI that can be easily calculated. No forecasting needed. If there is no emotional attachment to the business, just an opportunity cost, and there is a solid ROI, then my recommendation will be to make the sale and use the proceeds to fund the next idea.

There are many subjective factors that come into play when making a decision like this and there is a huge risk of leaving money on the table so a thorough analysis is always needed. In this case, the crux of the entire decision is whether, for this owner, the additional profit that will be realized by executing the business plan is worth the time and energy that it will take to build the business.

The bottom line is that even if it seems like your small business is running into insurmountable obstacles, it is very likely that there are ways to monetize what you have done. Feel free to contact me for a full analysis of your business, and your options.

New Carter Consulting Partners Web Site Launched

2010-07-25T15:22:00.000-04:00

Just a quick post this week, but I put up a web site this week at www.cartercp.com that describes what I do for my clients and who some of them are, along with some representative engagements that I have underway now.

Take a look and let me know what you think! See also a post to the HealthGlobe blog I put up earlier today.

Obamacare prognosis: Expensive

2010-07-20T10:10:00.001-04:00

Below is a link to a recent article from Newsweek. More and more of these continue to surface as a thorough understanding of Obamacare starts to diffuse into the general population and the discussion turns from needing health care for all, which is a laudable goal, to how we will actually afford this new entitlement program. Let me know what you think.

Newsweek: Massachusetts Offers Preview of Obamacare

See my related blog posts:
- Coverage, Yes -- Cost Control, No
- Is Health Care the NASA of the 2000s?
- Is a Single-Payer Health Care System a good solution?

Reduce Year-Over-Year Health Care Costs with HealthGlobe

2010-07-13T17:01:00.006-04:00

[The following is a transcript of the video above.]

Hi this is Jeff Carter from HealthGlobe and today I want to talk about a really interesting conversation that I had a couple of weeks ago. I was at a CFO Core Concerns Conference which was sponsored by CFO Magazine and I was able to participate and speak at the conference. It was in Baltimore.

While I was there I met a guy who is the CFO of a large cloud computing company that has about 400 employees. We started talking about his health care plan so he shared with me that they have a 15% year-over-year trend increase just built into their budget for their health care costs.

And so I thought about this for a minute and I asked him, "What would happen if you had a 15% year-over-year increase in your top or your bottom line? Would you just accept that and build it into your projections or would you get your best people in the room to think creatively about it and really try to solve the problem?"

Well, you know, in the course of the conversation it really came out that he feels stuck. He has to provide health care, or at least in his own mind, I think correctly, he has to provide health care for his employees and that he feels like this increase is just something that he has to accept and move forward with.

So I told him about a proposal that we put on the table for a company with 700 employees out of New Jersey recently that brought their fixed costs down by 10% year-over-year and reduced their claims costs by what we calculate to be about 20% year-over-year by incorporating a Medical Travel benefit and using some different PPO networks.

So this has created overall about a $1M savings for this plan year-over-year. So we are not talking about just reducing the size of the increase we are talking about actually bending the cost curve down and making it so that health care costs are being reduced on a year-over-year basis.

So I would be really interested to discuss with anyone what their issues are with health care and what their problems are and see if we can use Medical Travel to help reduce those costs because at HealthGlobe we really think that Medical Travel benefits are a key tool to reducing health care costs in the short term and the long term.

You can call me at 617-708-4229. Again, Jeff Carter from HealthGlobe. Thank you.

Coverage, Yes -- Cost Control, No

2010-07-08T09:08:00.000-04:00

In last week's article, Is Health Care the NASA of the 2000s, I very deliberately pointed out that I thought the Patient Protection and Affordable Care Act (PPACA) was flawed as written. The point of that article was only that the next wave of investment to make our economy as efficient and productive as it can be will be in the health care sector.

And then along comes this little gem from yesterday's Wall Street Journal, "The Massachusetts Health Care 'Train Wreck'" which very pointedly illustrates some of the issues we are having with our 4 year old implementation of universal health care here in my home state. Basically, it doesn't reduce costs at all and puts the taxpayer on the hook for the premium increases that apply to the subsidized population.

Anyone who has looked closely at the PPACA already knows this to be the case, but the skeletons are starting to fall out of the closet in Massachusetts and, as the article points out, entitlement programs really can't be repealed once they are enacted. That means lots more "fixes" will be coming soon to a Congress near you and that big incentives, investments and subsidies will be rolled out to tackle the real problem with our health care: cost.

Since this is such a large part of what I have been working on for years at HealthGlobe, we understand some of the simplest steps that can be taken to reduce costs. Take a look and let us know what you think.

Health Care Costs Moving Up on "Auto Pilot"

2010-07-07T09:17:00.000-04:00

Over the past couple of years, I have been hard at work on the problem of bending the cost curve in health care. Here's a quick blog entry from HealthGlobe on how the demand side can contribute and even reduce fixed costs for health care *this year*. Click here to read the full article: http://bit.ly/bynsrt

Is Health Care the NASA of the 2000s?

2010-07-03T12:34:00.004-04:00

As promised in a previous article from last month, I want to continue to explore the transformation that is coming to the health care industry. I truly believe that we are at a tipping point in health care, and that the US economy will be pulled out of the current recession by innovations in health care. Furthermore, I think that will be the start of a trend of economic growth and innovation that will last decades. This article gives the big picture, and as new developments happen that support or erode my hypothesis, I will follow them here.

This article is going to be long in order to get my entire point across, so make sure you have some time on your hands.

There is a general consensus that history repeats itself, right? Well, let's look back to a young President of the United States who presided over a critical point in our history and made bold decisions that divided the public. That's right, we are heading back in time to the 35th President, John F. Kennedy. On September 12, 1962 in a speech at Rice University in Houston, TX Kennedy declared, "We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too. "

What followed was a monumental influx of US government resources into NASA and any other agency that could contribute to the completion of the moon mission. This was a hotly debated topic not just among politicians and businessmen, but across the entire American population. Was this a total waste of government resources on an overambitious project undertaken by a young and naive president, or was this Vision? With a capital 'V'? It really all depended on who you asked and when you asked them. Well, until July 20, 1969 rolled around. At that point the nation was unanimous in its judgment of this "boondoggle" that had grown up to become, and continues to be, a defining point in the history of our great nation.

Well, it's probably pretty obvious where I am headed with this but let me take a minute to discuss the ripple effects of the Apollo missions that not many of us consider. I want to make an assertion that the entire technology industry, including the tech bubble of the 1990s and the mobile internet revolution of today, is a direct result of government-funded research. Most people know that the internet was originally a DARPA (Defense Advanced Research Projects Agency) project that spread to academia and eventually to the public. But without devices to connect to the internet, it really wouldn't be that interesting.

Among lots of other advancements in science, fundamentally what the government funded that enabled the tech industry were the following:

Miniaturization of electronics: How cool would your BlackBerry or your iPhone be if it was the size of your laptop like the "bag phones" back in the 1980s? NASA needed computers that were, at the time, very small and very powerful in order to fit into the capsules they were building. The Apollo mission was the first foray into the fixation with miniaturization that lead to you reading this article on something that fits in your hand but serves as a phone, browser, pager, music player, calendar and email device. Make no mistake, private companies have done with this technology what bureaucrats could only dream of, but the US taxpayer was the entrepreneur that invested in a little startup called NASA that got the ball rolling.
Efficient heat sinking: All those electronics produce a whole lot of heat that needs to be dissipated in order to keep the electronics working properly. You can solve the problem in two ways: more efficient electronics (which produce less heat) or more effective ways to dissipate the heat. NASA used both and those innovations continue today in research funded by the public and private sector.
Battery power: Even today battery power isn't what it should be but the fact is you can still work on the plane and leave your phone on for 2-3 days before you need to plug in. Well, all the computers on the Apollo capsule couldn't exactly plug in at Terminal 2 on the moon, and solar power only works during the day. Just like with miniaturization, private industry has done amazing things with this technology but government funding got it started.

I guess my point to the above, because I am sure the list of NASA achievements is a long one, is that capitalism is a very efficient machine and, as a result, capitalist economies can be effectively directed by the government through the use of incentives. The government placed an extremely high value on technology back in the 1960s and has continued to do so. The result has been an explosion of innovation and success that has made the US economy the envy of the world.

Things now are very tumultuous. Our beloved tech industry stumbled and we used the real estate market to prop up the economy (I will point out but not discuss that the RE market was also a function of government incentives put in place using low interest rates and by taking the reigns off of Fannie Mae and Freddie Mac). That hasn't worked so well, in my opinion because there wasn't any innovative force driving the real estate market forward and creating true economic value, just smoke and mirrors in the form of "financial innovation". As a result not only is our economy damaged but the banks that have in the past served as the backbone of our ability to recover are hurting and are being vilified by the public and scapegoated by the government. That is another article for another time.

So let's get to 2010. Barack Obama is a young President who has taken the helm during tough times. His signature issue is that of health care. Nobody questions that health care is an issue that must be addressed and nobody questions that it will be, effectively, political suicide to address it. Here is what Mr. Obama had to say on January 10, 2010 during his State of the Union address, "I didn't choose to tackle this issue to get some legislative victory under my belt. And by now it should be fairly obvious that I didn't take on health care because it was good politics. I took on health care because of the stories I've heard from Americans with preexisting conditions whose lives depend on getting coverage; patients who've been denied coverage; families--even those with insurance--who are just one illness away from financial ruin."

As good of a speaker as President Obama is, I have to give the eloquence award to JFK. As a complete aside, don't you think that if instead of barraging us all with daunting figures and facts that seem overwhelming, Obama had chosen to make a strong declaration of action like Kennedy did, that he may not have faced such an uphill battle?

Having said that, this is a President who believes in what he is doing and that he is taking our country in the right direction. To take an excerpt from above: This is a hotly debated topic not just among politicians and businessmen, but across the entire American population. Is this a total waste of government resources on an overambitious project undertaken by a young and naive president, or is this Vision? With a capital 'V'? It really all depends on who you ask and when you ask them.

The purpose of this article is not to defend the policy decisions of President Obama and, to be clear, I think the implementation details of the reform package are flawed. But what I am saying is that one thing is very, very clear: The United States government has identified health care as a key issue and they are putting an absolutely unimaginable amount of resources into fixing the problems that we all know are there.

Just like with the Apollo missions, the government is telling us what we need to focus on in order to usher in a new era of greatness for the American economy and it is putting all of our tax dollars on the line to make it happen. Like we always have in our past, it is up to the private sector to innovate and I think that in the course of the next decade that every possible solution will be given its due because we all know the health care system is broken and now we all know that there are BIG incentives in place to fix it.

So set your alarm for 10 years from now because, in my opinion, when you look back from there we will be in the midst of another massive growth cycle in the American economy. The next cycle will be powered by innovations in health care and we will all be better off for it. And if you're paying attention, you'll realize that it all started now.

Strategic Cost Cutting - a key focus of today's Chief Financial Officer

2010-06-26T21:23:00.001-04:00

This week, I will be participating in CFO Magazine's CFO Core Concerns Conference as a panelist discussing what health care reform means for health care costs. For obvious reasons, the costs of health care and the impact of the recently-passed Patient Protection and Affordable Care Act on the benefits that employers must deliver to their employees is a key focus of the Human Resources, Insurance Brokerage and Benefit Consulting industries.

While all of the minutiae of the implementation of health reform keeps scores of people busy, CFOs are responsible for watching their bottom lines and health care is a massive expense for most companies. So it's no wonder that cost containment in the health benefits space is something that CFOs always want to hear more about.

In every venture I am involved in, particularly in the case of HealthGlobe but also through Meaningful Use Technologies and even in individual engagements with key clients through Carter Consulting Partners, the ultimate buyer of our services is a frugal CFO motivated to cut costs.

As the details of health care reform continue to be made public (it is a little-known fact that many of the specifics of the reform package have yet to be written and published by the government) you can be sure that health care cost control will increasingly become a top priority in corner offices across the country.

Is a Single-Payer Health Care System a good solution?

2010-06-24T20:03:00.001-04:00

I had a conversation the other day in which the following comment was made: "A single-payer system isn't the solution to our problems, the best solution would be a single-biller solution."

Huh.

That sounds pretty simple and it's easy enough to understand, but from a logistical and business perspective what does it really mean and how would it be any different?

First of all, let's discuss from a payer (insurance company) perspective what happens right now when you go to the hospital for a simple surgery, for example. We'll use a frequently-performed procedure like a knee replacement surgery as an example. We won't worry about any of the doctor visits leading up to the surgery or any of the follow up care like physical therapy or anything like that for now, just the surgery.

The surgery, if all goes according to plan, will take a few hours and you'll probably even be released the same day. Over the next several weeks, your insurance company will receive up to *thirty* (30) bills from all of the entities involved in making your surgery happen. The surgeon, the hospital, the lab (for bloodwork, etc.) the anesthesiologist, the knee implant itself and a whole host of other things need to be paid for. And virtually every one of them is billed to your insurance company separately. Someone just yesterday who had to pay for their own knee replacement told me it cost them $47k so we'll use that as the total cost. Now your insurance company (or PPO or HMO, etc.) has a discount that they apply to those charges. The discounts are negotiated in advance so they subtract the discount for each invoice they receive. Let's say that the discounts are 30% and so in total they end up paying $32,900 for your knee surgery, a "savings" of $14,100 off the standard charges, after all is said and done.

The key issue here is that before your surgery happens the insurance company has no way of knowing exactly what invoices they will receive for the surgery, nor do they know the amount of those invoices! They know on average what they pay for a knee replacement but they have no way of knowing in advance what they are going to pay for a specific surgery. What that really means is that there is no possible way of "shopping around" for the best value between surgeon and price. You may not believe this but this even happens for large companies. They don't really know what their cost will be for medical care before it happens. Imagine doing that with any other service you consume -- you wouldn't.

A single-payer system does not fix this problem. It simply replaces the insurance company with the government, or a government agency. To be sure, the single payer does have leverage to fix prices, but the morass of paperwork and disorganized infrastructure continue on unabated. This is why some of the better known single-payer systems of the world are among the worst for providing health care, most notably Canada and North Korea.

So what then would a single-biller system look like? In this case it would be one entity (a doctor in a private practice or a hospital in most cases) that would submit a single, unified claim for providing a service. It seems like a pretty simple change but the ramifications of the change are very significant. It means that employers that self-insure their health benefits (there are many and most are large corporations) could basically canvass a region in search of the best outcomes at the best price and know in advance what a particular service would cost. This would make consumer-driven health care much more of a reality than it is now, where as much as a consumer might like to drive the process, they have no way of getting one of the most critical pieces of information -- PRICE!

So is a single-biller health care system, like what most of the world currently has regardless of whether they have nationalized health care systems, be a silver bullet? Certainly not, but it would get us much closer to a tractable solution to our health care woes.

Does Medical Tourism sacrifice quality for cost?

2010-06-20T15:22:00.001-04:00

So many times in life we have to make choices between cost and quality. But even more frequently doesn't it seem that we are being made to think we are choosing one or the other when a little research reveals that we can actually get both low cost and high quality? A stroll through any shopping mall will present this challenge to you every step of the way.

As a follow up to a previous article, "Why is Medical Tourism so inexpensive?" I want to address what seems to me to be a natural extension of that article. What am I sacrificing by using Medical Travel in order to save money as compared to getting care in the United States?

To start the discussion off, let's continue to expand the analogy I used in my previous article. There was a time, as most of us remember, when the U.S. automotive industry was the envy of the manufacturing world. Few Americans would have considered driving anything besides the reliable output of Detroit, even if they had the option. There was, obviously, no equilibrium in the marketplace, globally speaking.

Slowly foreign cars were introduced, mostly from Asian countries, predominantly Japan. The small, minimalistic cars were not very well-received and market penetration was poor. But over the course of 15-20 years, all that changed. A relentless focus on quality and price by the overseas manufacturers and a lackadaisical attitude about competition from imports put the U.S. auto industry into a tailspin from which it seemed unlikely to recover. Foreign imports had made quality available at a lower cost.

There are many cases of this throughout the modern industrial complex today, but one of the areas that has remained relatively insulated from the forces of globalization has been the medical industry. With the passage of the Patient Protection and Affordable Care Act this year, health care reform is setting the stage for a globalized medical industry. Over the next few months I will be putting out a series of articles focusing on how the Health Care sector is the next part of the US economy that will be completely transformed, and why that transformation is starting now. Stay tuned!

Korea as an export hub for the medical industry?

2010-06-20T15:15:00.002-04:00

A few days ago I posted a detailed article on Korea as a Medical Travel Hotspot. Check it out here: http://blog.myhealthglobe.com/?p=9

Medical Tourism is definitely worth the research

2010-03-02T09:18:00.002-05:00

A couple of completely unrelated things happened to me yesterday that really got me thinking about how I have turned into such a proponent of Medical Travel. Here they are:

I was speaking to a new person we are bringing on to support our corporate sales activities. She has been in the health care industry for a long time and has had a very successful career. At one point in the conversation she made the comment, "I am educated enough to know that we don't have the best health care system here, just the most expensive one." She then went on to cite a recent report that puts the US in the prestigious #37 position globally in terms of health care across national populations.

I have a health issue that I need checked out. I travel pretty frequently and will be in Turkey for a few days this week. I called a very reputable Johns Hopkins affiliated facility and asked for an appointment with a specialist. I placed the call yesterday and on Thursday I will be picked up at the airport, brought to the hospital for my procedure and then brought back to the airport in time to fly back to "work". All this for around $100, and that includes the $60 round-trip commuter flight from another city in Turkey.

And I find myself having to ask, considering that the same thing would cost me at least $1000 here in the US and I would probably have to wait a month or more for an appointment, "Why?" It really just seems like it should be an easier process.

When I was first approached about starting HealthGlobe, I was very skeptical. My biggest concern, like most people, was the quality of care. I had traveled extensively around the world but never stepped foot into a single hospital outside my home country.

I am in a position now where every day I have to explain to people that the care they will receive in the HGI provider network is every bit as good as the care they will receive at their local hospital and I find myself holding back on saying that the care would be better, mostly for fear of losing credibility with my audience.

The facilities, equipment, technology and skill that I have seen in hospitals around the world after having visited most of the providers in our network means that I am certain that in some cases getting "the best" will not be found in my home country and that I need to do my research before seeking treatment for myself. On top of all that, the hospitality, compassion and sensitivity with which I and all of HGI's patients are treated whenever we are at one of our network hospitals puts the high-volume feel of major US institutions at a distinct disadvantage when I look for care for myself. Do you have your doctor's cell phone number? Our patients do...

So give one of the Patient Advocates at HealthGlobe a call at 800-290-0197 or get in touch them on their website at www.myhealthglobe.com and find out for yourself what all of the options are for your health care. It's definitely worth the research.

Why is Medical Tourism so inexpensive?

2010-02-09T08:00:00.000-05:00

I wanted to take a few minutes to address an assumption that I hear all the time when I speak with people about Medical Travel and what I do at HealthGlobe . People often seem to think that the cost savings is primarily realized as a result of the limited liability of medical providers outside the U.S.

To keep this article to a reasonable length, I need to assume that the reader is willing to accept the fact that the premier health care institutions outside the U.S. provide health care that is at least equal to the care that you would find at premier hospitals here at home like Massachusetts General Hospital or the Mayo Clinic. Having said that, let's take a look at the numbers and then draw an analogy to other sectors of the economy that have faced cost pressures and labor shortages in the past.

Currently about 16% of U.S. gross domestic product (GDP) is spent on health care. For 2009, the U.S. Department of Commerce estimates that GDP came in at $14.46 trillion so to put this all in perspective we spend about $2.31 trillion each year on health care. Interestingly, the Kaiser Family Foundation estimates that malpractice costs account for less than 2% of health care costs, bringing us to an approximate $46.3 billion malpractice expense.

Going back to the introduction of this article, if the assumption that Medical Tourism is inexpensive because there is no, or very limited, malpractice liability outside the U.S. held true then prices overseas would only be discounted by 2% from retail rates at home. That wouldn't even offset the cost of travel and accommodations and the entire discussion would be moot.

So where does that savings come from?

Well, there is a very solid line of reasoning that suggests that the simple fact that doctors are afraid of being sued leads them to recommend more tests, treatments, etc. This practice of "defensive medicine" certainly does lead to increased costs and those costs are not accounted for in the estimated cost of malpractice above. But would tort reform lead to a less defensive medical practice in reality? A study by the Congressional Budget Office didn't find much evidence for that and labeled as "very small" the savings that would be realized as a result of reduced use of unnecessary services due to changes in liability laws.

Let's think about this from another angle: If malpractice is the primary driver behind the cost savings of Medical Tourism, essentially medical outsourcing, then why does outsourcing work for the manufacturing, technology and customer service industries where malpractice and liability in general is much less of a concern than in the medical field?

The answer: Labor Cost.

While there are all kinds of secondary cost containment arguments that can be made in any industry where an outsourcing model can work, reduction of labor cost is almost always the key factor. With few exceptions, personnel costs are the largest expense for businesses and taking a 50-75% reduction in those costs creates massive savings. The sort of savings that precipitates structural changes across an entire industry. Interesting that the discounts you routinely see with Medical Travel are between 50-75% too, isn't it?

So am I saying that medicine will globalize to the extent that manufacturing and technology have? Absolutely not. There are much more subjective forces at work in medicine than in other sectors. Emotions, travel restrictions, mobility, global geopolitics and the list goes on. I do think, though, that medicine will globalize for the same reasons that other industries have. The list of reasons that I think are important in outsourcing is enough for an entire article in itself so I will leave my thoughts on that for another day.

While I admit that this is a bit of an oversimplification of an extraordinarily complex topic, I think it builds a good case that labor costs are the key cost containment driver for Medical Travel and not malpractice.

For more on Medical Travel, see http://blog.myhealthglobe.com and http://www.myhealthglobe.com.