At the recent Health 2.0 event in Santa Clara, Douglas Goldstein, eFuturist, caught up with our founder and Managing Partner to debrief on the event and some of the major trends currently affecting the healthcare industry and health IT adoption. Their discussion was produced for Health Innovation Media and the original recording can be found on their BlogTalkRadio site. We’ve also embedded it here for easier listening, along with the transcript.
DOUGLAS: Douglas Goldstein, e-Futurist, Health Innovation Media, Health 2.0. I have one of the leading experts here, John Moore with Chilmark. And John, what’s your top line take on Health 2.0, 10th Annual Edition?
JOHN: Well, seeing as I’ve been to pretty much every single Health 2.0 Conference that Matthew has had, I think the top line take is that it’s really matured to the point where we’re actually getting healthcare systems involved here, having conversations with them, and it’s not just the startups. And I think the maturity of the some of the solutions we’re seeing here has… they are really starting to solve some real problems. It isn’t just like, “Oh, let me try to create something in my garage,” and then try to find a place to sell it – they’re actually addressing some pretty hard problems.
DOUGLAS: That’s the same observation I had and I think Ian Morrison summed it up when he said, “Clinical Operations 2.0”
JOHN: Yes, yes, Clinical Operations 2.0 is an interesting thing. I think with Ian’s presentation about whether or not to disrupt healthcare and that you have some very big entities in the healthcare system that aren’t going to go anywhere soon, I believe that to some extent, and I believe in this thing about there’s a lot of opportunity in clinical operations. But I think there’s also a lot of opportunity outside that in terms of new modalities of care delivery that will be somewhat disruptive to the existing system of care.
DOUGLAS: Funny thing is that healthcare is always adapted technology. We’re living longer; the are kinds of things that are being done to people… He also said that disruption isn’t the right word; it’s just better health, leveraging tools and people. So I think that I’m seeing that. I agree 100% with this. I moderated two panels here and was impressed by the sophistication of both the entrepreneurs, their understanding of the sales cycle and their solutions that are working.
JOHN: Yeah, I would agree with that in the sense that I think the entrepreneurs have become much more savvy in understanding who they’re selling to and what are some of the challenges are that they’re trying to address and the kind of challenging sales cycles in some of these sectors of healthcare. But I will also say that when people talk about disrupting healthcare, there is a need for some disruption here because this is in the United States over a $3 trillion market. And that numbers thrown around a lot. And people say “Well a third of that’s waste.” But that waste is someone’s salary. So if you’re going to try and take out that waste, you’re disrupting. Someone. Somewhere. And I think that is a critical factor that we have to constantly keep in mind that disruption is disruption to someone else. The question is who is going to be disrupted? And I don’t think we really know that yet.
DOUGLAS: I think it’s disintermediation and I would soften the word. Just working inside health systems, I would soften the word and say, “We’re improving efficiency.”
JOHN: Well, yeah. I mean optimally. The real goal I think for all of us here – for Matthew and Indu that have put on this great event, to a lot of the people speaking here, and to all of these entrepreneurs – honestly, a lot of them have personal stories that brought them here, including myself. And I think at Chilmark Research, what we really look at is…our mission is how do we improve the patient experience through the work that we do? And I think that’s pretty much true for everyone here, whether it’s a consumer, patient, member, employee – we’re all looking to try and improve how they navigate the healthcare system and get the best care that they possibly can, and how do we use these different technologies to deliver that experience to improve their outcomes or at least improve their journey in this healthcare space. Which right now is pretty convoluted.
DOUGLAS: Absolutely! So what’s the next great research you’re working on that we can anticipate coming up in the next few months?
JOHN: Well, I think really what we’re working hard on right now – and I’ve actually brought on a couple of new analysts in the last 6 months to help us address this issue – is that we really think there’s going to be a need to move beyond this kind of parasitic relationship that we’ve seen today between payers and providers. Between the health insurers and the doctors. And I believe to be successful in this country at managing populations within communities, that these two entities are going to have to work much more symbiotically together to manage that population for which they’re under contract, whether it’s a contract to a self-insured employer or if it’s a contract to CMS. But how do you manage that population? How do you bring these resources together in these core competencies in either side of the table together to actually effectively manage the health of that population?
DOUGLAS: And you get everybody to become more efficient, lower cost and improve outcomes. That’s the Holy Grail.
JOHN: Yeah. You know, I was just recently at another event and what was really interesting there was this healthcare system had a big focus on quality and they were working with a payer around, “Where is the quality and some of the quality metrics?” So they went really deep – and particularly, this was around the Cardiovascular Department – on how they improve the quality of the care that they deliver, looking all the way from their supply chain and the instruments they’re using through their treatment protocols, to the clinical pathways, to discharge process – the whole nine yards on Cardiovascular. And what they found was that in improving their quality, they actually lower cost. That, just improving the quality, they lower length of stay, they lower pneumonia or contracted hospital infections, what have you, across the board, and they have pretty dramatic reductions in the cost of care.
DOUGLAS: And in the short run, if you do that now, if a health system does that now and they reduce the four-day length of stay to a one-day length of stay, they’re making the margin. They’re getting paid for four, because CMS is lagging in adapting to both quality improvements and technology improvements in a number of surgical areas. They’re not rolling out of episodes of care fast enough for some of the systems who are improving quality and reducing cost.
JOHN: Exactly! And as we move more and more towards this kind of concept of value based care, value based reimbursement where we’re going to be paying physicians for the quality and the value of the care they provide, these are going to become really important issues.
Look at what we’re doing with CJR, the Confined Joint Replacement program that CMS is funding. This is a bundled payment model, and now they are introducing a Cardiovascular Bundled Payment Model. Those organizations that can effectively address this issue of length of stay, what have you, they’re going to get paid a certain amount for that procedure, and if they can do it for less than that, that’s all margin.
DOUGLAS: You’re the first mover, you’re making margin in the short run. It’s joints and hearts today and it’s cancer bundles tomorrow.
JOHN: Exactly! We’re going to see this more and more throughout the industry. The challenge though is that a lot of healthcare organizations today that we’ve been speaking with are just getting started. The ones that are doing this great work are really the early innovators. And we have a long ways to go and I think we’re going to see a lot of suffering amongst a lot of healthcare providers in this transition.
It’s going to be tough. It’s not going to be an easy path.