Saturday, September 29, 2012

Health Plans Continue to Struggle to Reinvent Themselves

American health care insurers continue to scramble to try to reinvent themselves and discover a new business model that will be successful during a time of transformation and payment reform.  In previous blogs I have described several different approaches, some of which leave me skeptical. ( )

One of the most interesting and controversial attempts to reinvent a health insurance franchise appears to becoming unraveled.  I wondered in print if new Highmark CEO William Winkenwereder would continue to try to implement fired Highmark CEOKenneth Melani’s aggressive merger with the failing West Penn Allegheny Health System.  The new CEO did not have Melani’s historical loyalty to West Penn Allegheny, and many questioned the wisdom of the merger from the start. (  

Late last week, the West Penn Allegheny board called off the merger because Highmark wanted the health system to declare bankruptcy to get out from under nearly $1billion in debt.  Highmark had already acquired Jefferson Regional Health System, Premier Medical Associates (the largest independent multispecialty physician group), and planned medical malls to supplement West Penn Allegheny in a new integrated delivery system. (  Highmark also tried to acquire Excela Health, partner in its medical mall and gain majority ownership in the Westmoreland county provider network.  When Excela declined the offer, Highmark threatened Excela according to the Excela board chair: “The threat was clear – if Excela did not enter into an acquisition or affiliation with it, Highmark would use its monopoly position to destroy Excela,” said James Breisinger.  (

Reaction to the failure of the merger included Jan Jennings,  President of American Healthcare Solutions, who said, “It is the dumbest, most recless abandonment of fiduciary responsibility I have ever seen. I don’t think anybody from out of town sees West Penn Allegheny as some kind of crown jewel.  I just think it is a big mistake.” (

Highmark is not the only insurance company that is finding out that reinvention can be difficult.  When Patrick Geraghty left Minnesota Blue Cross and Blue Shield to run the Florida Blues, the Minnesota Board hired Kenneth Burdick largely because he had experience with the highly successful for profit UnitedHealth Group.  After six months on the job Burdick was fired due to “examples of leadership that weren’t optimal.”  Board chairman Vance Opperman was quoted as saying, “’What you have is a difference in culture.  The difference between for-profit and not-for-profit is pretty big…After looking at this for many hours and many meetings, we came to the unfortunate and unhappy realization that Ken couldn’t make the transition and couldn’t bring the leadership team with him.’” (

Another health care organization struggling to cope with the new health care environment is  Seattle’s Group Health Cooperative which recently decided to cut $250 million over the next 16 months to better position the organization in the new world. Group Health has already assembled the combination of hospitals, physicians, and health insurance plan that Highmark was trying to emulate in Pittsburgh.  However, CEO Scott Armstrong is facing three years of sharp declines in revenues, and he has arranged for Richard Magnuson, executive vice president and chief financial and administrative officer to leave the $3.5 billion health system.  (

HealthPartners of Minneapolis is a fourth health plan recently announcing a new direction by merging with Park Nicollet to respond to federal health care reform measures.  If approved by regulators, the new system will become the second largest in Minnesota with 1,500 physicians and two hospitals Regions in St. Paul and Methodist in St. Louis Park.   HealthPartners insurance plan covers 1.4 million people.  Keith Halleland, a health care attorney, states that the merger is part of a national trend to “’provide total cost of care for a variety of populations’” and to create “’one organization that can do everything for basically anyone in the health care environment.’” (

These four examples of health plans trying to create new business models for the 21st century offer a window into the complicated and evolving health care environment that is creating anxiety and opportunity for everyone involved in the industry. 

Thursday, September 27, 2012

Sticking to Health & Wellness Goals: These Websites Made Me Do It

My regular readers know how important I think behavioral economics will become in the field of health care.  (  The best place to start thinking about applications of behavioral economics principles to wellness is Nobel Prize Winner Daniel Kahneman’s book Thinking, Fast and Slow

Several start-up companies have created ways for people to apply behavioral economics heuristics to their own individual fitness and wellness programs.  Jordan Goldberg was so intrigued by these possibilities he encountered in undergraduate classes at Yale that he started a company, Stickk, with his professors Dean Karlan and Ian Ayres. 

As Goldberg related in an e-Patients Connections 2012 talk in Philadelphia recently, people say they want to do healthy things, but then life happens, and they don’t follow through on their stated intentions.  Stickk creates clever ways to take advantage of nudges and libertarian paternalism to frame choices so people do what they really want to achieve.

My favorite example of this concept  is their anti-charity option where Stickk takes money away from you to give to a charity you hate if you do not achieve your goal.  If your stated goal is to walk 10,000 steps every day and you slack off, the despised charity you choose gets an automatic contribution.  According to Goldberg the George W. Bush Library is a favorite charity in this program.

By applying the behavioral economics principles of hyperbolic discounts, real time loss aversion, carrot vs. stick, reference points, and power of defaults,  Stickk has created both public and commercial websites that may really get people to stick to their stated health and wellness goals.

Aherk! is another website designing tools for people having difficulty sticking to their weight loss regimen. 

“The user also emails Aherk! An embarrassing photo – referred to as ‘the bomb’ on the site.  When the deadline hits, Facebook friends vote on whether the goal was achieved.  If not, up goes that incriminating pic at the expense of some social media status.”

Other start-ups applying behavioral economic heuristics to healthcare include GymPact where smartphones track missed exercise workouts and automatically fine the participant and MetaReal’s Virtual Fridge Lock with its refrigerator device that posts a Facebook notice when one raids the refrigerator when one is not supposed to.
One can find psychology professors who think the above tactics are laudable and those who object to these approaches:

“I would rather see a website that allows a person to define a goal and state a reward the person will give him or herself if the goal is met.”  Erin Way

“Committing to anything in public, something that has been known for a long time in psychology, is a good way to get people to stick to their guns…People don’t like to feel like a fool.” Andrew Ward (

Wednesday, September 26, 2012

8 Things Medical School Failed to Teach Me About Being a Physician Executive

You Will Have to Move a Lot

I went to medical school in Cleveland and did myj pathology residency in San Francisco at UCSF.  I was on the medical school faculty at UCSF, Iowa, Allegheny University of the Health Sciences, and Michigan State. 

Since leaving academic medicine, I have worked at a bio-tech start up in Cambridge, an educational and research institute in Grand Rapids, a $2 billion integrated delivery system in Iowa, and an evidence-based medicine consortium in Minneapolis.

In my experience physician executive positions do not always last a long time because the environment changes, my career aspirations changed, and getting the job done sometimes means alienating enough people to get in the way of long job tenure.

You Will Have to Reinvent Yourself Over and Over Again

My main professional roles have included: medical school pathology course master, surgical pathologist, division head, vice chair of academic department, chair of academic department, medical director of managed care, corporate operations officer of ambulatory care, special assistant to the president of a big ten university for managed care, search consultant, chief knowledge officer of a genomics bio-tech start up, president and ceo of an educational consortium, chief medical officer of a delivery system, president and ceo of an evidence based medicine institute, and health policy professor at a school of population health.

My only educational credentials are a bachelor’s degree in history and a MD degree.  Although I have taught in MBA programs, I do not have a MBA degree.  Although I headed up a genomics repository of DNA, I had to teach myself genomics and proteomics on my own.  Although I teach health policy and population health, I did formally study these subjects.  I have discovered that if I read a lot, go to conferences in different fields, and talk to smart people, I can pick up what I need to know without going on to obtain lots of graduate degrees.

Everything is in the New York Times and The Wall Street Journal 

I am amazed at how much I am able to keep up with payment reform, federal health care reform, and major trends just by reading these two newspapers every day.  It is also good to see how liberals and conservatives interpret the same story, often with dramatically different conclusions.

The Killer App in Social Media is Community

Twitter has become the most important technology in my career as a physician executive.  I follow about 2000 key opinion leaders in health care, and about 7000 people follow me.

I use twitter to crowdsoure subjects that I need to master in order to give keynotes or consult with health care systems.  For example, Einstein Medical School asked me to come give a presentation on social media and undergraduate medical school education.  In order to prepare for a subject that I had not thought about much, I tweeted the following: “Help; need best practices of social medical and medical school education.”

I received responses from all over the world that formed the basis for my all day seminar that was well received and consisted of concrete examples of medical educators from the Cleveland Clinic to the UK using twitter and facebook in ways I had never imagined.

An important point here is that it is now my obligation to my social media community of practice to provide knowledge to others when they are reaching out for assistance.

If I can’t understand it, I don’t believe it

When I started out in leadership roles, I did not always trust my own judgment.  I sometimes thought I was not smart enough to grasp situations that made no sense to me.

When I was Interim Head of pathology at Iowa, I thought my lack of training in clinical pathology was the reason I could not understand the classification of all the technologists in the hospital labs.  It took a while to grasp that job classifications and titles had multiplied and proliferated in a way that did not serve us well in a changing health care environment.  It was only when I truly understood that the system did not make sense that I could lead a simplification of job titles that made more sense in that time of managed care. 

I will never forget going to a meeting in Palm Springs of venture capitalists.  What made them different from others I had encountered was their skepticism and insistence that they understand how start-up companies would make money.  If they could not understand the business plan, they did not invest. 

You Will Fail; Do it Quickly and Cheaply

A successful entrepreneur in Iowa taught me that failure is inevitable.  The trick is to recognize when you have failed, learn from it, and move on as quickly and cheaply as possible.  When I was helping to raise $36 million dollars for a genomics company, I was amazed to learn from venture capitalists that they do not try to predict winners and losers.  They do not think it is possible.  When they invest in 20 companies, they are hoping that one of them will be a Google or apple.  They fully expect the others to fail. 

I have noticed that health care organizations have a hard time killing programs that are simply not working. 

You Must Become a Life Long Learner

When I graduated from Case Western Reserve School of Medicine in 1980, there was no Internet, no Google, no disease called AIDS, and no smartphones.  You must continue to learn about the world you live in, and the world will continue to change in amazing and confusing ways.

Master the Gartner Hype Cycle and Learn Behavioral Economics

Do yourself a favor.  Master the Gartner Hype Cycle to understand why all those revolutionary disruptive technologies fail and those startup stocks go down (

Read Nobel Prize winner Daniel Kahneman’s book Thinking, Fast and Slow; you will understand why you and those you work with are often irrational and annoying.

Saturday, September 22, 2012

Why Do Academic Medical Centers Do Poorly on Quality Report Cards?

In September 2012, the Joint Commission recognized 620 hospitals (about 18% of the total number of accredited American hospitals) as “top performers,” but many were surprised when some of the biggest names in academic medical centers failed to make the cut.  Johns Hopkins, Massachusetts General Hospital, and the Cleveland Clinic (perennial winners in the US News & World Report best hospital competition) did not qualify when the Joint Commission based their ranking not on reputation but on specific actions that “add up to millions of opportunities ‘to provide the right care to the patients at American hospitals.’” ( )

The gap between the perceived reputation of America’s “best” hospitals and medical schools and their performance on an evidence-based medicine report card provides an interesting lens through which to understand the role and performance of America’s academic medical centers in the 21st century.

The most pressing challenge for American medicine has been summarized in the triple aim:  how to cut the per-capita cost of healthcare, how to increase the quality and experience of the care for the patient, and how to improve the health and wellness of specific populations.

Can we expect academic medical centers to lead the country in meeting the challenge?  If history is any guide, the answer may be no.  In a 2001 article titled “Improving the Quality of Health Care:  Who Will Lead?” the authors state

“We see few signs that academic medical leaders are prepared to expend much effect on health care issues outside the realms of biomedical research and medical education.  They exerted little leadership in what may arguably be characterized as the most important health policy debates of the past thirty years:  tobacco control, health care cost containment, and universal access.”  

Having been a professor at several medical schools (UCSF, University of Iowa, Allegheny University of the Health Sciences, and Michigan State), I learned early on that the key to academic advancement was NIH funded basic science research.  While lip service was paid to the ideal triple threat professor (great clinician, superb teacher, and peer reviewed published investigator), the results of the tenure process clearly resulted in a culture where funded research counted far more than teaching and clinical care delivery.

This gap between what the country needs and what medical schools traditionally emphasize was demonstrated when researchers studied more than 60,000 medical school graduates from 1999 to 2001.  As Pauline W. Chen, MD wrote in the New York Times:

“Putting the issues of primary care shortage, underserved communities and workforce diversity under the banner of ‘social mission,’ the researchers found that many of the schools that were traditionally ranked highly were also among those least focused and least successful in addressing the most pressing issues facing the country right now.”

A recent report from the Lucien Institute at the National Patient Safety Foundation describes the kind of culture required to achieve the goals of the triple aim.

            “Achieving safety in the work environment requires much more than
implementing new rules and procedures. It requires developing and sustaining cultures of safety that engender trust and embrace reporting, transparency, and disciplined practices.  It also requires an atmosphere of respect among the health care disciplines and a fundamental ability of all practitioners to work together in teams.” (

The Association of American Medical Colleges survey on medical school culture reveals a culture that does little to encourage trust and transparency. From 2004 to 2008, 12.7% to 16.7% of students reported being publicly belittled or humiliated.  The best program for implementing a culture of safety I have seen did not originate in an academic medical center; it was developed and implemented at the Sentara Healthcare System in Virginia.

Academic medical center hospitals often save the lives of patients with complicated conditions who benefit from cutting edge treatments supported by basic science research.  However, it is revealing that the community Holy Cross Hospital in Silver Spring, Maryland made the Joint Commission’s list of  “top performers” and the famed Johns Hopkins did not do as well on the quality scoring report card. 

The Holy Cross vice president of quality and care management cites three factors for the hospital’s excellent quality results: intensive review of patients’ charts, the electronic medical record system, and the leadership focus on quality. ( )

When it comes to choosing a hospital, patients should take into account quality report cards as well as reputation.