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Deaf to Moore’s Law: The $6800 Hearing Aid Set, or the $475 One?

September 12, 2014

hearing aidThis Forbes article describes the applicability of Moore’s Law to health innovation and pricing. The author needed a hearing aid. He cited a teacher who had paid $6,800.00 for a pair of hearing aids. The writer had his own hearing loss and with some shopping, found an innovative source that sold him a hearing aid online for 7% the cost — $474.50 — delivered in 2 days via FedEx.

To be fair, the author notes that he does not know how his condition compared to that of the teacher.

We have seen similar disruptive changes in eyewear with Warby Parker and others selling prescription glasses for $100.00 or so, less than the cost of lenses alone in most outlets.

Must a set of hearing aids really cost thousands of dollars? Setting aside our lack of full information, we do know that they are a solid state electronic device, sold by the thousands and mass produced at some level. They would appear to filter and amplify sound, and be quite small.

Should a set of glasses cost hundreds of dollars? One has a piece of colored plastic in the form of a frame, and a piece of plastic bent to refract light. Both made by machines in bulk. There is a fashion aspect of the frames that to many buyers matters a great deal. Eyeglasses, unlike hearing aids, are worn by many billions of users world-wide, a number of whom own multiple pairs.

Compare a hearing aid to a smart phone. A top of the line Iphone without a carrier subsidy can be bought for $750.00. This device, like similar Android phones, is remarkable. Unlike the $5,000+ hearing aid, it is a full-fledged computer that computes, locates, calls, transmits, schedules, messages, photographs, shops, informs, and performs hundreds of other functions depending upon apps installed. One might reasonably assume that these devices are far more complex than a top of the line hearing aid. The price difference likely has more to do with scale, competition, buyer motivation, and other market factors.

Those who shop for eyeglasses and hearing aids are often paying out-of-pocket, and have a motivation to shop. Those selling such devices have a motivation to attract buyers with innovative delivery and pricing models. Can and should similar innovation be applied to high priced pharmaceuticals, medical devices, and medical procedures?

A Doctor’s Malaise, and a Profession’s

September 9, 2014

Brian L. Grant MD

doctoredReading the NY Times Review of this book leaves one with their own sense of malaise, whether they are a doctor or a patient. The anecdotes shared reflect the reality for many physicians and health care workers. This writer recalls a number of years ago, refusing to sign off on routine admit orders for a patient who had no need for $5.00 multivitamin tablets that could be purchased at a drug store for a hundredth the cost (not that they were needed at all from a clinical or nutritional standpoint), I was called in to “meet” with the hospital administrator, a non-clinician, who was clearly irritated with my decision, and the general comment that I was going to do what was clinically appropriate and was not concerned with his cost and profit issues. Thankfully I was not an employee of the hospital, or that may have been my last day.

It is hard to feel sorry for colleagues on an economic basis, as physicians are hardly on the bottom rungs of the US economic ladder. But one is more likely to enjoy a waterfront home as an MBA or entrepreneur than an employed physician. The lack of autonomy driven by a seizing of power by payers, drug companies, and non-medical managers is perhaps what drives physician malaise. Medicine is not your father’s profession any longer. Not only is your doctor more likely than ever to be a mother now, but the economic realities of health care have substantially changed. The smartest people in the health care room are as likely to be the investors and non-medical managers who ably control distribution and access. And as has been discussed before in these pages, the lack of market dynamics in a system where the ultimate consumer – the patient — is generally buying without paying, abets a system where abuses like unneeded treatments, consultations, and tests can take place.

Today the new IPhone comes out to great fanfare. It will be expensive relative to most phones. Some will decide they must have it, but many will stick with what they currently have in their pockets – whether a current IPhone or another brand. If phones were paid for by “phone insurance,” many would decide that this latest version is the only acceptable option and that it is unjust and unfair for their carrier to deny them this phone. And of course Apple would determine that their phone will be priced at a much higher rate reflecting the perceived necessity of it and lack of market constraint and competitive drivers like we see in many a medical device, drug, procedure or study.

The saddest part is that while nobody has ever died or been hurt from too nice a piece of consumer electronics (unless they were mugged to get at it), many a patient has been harmed from unneeded care and medical intervention. And society is harmed from way too much money being spent in the health care sector, driven as much by overconsumption as by high prices.

Thoughtful physicians and health practitioners are saddened and disheartened when they conclude that much of what they do lacks value relative to the cost and actual impact. They realize that they are part of a system driven by excesses and motivated by behaviors on the part of colleagues, hospitals and companies that are less than admirable in many cases; and driven on self-interest rather than the physical and economic well-being of patients and society. The ideals that still drive many to enter health care are challenged regularly, leading to a disconnect between one’s self-identity and reality. This can give way to depression, cynicism, or concession. On the other hand there still remain many in medicine who have found ways to do what they love, while serving others with integrity and pride.

Emergence of the Trauma Industry

September 5, 2014
Of the Human Condition: Hope and Despair at the End of the Century exhibition catalogue, 1994

Image from “Of the Human Condition:
Hope and Despair at the End of the Century”
exhibition catalogue, 1994

This article from The New York Times focuses on a particular criminal ex-cop. But reference is made to many other defendants involved in this particular crime, of “feigning mental illness” and invoking the 9-11 attacks as a source of psychological scarring. These crimes did not take place in a vacuum. They occurred in a social context where the defendants, many sworn officers, believed they could get away with it, and likely saw themselves as damaged and entitled.

The experience of trauma and even the development of a diagnosis such as Post Traumatic Stress Disorder does not correlate with a person being damaged or disabled. Trauma is part of the human condition, and in most cases the victims adjust, move on, and support themselves and their families – at times with the help of some therapy. Men and women have gone to war, and returned to productive civilian lives. A bureaucracy of entitlement for compensation and pensions based upon ones experiences, rather than one’s actual impairment, did not exist.

Only in recent years have we observed an emergence of a trauma industry, where both individuals and clinicians all too frequently appear to correlate an unfortunate experience or experiences with damage. The ability to obtain compensation likely has driven this process and outcome.

Those who die in performing their jobs or who sustain serious injury warrant eternal respect and honor. What of those who ride on the coat-tails of dramatic news, and do their sometimes unpleasant and highly stressful jobs? Has the human condition and the nature of trauma and war changed fundamentally in the past couple decades to explain or justify the increased level of diagnoses and compensation for trauma-related experiences?

The article reflects some who were caught. In the culture of cynical entitlement that appears to be reflected in the article, what remains unrecognized? Does one really believe that this case and the Long Island Railroad abuses cover and resolve the core issues?

MCN Achieves SSAE 16 Soc 1 Type 2 Compliance

September 5, 2014

Medical Consultants Network, the nation’s leading fully integrated provider of Independent Medical Examinations and Peer Reviews, announces successful completion of our third-party SSAE 16 SOC 1, Type 2 audit. This third-party audit by Moss Adams confirms Medical Consultants Networks’ commitment to maintaining high standards for security. 

SSAE 16 (Statement on Standards for Attestation Engagements #16) provides United States guidance for auditors reporting on a service organization’s controls, while SOC (Service Organization Controls) reports are designed to help service organizations build trust and confidence in their service delivery processes and controls through a report by an independent Certified Public Accountant. The SOC audits provide assurance that controls asserted actually exist and are functioning properly.

An organization can receive either a Type 1 or a Type 2 SOC audit. The former merely reports on the suitability of controls at a point in time, while the latter tests the operating effectiveness of controls over a period of time.  MCN’s audit was conducted by Moss Adams LLP, one of the largest and most respected accounting and business consulting firms in the nation.

MCN has long recognized the importance of IT security, maintaining the safety of medical information and the integrity of our systems. The certification of our compliance with SSAE16 SOC 1 Type 2 standards is a recognition of our efforts and the hard work by MCN companywide, from our information services and operations staff to our human resources personnel in meeting industry standards at this high level. Our attention to security and the safety of our clients’ data is on-going.

“In attaining its SOC 1 Type 2 audit reports, MCN reinforces its strong commitment to the security and availability of its data centers and operations,” stated Chris Kradjan, Partner, National IT/SOC Practice Leader, Moss Adams.

An Unsuitable Trajectory

September 2, 2014

expensive medsMCNTalk reads Forbes. Mainly for great business articles but even for opinions, which are predictably free market and generally anti-government and Obama. That said, Forbes agrees that US Health care is high priced and advocates a consumer-driven solution. As we have opined elsewhere, consumer engagement that led to citizens shopping in a competitive market for care and coverage might have benefits.

Most startling is the reference to Swiss health care spending being 45% of the US levels. Having traveled in that marvelous country, one can’t credibly claim they are anything but more robust and wealthier per capita than the US. We deserve to understand and respond to such massive differences. Not having been to Singapore, where spending is said to be at 20% of US levels, this 5x spread is incomprehensible and we wonder if it is a typo or some major relevant facts are missing. Even Forbes agrees that things are way out of whack with our system’s cost.

As a thought experiment, imagine that rather than health care, the media reported that cars, smartphones and flat panel TVs cost twice or more as much in the US as they do in Switzerland. Since we pay ourselves for these goods, how much rhetoric and justification would we tolerate in explaining the differences? Or would we rather have a flurry of innovative efforts to ensure that US consumers are able to pay the same or less than others for similar products and services? The difference of course is who is paying. When employers or government pay, we the consumers basically have little reason to care. When on the other hand we have to pull out our own wallet, the impact and visibility is immediate. Unfortunately, the ACA and other reforms that don’t truly engage the consumer in feeling some pain or gain, have a basic flaw that impedes price competition. Furthermore, as many have pointed out, the ability to make an informed choice when it comes to complex health issues is questionable, not to mention the ability to shop when one is bleeding or in the process of an acute condition needing immediate intervention. Informed buying requires both the ability to have good information and enough time to decide.

The question is when do we stop debating and engage in the truly tough decisions that will send us in the right direction. We are not optimistic because any system that represents almost 20% of our GDP will not give up turf easily. For the US health spend to approach benchmarks of other industrialized and healthy economies would displace many jobs, institutions, revenue streams, and profits.

The Impact of Community Health Workers: Cutting Re-Admissions and Creating Healthier Communities

August 29, 2014

community health workersCommunity health workers can support, guide and encourage patients to manage their health over the long term. Many poor countries use CHWs on an enormous scale. This is a crucial role in a country where vast numbers of people are sick with chronic lifestyle-related diseases. Doctors can’t help patients change their behavior in the 15 minutes they spend with each patient. But community health workers can.

In the United States, in 2010, researchers from the University of Pennsylvania began interviewing patients who lived in high-poverty neighborhoods about what they saw as barriers that kept them from getting health care, and kept them sick. Those responses — from long interviews with 115 patients — became the basis of the Penn Center and IMPaCT, which stands for “individualized management for patient-centered targets.”

The Penn Center is one of several new models hospitals are trying to make CHW programs sustainable. Another is program is Grand-Aides. Unlike the Penn CHWs, Grand-Aides don’t help with social or logistical issues. They are nurse extenders who get hundreds of hours of medical training. Each patient visit is supervised in real time by phone by a nurse, who makes all the decisions. A pilot at two pediatric Medicaid sites in Texas showed that the program cut readmissions by at least two-thirds. Learn more…

Do Patients Feel Better in Redesigned Hospitals/Rooms?

August 27, 2014
Butaro District Hospital in Rwanda, photo from MASS DESIGN GROUP.

Butaro District Hospital in Rwanda, photo from MASS DESIGN GROUP.

Often ignored by front-rank architects, left to corporate specialists who churn out too many heartless buildings, hospitals are a critical frontier for design, for exterior design as shown in the photos included here, individual room layout, and overall hospital layout.

As an example of the impact of interior changes, after months of testing a new room layout at the University Medical Center of Princeton, patients in the model room rated food and nursing care higher than patients in the old rooms did, although the meals and care were the same.

Some innovations are logical and even seem obvious, and some do have their downside: patients in single rooms are likely to share more information with the medical staff more quickly than those in double rooms, so the Princeton plan opts solely for single rooms, though this increased the building’s overall size, thus forcing a larger separation between certain departments and thereby requiring new methods of internal communications. The new rooms include a sink positioned in plain sight, so nurses and doctors will be sure to wash their hands, and patients can watch them do so. A second sink is in the bathroom, which is next to the bed, a handrail linking bed and bathroom, so patients don’t have to travel far between them and will fall less often.

But the real eye-opener was this: Patients also asked for 30 percent less pain medication. Reduced pain has a cascade effect, hastening recovery and rehabilitation, leading to shorter stays and diminishing not just costs but also the chances for accidents and infections.

Redemption Pediatric Hospital, Monrovia, Liberia. Photo from MASS DESIGN GROUP.

Redemption Pediatric Hospital, Monrovia, Liberia. Photo from MASS DESIGN GROUP.

Health care is a trillion-dollar industry just discovering the medical and economic benefits of better design. “It’s a significant part of our G.D.P.,” noted Christopher Korsh, the principal architect on the Princeton project. “Patients now say they won’t come to a facility because they don’t like it, and if there’s a building that can save 2 percent on the cost of delivering health care, that’s huge. Plus good design really can make you better faster.” Read more…

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