Healthcare Breakfast Club

Why Playing the Mega Millions Isn't Stupid (Even If You Lost)

I’m not a gambler, but this week I played the Mega Millions.  I obviously didn’t win the $640 million, or I wouldn’t be writing this.  Someone in Maryland won.  Did I ever stand a chance, or was I, as my sister likes to say, simply paying a “tax on stupid people”?

I’m not stupid, and here’s why.  Mathematical arguments that the lottery is a losing proposition are based on fallacies of mathematics.  Such arguments usually go something like this: The price of a ticket is $1, the prize is $1 million, the odds of winning are 1 in 2 million, therefore the value of the ticket is ($1 million) divided by (2 million), or $0.50.  The rationale is the law of averages.  If you play many games, the argument goes, over time your winnings will be smoothed out, and on average you’ll earn $0.50 for each $1 you spend. 

These mathematics explain small lotteries, but not big ones like the Mega Millions.  Suppose you and nine friends chip in $1 each for a 1/10 shot at the $10 prize, and you do this regularly.  Here, the law of averages holds, because you actually will play many games, and when you add up your winnings at the end of the year, it will come out to just about $1 per ticket.  In other words, the law of averages holds when the number of games played is large relative to the frequency of winning.  This is why casino blackjack is safe but boring – you’re sure to win, and often, but the amount will never be very much.

In contrast, Mega Millions carries odds of 1 in 172 million (or so).  It’s drawn twice a week, so to guarantee a win you’d have to play for 1.6 million years straight, and you’d obviously spend $172 million (not accounting for 1.6 million years’ worth of inflation).  The law of averages is reversed – the number of games in between wins is far larger than the number of games you’ll ever play.  You’ll never play Mega Millions enough times to actually smooth your winnings into an average income stream.  If God played Mega Millions, maybe He could assign a ticket an average value of $0.76 or $1.39 – but to me, a mere mortal, it’s all-or-nothing.

We call this a quantum phenomenon.  There is a world in which you win and one in which you lose, and the two can never co-exist.  This is unlike your $10 lottery with your roommates, a game which you can win and lose multiple times in the same week.  Compared to the enormity of Mega Millions, your puny ticket is an atom that exists in one quantum state or another, but not both and not some average.  It’s Schrodinger’s cat – it’s either alive or it’s dead, but it cannot be some average of alive-and-dead. 

Borrowing more vocabulary, you might call this a black swan event – like, say, a global financial crisis or an unprecedented tsunami.  Some people planned for a global crisis and shorted the rest of us.  Before the black swan event actually happened, we thought they were crazy; now they seem prescient.  Conversely, when the Fukushima Daiichi planners did not account for massive catastrophes like last year’s earthquake-tsunami-flood combo, no one faulted them, but in retrospect their mathematics look flawed.  It would have made no sense for Fukushima Daiichi to calculate the average price-per-share of a highly unlikely event that destroys the entire company value (and maybe that of Japan’s whole nuclear sector).  Similarly, presenting the average per-ticket value of the Mega Millions as $1.09 (or whatever) is utterly meaningless.  You don’t get nine cents – either your life is changed massively and forever, or it isn’t. 

 

Finally, the lotto doesn’t cost very much.  If I play a ticket every single drawing, that’s only $100 a year, not a burdensome sum for most Americans, and far less than I already spend on totally stupid shit.  Black swan events do happen – as some lucky bastard in Maryland is learning right now.  To summarize, therefore, the logic behind choosing to play the Mega Millions is this:

-          -  Spend nearly $0 to have a small but nonzero chance to completely transform your life,

-          Or

-          -  Give up any chance whatsoever of that life-changing event, and get nothing in return.  

When framed that way, the small fortune I spent this week feels slightly less stupid.

Free Startup Idea: Discharge Planning

Medicare and private insurers are increasingly going to stop paying hospitals for readmissions.  But reducing readmissions requires dedicated staff with skills that hospitals don’t currently have.  Great systems like UCLA can grow such skills in-house, but everyone else requires help – and that’s where you come in.

 

Here’s the pitch – for a per-case fee, your staff helps hospitals plan discharge.  Your social workers sort out outpatient dialysis, home health equipment, and home nursing.  Your coordinators call all the outpatient docs and get them the Discharge Summary and info they need.  Your nurses perform medication reconciliation and teach the patients about their follow-up plans.  Your call center serves as the point of contact for patients, which is easier for them than trying to call the hospital (ever called a hospital?).  This combination of pre- and post-discharge care coordination reduces readmissions.

 

The sale shouldn’t be hard.  Hospitals faced with looming unreimbursed readmissions – now a cost at $5,000-$15,000 a night – will find your rates reasonable in comparison.  In addition, you’ll be lightening the burden on their clinical staff, freeing them to do the clinical work they’d rather do.  Because you have dedicated skills and local relationships, you can do this faster and at lower cost than the hospital.  Because you have cost accounting skills the hospital doesn’t, you’ll be assured of forecasting your rates accurately.  Also, as a third party you’ll be entrusted with data that payors are reluctant to give hospitals.  This knowledge advantage will allow you to offer to take a pay cut when patients are readmitted, thus proving to hospital clients that you have skin in the game.

 

Costs are modest.  You hire staff at reasonable rates from hospitals, where the work is too intense, and insurers and disease management companies, where it’s too hands-off.  Otherwise you’re asset-light – no inventory, no plant, no specialized technology.  You get to know all the SNFs, rehabs, home health companies, and dialysis units in the region, creating barriers to entry for competitors.  Billing is easy – you go straight to hospitals and not payors.  No special coding needed.  Patients should like it, since your job is to help them stay healthy, understand their health, and connect them with their docs.  Policymakers should get behind you, too.

 

I might be biased but I believe it’s do-able and it would be good for patients.  It’s yours free of charge – good luck. [Disclosure: I work for the UCLA Health System.]

Patient Notes Are Stupid. How About a Wiki?

Imagine I asked you how many times Theodore Roosevelt went hunting.  Here, I say - Teddy’s complete library, all his letters, speeches, and journals.  You comb through letter after looseleaf letter.   Then I say tell me every hotel he ever stayed in.  So you go back and go through the library again.

 

Sounds crazy – but that’s what a medical record is like.  Patient info is kept in a series of notes that are basically letters by docs to one another (or to insurance companies).  Every time I meet a new patient, I comb through the library to find how many times were they admitted, what antibiotics were used, etc.  We call this a “chart biopsy,” and like a real biopsy it practically takes a week to get a result.  If I’m lucky someone else has done a good summary and I copy-forward; but no guarantee.   If I’m really lucky, an electronic record has sections for “Laboratory Results” or “Radiology,” but I still can’t connect the data to the story.  Why was this ESR ordered in 2005?  Did they have a bone infection or arthritis?  Why was this stress test done?  Did they have chest pain?

 

With Teddy, you’d go to Wikipedia, and so it should be with patients.  Each patient should have a Wikimedica page.  The front page would be their life story – what we call the Past Medical History.  Current meds would be there, as well as historic meds, as would Allergies, Family History, Social History, etc.  Separate sections would have all the hospital admissions and surgeries, each with a Discharge Summary or Procedure Note.  When a doctor meets a patient, apart from her own History of the Present Illness and Physical Exam, she just goes to the Wiki and copies down the most important relevant history, and BAM! it’s her note.  If she changes the meds, she updates the Wiki.  If she learns important history, like the name of that one uncle’s rare blood disorder, she adds it to the Wiki.  Nothing ever lost; no time wasted with pointless chart biopsies.

 

The current debate about EMRs focuses on whether or not data is digital – but says nothing of whether that data is truly organized.  There’s a huge difference between Wikipedia and simply scanning Roosevelt’s epistles.   A wiki is do-able.  It would be cheap.  The time savings of not having to chart biopsy would attract docs, who wouldn’t have to write anything they’re not already writing.  And the potential to reduce error should get everyone’s buy-in. 

Healthcare innovation - short blurbs from the HBR

For those who may have missed it, there are a great series of short pieces on
healthcare innovation in HBR today - featuring Clay, Rosabeth Moss
Kanter, Julio Frenk, other heavyweights at Harvard.  Fascinating pieces, definitely worth a read:

http://blogs.hbr.org/innovations-in-health-care/

Pay-for-Premonition?

This is too funny.  The New York Times just reported that the Romanian government, which recently began taxing witches and fortunetellers, will now begin fining them if their predictions don't come true. I believe this is called "pay-for-performance."  It's safe to say that Romanian fortunetelling remains safely in the "Intuitive Medicine" realm in the Clay Christensen model, and has not yet entered the "Empirical Medicine" or "Precision Medicine" phases.

Predictably, the witches and fortunetellers are protesting, saying their cards and other tools can be inaccurate.  We will no doubt soon hear "fortunetellees' advocates" contending that the new policy will simply lead to fortunes become more vague and unhelpful - "teaching to the test," they'll call it.  They'll argue that the work of witches is by definition highly subjective and variable, and there's no predicting individual human biology.  After all, fortunetellees' behaviors also determine outcomes, so witches shouldn't be held accountable for their failure to comply with recommendations.

 

Coming soon - Dispatches from India.

Don Berwick, Extremist for Patients

This week, to take my mind off whether or not John Boehner will gut the Center for Medicare and Medicaid Innovation for funding, I found myself revisiting one of my favorite articles, Don Berwick’s piece “What ‘Patient-Centered’ Should Mean: Confessions Of An Extremist,” published in Health Affairs in May of last year.  Berwick argues passionately and compellingly that we must view patient-centricity as a worthy goal of healthcare in its own right, defines “patient-centered care,” and illustrates vividly what it would mean.  He opens with this anecdote:

     Three years ago, a close friend began having chest pains. She headed for a cardiac catheterization, and, frightened, she asked me to go with her. As I stood next to her gurney in the pre-procedure room, she said, “I would feel so much better if you were with me in the cath lab.” I agreed immediately to go with her.
     The nurse didn’t agree. “Do you want to be there as a friend or as a doctor?” she asked.
     “I guess both,” I replied. “I am both.”
     “It’s not possible. We have a policy against that,” she said.
     The young procedural cardiologist appeared shortly afterward. “I understand you want to have your friend in the procedure room,” she said. “Why?”
     “Because I’d feel so much more comfortable, and, later on, he can explain things to me if I have questions,” said my friend.
     “I’m sorry,” said the cardiologist, “I am just not comfortable with that. We don’t do that here. It doesn’t work.”
     “Have you ever tried it?” I asked.
     “No,” she said.
     “Then how do you know it doesn’t work?” I asked.
     “It’s just not possible,” she answered. “I am sorry if that upsets you.”
     Moments later, my friend was wheeled away, shaking in fear and sobbing.
     What’s wrong with that picture?

Fig. 1 - He was a very unassuming-looking extremist.

Lay readers will probably be largely shocked at this patient’s treatment, while I suspect a number of docs will insist that the cardiologist was right.  Berwick goes on to talk about how “patient-centered care” became a term and shows how it always got short shrift next to safety and quality.  In a vivid repudiation of one of the traditional tenets of medicine as a self-regulating profession, he memorably writes, “I think it wrong for the profession of medicine—or any other health care profession, for that matter—to ‘reserve to itself the authority to judge the quality of its work.’”  We should  behave, he says, "with patients and families not as hosts in the care system, but as guests in their lives."

He then goes on to lay out eight simple yet radical ideas that would absolutely transform hospitals and healthcare settings if implemented.  They are: 

     1. Hospitals would have no restrictions on visiting—no restrictions of place or time or person, except restrictions chosen by and under the control of each individual patient.
     2. Patients would determine what food they eat and what clothes they wear in hospitals (to the extent that health status allows).
     3. Patients and family members would participate in rounds.
     4. Patients and families would participate in the design of health care processes and services.
     5. Medical records would belong to patients. Clinicians, rather than patients, would need to have permission to gain access to them.
     6. Shared decision-making technologies would be used universally.
     7. Operating room schedules would conform to ideal queuing theory designs aimed at minimizing waiting time, rather than to the convenience of clinicians.
     8. Patients physically capable of self-care would, in all situations, have the option to do it.

You can almost hear the profession gasp.  Can you imagine?  No visiting restrictions?  Clinicians need patient permission to access records?  Patients on rounds??  But why not, after all?  What are you saying about them that they don’t deserve to hear?  Why should you have the right to freely peruse their most private information – no matter how irrelevant to your work – when you don’t have the  right to see their tax returns?  Why can’t they have the succor of their loved ones’ presence in their time of need, when you enjoy the right to banter and gossip at the nursing station all day? 

Berwick goes on to rebut a few common clinician objections, like “but patients don’t know what’s best in the evidence,” and to describe how the health system might be re-shaped to achieve better patient-centered care.  He ends with these moving words: 

     [This is] what scares me: to be made helpless before my time, to be made ignorant when I want to know, to be made to sit when I wish to stand, to be alone when I need to hold my wife’s hand, to eat what I do not wish to eat, to be named what I do not wish to be named, to be told when I wish to be asked, to be awoken when I wish to sleep.
     Call it patient-centeredness, but, I suggest, this is the core: it is that property of care that welcomes me to assert my humanity and my individuality. If we be healers, then I suggest that that is not a route to the point; it is the point.

Food for thought for all of us, not least because he’s now the guy that pays our salaries.  For the original article, see here.  For more on the Center for Medicare and Medicaid Innovation – the greatest hope our system has for reform – see here.  For one of Dr. Berwick’s memorable speeches, see here.

Fig.2 - Healthcare that is maybe too individualized

The Death of a Saint

On April 30, 2010, St. Vincent’s Hospital in the West Village in downtown Manhattan shut its doors for good.  This was a great loss for countless poor and underinsured patients, for New York City, and for hospitals everywhere (through whose spines a chill ran and through whose ERs a flood of patients threatens to run).  This was no ordinary hospital – it treated the 9/11 survivors, the first AIDS patients, the victims of the Triangle Shirtwaist Factory fire, and even the passengers of the Titanic.  How could it close after so many years?

Fig. 1 - The Triangle Shirtwaist Factory Fire, all too prescient.

 

The saga of St. Vincent’s suffering and demise has been told by many, probably none better than Mark Levine in New York Magazine this week.  The story tells itself, but at its heart, St. Vincent’s problem was a perfect storm of many factors, primarily:

•  Growing numbers of uninsured, undocumented, and Medicaid patients,
•  High rent and labor costs,
•  The ability of New York insurance companies to pit hospitals against each other to negotiate lower reimbursements,
•  The widespread competition in American healthcare to attract patients with high-tech procedures and diagnostics, rather than health results,
•  And the fundamental over-bedding of New York. 

Levine claims that a downward spiral of closures among vulnerable hospitals may result, and he rightly points to the recent closure of North General, the added pressure on Bellevue, and the growing financial losses at Jamaica and others.  Community hospitals can’t steal cardiac catheterization patients from New York Presbyterian or NYU any more than St. Vincent’s can.  Are they next?  Is there anything they can do?

Answer: Run headlong towards the problem.  Turn chronic disease from a loss into a source of revenue.  Here’s how St. Vincent’s could have done it.  

•  Create Integrated Practice Units (IPUs) or Patient-Centered Medical Homes (PCMHs) – call ‘em what you like – centered around prevention and maintenance for chronic illness.
•  Focus on the major chronic conditions burdening St. Vincent’s most difficult patients – HIV/AIDS, depression, schizophrenia, cardiovascular disease, diabetes, frailty and old age. 
•  Build interdisciplinary teams – social workers, nutritionists, care coordinators, etc. – with strong ties to the community to form the backbone of these teams.
•  Negotiate a capitation payment with your major payors – Medicaid, etc. – preferably risk-adjusted with performance bonuses.  The basis of this payment would be the historic average spending for these patients – in most cases, probably a lot of money.  Any care they needed, you’d pay for, meaning any care they didn’t need, you’d save on.
•  With these teams, help patients manage their care better, reduce avoidable complications, keep the savings, no longer depend on procedures for revenue, and make people healthier at the same time.

Why would this work?  For most of these diseases, the bulk of healthcare spending – and patient suffering – comes from complications that can be avoided with a little more intensive outpatient coordination.  Better diet education can prevent heart failure exacerbation; social worker help with living conditions can avoid falls; drug adherence can prevent psychotic episodes.  You’d have this market all to yourself, since no other medical center in their right mind would want them.  No large investments in machines and sub-specialists needed.  No I.M. Pei-designed tower needed.  No Eli Manning.

Fig. 2 - He didn't come free.

 

This is the definition of an Accountable Care Organization – an entity that assumes financial and medical responsibility for chronic disease care.  This wouldn’t be easy, since it would require payment contracts that don’t exist and training your people don’t have.  It also wouldn’t cover undocumented immigrants and other totally uninsured patients.  But it’s a strategy, and it would be better than buying scanners New Yorkers don’t need and hoping to steal patients from Cornell.  Other organizations, from PCMH demos across the country to Kaiser Permanente to small systems like the Commonwealth Care Alliance in Boston operate on exactly this set of principles.  The ACO Program, whose rules we all await, might also help.

It’s too late for St. Vincent’s, but New York’s other saintly hospitals don’t need to go down with it.  Vulnerable hospitals need new ideas, and here’s as good a place to start as any.  

 

Acknowledgement – this idea was not mine alone but the brainchild of Wing Province, Vanitha Janakiraman, Arshia Siddiqui, Camila Lajolo, and myself. 

Fig. 3 - Thanks for your years of dedicated service to the poor of this city.  We'll miss you.

The ACO Series, Part 2 - Antitrust

Breaking news - Federal Trade Commission chairman Jon Leibowitz has suggested that the FTC may permit antitrust waivers or an expedited review process for healthcare organizations seeking to become Accountable Care Organizations and wary of running afoul of antitrust legislation.  If such a process is created, organizations could achieve the scale they need to control the entire cycle of care for their patients.  It's a thorny grey zone - some of the same actions that enable you to provide all aspects of a patient's care also let you shut out competitors.  For example, having your primary care network refer only to your tertiary centers, negotiating favorable capitation contracts, buying information systems for docs that agree to work with you.

This isn't the first time antitrust has been a concern for healthcare organizations looking to corner a market.  In 2008, the Boston Globe published a series alleging that Partners Healthcare has been uncompetitively raising prices for a decade, though their claims have yet to stick.  UPMC, too, has been challenged for having a near-monopoly on healthcare throughout its region, but by a competitor (West Penn Allegheny) in a court of law, not by a newspaper in the court of public opinion.  That suit was thrown out, but antitrust continues to be a concern for large systems, who contend that insurance companies have been able to achieve national scale without seeing the same antitrust pressure, while the FTC has been quick to break up hospitals.

It's a fascinating issue and we'll see more activity here as the ACO movement goes forward.

More on the ACO Program here.

 

 

 

The Future of Health IT: Major League Baseball?

At an event recently, I met a professional baseball player who told me that he’s part of a fascinating experiment in personal health records.  Early this year, Major League Baseball linked all 30 teams’ medical records into one system.  This web-based system has doctors’ notes, radiography, and lab tests, and will standardize all of a player’s past data – MLB is even digitizing old records that were on paper.  The information is protected by HIPAA and not shared in real-time, so the Red Sox can’t access Jeter’s records to find out why he isn’t in the lineup one night at Fenway.

 

Fig. 1.  Iatrogenic harm

 

Sounds great, right?  Continuity of care, right?  Trainers and orthopedic surgeons starting care for a newly-traded player shouldn’t rely on vague recollections of past injuries, surgeries, or imaging, or even on written reports.  Now they can compare MRIs and X-rays and see exactly how an injury has healed or progressed over time.  They can see exactly what doses of meds a patient responded to in the past and which didn’t work.  Sometimes in healthcare we can get away with missing the details of a surgery or a CT scan, but at the level of physical performance that the MLB expects, nothing short of total precision will do.

 

Not so fast – the player I met, who shall remain unnamed, was not a fan.  Why not?  Turns out it’s not just the docs who access the system – it’s the general managers and club owners as well.  My friend realized early that such access gives clubs tremendous negotiating leverage over players: “Minor sprain, you say?  Says here on this MRI that several tendons may have been hurt.  Not sure we can give you $5 million.”  So my friend has wisely taken pains to edit exactly what health information he gives them and what he doesn’t – he’s careful to see non-MLB doctors for many things.  He’s often cited as one of baseball’s most overpaid players, so he’s clearly onto something.  Whether or not he withholds the right information, only time will tell. 

 

Let this be a cautionary tale.  If we’re to organize universal medical records systems, whom do you trust to lead the way?  Employers, who have a good reason to see their employees healthy but may have other motives?  Docs and hospitals, whose bickering and feudalism oftentimes undoes their good intentions?  Private enterprises, like Google or Microsoft?  They already seem to know what we’re searching for better than we do.  Insurers?  The government?  The Tea Party?  I welcome your thoughts.

 

More on the MLB's system here.

 

Fig. 2.  The patient reported a long history of being assaulted by strangers with wooden bats.

How Prisons Are Like Hospitals (Not the Other Way Around)

As you probably know, for-profit prison operators like the Corrections Corporation of America don’t have the best reputation – they stand accused of profiting off of America's growing crime rates, while we on the outside see only worsening violence, repeat offenders, and a drain of our tax dollars.  They have lobbied for legislation toughening penalties, which has many suspicious that they are not so much looking out for our safety as seeking to guarantee reliable revenue.  Many of my HBS classmates found the idea of private prisons ethically repugnant, arguing that some things must be handled by the state and should never be the province of private individuals.  I take exception to private prisons too, but for a different reason.  The problem with private prisons – like the problem with hospitals – is not that people profit, but that they profit off of the wrong things.

Fig. 1 - Maybe when they're out, they can solve healthcare

We shouldn’t be so surprised that private prisons aren’t improving society.  After all, we're getting exactly what we pay for.  Private prisons are typically paid per diem by the government – a fixed sum per prisoner head der day.  Their substantial fixed investments in buildings, guards, and security systems are their own cost to bear.  Clearly, the only way they can stay afloat is to have as many prisoners as possible, all the time, in more facilities.  Recidivism isn’t bad for them – in fact, it means repeat customers.  Not that they are evil – I don't believe any prison operators wish more crime on society, but it certainly makes no economic sense for them to spend millions on programs intended to prevent or reduce crime. 

Sound familiar?  It should – it's the same problem we have with our hospital-centric, acute care-driven health system.  Hospitals are paid per admission and docs per visit or procedure, so we shouldn’t be surprised to find that the numbers of hospital admissions, doc visits, and procedures have only multiplied over the years.  Healthcare providers aren’t paid for what we on the outside really want: health.  Not that doctors or hospitals are evil.  No one would deliberately harm their patients or attempt to increase hospital admissions.  But well-wishing and meaningful action are two different things, and for most healthcare providers, there are no resources available to invest in programs that will only reduce revenue by preventing readmissions or procedures.

Prisons, then, can learn something from healthcare. The trend for years in health policy has been to find a way to pay not for health care but for health.  Managed care, pay-for-performance, accountable care organizations, you name it – we haven't found the right way, but we're getting there. 

 
So why don't we pay prisons for criminal "health"? Not literal health, but rehabilitation in the societal sense – reduced violence, reduced recidivism, improved job and social skills.  Instead of earning more revenue for bounce-backs, prisons should be penalized, just as hospitals are increasingly docked for avoidable complications.  We could easily follow released inmates and "score" prisons on whether their people got jobs and stayed out of trouble, and pay them not for "quantity" of imprisonments but "quality."  Better yet, we might have prisons competing for the most lucrative contracts based on their results.  Suddenly we'd find prison companies investing not in lobbying but in research on how to rehabilitate criminals.  Far from being a costly nuisance, services like education, psychiatry, and therapy would become the keys to success.  Or think bigger - what about an accountable care organization for crime?  Imagine an organization responsible for the overall level of crime and security per member of the population of a region.  Because having people in prison would be the most expensive cost it could incur, it would turn its focus away from building jails and towards crime prevention, gang busting, and job creation.

Of course, as with many of my crazy ideas, there would be many technical problems.  The most vexing would be how to define "health" for crime – is it just the absence of crime or is it something bigger?  But that is the same debate we are having with healthcare – is health just the absence of disease or something bigger?  We find that the technical problems – how to achieve crime “health,” how to figure out which prison deserves credit for good results and which penalty for bad ones, how to keep players from "gaming" the system, what to do with prisoners that can never be reformed – all resemble the ones that now plague healthcare.  But these are technical arguments, not ethical ones, and they are reasons to try harder, not reasons to stick with our status quo.  After all, in prisons as in healthcare, the status quo costs our country dearly in dollars and lives.  Let's start by buying what we really want: health. 

For more about a fascinating idea for reforming prisons, see Graeme Woods in this month's Atlantic.  Prison Break and its images are property of Twentieth-Century Fox and are reproduced here entirely without permission; please don't sue me.