November 6th, 2009

Canadians get a taste of American medical system with IMS Health buy

Posted by Dana Blankenhorn @ 7:28 am

Categories: Finance, General, Government, Medical Office IT, Payment Processing, Research, SaaS

Tags: IMS Health Inc., IBM IMS, CPP, CPP Investment, Sales Strategy, Sales Force Management, Personal Finance, Benefits, Payroll Solutions, Sales

You have likely never heard of IMS Health, but they’re a big deal in the current IT environment of American medicine.

IMS buys prescription records in bulk from big pharmacies, strips out the patient names but identifies the doctors, then tells drug companies of the doctors’ prescribing habits. This lets the drug companies target their sales efforts.

The picture at the right, taken from IMS’ current home page, illustrates the firm’s view of it. The little blue ball represents sales, and the nice lady has IMS knowledge to shoot it accurately.

Critics have their own view. New Hampshire sought successfully to stop IMS data collection in court, and the American Medical Association (AMA) runs a program through which doctors can opt-out.

Regardless of your view, it’s a data processing company that makes money. IMS earned $311 million on sales of $2.3 billion last year. This made it attractive, and a leveraged buy-out of the company was announced yesterday.

Which is where the Canadians come into the story. The main player here is TPG Capital, run by the renowned financier David Bonderman, but his partner in this deal is the CPP Investment Board.

CPP is the investment arm of the Canada Pension Plan, which you might compare with a privately-run Social Security system. CPP Investment seeks a return on the pension contributions of Canadians. The CPP collects the fees and pays the pensions.

Out of the CPP’s $116.6 billion in assets, private investments like this represent “just” $18.4 billion. But that’s enough money, and the law offers CPP Investment enough leeway, for it to get into some very interesting deals.

Like this one.

All of which means that Canadian pensions may be riding on the success of an American company performing computing feats that would be incomprehensible in their own country, which is a single-payer system run through the nation’s provinces.

September 25th, 2009

Intuit service shows how little patients count

Posted by Dana Blankenhorn @ 5:45 am

Categories: Finance, General, Insurance IT, Medical IT, Medical Office IT, Payment Processing

Tags: Intuit Inc., Patient, Benefits, Human Resources, Dana Blankenhorn

Regular readers may remember a piece I did in August on bill payment processing. I noted the hassles of tiny bills, and noted they cost more to process than pay.

Intuit says it has an answer, called Quicken Health Bill Pay. It is an answer. For doctors.

Intuit has integrated with major insurance billing systems so it can present patients with online invoices that are paid online. This has enormous benefits. For doctors. They can learn quickly when insurance has finished its work and balances are due. Patients are notified of this via e-mail, so doctors get their money faster.

A subhead on the press release reads “Taking the Pain out of Paying and Receiving Medical Bills.” And I find myself quoting a Saturday Night Live skit. Really. Really?

Because I don’t see it. How is it to my advantage, as the person paying the bill, that the doctor gets their money faster? What’s the big whoop-de-doo about my using your online interface when my bank already has one?

There are, in fact, two audiences for this offering. But Intuit offers real benefits to only one.

It’s as though they don’t know there is competition in the patient end, or don’t think patients expect a little something for giving someone else a benefit.

Which means that if my doctor signs up for this service, I’m going to ignore it. I’m going to wait until the bill comes to me, on paper, and I’m going to wait until it’s due to pay it. Maybe I’ll use a credit card for that next $3.47 payment.

Because unless someone is going to give me a benefit, a real benefit, I see no reason to make their life easier and mine less-so.

Really.

September 17th, 2009

Companies to offer free foreign travel for their sick

Posted by Dana Blankenhorn @ 5:27 am

Categories: Finance, General, Insurance IT, Medical IT, Payment Processing

Tags: Health Care, Vertical Industries, Benefits, Healthcare, Human Resources, Dana Blankenhorn

As many as 40% of us who think we have insurance don’t.

These are the people in self-insurance pools. Companies use insurers for administrative and back-office functions, but they basically manage their own risks, and pay the bills directly for employee care.

This gives them the power to bend the cost curve, and one way they might do it is through medical tourism.

Steven Lash, CEO of Satori Medical World, has a patent on how to do this. (Satori is a term used by Japanese Buddhists for a sudden flash of individual enlightenment.)

Here is how it works.

Lash has spent the last year building a network of hospitals around the world that offer first-rate care, based on international standards, at prices a fraction of what you would pay in the U.S., plus experience dealing with English-speaking patients.

“We are sending people to Mexico, to Monterrey. We hope to add Mexico City. At the first of the year they will be going to Panama and Costa Rica. Then we have the Philippines, India, Thailand, Turkey and Singapore.”

Lash has also spent time calling on these self-insured companies, persuading them to his idea, trying to get a chance. “We would become embedded as a health care option for their clients. They would have a choice of going to five network options and we’d be the sixth. We don’t replace the benefit. We become an option.”

To make sure this works, Lash will also choose patients carefully. If you have co-morbidities, stay. If your case is just emerging, stay. The benefit will be offered to those who need a defined procedure only.

The savings here can be huge. The patent covers what happens to them.

“We have a business method patent whereby the employee gets to share in the savings through a deposit in a Health Reimbursement Account (HRA).

“If the savings are $40,000, the employer shares $8-10,000 with the employee and makes a deposit in their HRA. This money can then be used to do co-pays, deductibles and for further premiums.”

HRAs are defined by the Treasury Department, and are different from Health Savings Accounts in that they are “100% employer funded, and non-portable. It rolls over. There’s no limit on what you can put in. And it can pay for first dollar coverage.”

There are incentives here for both sides. The self-insurer pockets big savings, plus they build loyalty because the employee isn’t going to leave with a big HRA balance. The employee, meanwhile, may save enough to pay for the next year’s premiums, or the birth of their next child.

Yes, you’re exporting the practice of medicine overseas, but that’s the market. Those with real insurance won’t see this for years because such things need to go through state regulatory processes.

Lash has just built this machine, and Satori only sent out its first patient recently. A few more will go out in the fourth quarter, and as many as 200 next year. But “we have been getting quite a bit of traction” and it’s easy to see why.

Health reform proponents are far too polite to charge opponents of reform with killing American jobs, so what can go wrong?

August 24th, 2009

Condemning what the market does worse

Posted by Dana Blankenhorn @ 5:00 am

Categories: Aging, Ethics, Finance, General, Government, Insurance IT, Payment Processing, Research, U.S.

Tags: Bank, Patient, Insurance Company, Doctor, Insurance, Government, Financial Services, Business Operations, Corporate Insurance, Dana Blankenhorn

The most cynical part of the current health care debate is how industry advocates have turned their current practices into controversial, even evil-sounding threats against citizens.

(Picture of Fox News report from MediaMatters.)

Take the idea that “the government will force you to give up your bank numbers.” I complained about post-care bills in a recent post and got several private e-mails from doctors saying they had a simple solution to the problem.

They took the patients’ bank numbers before giving any care.

Works great for the doctor. Once the insurance company is done you just bill the patient’s credit card or debit card for what is left. But the patient is given no prior notice of how much is being charged. What if the doctor overdrafts their account?

Thus the fear of what government might do is more than matched by what industry is already doing.

This is especially true with comparative effectiveness. None of the bills that have passed committee mandate the use of best practices derived from data. Yet there was Sen. Coburn on TV sanctimoniously intoning that the Obama plan would “get between a patient and her doctor” using just such research.

Trouble is such research is moving forward, and insurance companies do plan to use it to drive costs down. That’s what HMOs were all about, mandating less-expensive care, only without numbers to back it up. With the numbers you have no appeal.

What Coburn is complaining about is what industry is doing and plans to do more of.

Or take the nonsense about “death panels.” This refers to a provision that Medicare cover end-of-life counseling. A House bill describes the services to be performed. Betsy McCaughey, who started the death panel slander, tried to sell it to Jon Stewart of The Daily Show recently by reading the bill.

A recent AARP survey in Massachusetts shows this is something seniors want, something they need, and something they are not yet getting. Some 89% said they wanted honest answers from doctors before the end, while they are still lucid, but only 17% said they were getting that service.

Then there’s the question of end-of-life care itself. The House bill gives seniors choices on how, when and where to get this care. Insurers, meanwhile, are entering exclusive agreements with hospice providers, telling you where you will die to maximize their profit.

Few deny the Obama Administration has mangled the health care debate. On my personal blog I have compared this to how the Bush Administration handled Hurricane Katrina.

But if the result is that voters see everything Republicans taught them to fear, only done privately and for twice the price, all the PR in the world won’t smooth things over.

August 17th, 2009

Big money to be made in health payment processing

Posted by Dana Blankenhorn @ 5:00 am

Categories: Finance, General, Hospital IT, Insurance IT, Medical Office IT, Payment Processing

Tags: Payment Processing, Payment, Patient, Insurance Company, Health Care, Operational Accounting, Insurance, Finance, Business Operations, Corporate Insurance

Here are some recent entries from my personal checkbook.

$24.28. $16.28. $12.07. $4.56. $3.99.

Each represents a medical payment, billed long after work was performed, after my insurance company had its say. I should add here I have what they call the “good insurance,” a PPO that lets me choose my doctor and hasn’t entirely refused a big bill in almost 30 years.

Multiply this $61 by tens of millions, then consider many patients are going through this exercise several times a year, maybe monthly. These are what I call the “dribs and drabs” of our medical payments system, money that is often not worth collecting once the costs of that collection are added-in.

Consider that last bill, $3.99. To get that money someone had to print an invoice, mail it, then pay the costs of processing either a check or a debit payment. The payment forms offer patients the chance to even pay by credit card. So there’s another 2-5% taken off the top, plus the processing fee.

And if the payment isn’t made in time, you have to bill it again. Maybe go to a collection agency.

This is stupid. It’s also an opportunity.

So let me offer a modest proposal, that insurers offer doctors a “petty cash” service through credit card processors. All charges under, say, $20 are passed to the fund and reported to the patient, not billed but reported. At the end of the billing year patients get one bill, which could be rolled into the next year’s premium.

Insurers call your processors.

This is a payment service. It’s pure cash management. All sorts of businesses do this. Banks know all about it. You’re banking debts for a year on behalf of the doctors, saving money for both sides of the transaction.

Here’s where it gets good. You can make so much money off this debt over the course of a year that the insurer can actually offer “points” to patients that might come out in the form of small premiums or discounts.

For the doctors, they save on processing and get back what amounts to a bonus check at the end of the year. Employers whose customers pay on time could even get a discount next year, which they can gleefully report to the employees. Want an incentive for people to use Health Savings Accounts? Here it is.

And for the insurance companies, for the processors, for the banks who are handling this debt and this processing, it’s a gold mine. Billions and billions of dollars that right now cost more to collect than they’re worth, turned into valuable savings and revenue streams, not to mention goodwill.

June 29th, 2009

Do security and privacy make health IT reform impossible?

Posted by Dana Blankenhorn @ 8:34 am

Categories: General, Hospital IT, IT Management, Insurance IT, Medical IT, Medical Office IT, Medical Records, Payment Processing

Tags: Information Technology, Privacy, Health Care, Vertical Industries, Benefits, Healthcare, Strategy, Security, Human Resources, Management

An ongoing series on health IT reform by Ann Carnes over at Kaiser Health News has a subtext worth discussing here. (Picture from Allscripts.)

To what extent are fears of privacy and security preventing health IT reform?

In her latest piece she profiles a doctor who stopped using an eprescribing pilot because of security and policy problems. The system automatically logged out when inactive, and would not support the full range of medicines being prescribed.

An eprescribing system can cut costs by eliminating paperwork, but it must support what paper is already doing or it’s worthless. And if it’s a pain to use doctors will give up and go back to their pads.

These are reasonable objections. There is a need for security, privacy and procedure in any health IT implementation. But it must be balanced against the need for simplicity, with its ease of use constantly compared with paper alternatives, to be effective.

The hardest thing to be is simple. This is true in story-telling. It’s true in science. It’s also true in software.

Any requirement that gets in the way of simplicity needs to be carefully considered, and pared down to its simplest form, before being tossed at an industry with a lot on its plate.

April 23rd, 2009

Behind the Microsoft skepticism on Health IT

Posted by Dana Blankenhorn @ 8:53 am

Categories: Finance, General, Government, Hospital IT, IT Management, Insurance IT, Medical IT, Medical Office IT, Medical Records, Payment Processing, U.S., Windows

Tags: Electronic Health Record, Health Care, Microsoft Corp., E-health, Healthcare, Vertical Industries, Benefits, Enterprise Software, Software, Human Resources

Peter Neupert, corporate vice president for the health systems group at Microsoft, is out with an editorial questioning the wisdom of putting Heatlh IT in the stimulus.

It’s a good piece. It warns that we need to focus on the goals and not the technology. Electronic medical records (EMRs) won’t solve the problem of chronic disease or our problems with the way we pay for care, he writes.

Absolutely.

But why is it, with everyone who went to HIMSS now praising the money and lining up for their share of the spoils, is Microsoft being the skunk at the picnic?

The reason is Microsoft is not yet the leader in this market. IBM is better-positioned in many ways. If there’s a rush by hospitals and medical clinics to quickly install EMR software, Microsoft is not going to get its customary lion’s share.

Better then, to lay down a marker saying “it’ll never work” because, in the short run, it won’t. EMRs by themselves don’t solve medical problems. They are just a small piece of a much larger solution:

• They have to be fully integrated with Personal Health Records (PHRs) in order to be of use to patients. That doesn’t just mean PHR systems like HealthVault, but applications built on those systems.
• They have to share data structures if research is to be done with them. The real health IT battle is going to be fought in the clouds, not on the ground.
• They don’t change the rules of the health care game by themselves. They point to the direction of reform, but the big contracts come once the direction of reform is set.

Yet at the same time EMRs are a wrenching change for a hospital or medical practice. In the short run an EMR system actually reduces productivity, until everyone in the office learns the new system and adapts to it.

Think of the EMR opportunity as round one in a long fight over health IT, something worth not $19 billion but trillions of dollars. Neupert is positioning Microsoft for the larger game.

March 13th, 2009

Visa going direct into health payments market

Posted by Dana Blankenhorn @ 9:27 am

Categories: Finance, General, Hospital IT, Insurance IT, Medical IT, Medical Office IT, Payment Processing

Tags: Visa Inc., Payment, Health Care, Operational Accounting, Insurance, Finance, Business Operations, Corporate Insurance, Dana Blankenhorn

Visa announced a deal with Preferred Health Technology of Carrollton to push PHT’s A-Claim payments system to insurers and hospitals, based on the Visa brand.

A-Claim offers insurers an interface that checks eligibility and automatically calculates payments based on the patient’s plan.

This does not mean patients must settle bills with Visa cards, but it could put the Visa logo onto insurance cards and run payments through Visa’s processing system.

The deal is big for both sides. It puts Visa directly into health care payments. It gives PHT a big partner it can use to secure deals with insurers and hospital networks.

Visa emphasized that the system allows hospitals to guarantee payment at the point of care, noting that as many as 50% of all bills go unpaid.

Hopefully this can also eliminate the common hassle of patients getting tiny bills from hospitals for treatments received weeks or months before, after they have been run through the insurance system. The A-Claim solution promises to run those payments through Visa automatically.

March 3rd, 2009

HITrust launches health security effort

Posted by Dana Blankenhorn @ 11:34 am

Categories: General, Hospital IT, IT Management, Insurance IT, Internet, Medical IT, Medical Office IT, Medical Records, Payment Processing, Physician Information

Tags: Group, Health Care, Healthcare, Vertical Industries, Benefits, Peer To Peer (P2P), Security, Enterprise Software, Software, Human Resources

The HITrust Alliance announced a common security framework for moving Electronic Medical Records (EMRs), which seems to be based on a Verisign certificate authority.

The Common Security Framework was announced in San Francisco, with the tools available through HITrust at prices starting at $1,875.

The group’s executive council consists of incumbent providers of IT services, health insurers and hospitals, which will lead some to question whether this standard will indeed be open, or closed.

The group has a full community center, albeit much of it behind a registration firewall. You know you’re in the public section because the https appears as https.

The group’s blog features a complaint about new regulations on reporting identity theft, increased penalties for HIPAA violations under the Stimulus Act (which it supported), and fears about peer-to-peer programs.

The good news is the group’s offering is based on existing standards like COBIT, NIST and ISO 270001.

What do you think about it?

February 28th, 2009

Obama health reform strategy is money first

Posted by Dana Blankenhorn @ 8:52 am

Categories: Finance, General, Government, Payment Processing, U.S.

Tags: Strategy, Health Care, Money, Vertical Industries, Benefits, Healthcare, Enterprise Software, Software, Human Resources, Dana Blankenhorn

The Obama strategy for achieving health reform is now clear.

Get the money first. This changes the terms of the debate, from what will it cost to how do we do things more efficiently?

The Stimulus package featured money for health IT, and an extension of federal coverage to children and the unemployed. The budget aims to get the rest of the money by getting insurers out of Medicare and pushing down drug costs.

The result, as our friends at BNET note, is a $634 billion fund that can expand coverage, under the new budget’s terms, to all Americans.

The strategy is a contrast to what the Clinton Administration tried to do in 1993, namely combine the debates about financing and reform into a grand bargain that was never struck.

The Obama strategy of doing health reform in pieces left conservatives clutching at air, even those who were aware of his plan.

Their warnings, that health IT money in the stimulus would lead to socialism, were seen as extreme. Big business, seeking a way to get health care off its books, changed sides.

Conservative allies in the insurance industry have already bought, in theory, an end to underwriting. Their arguments against comparative effectiveness backfired, as they wound up opposing the insurance industry’s own tech plans.

What is left is their alternative vision of Health Savings Accounts, an approach that becomes more distant with each Congressional vote, and ideology, personal attacks or charges of socialism, which most voters currently reject as shrill.

There is still an enormous amount missing. It’s obvious with each passing day that the Administration lacked a Plan B for Tom Daschle. No HHS Secretary has been appointed, and thus Bush Administration holdovers are still in charge of reform.

Their plans, especially in the area of IT, could be irreversible before Obama’s people arrive to change course.

But by concentrating on the money first, and using the typical Presidential honeymoon to push for the money, the Administration has bought itself time.

By the time Obama is ready to engage on his true reform agenda, the debate will not be about funding, but about using the money wisely.

That’s a debate the President might well win.