A useful summary from Healthcare.gov:

The Affordable Care Act makes investments to help raise the quality of care, while giving Americans – and their health care providers – more control over their health care.  It puts patients’ relationships with their doctors and nurses ahead of insurance company profits and paperwork, and gives health care providers incentives to better coordinate care.  The Affordable Care Act also ensures that millions of Americans will have access to affordable insurance – giving them access to the quality care you deliver.

What Does the Affordable Care Act Mean for Doctors, Nurses, and Other Health Care Providers?

For health care providers, health reform is designed to make our health care system stronger and make it work better for you and your patients:

• Expanded coverage and consumer protections will offer security.  As health care providers, you experience the impact of uninsured patients and uncompensated care first-hand.  Under the Affordable Care Act, over 30 million uninsured Americans will have increased access to affordable, quality health coverage options, such as those through the new Health Insurance Exchanges, which will provide essential benefits and impose limits on cost sharing.  With better access to health coverage, fewer Americans will need to delay or avoid seeking the care they need because they can’t afford it.  This will lower the burden of uncompensated care on physicians, hospitals, and the rest of the system.
• Reduced paperwork and administrative simplification will bring down the cost of care.  New rules will simplify paperwork and lessen administrative hassle to allow you to focus on caring for your patients instead of dealing with insurance company bureaucracy.  This comes alongside investments in electronic health record adoption that will bring doctors’ offices and hospitals into the 21^st century.
• Tough new consumer protections will hold health insurers more accountable for treating patients and providers fairly.  By eliminating many of the worst insurance industry practices, the Act will free you and your patients to focus on what really counts – taking care of the illnesses and injuries that affect them.  Insurers won’t be able to cancel coverage because a patient made an unintentional mistake on his or her application for coverage.  They won’t be able to set annual or lifetime limits on benefits that leave patients without coverage when they need it most.  And they won’t be able to exclude millions of Americans from coverage because of a pre-existing medical condition.  Patients will have new rights to choose their primary care professionals – including pediatricians – and to file appeals when insurers deny claims.  Finally, insurers will be required to spend a minimum amount of premium dollars on patient care, reducing their ability to make excessive profits and pay unreasonably high salaries.
• Medicare will be stronger and offer new benefits.  The Act preserves the guaranteed benefits under Medicare, makes recommended preventive services available with no cost-sharing, and provides an annual wellness visit.  It closes the Medicare Part D prescription drug program “donut hole” over time, beginning with a $250 rebate to seniors who reach that limit in 2010.  By lowering cost-sharing, the Act empowers providers, who will have to worry less about patients being unable to afford needed treatments.
• New investments in prevention and public health will support your efforts to help patients live healthier lives.  In addition to expanded access to preventive services, the Affordable Care Act will give states and local communities new resources to address the nation’s mounting health problems, such as the increase in chronic diseases, or in conditions linked to obesity.  This will strengthen provider efforts to help patients make healthy choices like losing weight or quitting smoking.
• Health care providers will help drive improvements to health care delivery.  New models of patient-centered, coordinated care will give you and your patients more control over how care is delivered.  Investments in medical homes and other advanced care coordination and disease management models will help you ensure that your patients receive seamless, efficient care.  Providers who provide high-quality services will be rewarded based on standards that they help develop, based on solid medical evidence.  And Medicare will pay bonuses to qualified primary care doctors and general surgeons, particularly those who practice in underserved areas.

Of course, none of these changes can happen without highly trained and dedicated health care professionals – and independent experts are already projecting that, unless we take action, we will see a shortfall in primary care providers.  For that reason, the Affordable Care Act will make an unprecedented investment in workforce development:

• Strengthening and growing our health care workforce.  Combined with the earlier investments made by the American Recovery and Reinvestment Act of 2009, the provisions of the Affordable Care Act will support the training and development of more than 16,000 new primary care providers over the next five years.
• Investing in community health centers and new clinical settings.  In addition to new resources to build new and expand existing community health centers, the Affordable Care Act will establish new nurse-managed health clinics to train nurse practitioners and operate in underserved communities.
• Loan forgiveness and scholarships.  The National Health Service Corps will be expanded in order to repay student loans and provide scholarships for even more primary care physicians, physician assistants and nurse practitioners willing to work in underserved areas. 

Talking to Your Patients About Health Reform

When patients have questions about their care or coverage, they often turn to one of their most trusted sources: the men and women who care for them when they are sick or injured.  Your patients are likely to have a lot of questions about how health reform will affect them.  Here are a few key things about the new law to remind patients about:

• Greater insurance security for families.  The Affordable Care Act will help to ensure that patients will have choices among quality, affordable health coverage options, even when they lose their job, switch jobs, move or get sick.  In fact, through the creation of Health Insurance Exchanges, millions of Americans will have the same choice of health plans as their member of Congress.
• Protecting patients when they get sick.  For policies issued or renewed on or after September 23, 2010, insurance companies are now prohibited from dropping patients from coverage when they get sick just because of an unintentional mistake on a form, and can no longer be able to deny coverage to children based on pre-existing conditions.  The new law also eliminates lifetime coverage limits and, by 2014, will phase out annual limits that adversely affect the sickest patients with the highest costs.
• Preventive care leads to better health.  For plan years beginning on or after September 23, 2010, the law now requires health plans and health insurance policies to cover certain recommended preventive services at no charge to patients.  And Medicare patients are now eligible for an annual wellness exam and certain preventive services with no cost-sharing.

Steve Brill’s article in Time (Bitter Pill) provided several real-life stories of the unfortunate impact rampant prices in healthcare have on under-insured individuals.

This slide from Martin Gaynor’s recent presentation at the American Enterprise Institute (video here) illustrates that the unfairness in the healthcare system is in large measure due to rampant prices in chargemasters:

Evidence suggests that prediction models for hospital readmissions have room to improve.

Link here to article by Kansagara et al in JAMA 2011.  Their conclusion:

“Most current readmission risk prediction models, whether designed for comparative or clinical purposes, perform poorly. Though in certain settings such models may prove useful, efforts to improve their performance are needed as use becomes more widespread.”

Nice discussion about the relative value of two types of analytics here: http://healthsystemcio.com/2012/06/13/a-suggestion-about-predictive-analytics/.

Also a commenter offers an interesting reframing of the discussion as analytics to discover “known unknowns” or “known unknowns”.

Characteristically clear article from Peter Orzag discussing fiscal challenges in context of healthcare cost and value. (Link here: https://secure.www.cfr.org/economics/healthcare-americas-real-problem/p29860)

His prescription for managing healthcare costs:

“Three steps would be particularly helpful – starting with the acceleration of the shift from paying for specific services to paying for “value”. Second, promote evidence-based medicine by connecting electronic health records with patient registries and by prohibiting malpractice suits when doctors follow professional guidelines.

Finally, we should require any patient admitted to a hospital to fill out an advance directive about their end-of-life care preferences. This reduces costs as some patients choose to skip expensive, often painful procedures towards the end of their lives.”

Next week I will participate in a panel at Duke University discussing business models for patient engagement.  We need successful business models that successfully help patients to take an active role in maintaining wellness, treating disease, and improving health outcomes.  Why?

• Widely cited research by New England Medical Center suggests that patients who take an active role in preventing illness and treating disease have better health outcomes and productivity.  But many patients acknowledge they lack the ability to maintain engagement.  Our health system depends on better patient engagement. 

• If you believe the drag poor population health has on economic output (see WEF report), it follows that economic sustainability also depends on better patient engagement.

There are many relevant questions to this topic:  How should one construct business models for patient engagement?  Which capabilities do payers, providers, manufacturers, patients need to support patient engagement?  What should entrepreneurs solve for? 

My views on the subject have been shaped by my personal experience with the health system and professional experience serving therapeutics manufacturers and collaborating with emerging Health IT, MedTech Services companies.   I use a template to help understand how patient engagement works.  The template involves the interaction of interventions, relationships and incentives:

1.  Interventions that influence health outcomes.

An intervention is any action that an individual takes or allows a healthcare practitioner to perform.  Types of interventions are limitless.  From what one puts in (i.e., food, tobacco, etc.), around (second hand smoke, sun, etc.), or does (exercise, etc.) to one’s body, to a medication, device, surgery, behavior a healthcare practitioner prescribes. 

2.  Relationships that influence interventions.

Relationships encompass personal relationships with religion, family members, friends, food, alcohol, and professional relationships with educators, healthcare providers, health insurers, product manufacturers and other service providers.  Each relationship creates a frame of reference for an intervention.  Relationships interact in complex ways.

3.  Incentives that influence relationships.

The easiest incentives to describe are economic ones at a personal or health system level.  However, there are some other incentives (such as psychological and behavioral ones) that are harder to describe, and still being studied.  Incentives weigh in on relationships that in turn influence interventions.

This is an simplified template to help understand patient engagement, especially compared to the vast literature on the topic of patient engagement.  But it helps tease apart important factors at play.

Business models must navigate the three forces above in a way that creates differential value to all stakeholders.  It need not be a “zero sum game” (i.e., everyone can win).   In their essence, business models is a combination of choices of (a) a customer base and value proposition to deliver, (b) resources (human, technology, financial capital), (c) delivery process, and finally (d) a profit equation.  (Clayton Christensen and others discuss this at length.) 

With four degrees of freedom, there are many business model designs to choose from, but subject to who you are and where you are starting from and the practical constraints of today’s health system incentives and policies.

A patient engagement business model will win when it can repeatedly deliver differential health outcomes, at lower cost with high levels of patient satisfaction.

I’m looking forward to discussing the topic and learning from the panel and the conference attendees next week.

In addition to a previous (Feb 15, 2012) post on this topic, helpful to ask insightful questions (rather than toss-aways) when discussing career options with a potential employer (via Jeff Haden at Inc. magazine):

• What do you expect from me in the first 60-90 days?
• What are common attributes of top performers?
• What are a few things that really drive results for the company?
• What do employees do in their spare time?
• How do you plan to deal with [circumstance]?

Useful summary of options and considerations for financing risky (pharmaceutical) projects:

glenlifesciences:

In an earlier blog post, I provided an overview of creative R&D financing structures utilized in the biotechnology industry over the years, and the related accounting consequences of such structures.  These structures normally involve the use of a special purpose entity (SPE) that licenses one or more product candidates from a sponsor company (which retains a buyback option on the products or on the entire SPE), raises capital from third party investors and then funds research on the licensed products.   The risk of development in these structures falls with the SPE, with a significant upside to the third party investors if the repurchase is eventually exercised.

Over the course of time in the biotech industry, these structures have been motivated either by profit and loss considerations (for example by recently profitable entities seeking to move some R&D expenses off the financial statements), or by purely the need to access capital (for example by loss making biotechs with reduced options for traditional fundraising).  From the perspective of the sponsor company, the income tax considerations of these structures has historically been, at most, a nominal consideration, and thus the structuring dialog has focused primarily on governance and financial reporting.

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