I'm Shocked, Shocked

By Kim Bellard, October 22, 2015

Some new research on the effect of physician practice arrangement has on spending offer some disappointing -- but not entirely surprising -- results.

Take physician groups. The death of the independent physician practice, working solo or in a small practice, has long been predicted. Honestly: would you rather be treated by a doctor practicing alone, or by one at the Mayo Clinic? Physician groups allow for things like development of best practices, administrative efficiencies, and, in this era of Big Data, larger data sets that can be used to improve patient care. When it comes to physician groups, bigger would seem to be better.

If physician groups are good, the theory goes, then integrating them clinically and financially with hospitals, such as through partnerships or common ownership, should even better.

The AMA says solo practice physicians now are only 17% of all physicians, down from 40% in 1983, and that physician ownership of their practice has declined from 76% in 1983 to just over 50% now. Our health care system, it would seem, is destined to be made up of large physician groups, many of which will be owned by hospitals.

Too bad both larger groups and hospital ownership apparently end up costing us more.

A new study in Health Affairs found that as physicians concentrate in larger groups, prices tend to go up, at least for the 15 high volume, high cost procedures the authors looked at. It might seem that whatever savings might be gained by becoming part of a group are not being passed on to consumers (or their health plans), and/or larger size allows groups to bargain for better reimbursement rates from payors.

An earlier survey, by one of the lead authors of the new study, found that more competition among physicians did, in fact, result in lower prices, at least for office visits. The moral appears to be, if you don't want to compete with them, join them!

Then there is the hospital ownership effect. A study in JAMA Internal Medicine found that increased hospital/physician financial integration led to greater spending, primarily in outpatient care and almost entirely due to higher prices, not higher utilization. The AHA protests that the study "is not reflective of the changes happening in today’s health-care market," citing newer value-based payment arrangements and hospital price increases that are at historically low levels.

Maybe the AHA is right. Maybe once we move more fully into the wonderland of value-based payment arrangements everything will work out: better quality for same or lower costs.

I've lived through DRGs, RBRVS, capitation, global capitation, staff model HMOs, IPAs, and an array of cost/quality incentive programs -- each of which was supposed to be the next magic bullet -- so I'm not holding my breath that payors will finally be able to outsmart providers when it comes to controlling revenue.

Don't get me wrong: I've long been a believer both in large physician groups and in clinical integration. But I worry that those strategies to improve health care delivery are now being used more as tactics to maintain and even improve revenue.

As I've written before, when you have to create a new model that is supposed to be patient-centered, and providers demand to get paid more just for participating it in, it's a pretty clear indication that our health care system isn't about patients but rather is about the providers.

The problem isn't the structures themselves but rather their focus.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

Transitioning payer reimbursement from volume to value

By Claire Thayer, October 20, 2015

Moving away from traditional reimbursement models based on volume to those aligned more closely with outcomes, cost and quality is easier said than done, but has over-whelming industry support.  Earlier this year, Modern Healthcare spoke with committee members of a new Health Care Transformation Task Force (made up of providers, insurers and employers) who pledged collectively to shift 75% of its members' business into contracts with incentives for health outcomes, quality and cost management by January 2020.

The U.S. Department of Health and Human services has jumped on board the value reimbursement trend as well, setting a goal of tying 30% of traditional fee-for-service Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50% of payments to these models by the end of 2018.  A Deloitte study found that 72% of surveyed health executives said that the industry will switch from volume to value. The Case for Value-Based Care was the focus of a recent MCOL infographoid, highlighted below:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

The Nexus of Payviders

By Clive Riddle, October 16, 2015

To what degree will the mega-merged health plans dominate the landscape in the balance of this decade? We’ve recently discussed the topic: will health plan start ups and provider sponsored plans fill the competition gap? We noted then, that the airline industry demonstrated opportunities that might apply in the current health plan environment,  “where the post-merger environment after established airline joined forces didn’t prevent the emergence or growth of carriers like Southwest, Jet Blue, Virgin America  and many others.

It’s looking more and more like the gap won’t be significantly filled by co-ops, with theKentucky Health Cooperative being the latest co-op to bite the dust. Much attention, and Wall Street dollars, is being given to the venture-capital backed startups. But it remains to be seen if they will take over the world or suffer the fate of a number of the co-ops.

In the meantime, regional independent plans, a large portion being provider sponsored, have much more of a track record and maturity to fall back on. A Reuters article this week, As U.S. insurers aim to get bigger, hospitals eye health plan entry, discusses established integrated delivery systems such as Kaiser and Geisinger, as well as the re-entry into this business by hospital companies such as Tenet, who now owns six health plans with about 100,000 members. Companies like evolent health are also covered, who are doing big business working with hospitals on developing new plans and risk-bearing networks.  

During the course of 2015, a term emerging into the lexicon around the country has been “Payvider”, which hopefully is self-explanatory. Let’s listen in a discussion about Payviders from Cathy Eddy, President of Health Plan Alliance:  

“….we met with the research firm KLAS. They are conducting a survey with “Payviders,” or health systems that have their own health plan.  This is a new term for a concept that has been around for more than 30 years, but seems to be gaining traction again as more providers move into value-based reimbursement (don’t call it capitation – that is so 90s), and more are leveraging their existing health plan, partnering with one, or even starting a health plan. I’ve been working in the space between payers and providers since 1982 and running the Health Plan Alliance for nearly 20 years.  What seems different now is the level of strategic alignment between the plans and their provider sponsors.  The expertise that exists in a health plan is a great (essential? necessary? logical?) resource for a health system that is moving into Population Health, establishing ACOs and negotiating contracts for value-based payments and incentives. Many of the competencies it takes to run a health plan are critical elements for health systems that are taking on risk.”

The Health Plan Alliance represents almost fifty provider-sponsored and independent health plans, that range in size, from less than 50,000 members to more than I million members, and operate in all lines of business, including commercial, Medicaid, and Medicare. Perhaps they are the nexus of the source of competition in the health plan industry for the rest of this decade.

Consumers and Physicians and Technology in 2015

by Clive Riddle, October 9, 2015

 

The Deloitte Center for Health Solutions has just released a survey report, Health Care Consumer Engagement: No One-Size-Fits-All Approach, which they say shows 'that Americans are increasing their use of technology to improve their health, navigate the health system and flex their shopping muscles in acting like consumers instead of passive patients."

 

Overall, how "techy" are American healthcare consumers? They found "22% used technology to access, store and transmit health records in the last year, up from 13% in 2013. Use was higher for those with major chronic conditions: 32% compared to 19% in 2013."

 

Deloitte’s findings are that consumer engagement is increasing three ways:

1. "More consumers today prefer to partner with doctors instead of relying passively on them to make treatment decisions"
2. "Consumers’ trust in the reliability of information sources is rising"
3. Consumers are increasingly relying Relying on technology

Here's some of the numbers behind their report, regarding the oercentage of survey consumer respondents: 

• 28% have used technology to measure fitness and health goals, up from 17% in 2013 (45% of Millennials this year)
• 23% have used technology to monitor a health issue, versus 15% in 2013
• 40% of the surveyed technology users have shared their fitness or monitoring information with their doctor
• 39% with major chronic conditions use tech-based monitoring (22% in 2013)
• 63% of the surveyed technology users say their use of fitness or monitoring technologies has led to a significant behavior change
• 13% who take prescription drugs receive electronic alerts or reminders
• 48% prefer to partner with doctors rather than have them make decisions for them, up from 40% in 2008
• 34% strongly believe doctors should encourage patients to raise questions
• 58% feel that doctors should explain treatment costs to them before decisions are made
• 16% who received care report asking their doctor to consider treatment options other than the one initially recommended.
• 52% report searching online for health or care-related information; 
• 16% who needed care went online for cost information, up from 11% in 2013 (27% of Millennials this year)
• 71% of all those surveyed said they have not gone online for cost information but are "very" or "somewhat" likely to use a pricing tool in the future
• 25% used a scorecard to compare the performance of doctors, hospitals and/or health plans, up from 19% in 2013 (49% of millennials this year)

What do these numbers mean? Harry Greenspun, M.D.Director of the Deloitte Center for Health Solutions, tells us "not all consumers are alike in how they engage the system, and a large segment still remains disengaged. Companies likely won't take a one-size-fits-all approach in their marketing and operations, but a tailored strategy that considers the unique characteristics of the segments they are most interested in."

 

Greg Scott, Principal, Vice Chairman and national sector leader for Deloitte's health plans practice, adds "the specter of a more customer-driven industry is causing many health companies to transform into retail-focused organizations, impacting everything from strategy and scale to operations and human capital. For the enterprise, this is about more than a cool app – this is about making the end-to-end changes needed to better identify and engage a more empowered purchaser."

 

So at the other end of the stethescope, how do doctors feel about using technology in their practices? Geneia just released survey results on this topic - not addressing physician interaction with consumers as discussed above, but rather how physicians relate to EMR, data and analytics.

 

Heather Lavoie, Geneia's President & Chief Operating Officer, tells us that "seemingly, there is an inverse relationship between health IT spending and physician job satisfaction,..physician sentiment towards technology is surprisingly nuanced. Doctors are indicating that data and analytics tools have the potential to reduce time spent on recordkeeping, one of their primary frustrations, while also contributing to it."

 

24% of physicians said that EMR impact on practices was positive, 19% negative, 53% a little of both, and 5% said they do not use EMRs. 69% of physicians felt data and analytics tools positively impacted their ability to efficiently assess patient history and needs, 63% said they help them get value and improved outcomes from chart documentation, and nearly 60% felt they helped identify and triage the highest need patients and created greater efficiencies in office workflow.

 

But Geneia shares that "on the other hand, more than 60% of physicians say that data and analytics tools have negatively impacted recordkeeping time. In fact, when asked to identify the number one way data and analytics could improve their job, the most popular answer was to reduce the time spent on recordkeeping (41%) followed by more time with every patient (22%), better access to patients' complete medical profile and history (20%), and more time with the patients who require enhanced care (14%)."

The Patient Experience of the Very Elderly

by Clive Riddle, October 2, 2015

Press Ganey has just published a seven page white paper Patient Experience in the Very Elderly: An Emerging Strategic Focus, that in their words, “examines the clinical and strategic benefits for health care organizations creating targeted care strategies for the ‘Very Elderly’ population” which they  define as patients 80 years of age and older.

Thomas H. Lee, MD, Press Ganey’s Chief Medical Officer and a co-author of the paper tells us “most patients in this Very Elderly population claim a ‘poor’ or ‘fair’ health status and tend to have greater and more complex needs. The data suggest their needs are not being met reliably. Organizations that embrace a more focused, compassionate, connected care model have the potential to reduce suffering for this very vulnerable population and mitigate the impact of age and health status on patient experience ratings.”

Press Ganey points out that while only 3.5% of the U.S. population is over 80 years of age - this demographic is a dominant presence in hospitals, emergency departments and outpatient practices, representing “27% of medical service and 12% of surgical service admissions, and their lengths of stays are longer.” Press Ganey’s analysis examined HCAHPS data by service line and age group for 1.5 million patients.

Press Ganey uses HCAHPS patient service ratings as an argument that the medical needs of the Very Elderly are not being adequately met. They note that “the percentage of patients giving top ratings [to providers] steadily increases as patients get older—but then declines for patients above 80 years old. When data “change directions,” the reason is usually two different forces are at work. The most likely explanation for the data in Figure 1 is that the elderly patients have greater needs, and that, in the Very Elderly, failure to meet these needs overcomes the tendency of older patients to give higher ratings to their providers.”

Service ratings of providers that were a 9 or 10 (out of ten) increased by each age group (medical services from 58.6% for age 18-34to 71,2% for ages 65-79; and surgical services from 65.2% for ages 18-34 to 78.2% for ages 65-79; which fell to 69.2% for age 80+ medical services and 75.9% for age 80+ surgical services.)

Press Ganey also points out that “patients in poorer health give lower ratings to their hospitals than do those in better health, regardless of age,” and the HCAHPS data clearly shows a deterioration in reported health status by age. 83% of patients reporting excellent health rating medical service providers 9+ out of ten, compared to 61% reporting poor health. 86% of patients reporting excellent health rating surgical service providers 9+ out of ten, compared to 65% reporting poor health. Press Ganey provides graphs demonstrating that “older patients are more likely to describe their health as fair or poor, and few Very Elderly patients report being in very good or excellent health.”

Press Ganey emphasizes to providers that “taken together, these data demonstrate both an opportunity and a threat. The threat is the risk of losing the patient segments that account for a large proportion of the care delivered by most organizations—the sick elderly. Furthermore, hospital payments might be compromised by lower patient experience scores that result from having more sick Very Elderly patients.” Press Ganey concludes that “this group wants more thorough, communicative care that meets their needs for information, coordination, responsiveness and general hygiene;” and that “providers have the potential to reduce suffering for this very vulnerable population, improve patient experience and market share through focused efforts and team-based care.”

Royal Philips has also just published new study results relating to the elderly’s healthcare experience, with their analysis “demonstrating an insightful correlation between chronic conditions and falls risk. Their researchers” retrospectively analyzed the records of 145,000 seniors equipped with a standard Philips Lifeline medical alert service or a medical alert service with AutoAlert (automatic fall detection) between January 2012 and June 2014.”

Their findings, and national data they highlight in their report include:

• Seniors with chronic conditions fell and required emergency transport up to 54 percent more often, compared to their peers with no chronic conditions. (they note that one in three seniors fall each year and that 80 percent of the senior population has at least one chronic condition and 68 percent has two or more.)
• Seniors with physical conditions not typically tied to frailty, including COPD and diabetes, also were shown to fall more often.
• Among Philips users, seniors who self-reported suffering from three chronic conditions had 15 percent more falls that required hospital transport, and those with five or more conditions had 40 percent more falls than those with no chronic conditions.
• Within the study population, 72 percent reported having one or more chronic conditions, with 20 percent reporting five or more.
• The data shows that seniors fell more often and needed hospital transport when reporting the following: Cognitive impairment by 54 percent; COPD by 42 percent; Diabetes by 30 percent; and Heart condition by 29 percent.

Can Slick Trump Sick?

By Kim Bellard, September 24, 2015

Health insurance is getting some love from investors.  A lot of that money is going to companies that make it easier to deal with health insurance, but some is going to start-ups -- like Oscar, Clover Health, and Zoom+ -- that actually hope to reinvent the nitty-gritty, often grimy business of providing health insurance.

Oscar, of course, has long been a media darling.  Google just put in another $32 million that ups their valuation to $1.75b.  All this for a company that only has 40,000 members, is offered only in New York/New Jersey (with plans to expand to California and Texas), and which in 2014 lost $28 million on $57 million in revenue.  But never mind all that; they've got a nice website.

That's not really fair, of course.  They've focused on using technology to improve the customer experience, are ahead of the industry curve on use of technology like fitness trackers and telehealth, and are working to use data to match patients with the best physicians for their conditions.

Clover Health, which just raised $100 million in a funding round through some impressive lead investors, has a somewhat different strategy.  It focuses on the Medicare population, putting their primary emphasis on using data to improve patient outcomes.

Clover uses their algorithms to identify high-risk patients, sends nurse practitioners to their homes to develop personalized care plans, and continually loops in new data to update patient profiles. So far Clover (headquartered in San Francisco) is only available in six New Jersey counties, but they claim to have 50% fewer hospital admissions and 34% fewer readmissions than the average for Medicare patients in those counties.  Most of their competitors would claim to have similar efforts for high-risk patients, so we'll have to see if their model scales.

Then there is Zoom+, or, rather, "Zoom+ Performance Health Insurance."  It is the outgrowth of ZoomCare, a network of retail clinics in Portland (OR).    Zoom+ claims to be "the nation’s first health insurance system built from the ground up to enhance human performance," and thinks of itself as "Kaiser 4.0."

Hmm.

Zoom+ has focused heavily on the user experience, wanting "health care to be more like visiting an Apple store," according to Fast Company Design's profile of them.  Zoom+ features not just cool retail centers but also mobile capabilities, a Personal Performance Path, and a Zoom+ Guru, among other services.  It is not your mother's health insurance, and right now can't be yours either unless you happen to live in Portland.

I'm all for reinventing health insurance.  I'm all for making the customer experience much, much better in health insurance and in health care generally.  But I do worry that some of these upstarts may be taking advantage -- perhaps inadvertently -- of one of the underlying problems with health insurance: risk selection beats execution.

Health insurers can market features that are more likely to appeal to younger, healthier customers, like snazzy websites, fitness trackers, or training advice.  None of those are only of interest to "healthy" people, but, it doesn't take much of a shift in the risk profile to have noticeable impacts on costs.

Health insurance needs more consumer-focused technology, more effective use of data, and more focus on promoting health.  However, I'm not getting too excited until I see a health insurer that does away with provider networks, refuses to be complicit in outlandish provider charges, and offers a plan of benefits that consumers can actually understand.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

Will Health Plan Start Ups and Provider Sponsored Plans Fill the Competition Gap?

By Clive Riddle, September 18, 2015

The AMA recently released a special analyses of commercial health insurance markets that found the "combined impact of proposed mergers among four of the nation's largest health insurance companies would exceed federal antitrust guidelines designed to preserve competition in as many as 97 metropolitan areas within 17 states," and that "all told, the two mergers would diminish competition in up to 154 metropolitan areas within 23 states."

Art Caplan, a professor at NYU and a correspondent for NBC News, responded to a recent New York Times editorial, Regulators Need to Scrutinize Health Insurance Mergers, with a humorous post in The Health Care Blog, entitled Merge Away!!!. Here’s the heart of Caplan’s argument: ” Blocking these deals is a terrible idea. The mergers should be allowed to continue. In fact they should proceed until there is only one private insurer left. Only, at that point should the government step in, declare the last company standing to be required to merge with Medicare thereby letting the free market produce what many reformers have only been able to dream of—a single payer system.”

Will the mega mergers result in a vacuum of competition, and perhaps a default single payer system, or perhaps as some noted healthcare pundits have wondered out loud: where health insurance becomes the new cable television provider? Or will emerging players fill the void left in the coming competition gap? This did occur in the airline industry – where the post-merger environment after established airline joined forces didn’t prevent the emergence or growth of carriers like Southwest, Jet Blue, Virgin America  and many others.

Two potential candidates to fill the health plan competition gap are provider sponsored plans and well funded health plan start ups. Provider sponsored plans have always been around, but with today’s environment is much more conducive for their long-term prospects: the growth in Medicaid strengthens the prospects of regional provider backed Medicaid plans; the proliferation of ACOs that can serve as health plan incubators; the emergence of value based payment systems and clinical integration that nudge health systems closer towards the purchaser end of the spectrum.

And then there’s the potential of VC backed health plan start ups. Everyone continues to write about Oscar Health. Here’s a typical headline from last month: Oscar's losses are huge but investors don't care - How one insurance startup with only 40,000 members is worth $1.5 billion.

Oscar Health has been held up as the disruptive innovator embracing tech and customer service for health insurance, in the manner the Uber entered the personal transportation scene. Now this week, you can add this headline to Oscar’s mantle: Google Backs Startup Oscar Health Insurance - Internet company’s growth-equity fund makes $32.5 million investment.

And Oscar isn’t the only VC darling health plan startup. Fortune magazine this week, in their article How this startup is trying to upend health insurance, profiled Clover Health, who just announced a $100 million round of equity and debt funding to expand its presence. Clover is focusing just on Medicare Advantage, and like Oscar, has started small. Founded in 2014, they currently operate in only six New Jersey counties. Also like Oscar – their vision involves embracing technology in a more disruptive means than the traditional health plan approach.

It should be a reasonable wager that Clover and Oscar won’t be the only VC backed startups making news a year from now.

Public Exchange Subsidies – A Snapshot with Distant Clouds

By Clive Riddle, September 11, 2015

Two item of note occurred this week with respect to public exchange subsidies and enrollment: CMS released their June 30, 2015 Effectuated Enrollment Snapshot, and federal judge Rosemary Collyer in an unprecendented ruling that congress has standing for litigation, has allowed United States House of Representatives v. Burwell et al, U.S. District Court for the District of Columbia, No 14-1967 to move forward. 

So the attempts to chip away at health insurance marketplace subsidies did not die with the Supreme Court ruling on King v. Burwell, and another cloud, albeit distant for now – as it will undoubtedly wind through an appeals process assuming it succeeds at Collyer’s level – hangs over the head of public exchange subsidies. 

But in the meantime, CMS has provided a current picture of what these subsidies entail. CMS announced  that “Of the approximately 9.9 million consumers nationwide with effectuated Marketplace enrollments at the end of June 2015, about 84 percent, or more than 8.3 million consumers, were receiving an advanced premium tax credit (APTC) to make their premiums more affordable throughout the year. The average APTC for those enrollees who qualified for the financial assistance was $270 per month. There were 7.2 million consumers with effectuated enrollments at the end of June 2015 through the 37 Federally-Facilitated Marketplaces (including State Partnership Marketplaces) and supported State-based Marketplaces (collectively known as HealthCare.gov states) and 2.7 million through the remaining State-based Marketplaces.”

Here is an infographoid MCOL will release next week, mapping the average subsidies by state:

CMS notes that “the ten states with the highest rate of consumers who received financial assistance through APTC were: Mississippi (95.4%), Wyoming (92.2%), North Carolina (91.6%), Florida (91.3%), Alabama (90.9%), Louisiana (90.7%), Georgia (90.0%), Arkansas (90.0%), Wisconsin (89.6%), and Alaska (88.8%). The states with the lowest rate of consumers who received APTC are: District of Columbia (10.2%), Minnesota (54.8%), Colorado (55.3%), Hawaii (61.4%), New Hampshire (62.8%), Vermont (64.2%), Utah (65.6%), Kentucky (69.8%), Maryland (70.7%), and New York (71.4%).”

With respect to enrollment by metal plan, CMS shared that 1% were enrolled in Catastrophic plans (63,174); 21% in Bronze plans (2,096,542), 68% in Silver plans (6,761,363); 7% in Gold plans (695,377); and 3% (332,624) in Platinum plans.

The issue of inappropriate marketplace enrollment has been increasingly raised by various parties. CMS released data regarding enrollment data matching initiatives, noting “During the time period from April 1, 2015 to June 30, 2015, enrollment in coverage through the Federally-facilitated Marketplaces was terminated for about 306,000 consumers with citizenship or immigration status data matching issues who failed to produce sufficient documentation of their citizenship or immigration status. In addition, during the same time period, about 734,000 households with annual household income inconsistencies had their APTC and/or CSRs for 2015 coverage adjusted. Overall, as of June 30, 2015 the Marketplace has ended 2015 coverage for approximately 423,000 consumers with 2015 coverage who failed to produce sufficient documentation on their citizenship or immigration status and has adjusted APTC and/or CSRs for about 967,000 households.”

A Quick Look at Provider Billing Facts

By Claire Thayer, September 9, 2015

In 2014, the U.S. health care system spent close to $1 trillion on health care, with half of this paid to hospitals, a third toward physicians and clinical services and the remainder on prescription drug spending. Over the next 10 years, CMS projects that health spending will continue its steady upward pace and grow at an average rate of close to 5.8% per year. While perhaps not surprising, examining the validity of claims is proving to be an enormous undertaking, with a recent GAO Report on the Medicare Program estimating that $60 billion (close to 10%) of total Medicare claims paid in 2014 was paid improperly. These and a few other provider billing and payment facts are highlighted MCOL’s infoGraphoid this week:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

Cadillac tax may hit over 25% of employers starting in 2018

By Claire Thayer, September 2, 2015

One of the provisions of the Affordable Care Act is the high-cost plan tax (HCPT), aka the ‘Cadillac’ tax,  will be imposed on health insurance companies as well as sponsors of self-funded group health plans beginning in 2018.  Plans that exceed cost thresholds will incur the excise tax.  For 2018, cost thresholds are $10,200 for an individual (single coverage) and $27,500 for family. The excise tax is 40% of the amount that exceed these thresholds.

A recent analysis by the Kaiser Family Foundation of the impact of the Cadillac tax on employers summarizes the overall cost for each employee to include:

• The average cost for the health insurance plan (whether insured or self-funded);
• Employer contributions to an (HSA), Archer medical spending account or HRA;
• Contributions (including employee-elected payroll deductions and non-elective employer contributions) to an FSA;
• The value of coverage in certain on-site medical clinics; and
• The cost for certain limited-benefit plans if they are provided on a tax-preferred basis.

This same study estimates that in 2018, over 25% of employers offering health plan benefits may be subject to the Cadillac tax, and by 2028, as many as 42% of employers will incur this excise tax:

As employers look for ways to save costs, the Cadillac tax will have a huge impact on flexible spending accounts (FSAs), with some analysts conjecturing that this could lead to the demise of FSAs, as reported last week on Politico. Expect employers to make benefits changes during the open enrollment season for both this year and next. For more in-depth discussion, the Kaiser Family Foundation’s August 2015 Issue Brief will be insightful.

More About Us, Less About Them

By Kim Bellard, September 1, 2015

Something Amazon just did is worth those of us in health care paying attention to.  It was the layoff of "dozens" of engineers at Lab126, Amazon's hardware development center, as first reported by The Wall Street Journal.  These were the first layoffs in the division's history.

Lab126 is responsible for Amazon's consumer devices, including their very successful Kindle e-reader and the new Fire TV. What makes this is a cautionary tale for the rest of us is that even Amazon -- which is noted for their prowess with their online consumer experience -- can't necessarily get the physical consumer experience right.  I think Wired captured the problem best, asserting that Amazon's consumer devices would have been more successful "if Amazon focused more on consumers, and less on consuming."

Now perhaps the relevance to health care may be clearer.

Consumer devices are all the rage in health care.  The global mHealth market is predicted to be $49b by 2020, with some 73 million units shipped in 2015 and an eye-opening CAGR of 47.9% expected from 2013 to 2020 (although other analysts already see slowing demand).

At the core of Amazon's devices is the goal to, well, get consumers to buy more stuff from Amazon.  
So I wonder: what is the goal of consumer devices in health care?  Are they intended to help us achieve better health -- or to consume more health care services?  I hope for the former but I fear it may end up being the latter.

I was struck a couple of weeks ago by an opinion piece in JAMA: "Obstacles to Developing Cost-Lowering Health Technology."  It's authors, doctors Kellerman and Desai, note that:

The inventor’s dilemma is that creating a product that improves health is not enough; the product must also be able to generate a healthy return on investment. In the United States, the surest way to generate a healthy return on investment is to increase health care spending, not reduce it.

Think about the terminology used in health care.  It speaks volumes about the underlying culture and its attitudes towards us.  Health care providers call us "patients."  Health plans call us "members."  Medicare and Medicaid call us "beneficiaries."    The name for one of the newest fads -- "patient centered medical homes" -- serves to remind us that we're not normally considered the center of our health care, and that the focus is on our medical care, not our health.

At least "consumer-directed health plans" pay lip service to us being in charge.

I'm all for people and organizations making money in health care, but I don't like to be seen as some kind of ATM for them either.  The health care industry needs to realize that we don't really want to be its customers, don't want to need to consume their services, and certainly don't want to have to be unduly patient about it when we do. 

What we want is to be healthy.  Give us the devices, services, and experiences that make that as simple as possible and then you can call us whatever you want.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

Independent Pharmacy Accountable Care Organizations

By William DeMarco, August 26, 2015

The competition for Pharmacy Services has become brutal as large chain stores such as Walgreens and CVS, as well as big box stores like Target and Walmart, attempt to develop exclusive service contracts with large insurance carriers and Pharmacy Management Companies (PBMs). At the same time, employers are faced with rapid increases in specialty drug costs for diseases such as Hepatitis and similar chronic illness drugs that may cost as much as $50,000 to $75,000 per year.

For example on July 24th the FDA approved a new class of cholesterol lowering drugs known as PCSK9. Many health plans were anticipating a price point of $10,000 per year, but the approval came with a recommended $14,600 annual price target. This would translate to a $6.71 per-member, per-month (PMPM) for Commercial and a $15.16 PMPM for Medicare, depending on the patients other conditions according to a Prime Therapeutics public analysis released in June.

While the clinical side of this evaluation proves these targeted drugs do work, the cost to public and private payers is changing the landscape of how employers deal with these services.

PBMs initially established a very good solution for a very complex problem by integrating costs, necessity and quality with outcomes. However, the mark up on PBM services and ability for PBMs to buy wholesale and resell retail has made some employers believe there may be better options they should consider.

In addition, the generic substitution strategy that saved employers millions in the early 1970s has worn away and generic prices are climbing - making the spending for both specialty and routine pharmacy a very large concern.

One solutions being attempted in several areas around the country is the development of an Accountable Care Organizations (ACO) like network of independent pharmacists.

In this segment of the delivery system, most pharmacies are owned by one or more families and are often one man drug stores, or represent small chains covering one or more counties. These pharmacies offer personalized service and a tradition of being a patient advocate - often providing answers to their customer's questions regarding medications, looking out for adverse reactions and communicating with the physician when a question of dosage or reaction occurs.

Organizing these smaller entities into a network with contractual obligations to a central agency that acts as a Management Services Organization (MSO), which in turn, contracts with purchasers, has employers intrigued and supportive because many of these hometown stores can also be an advocate for the employer - a resource needed more and more as value based payment emerges.

These independents not only offer dispensing, but also agree to offer Medication Therapy Management (MTM) to help the patient reconcile drugs, vitamins and even nutrition that may be playing a part in their drug therapy. Many of these stores can also offer medical appliance and durable medical equipment at less than the hospital outpatient cost. In addition, as a local provider, they are predisposed to working closely with PCPs to help introduce alternative drug therapies that may be less costly to the patient and the employer, but are just as effective as standard therapies.

Even if this connectivity is missing electronically, one can still work with purchasers to make sure the patient is adherent and getting their 30 day supply refilled on time. This can be a mutual responsibility between payer and pharmacists. The savings of substitution, the ability to control use of specialty drugs as necessary, and the coordination of care to assure adherence are all part of this new model.

Where does the PBM fit? The PBM can still process drug claims for the employer and share this with the pharmacy MSO, but it relinquishes control of the network to the employer. The employer may decide to run two networks—one of independents (the high performance network) and one of the big box and chains (the general network). If the employer really wants to test the effectiveness of the networks, they could also pay 100% of the high performance network prescription and MTM fees and 80% of the non-high performance network. This gives employees the choice but also incents new business to those who have little preference, but want to save money. It secures the patients for the local pharmacy, which creates competition for the chain stores.

Drug stores as care outlets versus retail vendors can make a very big difference in areas of managing drug costs and adherence. The leading cause of readmission to a hospital is non-adherence to drug therapy - which puts people in the ER. This is a classic example of a Preventable and Avoidable Cost (PAC) that could be better managed on an outpatient basis by having care coordinated by the pharmacists and the PCP.

While the cost of pharmacy will continue to rise as medical research promotes more effective drugs, we know employers and health plans can better manage utilization and patient experience at the delivery point of care, and that is, for many, the local home town pharmacist.

The Role of Master Data Management in Health Care

By Claire Thayer, August 25, 2015

Health Market Science tells us that Master Data Management (MDM) in health care encompasses everything from patient data to provider data detailing the treatments, procedures, modalities, products and processes which govern and describe patient interactions and outcomes. A recent KPMG survey finds that a slight 10% of health care organizations are effectively using advanced data collection and analytic tools in this regard.  MCOL’s recent infoGraphoid outlined summary findings from the KPMG survey, along with core customer entity types, key barriers to properly implementing data and analytic tools and primary main drivers to MDM:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

Seven Things to Know About Medicaid Going Forward

By Clive Riddle, August 20, 2015

1. The most current CMS report indicates total Medicaid and CHIP enrollment of 71,637,638; with 509,082 additional people were enrolled during the past 30 days in the most recent reporting month (May 2015.)
2. Total Medicaid spending will be close to $500 billion going into 2016.
3. Since initial Marketplace open enrollment period began in October 2013, more than 12.8 million additional individuals are enrolled in Medicaid and CHIP as of May 2015, more than a 22 percent increase (Among states participating in Medicaid expansion, enrollment rose by 29.2 percent, while non participating states reported an increase of approximately 9.5 percent.)
4. Regarding where states stand on medicaid expansion decisions, 20 states are not expanding Medicaid; 25 states (count includes the District of Columbia) are expanding Medicaid ; 5 states are expanding Medicaid, but using an alternative to traditional expansion; and 1 state is expanding Medicaid; pending federal waiver approval.
5. According to the Center for Health Care Strategies, nine states have an active Medicaid ACO program (Oregon, Utah, Colorado, Minnesota, Iowa, Illinois, New Jersey, Vermont, and Maine) and ten states are pursuing Medicaid ACOs (Washington, Michigan, Alabama, North Carolina, Virginia, Maryland, New York, Massachusetts, Connecticut, and Rhode Island.)
6. The GAO recently listed four key issues facing the Medicaid program, in their brief MEDICAID: Key Issues Facing the Program, including (A) access to care; (B) transparency and oversight (lack of complete and reliable data on states' spending, and need for improved HHS management of state demonstrations; (C) program integrity (the program's size and diversity make it vulnerable to improper payments). ; and (D) federal financing approach (automatic federal assistance during economic downturns and more equitable federal allocations of Medicaid funds to states.)
7. Medicaid Managed Care now involves 39 states that contract with comprehensive MCOs for Medicaid, with around 74 percent of beneficiaries receiving care through these plans. CMS recently issued the first major proposed rule addressed Medicaid Managed Care since 2002, which addresses issues including Network Adequacy; Medical Loss Ratio; Actuarially Sound Capitation Rates; Quality of Care Standards; Appeals and Grievances ; Beneficiary Enrollment Protections; Utilization Management; Managed Long-Term Services and Supports; State Monitoring Standards; and Information Standards.

Examining ACO Makeup Evolution During Past Three Years

By Clive Riddle, August 14, 2015

Compiling Accountable Care Directory Data, we can look at how the makeup of ACOs around the country has evolved from since 2012. MCOL’s HealthQuest Publishers just released version 2 of its 2015 Accountable Care Directory, and has published updated directory twice a year since mid 2012. We’ve compiled data from the directories to provide a look at ACO composition over time.

A few challenges present themselves in considering the data – the biggest one involving commercial ACO reporting. Given there is no uniform standard, or reporting requirement for what constitutes an commercial ACO, there is certainly a disparity as to the national number of commercial ACO arrangements that are reported by various organizations. But at least in looking at the same company’s reporting on commercial arrangements over time, there is at least a relative measure.

Another issue is that the number of Medicare ACOs will be very close, but not exactly match CMS reporting year by year, due to the timing of reporting specific contract cancellations and CMS counting multiple contracts for a few organizations.

But with that said, here’s a snapshot of Accountable Organizations, past and present:

ACOs by top 25 States:

State	Mid 2012	Jan 2013	Mid 2013	Jan 2014	Mid 2014	Jan 2015	Mid 2015
CA	23	34	42	49	51	57	54
FL	17	33	35	46	47	48	48
TX	16	22	25	38	39	41	41
NY	17	19	21	25	25	31	31
NJ	8	14	15	23	23	26	26
IL	3	7	7	11	14	22	22
MA	11	18	18	19	20	22	22
NC	6	9	9	14	17	20	20
GA	10	12	12	16	17	17	17
MD	7	9	10	14	14	18	17
VA	4	6	7	15	16	17	17
MI	5	7	7	13	13	16	16
OH	7	12	12	14	14	16	16
IN	4	7	7	10	10	15	15
TN	7	10	11	13	14	16	15
AZ	5	9	9	12	13	15	14
PA	2	5	6	10	10	15	14
CO	3	7	8	10	10	11	10
CT	2	6	6	7	7	11	10
ME	8	9	10	10	10	10	10
MO	2	5	5	8	8	10	10
KY	5	6	6	6	7	9	9
WI	5	8	8	9	9	10	9
AR	1	1	3	4	4	8	8
MN	5	6	6	8	8	8	8
Others	24	40	41	61	63	74	73
Grand Total	207	321	346	465	483	563	552

ACOs by Medicare vs, Commercial Contracts:

Type	Mid 2012	Mid 2013	Mid 2014	Mid 2015
Medicare Only	126	209	307	346
Commercial Only	59	96	118	130
Both	22	41	59	77
Grand Total	207	346	484	553

Mid 2015 ACO Attributed Patients Per ACO

Patients	Medicare	Commercial
< 10 K	28.8%	38.5%
10K - 24K	42.4%	28.6%
25K - 49K	18.8%	16.5%
50k - 99K	5.9%	9.9%
100K +	4.1%	6.6%
Avg/ACO	33,262	61,209
% Reporting #	40.2%	44.0%

The average attributed patients combined for Commercial and ACO in Mid 2015 was 32,566, compared to 29,584 in Mid 2012.

Mid 2015 ACO Physicians Per ACO

Physicians	Percent
<50	10.5%
50-99	10.8%
100-249	21.7%
250-499	20.4%
500-999	19.2%
1000+	17.3%
Avg	509
% Reporting #	58.4%

The average number of physicians per ACO historically has been:

	Mid 2012	Mid 2013	Mid 2014	Mid 2015
Physicians	620	613	567	509

Pharmaceutical Industry in Transition

By Clive Riddle, August 7, 2015

KPMG has just conducted a survey of pharmaceutical and medical device companies, finding “their biggest commercial challenges coming from payers, surpassing hurdles posed by regulators, declining access to healthcare providers, and the move toward specialty drugs.”

Based on these findings, KPMG’s Bill Shew, Alison Little and Peter Gilmore have released a twelve-page report:  Change in pharma? Not optional; 10 Integrated imperatives for pharmaceutical commercial transformation.  Page two contains just these 35 words, in large font – which sums up the situation for pharma: “The pharmaceutical industry is caught between a blockbuster-driven past and a future  comprising precision medicine, curative therapies, and payment for outcomes. The years of consistent  double-digit growth and unconstrained pricing power are fading into memory.”

Author Alison Little tells us "life sciences companies face increasingly high demands from payers to prove the value of their products in terms of improved patient outcomes and lower costs. This requires not only clinical and analytical rigor, but increased focus on account management and strategy. This is a significant part of the commercial model for the pharma, biotech and medical device sectors, which need to evolve to compete in the future.  These are dramatic changes in bringing drugs to market and are far removed from the blockbuster model of marketing drugs with large direct-to-consumer advertising budgets and extensive physician detailing. Newer brand name drugs are treating much more complex medical conditions and have more stringent handling and administration requirements than those a decade ago. Pharmaceutical and biotechnology companies need to consider 'beyond the pill' services to help with patient engagement and helping them adhere to treatment."

Their report cites challenges for the industry including a paltry one percent annual growth rate for top 25 life sciences companies in 2014, down from double digits five years ago; and that seventy percent of recent brand launches underperformed analyst forecasts.

Without further adieu, here’s The ten “Imperatives for Commercial Transformation” they elaborate on, in their report:

1. Use commercial tactics, not clinical data, to differentiate new products
2. Elevate pricing and contracting within the organization
3. Take a more holistic approach to stakeholder mapping and prioritization
4. Base sales models on a collaborative approach to improving outcomes
5. Play a larger role in the industry transformation from “volume to value”
6. Support providers in improving quality and patient satisfaction
7. Leverage data and analytics to enhance commercial strategies
8. Allocate commercial resources optimally across markets and brands
9. Evolve performance metrics and incentives to reflect new realities
10. Drive the transformation agenda throughout the enterprise\

The author’s sum up where the industry needs go from here:  “Pharmaceutical companies need to transform their commercial models so that they can continue to thrive. In our evolving healthcare ecosystem, power centers are shifting, quantifiable outcomes are expected, and companies must demonstrate value for every healthcare dollar spent. We are approaching a tipping point when pharmaceutical companies, no matter the size or therapeutic focus, will no longer be able to view commercial transformation as an aspiration. Instead, they will need to recognize that it is a critical imperative.”

The Most Difficult Part Of The Patient-Centered Medical Home

By Clive Riddle, July 31^st, 2015

The medical home transformation for primary care, incorporating a team approach, technology, elements of care coordination and much more, has been a significant driver of change and innovation this decade. In the about to be released August issue of Medical Home News, the Thought Leaders Corner asks the question:  What was the most difficult part of the patient-centered medical home transformation that you experienced or observed? Here’s what the panel shared in their responses:

Sam JW Romeo, MD, MBA, of Tower Health & Wellness Center in Turlock, CA says  “having surveyed many organizations nationally for accreditation as a Medical Home, including the USAF primary care centers, the two hurdles (difficult parts of the PCMH) that are most prominent are: (1) payer emphasis on case management, and (2) cultural transformation needs within the medical profession. With regards to the case management emphasis, the payers want to save money first and foremost (‘quarterly reports’) more than provide care for patients.  They create the economic incentives and support structures to minimize, for example, hospitalization and ER use and, if per chance, they transform the provider to be more patient centric vs disease centric, whoopee!!  This transformation, however, is not often seen. With regard to the cultural change requirements, there is the ‘upstream’ challenge of providers being trained in medical schools and residencies to care for diseases in patients and not patients with or without disease.  The PCMH transformation requires providing patients with prevention (beyond immunizations and screening and the typical PQRS measures), wellness and lifestyle support, along with the care of disease.  The PCMH care model includes coordinating all of a patient’s care needs.  These needs include caring for the whole patient, i.e., body, mind and spirit, and this is not often in evidence.”

Joseph E. Scherger, MD, MPH, Vice President, Primary Care at Eisenhower Medical Center  and the Marie E. Pinizzotto, MD Chair of Academic Affairs at the Annenberg Center for Health Sciences in Rancho Mirage, CA states  “the most difficult part of adopting a PCMH model is changing how physicians and other providers work.  Implementing a care coordinator is not hard.  Having an advanced IT system is part of modern medicine.  But getting providers off the treadmill of many brief visits and spending time in longer visits with complex patients and doing population care coordination is a difficult paradigm shift.”

R. Scott Hammond, MD, FAAFP, Family Practice, Westminster Medical Clinic and Clinical Professor, University of Colorado School of Medicine, in Westminster, CO shares that  “Westminster Medical Clinic was early to the PCMH movement, being recognized in 2009.  Our biggest challenge was trying to understand exactly what we needed to do to satisfy NCQA standards.  At that time, there were few tracks to follow. I do not believe that is an issue now, as NCQA has improved and clarified their implementation guide. In retrospect, the most difficult part of transformation was sharing our vision of the PCMH with our entire staff and changing the culture of our practice to meet the patient-centered principles of the PCMH.  Only then were we able to operate as a collaborative team. This was also the most rewarding part of the journey.”

Mary Takach, BSN, MPH, Senior Program Director, National Academy for State health Policy, in Washington, DC opines that “The biggest challenge is exercising patience in the PCMH model and not pulling the plug after the first year or even the second year if there is no return on investment.  This is difficult for policymakers on both the public and private side -- especially for those under pressure to deliver balanced budgets.  Waiting for practice transformation to take root and move the dial on desired outcomes requires firm resolve and belief that the current system is broken and that transforming primary care delivery is the right direction to go.”

Nancy Meisinger RN, MBA, PCMH CCE, Director Of Practice Transformation, Delaware Valley ACO in Radnor, PA feels that “the concept of population management and proactive outreach to patients vs. waiting till they come into the office for a visit is often a difficult concept for the offices to put into practice in a systematic way.  In order to be effective it involves consistently documenting preventative and chronic care services within the EHR and maximizing the use of the clinical decision support tools.  Training of staff and use of protocols so that the process is as systematic and accurate as possible can be a challenge no matter what size patient panel the office manages.”

Amy Mullins, MD, CPE, FAAFP., Medical Director, Quality Improvement, American Academy of Family Physicians in Leawood, KS tells us  “much like patients, patient-centered medical homes are all different and the process to become one presents different challenges to different practices.  However, looking from a broad national view, physician engagement has proven to be a challenge for many.  Physicians are smart, busy, and highly motivated individuals who want to do what is best for their patients and eliminate any unnecessary work. To increase their engagement you need to prove to them that PCMH transformation will not only benefit their practice, but will positively impact the health outcomes of their patients.  Once physicians are engaged, the challenge shifts to empowering care team members and integrating the patient in team-based care, which is integral to the patient-centered medical home.”

David Tayloe, MD, FAAAP, Goldsboro Pediatrics in Goldsboro, NC is of the opinion that “educating providers about community resources has been, and continues to be, the most difficult step in transition to the patient-centered medical home.  Many children are at-risk for poor outcomes because of social determinants of health (poverty, parenting, education, substance abuse, abuse/neglect, mental health issues of caretakers).  These children need support within the community from various agencies.  Primary care providers must identify these children and refer them to necessary support services.  Many primary care providers are not aware of the support structure available in their communities.”

Jaan E. Sidorov, MD, FACP, Chief Medical Officer, medSolis and Author, Disease Management Care Blog, in Harrisburg, PA  says “changing established workflows is often underestimated.  There's a tempo to patient ‘throughput’ and the diversion of patients into new pathways involving other clinicians requires new space, hand-offs, duties, policies, and templates.  Unless carefully planned, patients' additional waiting times in office can balloon or they'll be waiting at home for a call that is hours late.  Increasing ‘stops’ in an episode of care doesn't increase work linearly, it complicates it exponentially.” 

And finally, George Valko, MD, Gustave and Valla Amsterdam Professor of Family and Community Medicine and Vice-Chair for Clinical Programs and Quality, Department of Family and Community Medicine, Sidney Kimmel Medical College of Thomas Jefferson University, and Medical Director, Jefferson Family Medicine Associates in Philadelphia, PA shares that “sfter deciding to pursue becoming a PCMH, I think the initial application for recognition and all that it entails, was the most difficult.  To me, it was a forest vs. trees analogy -- the whole process, using the NCQA in our case, is quite overwhelming. However, while sifting through the standards and elements, it became clear that we, and most others, were meeting many of the requirements already.  And, if we were not already meeting some requirements, many were activities we should have been doing in any case.  Now, ongoing improvements to become a true medical home, including changing the culture of a practice, doing outcomes measurements, and creating a medical neighborhood are and continue to be time consuming and costly.”

You can check out Medical Home News at www.MedicalHomeNews.com.

Snapshots of the Mega-Mergers

By Clive Riddle, July 24, 2015

With Anthem and Cigna’s merger announcement, the dance card has been filled out. Here’s what they had to say about their deal:  

“Anthem will acquire all outstanding shares of Cigna in a cash and stock transaction and Cigna shareholders will receive $103.40 in cash and 0.5152 Anthem common shares for each Cigna common share. The total per share consideration equates to approximately $188.00 for each Cigna share based on Anthem's closing share price on May 28, 2015, valuing the transaction at $54.2 billion on an enterprise basis.”

So let’s take a look at the mega-health plan profiles, before and after these mergers, understanding that the “after” picture will undoubtedly change due to regulatory required divestures in certain markets:

    

Here’s a couple of edited graphics from by the plans that provide some additional insight into their merged companies:

It will be interesting to see how long the regulatory hurdles take for these three deals, and how many regulatory concessions, including specific market divestures, are required.

Accuracy of Provider Directories

By Claire Thayer, July 17, 2015

Beginning in 2016, health plans will face stiff penalties for failing update and monitor their provider directories. Kaiser Health News reports that inaccuracies in provider directories may trigger penalties of up to $25,000 per day per beneficiary for inaccuracies in Medicare Advantage directories while providers involved with plans on the federal exchanges could face penalties of up to $100 per day per affected beneficiary for problems in their directories.

MCOL’s infoGraphoid for this week takes a deeper look into the state of provider directories across the country:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.

Nag On My Shoulder

By Kim Bellard, July 15, 2015

We seem to like to have help with our health.  In addition to doctors, we might have a case manager, a health coach, a pharmacist, a personal trainer, or a nutritionist, to name a few.  But we soon may be able to have all of their expertise whispering in our ear 24/7.

Whether that would be a good thing or a bad thing remains to be seen.

The Wall Street Journal recently profiled an interesting company called OrCam.  OrCam's origins were in helping visually impaired individuals.  A small wearable camera processes surrounding images -- faces, steps, even handwriting -- on the fly and informs the user, almost as if they were seeing the objects directly.  Now OrCam is testing what they bill as a digital personal assistant -- Casie -- to add even more value.

I can see all sorts of potential for health care.

The WSJ article gives the example of you walking down the street, and Casie recognizes the face of one of your Linkedin contacts.  

If OrCam can recognize your Linkedin contacts, I would bet that it can recognize a donut, or a cigarette, and remind you about the health risks before you get either in your mouth.  
Such a digital assistant might also notice you haven't taken your morning pills.  Lack of adherence to taking medication has been labeled a $300b problem.

Maybe it could be trained to look at that rash on your arm and offer an informed diagnosis, taking teledermatology to the next level.

Pack a portable ultrasound into the device -- this technology is already here -- and suddenly whole new worlds of things your digital assistant could help you with really open up, especially if paired with a Watson type of AI.

Ideally, one would like to be able to tell your digital assistant how you are feeling, much like you might tell your doctor or try to do with an online symptom checker, and get a diagnosis.

Fitness trackers are all the rage, but the attrition rate on the use is terrible; a third stop using after six months.  Perhaps something like Casie could have better luck keeping you engaged.  

Smart glasses have faced adoption resistance for a variety of reasons: people think current models look goofy, there are concerns about privacy when everything in sight is suddenly a picture/video, or perhaps it has just been lack of a perceived killer app. 

OrCam addresses the first objection by being a fairly inconspicuous clip-on, and the second by deleting audio and video content after it has been processed and analyzed, sort of like Snapchat does for messages.  

And maybe digital health assistant will be the killer retail app.

I think the concept of "augmented reality" raises the bar for digital assistants.  Instead of just warning you about eating that donut, the digital health assistant might flash a picture of you with an extra thirty pounds just to re-enforce the risks it poses. It'd be like the health care version of "scared straight."

OrCam is a reminder that our digital future doesn't necessarily lie in smart phones or smart watches or even smart glasses. This is why companies like Facebook and Google are pouring so much money into virtual reality -- not just to escape reality but to augment it.

People talk about "the digital doctor," but what really makes that concept interesting is that it may not involve a doctor at all.  I just hope my digital assistant knows when to be quiet and when to make me listen.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting