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Tag: Healthcare

Healthcare Reform is Coming

3v43sn(I couldn’t resist the Game of Thrones meme :D)

No matter how many health technology events I attend or healthtech entrepreneurs/experts I speak with, one thing that has always jumped out to me is just how big of a change the coming healthcare reforms/mandates feel to the hospitals, practices, payers, and technology vendors who are being charged with enacting the proposed changes.

The chart below gives some indication of some of the major changes that hospitals are both in the midst of implementing as well as in the near future that they are (hopefully) planning for (HT: Dr. John D. Halamka, CIO at Beth Israel Deaconess Medical Center). As is probably painfully clear from the alphabet soup of acronyms, the dizzying array of colors, and wonky terms like “Accountable Care Organization”, there is a LOT of complexity here (“Meaningful Use” alone means hundreds of things, divided across multiple stages).

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Each box means new technology systems, new ways of doing things, new ways of paying for things, new ways of being paid, new rules, new exceptions … its that complexity and the fact that all of this is intended to shake up “business as usual” which makes the health technology space so interesting and makes it such a vibrant space for new startups. Healthcare reform is coming, people.

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Lets hear it for Mike

I’ve known Mike Lee since we were both in high school doing debate. He’s a great guy, and I’ve enjoyed talking to him over the years about comic books, science, religion, and politics. He and I don’t always see eye-to-eye (translation: sometimes I think he’s nuts – come on, Mike, Kyle Rayner as the greatest Green Lantern ever?), but he’s one of the most thoughtful and intellectually humble guys I know.

So, when I found out he wrote a paper which happened to be one of the Top 10 downloads on the Social Sciences Research Network about healthcare policy, I knew I had to recommend it to all my blog subscribers.

Oh and, the fact that I made it to his list of acknowledgements has, of course, no bearing at all on my recommending the piece :-).

In all seriousness, give it a read. I haven’t finished it yet, but if it comes from Mike, I know its definitely worth perusing.

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Schering-Plough says goodbye via analyst call

image If you follow the biopharma sector at all, then you’ll know one of the most noteworthy deals to be announced in recent months is the $41 billion deal where Merck will buy former rival Schering-Plough.

With the deal closing soon, Schering-Plough’s execs had to deliver one last earnings call with the analyst community which cover Schering-Plough stock.

Generally, these are very dry affairs full of corporate speak with many empty promises, excuses, and boasting (although, occasionally, if you have an interesting enough CEO like NVIDIA’s Jen-Hsun Huang, you get some very interesting commentary). But, this most recent analyst call had a bit of poignancy you don’t usually get in an analyst call, as covered by the Wall Street Journal Healthcare blog:

The earnings call’s invariable bleating about operational sales growth and foreign exchange impact came with notes of nostalgia… Analysts offered kind good byes and good lucks. Executives waxed about the company, and its pipeline of new drugs, that they had built. It will all go to Merck now, Chief Executive Fred Hassan said in closing.

Awwww. Adios, Schering-Plough.

(Image credit – Merck/Schering Plough)

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Make Money off of the Uninsured

How much do the uninsured cost the American healthcare system? This is a question with great practical relevance, as without a clear understanding of the health needs of the uninsured and the cost of providing care for those needs, it’s impossible to make a policy which successfully addresses the issues facing them.

Now, I personally was under the impression that the uninsured pose a major burden to the healthcare system. After all, we’re talking about a fairly large number of individuals who cannot afford health care (and hence need to be subsidized by the American taxpayer). Much to my surprise, the blog Healthcare Economist quotes from a paper from the Journal of Health Economics that finds that the uninsured in net might not actually be a burden on doctors’ wallets at all (hat tip: A. Phan)

The majority of physicians actually make money, on net on their uninsured patients12-14% of physicians found their uninsured patients patients more than twice as profitable as their insured patients; that is the net payments from the uninsured were more than twice the expected payments from the insured patients.

The reason? Apparently (although, as a consultant, I shouldn’t be surprised by this), insured patients are able to extract bargain prices for medical equipment/drug suppliers as a result of insurance companies being able to bargain for prices. Uninsured patients, on the other hand, have to pay the full list price, because they lack the scale (or, in other words, the bargaining power) to negotiate lower prices.

But, even more interesting, is that if the higher prices are ignored, the study concluded that

Even our most conservative estimates suggest that uncompensated care amounts to only 0.8% of revenues, or at most $3.2 billion nationally

 

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