Each of the experiences I have described above has shaped my thinking, but each has done so in a different way.

The data center visit

I visited a large data center, in which the operators are using state-of-the-art monitoring systems for electrical power, climate control, and the performance of its computer and server systems.  A company on whose board I sit, Eaton Corporation, is a leader in providing comprehensive power management solutions for data centers. What is remarkable about the large data centers is the degree to which these centers no longer need human beings to monitor many system components.  The central control hardware devices and software programs provide data on thousands of points within the system.  There are less than 10 employees for a huge data center.

What insight does this have for health care?  To the degree that we are designing a system that enables remote and comprehensive monitoring of the state of health of a patient population, we can do so with relatively few healthcare professionals.  Although we talk about a serious labor shortage, the labor shortage assumes an indefinite continuation of the face-to-face diagnosis and treatment systems we now have, as opposed to the remote monitoring systems toward which we are heading.

The term the data center people when describing a center monitored predominantly by sophisticated hardware and software technology is a “lights out” system.  We must evolve to a “lights out” healthcare system on the same model.

The medical school advisory board meeting

As we think about healthcare professionals being trained in modern medicine, it becomes clearer than ever that healthcare professionals not only need to learn traditional human biology and body chemistry, but to be steeped in the field of bioinformatics.  Bioinformatics is a relatively young field of knowledge and skill in which diagnoses and treatments are developed through both onsite and remote data collection and the computer-generated analyses that use the data.

There will never be a complete loss of human judgment by trained health care professionals, but their efforts can be focused on those cases in which human judgment can make the biggest difference.  Getting good data on biometric indicators, health and healthcare history, and the foods, beverages, prescription drugs, over-the-counter drugs, and other items ingested by an individual is critical to enabling the human judgment factor to work best.

Medical schools are beginning to understand the importance of bioinformatics, and to incorporate course material on this field.

The visits with biometric device producers and health plan administrators

The Dossia Health Manager now is able to aggregate not only the comprehensive clinical history on an individual, but biometric and daily activity data that enables the healthcare professional to get a much more complete picture of the individual’s state of health.

Even better, there is an increasing effort to integrate biometric data tracking and management into health plan designs.  Employers and health plans have been providing services and incentives to get individuals to participate in health risk assessments, but these have been one-time exercises, as opposed to a program of capturing and tracking health data all the time.

There was a 2010 Kaiser Permanente study which supported the view that someone who regularly tracks blood pressure is 50% or more likely to control blood pressure.  This is consistent with a broad principle, often articulated about business objectives, that what gets measured gets managed.  The ability to capture blood pressure data with wearable devices is better than ever, and should be stimulated with incentives and rewards.

Shopping at the local pharmacy

Perhaps the most interesting learning I have done over the past month has come from wandering through several pharmacies while I was shopping for a few items.  Near the pharmacy counter at every counter is an increasing variety of home health test kits which are getting close to laboratory accuracy.

One which particularly caught my eye was a kit costing about $30, marketed by Bayer, which enables a user to draw a drop of blood and get a quick reading on his or her Hemoglobin A1c level.  Hemoglobin A1c is a leading indicator of Type II diabetes.  In the past, someone like me, who monitors this biometric indicator as closely as possible because of a family history of Type II diabetes, a genetic predisposition to the disease, and a slightly elevated level of blood sugar, would have had to get a physician to write an order for a laboratory test.  I would have had to schedule an appointment to get blood drawn, and would have had to wait at least one day, and possibly longer, to get my A1C reading.

Today, I can buy my own kit, draw my own blood, and get a same-day reading of my A1C level.  While I would not rely on a home test kit for a definitive diagnosis, I can track general trend information and can do so far more frequently than would be the case if I relied on a physician’s order and on having to schedule an appointment at a lab.

The next step in the evolution of these biometric devices is to make them able to communicate automatically with either a smart phone or a laptop or desktop computer, so that the data can be communicated directly back to a personal health record controlled by the patient.  Once that happens, the productivity of healthcare professionals will increase dramatically.

Instead of having nurses reside at a physician’s office or visit each patient at home, the nurse can work from either a home-based desktop computer or a mobile laptop or I-Pad device to track the health status of a much larger patient population than ever before.  Physicians would write orders to that nurse relative to what biometric indicators are most relevant for a particular patient.

Final comment

The biggest obstacle to adoption of this “lights out” healthcare system is the resistance of those who have built strong capability and income from face-to-face diagnosis and treatment systems.  If I operate a large medical practice based on the assumption that I must see every patient I treat, it will be very difficult to put into place systems and processes that operate as if I am not there.  The biggest challenge in diminishing this resistance is not technological or educational; it is the fear of losing income, jobs, or status.

Some large self-insured employers will move their employees to the newly created state and federal health exchanges.  They will pay taxes or penalties to do so, but it will be better economically, in the short term, for them not to have responsibility for employee health care costs.

However, many employers will invest in the health and wellbeing of their employees, and derive competitive advantage from doing so.  Why?  For employers free to design an optimal healthcare system, including onsite clinics providing comprehensive primary care and developing a selective specialist provider and hospital network, the ability to design a good healthcare system gives them much more control over their employees’ health status, sense of wellbeing, and health benefits costs.

Some employers, like American Express, are even building care delivery networks outside the United States, in countries that have single-payer systems and that have government-employed doctors and government-owned hospital networks.  The staff physicians for these employers provide far better care, which is very attractive for talent recruitment and retention.

What employers will opt out of offering direct health care coverage?  Companies that have lost control of health care costs, such as those with exceptionally generous collective bargaining agreements, will welcome the chance to offload their entire population to health exchanges.  In many companies, CEOs simply do not understand that they can manage employee health and wellbeing and deliver shareholder value.  In others, corporate benefits departments do not want to assume responsibility for health care cost reduction.

Employers who retain health care coverage will develop better provider networks, and may even create multi-employer consortia.  This is happening in Southeastern Wisconsin, with Quad Med, Briggs & Stratton, Miller Coors, and Northwestern Mutual Life.  It is also happening with a consortium of labor unions in the New York City in the UNITE Here Health Center.

What will these employer-based health plans look like?

• They will migrate toward consumer-directed plans with high deductibles and co-pays for plan participants;
• Plan participants will be given significant incentives for making the best choices for their health, health care, and health benefit plan spending;
• Plan participants will be given continuously improving tools for self-managing health, including consumer-controlled personal health management systems like Dossia, clinical decision support tools, choices among health and wellness vendors, and good information and technology tools for continuously monitoring health; and
• Employers will put more decision power into the hands of plan participants and will force health plans to market directly and successfully to consumers to secure revenues.

These employer-based “accountable care” systems will be among the world’s best health care systems.

The wealthiest Americans will leave the core systems of which they are a part and pay extra for concierge medicine. They will consult with physicians who accept no Medicare patients and who direct their patients to the world’s best care, wherever available.  These Americans may actually be consumers of medical tourism, when that care is superior outside U.S. borders.

There is precedent for this.  In the UK, the top layers of UK society initially acquired supplemental health insurance through BUPA and, more recently, seek out care wherever it can be best delivered, including India, Singapore, and the United States.  Medical tourism started to meet the demand from single-payer systems abroad, but it will get bigger here.

There will even be increased medical tourism within the United States.  Concierge doctors will refer patients anywhere in the country in which they can secure the best care.  This system will also deliver exceptional care.

Some Americans will receive world-class care because of the lucky accident of where they are living.  Those Americans in the seven states in which Kaiser-Permanente is licensed to do business, or in Utah, where Intermountain Healthcare is based, or in Washington state, where Virginia Mason is based, or in Southeastern Pennsylvania, where Geisinger is based, will get excellent healthcare.

Other systems around the country will attempt to copy them, and some will succeed, but most will have difficulty, because, for the most part, world-class accountable care organizations will have been created in business models in which the primary care physicians are staff doctors paid a salary and in which there are tightly controlled specialist networks.  These systems work because they effectively limit patient choice by steering patients into a single managed care network.  They will stop seeming like a satisfactory alternative when the limitation on patient choice produces bad outcomes in a handful of high visibility cases.

There is precedent for this.  Back in the 1990’s, payers were effectively controlling healthcare costs and utilization through tightly managed care networks.  These systems also delivered a reasonable level of care quality.  However, they were dismantled because there were a variety of high-profile cases in which it appeared that the healthcare delivered was of inferior quality because the patient could not select the provider of choice.

Most government-run systems outside the United States use some form of provider choice control or give patients no choice as to providers.  Some have “gatekeeper” systems in which the patient cannot directly consult a specialist.  In the United States, such systems can survive only if they can avoid getting legislated or regulated out of existence because of the appearance of delivering inferior care.  They survive, but are highly vulnerable to being dismantled.

Many people have used the Veterans Administration and Military Healthcare systems as models for great healthcare at an affordable cost.  They have electronic health record systems.  They take advantage of broad clinical learning.  They deliver convenient and low-cost care through staff physicians and nurses paid on salary, and they develop long-term relationships with their patients.

However, because premiums paid by users are so low, and raising the prices paid by veterans and military families is politically suicidal, the federal government will reduce the financial burden of this system by quietly reducing the supply of care, rather than working to reduce demand.  They will shrink the size of facilities, the size of their staffs, or the hours of service, rather than increase the cost of accessing them.  Although shrinking a hospital or outpatient center is politically challenging, demanding that users increase their premium payments by several thousand dollars a year would be politically suicidal.  For example, the military health care system charges a 60-year-old military retiree $426 per year in premiums, a ridiculously low payment, considering that this type of retiree costs the system in excess of $10,000 per year on average.  However, raising premiums to even $1,000 per year is the metaphorical “third rail” issue; politicians will not touch it.

The best place for low income Americans dependent on Medicaid or other safety net health care programs is at community health centers.  These centers are generally better equipped to handle the complex problems low-income Americans face, particularly those with language and cultural barriers.

The top community health centers have expert resources to assist patients in applying for government benefit programs, in managing transportation and childcare issues, in addressing related social service issues, such as domestic violence, and overcoming language and cultural barriers.  They also tend to manage appointments for patients with more unpredictable schedules far better than a traditional private health practice.  Finally, they develop expertise in managing the different kinds of health problems very poor people have, compared with their non-indigent counterparts.

The Medicaid legislation passed in 1965 contemplated that Medicaid and Medicare patients would be part of mainstream health care systems and that Medicaid and other safety net programs were simply ways of paying for health care for poor people. We now know, from nearly five decades’ experience, that low income people have other overwhelming life challenges.  Their health care, economic and family needs are different, and are interrelated.  They need expert care a community health center is better equipped to deliver.

Medicaid and other safety net programs could have paid more for health care, and enabled private practice physicians to handle Medicaid patients, but the reimbursement rates for Medicaid providers are so low that private practice physicians have increasingly stopped seeing Medicaid patients.

Therefore, the community health centers will end up handling them, and will actually do a reasonably good job delivering care.

In trying to address budget deficit issues, the Obama administration and its successors will try to reduce what Medicare pays for health care.  This will cause even more medical practices to drop Medicare patients, because these patients have more complex health challenges for which the doctors will be paid less.

We continue to see a hemorrhaging of primary care physician populations, which leaves the Medicare populations even more poorly served by private practice physicians.

Medicare patients will seek out more care at retail clinics for minor illnesses or injuries, at urgent care centers for serious conditions, at emergency rooms for acute conditions.

We will see shrinkage of the physician population with the skill and will to take on older patients with more complex health care challenges.

Most Americans who work in small businesses, who freelance or are self-employed, who are unemployed, or who work for large companies that have abandoned health care coverage will end up in health exchanges.  They will get a progressively poorer quality of care from private practice physicians. They will wait longer for care, have long waiting times in doctor’s offices and hospitals, have short visits with healthcare providers, get too many diagnostic tests in place of more careful physical examinations because the fee-for-service system will survive and drive dysfunctional behavior by physicians and hospitals.

They will also visit urgent care centers and emergency departments more than they should, because these parts of the healthcare system will be accessible to them.

While the quality of care delivered through this government-regulated system will decline, the cost for patients will increase significantly.  There will be high deductibles and co-pays, and the risk pool in this population will get worse over time.  The state-run exchanges and any other system created and managed under the Affordable Care Act or any regulations emerging from it will receive those members not wanted in other systems.  For example, employers with already healthy populations will retain their health plans; employers with unhealthy populations will happily dismantle their health care coverage and drive employees to the exchanges.  There will be an “adverse selection” problem.

The titanic battle between proponents and opponents of the individual mandate, that is, the requirement that individuals either purchase health insurance or pay a penalty for not doing so is constitutionally and politically critical, but arguably irrelevant to whether our country will end with everyone insured.

The individual mandate design created by the Affordable Care Act, as well as the Massachusetts design, both are flawed in driving individuals to secure health insurance because the penalties an individual has to pay if he or she does not elect to secure insurance are inadequate.  I have commented on this more than once: if an individual driving into New York City were to have a choice between paying $40 to park legally in a garage or paying a $20 parking ticket for parking illegally on the street, the vast majority of individuals would elect to park illegally.  It’s nice to have a symbolic penalty, but such a penalty works only if the cost of noncompliance is close to, or better yet, greater than, the cost of following the law.

Because our elected officials did not have the courage of their convictions to create meaningful incentives or penalties for getting every individual covered by health insurance, a significant part of the population, many of whom will be young, healthy people who usually subsidize older, less healthy people, will remain outside the health insurance system.

They will actually have more attractive health care options available to them.  They will access retail clinics for treatment of minor illnesses and injuries. They will have more retail choices for both immunizations and periodic screenings.  They may even be able to access medical tourism options for surgical procedures that would otherwise be prohibitively expensive, even in an insured health care system. They will continue to access acute care at emergency departments.

They really do not need to secure health insurance until they have a condition that is both expensive and chronic, one in which emergency department care is inadequate.  In the past, they would not have risked waiting to get health insurance until getting a chronic condition, but the Affordable Care Act eliminates any barriers to them securing insurance whenever they can no longer operate in the uninsured system.

Oddly enough, absent a much more punitive individual mandate, the Affordable Care Act may actually drive more individuals into the uninsured system for longer stretches of their lives.

Final Comments

It is very difficult to reform the multiple health care systems that, in aggregate, employ over 15 million people, most of them in middle-class jobs, that contribute almost $3 trillion per year to our economy, and that are perceived to deliver two public goods, healthcare and insurance protection against catastrophically high healthcare expenses. Change will come from a combination of evolutionary development of better care for those who can acquire it outside the systems heavily regulated by the government and increasingly complex and dysfunctional government interventions.

The goal of universal healthcare equitably available to all Americans will not happen.  Those smart, rich, or resourceful enough to demand great care will get it; the remaining Americans, overwhelmed in trying to manage their daily lives or not sufficiently “street-smart” or rich will be lucky to get adequate, affordable care.  The more government tries to intervene to achieve fairness or to correct fraud, waste, and abuse, the more the system will create new opportunities for fraud, waste, and abuse. Moreover, as noted above, the government’s misguided attempt to eliminate denials of coverage for preexisting conditions will provide a perverse incentive for more individuals to drop out of the health insurance system until it becomes economically untenable for them to stay out. Every government intervention will result in a new set of “gaming” opportunities.

Some people would say that we have a crisis in health, healthcare, and health insurance, and that the crisis should be a call to action.  Unfortunately, the history of our representative form of government would suggest that crises are noticed and acted upon when they are triggered by highly visible events, coupled with strong leadership and large movements to take advantage of them.

Moreover, even when there is a crisis, there has to be an agreed-upon paradigm for how to think about the issue.  We do not have that:

• We do not have a consensus on how to resolve the healthcare crisis.
• We want everyone to have health insurance, but are not prepared to take the hard steps to penalize those who refuse to buy it.
• We support the goals of unlimited patient provider choice, unlimited access, very limited penalties for irresponsible and destructive patient behavior, and the belief that more access to care always yields better care and better health.
• We know that unlimited access and unlimited choice yield bad economics, but do not fully understand that most of the cost of healthcare comes from preventable and controllable decisions that should be penalized more; and
• We have exceptionally little understanding of the degree to which more care often means worse care and poorer health.

Our system will simultaneously improve in certain respects and deteriorate in many others for the next decade, but I am confident that it will settle into a complex, multi-segmented system like what I have described.

When governments, private insurers, and self-insured health plans try to drive drug prices down and, specifically, to convert patients from using generic drugs instead of branded drugs, there is a limit in terms of cost-saving opportunities available, without putting patients at risk.  To push cost savings beyond that point inevitably raises a huge risk of acquiring generic drugs priced at a level that does not optimize patient safety.

We cannot solve our health care cost crisis entirely primarily by driving prices down for drugs, supplies, devices, and medical services.  We have to reduce unnecessary usage of the health care system, and to drive the healthier behaviors that are the most sustainable way of reducing health care system usage.

Publicly held businesses and governments under stress for excessive costs often have the tendency to flex their muscles in procurement processes to demonstrate their ability to save money.  The unit cost savings are visible, the savings opportunities are often immediate, and the purchasers can present themselves as fiscally responsible.  Moreover, it is far more comfortable for payers to beat up on suppliers through the procurement process than to deal with the messy questions associated with inappropriate usage of the health care system, or driving people to engage in healthier behaviors.

There are two things wrong with relying on procurement strategies as the primary cost reduction tool:

• Unless there are tight controls on what is purchased, cost reductions are often covered by sellers cutting corners in what they are providing, or reserving the right to charge for what had been given away.  Government contractors have mastered the process of low-balling initial contract price offers, and then making huge profits from “extras” which are inevitably required by the government at a later time.  The so-called savings are phony; they are merely costs that are deferred to a later time and are often higher than a more comprehensive competitive bid.
• The sellers who agree to accept lower prices and try to honor them according to their terms often find themselves unable to perform profitably.  Over time, the pool of sellers willing to bid on business that is consistently likely to be unprofitable shrinks.  Eventually, the purchaser has no competitive options.

In the pharmaceuticals context, the corner cutting can be fatal to patients, as was the case with heparin.  Although I obviously cannot know what happened in every health plan procurement negotiation, I would not be surprised that purchasers which drove a hard bargain on pricing for generic drugs created an environment in which the supply chain functions of pharmaceutical manufacturers attempted to acquire ingredients for the drug at a price that could not be supported with the extra cost of a tightly controlled supply system.

There are no “magic bullet” ways to take drug prices down beyond a certain point.  Major drug manufacturers are administratively inefficient; they spend excessively on marketing and sales; and they may still have less efficient research and development processes.  However, beyond a certain point, cost cutting will cause people in their organization to take actions that put processes at risk.

Employees of pharmaceutical companies are not excessively evil or reckless compared to other businesses or governments; this is true of every large organization.  Employees under severe pressure anywhere to cut costs make stupid and reckless decisions to keep their jobs.  They particularly cut costs in areas in which the consequences are less visible or more likely to appear at a later time, especially if they can transfer the risk to someone else.  They are unlikely to go after the most sustainable cost reductions, which involve messy structural reform of their organizations.

In the health care marketplace, this was illustrated particularly with the Johnson & Johnson manufacturing safety problem in the last few years.  Much of the publicity about that case demonstrated that the root cause was a culture that, over time, became excessively focused on cost cutting at the risk of patient safety.

Relative to other areas of health care, the same principle applies: there is no free lunch when costs are cut excessively in the procurement space.  One major firm was very happy with the fact that its insurance plan administrator significantly reduced the payments due to physicians, hospitals, and other healthcare providers. The plan administrator secured a very good long-term contract because it presented itself as having a better ability than other administrators to negotiate prices with providers.

Unfortunately for the Company, the consequence of this hardball negotiation process was that many providers left the network and stopped treating patients with whom they had long-term relationships.  As a result, the Company lost in two ways:

• Some patients stayed with these providers, who were now out of the network and were charging much higher prices.  Even with lower reimbursement percentages for out-of-network care, the Company still paid more.  Out-of-network costs shot up.
• Some patients changed providers, received disruptive and suboptimal care, and were very unhappy with the Company for causing this to happen.

As a CEO, I was never comfortable with strategies based predominantly on procurement-based price reductions.  They tended to work for 2-3 years, and then fell apart.  The better strategy was to work with vendor-partners to get better products and services through sustainable cost reductions.  For example, I always liked solutions in which parts were re-engineered or packaging was reduced, or a less expensive, but equally reliable, way to ship the product was found.  These kinds of cost reductions were more challenging, but they worked.  Cost reductions based solely on price concessions struck me as a very lazy way to reduce costs.  I supported them, but, to a limited degree and for a limited period of time.

Ultimately, the challenges of reducing health care costs will require us to make deep and broad structural changes on how we live our lives, and allocate societal resources.  The move from branded to generic drugs is a small step in health care cost reduction, but, like every other, it has limited value and has to be managed with great care.

The Old Paradigm: Healthy people subsidize those who get sick or injured through no fault of their own.

Throughout the history of U.S. health insurance, the prevailing paradigm was that everyone paid for health insurance, with the healthy people paying higher premiums to subsidize those who became sick through no fault of their own.  State insurance regulators authorized the issuance of health insurance policies with three rating frameworks:

• Community rating: everyone paid the same premiums;
• Adjusted community rating: differences in premiums are allowed, based on population demographic factors like gender, age, and geographic differences in health care delivery costs; and
• Experience rating: those with pre-existing conditions either were denied coverage, paid more, or had coverage exclusions.

All these systems assumed that insured people had no control over their health.  Therefore, adjusting premiums based on individual behavioral risk factors, such as smokers’ penalties, allowed in life insurance policies, or premiums based on taking a drivers’ education course, part of automobile insurance ratings, were not allowed in health insurance policies.

The old paradigm made more sense in the early 20^th century because most health care costs arose from life-threatening infectious diseases or catastrophic injuries, believed to be beyond individual control. There were fewer treatment options for major diseases, and they did not have huge cost differences. Therefore, rewarding patients with lower premiums, deductibles, or co-pays for intelligent, discretionary treatment decisions made less sense.

The New Paradigm: Health insurance premiums, co-pays and deductibles are adjusted based on patient behaviors.

Recent decades have seen a radical shift in health care cost drivers.  Preventable and controllable diseases, such as Type II diabetes, heart disease, many cancers, and behavioral health and substance abuse conditions, comprise the vast majority of our health care costs.

Additionally, there are huge differences in the intensity of care provided to individuals, based on their providers selections and decisions they make among discretionary treatments.  Differences among end-of-life treatment options are hundreds of thousands of dollars.  Prostate cancer or back pain options can vary by tens of thousands of dollars. More health care costs are controllable.

Health insurance regulations and plan designs have not recognized these realities. Self-insured employers have the best chance to design health plans with the new paradigm because they feel the most pain and have the most plan design flexibility.

Value-based health insurance plan design is the new paradigm for self-insured employers.

Principles

Value-based health insurance plan design for self-insured employers is the new paradigm.  It is based on the following principles:

• Plan members are rewarded for behaviors reducing the risk of incurring preventable medical conditions.
• Plan members are rewarded for making intelligent choices of high value providers.
• Plan members are rewarded for intelligently evaluating treatment options.
• Plan members that adhere to treatment protocols get rewarded.  Those refusing to adhere to treatment protocols get penalized.
• Providers delivering better care at lower cost are rewarded with higher reimbursement rates.

Evolution of value-based health insurance plan design

Employers like Pitney Bowes adopted relatively simple versions of value-based health insurance, and obtained excellent results:

• They made preventive care free to plan participants, while charging participants for accessing the health care system.
• They supported health plans by making preventive care such as immunizations, health screenings, and health risk appraisals conveniently available, and paid participants for health-promoting behaviors.
• They enabled individuals to adhere to chronic disease treatment plans by making maintenance medications free of charge.
• They steered participants to treatment paths that increased their intelligence in making treatment decisions:
  • Pitney Bowes provided higher mental health reimbursement rates to participants accessing eight free behavioral health counselor visits before selecting their treatment path.
  • Pitney Bowes introduced a multi-stage treatment path for treating morbid obesity, with bariatric surgery as a last-stage, as opposed to first-line, treatment.
  • They created higher charges for emergency department use for non-urgent care, or for excessive diagnostic imaging test use.

These plan design implementations were successful, but the patient-controlled, portable, personal health management system, with a core personal health record, takes value-based health plan design to a new level.

The newest paradigm: value-based health insurance plan design rewards the right behaviors more precisely, faster, continuously, and more powerfully through a personal health management system.

Large self-insured employers understood that employees needed help navigating complex health care systems.  They purchased disease, care, and large case management programs, often from third-party insurance administrators to improve engagement. They also provided health-promoting behavior incentives, either within health plans or in separate employer-sponsored wellness programs.

The 2011 Towers-Watson Survey of employee benefits executives indicates that large employers are dissatisfied with these programs.  These programs achieve about 10% engagement from the target population, and have not produced hoped-for health outcomes.

Employers are also dissatisfied with prevention and wellness programs, because they believe that they are not securing additional participants.

How do personal, portable, patient-controlled health management systems solve these problems?

Personal health management systems allow data collection more frequently, more precisely, and in real time.

Daily tracking of biometric data increases the likelihood of controlling the disease being managed. For example, tracking blood pressure for a person with hypertension increases the likelihood of controlling hypertension by over 50%, based on a 2009 Kaiser-Permanente study.  This supports Peter Drucker’s observation that “what gets measured gets managed.”

A new value-based health plan design application would reward an individual partially for tracking key biometrics and partially for controlling them.

Personal health management systems create new and more effective ways of delivering health care coaching that an employer can reward.

Rewarding someone for engaging in a wellness program or for engaging with a health coach, nurse, or physician to manage a medical condition has produced disappointing results.  Wellness program providers routinely get only between 10-15% of the target population engaged in these programs.

Tailoring communications to consumer preferences will improve consumer engagement. The ability to supplement face-to-face and telephonic communications with text messages, or online web site, e-mail, and live chat tools makes these programs more effective, especially if the consumer receives rewards for every contact, not just the initial contact.

The value-based health plan could vary the co-pays and deductibles for an individual who engages frequently with health coaches or nurses in managing a chronic condition.

Personal health management systems are more effective at monitoring adherence with chronic disease treatment plans and other necessary medical practices.

One inherent frustration of self-insured employers is that high health care expenses come from individuals who fail to adhere to their chronic disease medication regimens, thereby ending up receiving expensive acute care.  A personal health record will receive information as to whether a prescription is filled within minutes after it is filled. The Vitality Glowcap device also enables monitoring of whether users are taking their medications.

In addition to making maintenance medications free of charge, the value-based health plan could provide incentives for filling a prescription within a specified period, for taking medications on schedule and for getting timely refills.

Personal health management systems can provide exceptional patient decision support tools for health care treatment decisions on conditions for which a variety of imperfect treatment options are available, such as back pain, obesity, mental health, prostate cancer, and end-of-life care.

Treatment differences manifest themselves in such discretionary decisions as:

• caesarian surgeries,
• surgery as a first-line option for relieving back pain,
• prostate cancer victims using either the most expensive laser treatment technology instead of watchful waiting,
• administering chemotherapy extending life a few weeks, but resulted in shortening life for many patients, and
• using bariatric surgery for morbid obesity.

The personal health management system can provide tools for patients to understand the strength and weakness of all treatment options.  Requiring patients to study these options does not automatically nudge them toward the least expensive option, but helps them control the decision, as opposed to having it imposed on them by their physician. It also makes them more active partners in managing their health.

The value-based health plan gives strong financial incentives for patients to engage in a careful, interactive decision process before making a choice among discretionary, imperfect treatment options.

Personal health management systems are great vehicles for helping patients, those making care decisions for them, and those working with them to improve their health to determine their life goals and values, as well as their sources of well being in their daily lives. Armed with such information, physicians and other health care professionals can help patients and those making care decisions for them make the best decisions on how to optimize health and well being.

Many flawed health promotion strategies assume that, if we educate individuals on healthy behaviors, they will engage in those behaviors.

Optimal health does not generally drive individual behavior.  Otherwise, no one would smoke, abuse alcohol, overeat, play inherently dangerous sports, or drive recklessly.  Many factors influence health-related decisions, such as peer and family acceptance, the pleasure derived from unhealthy behaviors, the perception that unhealthy foods cost less than healthy counterparts, and the belief that the unhealthy behavior has healthy side effects (smoking suppresses appetite and keeps smokers thinner.)

We need to understand life goals and values before changing them.  The personal health management system is wonderful for engaging in a dialogue to determine life goals, and figuring out what motivates both healthy and unhealthy behaviors.  The Mayo Clinic has a wonderful tool called “motivational interviewing,” which is great for this purpose.

These life goals are particularly critical to understand when the individual is unable to make healthcare decisions.  End-of-life decisions lend themselves to decision processes tested against life goals and values.

Value-based health plans, combined with personal health management systems, would be a major step forward in helping us produce better health care at lower cost.

I have now been the President and CEO of Dossia for almost four months.  As I look at the personal health record landscape, I think that those who care about this space need to rethink some fundamental directional assumptions about health information technology.

We are “consumers,” not just “patients”

The term “patient,” as applied to health information, has two flaws: first, we need health-related information at all times, not just when we are in a doctor’s office.  Health management is a 24×7 activity, not an activity confined to our clinical encounters, which are a tiny fraction of everyone’s life.  Second, “patient” is a passive term.  We should be controlling the management of our health, not being a passive recipient of clinical care.

We need all clinical information, not just medical information.

Our health care system encounters are with doctors, hospitals, outpatient centers, pharmacies, labs, imaging centers, dentists, alternative medicine providers, nutritionists, fitness trainers, health counselors, and retail outlets at which we receive immunizations and screenings.  We need all information, not just what our preferred doctor, hospital, or insurance company wants us to see.

The “medical home” and “accountable care organization” concepts contained in the recent health reform legislation are somewhat flawed because they assume we will concentrate our health care in one system.  That will never happen because we will want choices, even if we stay in the same geography. However, a sizable part of our population will change residences, which will force changes in health care providers, employer plan sponsors, and insurance plans.  We need a comprehensive and portable health information system.

We need all health-related information, not just clinical information.

Much of what matters to our health relates to non-clinical activity: what we eat, how active we are, how much sleep we get, how much stress we feel, what vitamins, herbs, and over-the-counter drugs we take, what infections are exposed to us, our genetic make-up and expression, what environmental hazards present themselves to us, and what injuries and cumulative physical stresses we risk.  We need all of that information presented accurately, automatically and comprehensively into a health record, not just what we can remember when asked by a doctor.

We need help navigating through health care payment sources.

The days when most Americans could anticipate having all their health care costs covered by a health plan are long gone.  Today, we navigate payment through four sources: the health plan, a tax-deductible vehicle like a Flexible Spending Account, a Health Savings Account, or a Health Reimbursement Account, an employer or other incentive program, or self-payment.  We need help navigating through these different payment streams.

We need help making health care decisions.

Health care decision making is increasingly complex.  It is influenced by cost, quality of care, relative effectiveness of treatments, and what health plans and other payment sources will cover.  Consumers increasingly need more decision support, because choices are imperfect.

We need to recognize that health-related decisions are often made by someone other than the patient.

The health care system and policies related to it, such as privacy policies, assume that most health-related decisions are made by the patient.  However, we know that this is not the case for many parts of our population.  Parents make health decisions for children, but a parent also drives health decisions for a spouse, for elderly parents, and even for elderly in-laws. People living together outside of traditional marriages are also making health-related decisions for domestic partners. Additionally, more elderly people are giving others health care proxies to make decisions for them under certain circumstances.  Our health care system needs to recognize this reality and accommodate in access to health information.

We need to recognize that people need help with decisions relating to health management.

The personal, consumer-controlled health management system assumes that, for many medical decisions, the decisions are not simple and the choices are both imperfect and inherently based on incomplete information.  Health management tools have to be available to make the health record more valuable in bringing to bear on health care decisions.

Privacy preferences are not simple and they will change, based on changing life circumstances.

Many privacy advocates, who are highly suspicious of the security and privacy of any health information system, and who may have experienced or been made aware of bad health outcomes because of misuse of health information, assume that everyone wants health information kept private. The real world is more complex.

Some people freely share their health status on public web sites, and on semi-public sites like Facebook, knowing that the information is no longer secret as a result.  For some, they do not care who knows.  For others battling a debilitating disease, they want to share information to get the best possible sources of help.

Others are willing to share information based on their need to find out better sources of help on allergies, back pain, or injury rehabilitation, but do not wants others to know that they have heart disease, because of job-related concerns.  Anyone who expects to apply for a health insurance policy wants to keep health information secret to the degree that it affects their ability to get insurance or to get the lowest possible rates.

Privacy consent management has to allow patients or caregivers to express precisely patient preferences and to have those preferences honored.

Moreover, people who express a preference at one time may change that preference, based on changed life circumstances.  Someone who is newly diagnosed with a condition may have more desire for privacy, or, in the alternative, may want information communicated more broadly.

Any privacy system has to make it easy for individuals to change preference profiles.

Conclusion

The state-of-the-art personal health management system needs to take all these factors into account.  Too much of what passes for personal health record systems today are based on flawed assumptions about how health, health care, and health benefits actually work. Dossia strives to help people function in the world as it is, not as we believe it once was.

The assumptions underlying many of our health care policies are that people are most motivated to do what is healthy for them and their families, and if we could only get them good information, and good and affordable care, they would do the right things.  Unfortunately, the reality is much more complex.

As the Duerson case, as well as many other cases involving athletes, show, many athletes deliberately engage in unhealthy and dangerous activities because they value the experience, and, to some degree, the money that comes to them from playing a sport at an elite level.  By the way, I do not think money is the prime motivator.  Otherwise, why would scholastic and college athletes engage in the same destructive behaviors as their professional counterparts?  Also, if we go back several decades in any professional sport, the financial rewards for professional athletes were not that great, but they still played violent sports.

What struck me in a TV interview with Duerson’s wife and son was the comment by his son that Duerson had died because he played a sport he loved and experienced one of the highest accomplishments an athlete can have: being part of a world championship team.  If we were to turn the clock back to the beginning of Duerson’s career and tell him that playing professional football would so damage his brain that he might commit suicide by age 50, it is unclear whether he would have made a different decision.

Similarly, many athletes become heavy users of performance-enhancing substances, despite strong evidence that those substances eventually destroy their health, because they believe that the substances will give them a competitive advantage, or, at worst, allow them to stay even others also using performance-enhancing substances.  The only thing that has changed in the last several decades has been the substance of choice, but the propensity for many athletes to seek out an extra edge has not.

In the rest of the population, we have found that every person has life goals and priorities, of which health is a contributor or an inhibitor.  People cannot relate to “optimal health.”  They can only relate to the benefits optimal health brings to them, or the problems that less-than-optimal health creates for them.  Why does this matter?

If we are to use the many tools available to us to make people healthier and reduce our society’s runaway health care costs, we need to tap the more fundamental behavioral motivations that drive their health decisions:

• The 50-year-old who has just had triple-bypass surgery may be more receptive to giving up tobacco usage, because failing to do so may be fatal.  However, the more fundamental motivation for that individual may be more concrete, like the desire to care for grandchildren or to pursue pleasurable activities.
• The 25-year-old single woman probably cannot be induced to give up smoking by making her afraid of lung cancer, especially since smoking usually makes people thinner than they would otherwise be, but if it reduces her chance of marrying the person of her dreams, she will find a way to curtail her tobacco usage.
• The teenager who drinks alcohol is more likely to be motivated by the desire to be accepted by peers than by whether alcohol consumption is healthy or unhealthy.

What does all this mean?

• To a significant degree, we have to supplement traditional health care system tools with personalized coaching that helps an individual figure out his or her deep life goals and that helps further those goals through healthy behaviors.
• The coaching may be face-to-face, telephonic, or even online, or some combination of all of these methodologies, but it must be tailored to how a coach might build trust with individuals to help them live healthier lives, while pursuing their life goals.
• The source of coaching will vary by person.  Over the years, I have found that it can be peers, nurses, pharmacists, doctors, behavioral health counselors, psychologists, mentors, supervisors, parents, siblings, or revered relatives or members of the community.  Most people have several sources of trust.  The sooner those trying to help individuals be healthier can find those trusted sources and match individuals to them, the better.
• Sometimes, changed circumstances also change life goals.  Earlier in life, individuals are motivated by wealth accumulation, the desire to start and build a family, or the desire to get secure employment and build a career.  Later in life, financial security, retaining connectedness to loved ones and the desire to have accomplished something meaningful matter more.  Matching health goals with life goals is an ongoing process, not a one-time effort.
• Everyone has life events that shock them into making changes in their behaviors, whether the event is a divorce, becoming a parent, losing a job, having an accident, or getting diagnosed with a life-threatening condition.  Health counselors need to understand how those life events alter life goals and change the health coaching patterns.
• As individuals are either too young to have life goals and are very dependent on parents or other guardians, or too old to care for themselves, the health care system needs to recognize that there are individuals who will have far more influence on an individual’s state of health and wellbeing than the individual himself or herself might have.

As I have learned more about Dossia, the personal health record platform, that we offer through the Dossia Service Corporation, it has become clearer that, while we can be successful in empowering individuals to manage health and health care to a degree by providing information and insight, there need to be other motivators, such as financial incentives, recognition from winning games and contests, and the ability to engage in more life activities.  We can offer Dossia as a standalone data repository, but its greater value derives from its integration with broader life goals to which optimal health contributes.

Fortunately, Dossia is not only in compliance with all applicable laws and regulations, but, having had to market our personal health record system through large employers, we have had to meet much more challenging security and privacy standards than our competitors, who market directly to consumers.  I am very familiar with exacting security and privacy standards from working inside a company that had to manage sensitive financial information for postal services and their customers because of our postage meter business.

In the last decade, my immersion in security and privacy issues increased exponentially for a variety of reasons:

• Pitney Bowes Management Services took on more large financial services and health services customers, and managed major functions like print and mail, which caused us to be exposed to a considerable amount of personally identifiable information.  Not surprisingly, our customers demanded security and privacy protection far in excess of what the law required.
• Pitney Bowes Management Services also became a major provider of mail and print services to more government agencies like the FBI, the U.S. House of Representatives, and the Justice Department, which had their own security standards.  After the 9/11 and anthrax bioterrorism events, these security standards became even more exacting.
• As Pitney Bowes expanded its reach into the consumer and small business customer space this past decade, we began accepting credit cards, which meant that we had to withstand the audits and scrutiny of the major credit card auditors for American Express, Mastercard, and Visa.

I learned a great deal about security and privacy.  Some of the most important insights that I take with me into my new assignment are the following:

• A system dependent on privacy and security is only as strong as its weakest link. Therefore, every system needs to be stress-tested at multiple points at all times, to make sure that there is not even a single point of weakness. Moreover, a system that is large, expensive, and highly secure in many places, but has more potential points of failure than a less expensive system in which there are fewer points of failure can actually be less safe. There is an optimal level of spending on security at any given time.
• The most frequent and, often, most serious security breaches do not occur because of technological flaws in a system, but because of human failures.  A private investigator and security Kevin Mitnick wrote a very insightful book some years ago called The Art of Deception, in which he made the point that he could find the most sensitive information about anyone from even the most secure system. For example, when he was retained by a party to a divorce proceeding to learn about the other party’s salary and benefits from an employer, he would pretend to represent the employer’s CEO and would demand payroll information on an individual from someone who should not have surrendered it.  He would play upon an employee’s fear of upsetting the CEO and that employee’s desire to be helpful and would get access to information that should not have been available to him.
• Closely related to the previous point, security and privacy systems have to be compatible with how individuals function within various processes.  If the process is made too cumbersome because of security protections, people who need to function more efficiently will find a way to work around or even disable security and privacy systems.  The ultimate goal is to maximize security and privacy, based on how people will use a system, not to achieve a theoretical maximum level that will not get achieved because people compromise a system.
• Maximizing security and privacy is not a one-time effort.  Those seeking to compromise systems keep improving their skills, so those protecting the systems have to keep improving their vigilance and the effectiveness of their efforts.
• Among members of the public, there are differences among people in their attitudes toward privacy.  There are also differences for a single individual in terms of privacy concerns relative to different categories of information.  A privacy policy and system needs to recognize that individuals will care differently about whether information is disclosed, to whom it is disclosed, when it is disclosed, and how the disclosure will take place.  To the degree that we secure informed consent from individuals, we also need to understand that individuals have diverse ways of locking in on the data that is relevant to them giving informed consent. We also need to be as upfront with people every time there is potential for their data to be shared, and to have a dialogue with them that gives them a reasonable opportunity to give an informed consent.  They should be aware of the risks of disclosure, but also the benefits to them, and should make a knowledgeable decision.
• There are cultural norms that privacy policies and procedures have to respect.  One example of this was the absurdly legalistic view that individuals could not be identified by their last name in a doctor’s office waiting room because of HIPPA privacy rules.  The theory was that other people would know who they were, and that having strangers hear their last name violated their privacy.  One day, I listened to a receptionist adhere to this rule by calling a black adult patient by his first name.  Many adult black people from an older generation feel that being called by their first name is insulting and disrespectful.  To many adults, including me, having a stranger address me by my first name is disrespectful and condescending.  Requiring doctor’s office employees to deal with strangers on a first name basis without getting their prior permission is stupid.
• No security system is ever invulnerable to breach as long as human beings have something to do with it.  The goal is to strive to have zero breaches, to minimize their seriousness, and to learn from them when they happen, so that they never happen again.

The Dossia team has done a superb job building an exceptionally secure personal health records platform.  I plan to improve it continuously.

In early 2009, the Obama Administration included significant funding in the ARRA stimulus legislation for the upgrading of medical records in physician offices, and directed the U.S. Department of Health and Human Services and the Federal Trade Commission to issue regulations, which would implement a transition process over a multi-year period.  Those regulations are largely in place and the legislation and regulations have enabled Dossia and the other players in the market, including Microsoft and Google, to get anchored in a relatively stable, coherent regulatory environment.

When many members of the public do not understand is the difference between electronic medical records, which a physician or hospital might maintain on their patients or a pharmacy, or insurance company might maintain on its customers, and a personal health record, which the patient or customer maintains on his or her own.  Even the Executive Branch of the federal government and members of Congress did not understand the difference when we started four years ago.

Many people ask us: why should a patient maintain a record separate from the records held by these other parties?  After all, could not the patient simply be given online access to these other records when he or she needs that access?  There are three big reasons why the Dossia founders, of which there are now ten companies, including Pitney Bowes, my old company, have invested in a separate personal health record business (although the founder employers’ only role is to give Dossia access to their employment base for marketing and enrollment purposes. The employers never have access to any individual or population health records.):

• The majority of Americans access more than one doctor, one pharmacy, one hospital, and one health plan.  Having your records scattered all over the place is not a good way of managing your own or your family’s health.  None of us who have to file an income tax return or manage our personal or household budgets would feel comfortable if we had to access relevant financial information in several record systems we did not control and could not consolidate.  Dossia is like Quicken in its goal of consolidating records from multiple and disconnected systems.
• To manage your health, getting records put together in one place is essential.  Bad health outcomes sometimes happen because individuals forget to tell a doctor or dentist that they have been taking a particular medication, or that they have a particular health history.  For example, something as simple as whether a person is taking a blood thinner medication for a cardio-vascular condition becomes very relevant for even the most routine surgical procedures.  Recently, I scheduled a minor surgical procedure to get a mole removed from my back, and was asked if I were taking a blood thinner.  Like most males over 45 years old, I am taking an aspirin tablet, which I was directed to stop taking a few days before and after the surgery, but, if I had been taking Plavix, Cumidin, or one of the more potent blood thinners (which, fortunately, I am not), the consequences of my physician not knowing about these medications could have been serious.
• Sometimes records get damaged, lost, or destroyed.  When we formed Dossia in late 2006, one of the first parts of the country that indicated an eventual interest in a portable patient-controlled record was New Orleans, since many paper and some electronic records were destroyed.  Many residents moved to Houston, Baton Rouge, and other cities but lost permanently any health records that had been in physicians’ offices, hospitals, or pharmacies in New Orleans.  Sometimes, hospitals have a policy of destroying certain records, like imaging tests, after many years of inactivity relative to a patient, simply because the electronic storage of that test is cumbersome and expensive.

Microsoft and Google are better known than Dossia in the personal health record space, but Dossia is different in four key respects:

• Dossia, as the agent for all of its users, secures all of the user population records and gets them downloaded from insurance plans, pharmacies, and providers.  This is called “pre-populating a record.”  Microsoft and Google depend on the user going to each separate data source and directing it to download health records to their “vaults.”  You can imagine how time-consuming and difficult it is to do that, and, as a result, despite their stronger name recognition, the Microsoft and Google vaults are not used actively by many who have signed up for them.
• Dossia’s model is to integrate with other employer-based health programs and benefits, including wellness and prevention programs, chronic disease programs, and health benefits and services.  Microsoft and Google have an excellent array of personal health applications, but they are stand-alone and they depend on the user’s ability to figure out how to integrate them in an overall health plan.
• Dossia has done the legal and conceptual work to allow it to have a single caregiver for a family to open up and manage the records for all the family members.  To our knowledge, no one else has this capability. The health care system is based on a model that each individual manages and controls his or her own health information, and, while I believe that works for most adults, there have always been three populations, children, the elderly, and people with certain kinds of disabilities, that need caregivers who have access to their health information.  One of the best uses of Dossia at our existing customers is the ability of mothers to manage the scheduling of immunizations and school physicals for their children.  Keeping track of who needs what shot at what time is challenging for busy parents.  Dossia helps solve that problem.  Microsoft and Google, like every other electronic health record, expect every individual to access his or her individual health record.
• Dossia has integrated medical and dental records, and, over time, will integrate records from a wide range of non-traditional health-related providers such as alternative and complementary medicine providers, nutritionists, fitness trainers, and behavioral health counselors.  The mistake lawmakers and public commentators make relative to health records is that they believe people have, or should have, a single primary care physician. The term “medical home” implies that there is a goal of having every patient get funneled to the same doctor for all purposes all of the time.  This is not the real world.  People change practitioners. People are mobile and get care whenever and wherever they need it, often far away from home. People seek care from alternative practitioners.  More and more people will access care from outside the United States, as they have been doing for a long time.  We had an emergency hospitalization for one of our children six years ago in Florence, Italy, when we were on vacation, and had voluminous and complex records, which we have no electronic medium in which to store.  Most electronic health record systems are what we call “tethered” to a particular doctor, hospital, or health plan.

Given the compelling value proposition for Dossia, why do we not have millions of users today?  There are many possible explanations, but I would suggest three primary reasons:

• Like every start-up business, it takes time to get customers comfortable with the offering.  In this environment, selling to users through employers has been challenging because of the bad economic environment from 2007 on, the uncertainty around the survival of employer-based health care during the pendency of the health care reform legislative debate, and the thinning out of HR and Benefits Departments, which has made large companies much less ambitious on health-related initiatives.
• In the early years, there was a great deal of uncertainty about privacy laws and regulations, which, thankfully, recent legislative and regulatory pronouncements have largely cleared up.  In our first rollout with a major company, 90% of the people who wanted to sign up were scared away by ominous-sounding privacy disclosures and consents, which were put in place to cover a wide range of possible legal risks, which turned out to be unfounded. From this point forward, we expect much easier sledding.
• The expected primary source of health-related information was the claims data from health insurance plan administrators.  This has been harder to secure because insurance companies are not organized to download member data in bulk to health record systems.  They are organized to feed that data to print-based systems to mail individual transaction data, through what is called an “explanation of benefits” statement, to an individual member.  They have attempted to direct members to the insurance plan’s own patient-specific portals, but, by their nature, these portals are incomplete representations of a person’s health history.

I am more optimistic than ever about the future of Dossia for three reasons:

• We have solved many of the technical, legal, operational, and communications problems that we confronted in our early days.  We have some very demanding customers, and have secured their trust.
• We have a more compelling set of applications than ever before, and we are continuing to develop partnerships with prestigious organizations like the Mayo Clinic, Healthways, and Vanguard Health, in addition to applications like the Healthcare Bluebook, which helps consumers select and price physician and other health-related services.  The usefulness of the record is increasingly good and will only improve.
• We have an increasingly large body of knowledge about the value proposition for personal health record systems like Dossia, and are reinforcing the value through continuous research.

More will follow as Dossia enters a most exciting time.  I am pleased to have the opportunity to be of service to our employer customers and those who use Dossia.

• Prevention and wellness, especially programs that have rapid and significant return on investment, such as immunizations;
• Wellness programs;
• Providing information to patients that improves their engagement in managing their health more effectively; and
• Hospital patient safety.

This last subject, patient safety in hospitals, is of broad interest to the federal government because the number of deaths occurring in hospitals because of deficient patient safety practices exceeds 200,000 people a year.  If these deaths occurred in spectacular airplane crashes, it would be equivalent to 10 fully loaded 747’s crashing every week and having every passenger die. Unnecessary deaths in hospitals are the third-leading cause of death in America, larger than every cause than cancer or heart disease.  More people die in one month in American hospitals than have died in the entire history of the Iraq and Afghanistan conflicts combined.

This is a particular area of focus for Dr. Don Berwick, the new head of CMS, the federal government agency responsible for both Medicare and Medicaid programs. I am going to do my best in 2011 to make sure it is of equal importance to hospitals, health plan administrators, and those who pay for hospital care, namely, businesses and individuals.

The New York Times highlighted this issue in the November 25, 2010, issue with a front-page story reported by Denise Grady, entitled “Hospitals Make No Headway in Curbing Errors.” In the article, Ms. Grady reports on a five-year study conducted in 10 North Carolina hospitals, which found that harm to patients was common and that the number of incidents did not decrease over time.  According to my good friend and colleague at the Harvard Advanced Leadership Institute program, Dr. Chuck Denham, the founder and head of TMIT, a non-profit devoted to transforming health care, there are three root causes to patient safety issues:

• Hospital acquired infections;
• Adverse drug events; and
• Deficiencies in care transitions or hand-offs (between emergency rooms and the remainder of the hospital, between shifts, between caregivers, between acute care and care after people leave hospitals, and from one hospital to another).

The Society of Actuaries, in a 2008 study, just focusing on the documentable costs at hospitals, found that hospital patient safety errors cost almost $20 billion a year, and it is highly probably that this estimate significantly understates the total cost. There are many cost-saving opportunities in the health care system that will be resisted, because they involve cutting payments to health care providers, reducing health care capacity, reducing health insurance coverage, or requiring people to pay more for health care.  However, no one can defend spending money on health care that kills or injures people, or results in serious, hospital-acquired infectious diseases. Saving money by reducing the frequency of bad hospital care practices is a no-brainer.

Dr. Denham pointed out that, while the airline industry has never had this intolerable unsafe record, it was far more dangerous to fly 40 years ago than it is today.  He referred me to a book by John Nance entitled Why Hospitals Should Fly.  Nance points out that many of the solutions to the patient safety are relatively easy, low-tech solutions, such as the consistent use of checklists, a practice that airline pilots and air traffic controllers have used for decades.  Many hospital errors occur simply because humans forget to check or recheck something they need to do.

Safety across all activity sectors also requires the elimination of excessive error-prone steps in processes in which errors create risks.  The simple substitution of putting bar codes on drug containers that eliminate human key entry errors reduces the frequency of people administering the wrong medicines.

This past summer, my daughter worked in a research lab and made an error frequently made in hospitals.  She picked up the wrong glass vial to commence an experiment.  When she described what happened, I pointed out to her that she made an error for the same reason errors are often made in hospitals: the vial was not color-coded to help remind her of its contents.  Hospitals make this same mistake with much deadlier consequences, by having health care workers confuse medications with saline solutions or water, because the containers are not clearly marked.

The incidence of hospital-acquired infections is often a result of health care workers not attending to a process of washing their hands frequently enough.  While it is easy to blame them, the opportunity to make hand washing easier is easy to create. At Pitney Bowes, we put hand-sanitizers everywhere, and we reduced the frequency of seasonal influenza, as well as upper respiratory infections.

Hospital workers and doctors sometimes believe that taking the time to wash hands reduces their productivity in terms of the number of patients they can see during the day, but increasing staffing to give everyone time to wash their hands is an investment that easily pays itself back.

The other big issue, which the recent health care reform legislation makes an effort to address, is the problem with preventable readmissions.  Many people end up back in the hospital for the simple reason that they fail to comply with the instructions hospitals provide them when they are discharged.  Early this year, I visited a major academic medical center that had a world-class electronic health information system, thanks, in part, to the work the brother of a close friend of ours had done.

However, despite the world-class information system that existed within the hospital, the discharge instructions provided to the patient upon discharge were in paper form.  There was no easy-to-use and standardized system for getting these instructions to the primary care physician for the patient or to whoever could most closely help the patient manage the post-hospital health care process.

The health care reform legislation will provide incentives to those hospitals,which do the best job in reducing preventable readmissions.  This is a welcome change in the law, but we have to go much further if we are going to reduce and eventually eliminate this problem.  Dr. Denham has done a wonderful and hard-hitting documentary entitled Waiting for Zero, which eloquently portrays the problem, with the help of actor Dennis Quaid, who, despite his wealth and influence, and his ability to secure what he believed to be the best available for his twin daughters, almost lost both of his twins because of hospital errors several years ago.

The hospital safety problem is the largest piece of a broader systemic problem of sloppy, error-prone health care in our country.  The solution is not a single-payer, or single-provider, system, or consumer-directed health care, but a relentless focus on error-free care delivery in every part of the health care system.

I should note that health care errors do not just happen in acute care settings.  In 1989, we lost a son at birth because of a poorly-administered lab test that prevented physicians from from diagnosing a condition that would have led to a early, planned, and, most likely successful cesarean birth.  Medical errors can happen anywhere and have devastating results.

Regardless of what else I do in 2011, I would expect that focusing on patient safety will be a high priority.

I commend NFL Commissioner Roger Goodell for having the good sense to address this issue decisively, although, as I will point out, the BU research findings are potentially far more transformational for contact sports than the commentators about the findings have communicated.  What is most interesting, and, to some degree, saddening, is the fierce resistance of many players and commentators to an action that will benefit the players and the sport in the longer term.

The Boston University Research Findings

I have gotten to know two of the researchers in the BU Study, Dr. Robert Stern and Dr. Ann McKee.  I have particularly worked closely with Dr. Stern, who is the co-chair of the clinical studies and trials program in the Alzheimer’s Disease Center.  The research he and Dr. McKee have published makes a number of key findings:

• The dementia that many athletes experience, sometimes well before old age, is not Alzheimer’s Disease, but a condition brought on by chronic traumatic encephalopathy (or “CTE”), which creates the conditions for dementia, but has a different source of progression from Alzheimer’s Disease.
• Most important, CTE does not result from a single concussive event, but from the cumulative effect of many violent impacts on the brain, many of which would not be diagnosed as concussions. While the NFL and other sports are to be commended for their proactive approach to managing athletes who sustain concussions, the problem is more widespread.  Indeed, it is entirely possible for an athlete to be victimized by CTE without ever having been diagnosed with a concussion.
• While the end result of CTE could be dementia, the effect on certain sectors of the brain even earlier in time might be damage to those brain functions that inhibit individuals from drug or alcohol addiction or prevent depression and/or suicide.  Thus, many athletes who become alcohol or drug dependent, experience clinical depression, or even commit suicide long before old age may be victims of CTE.
• Because the root cause of CTE is cumulative and sub-concussive, it occurs in a wide range of contact sports, not just obvious contact sports like football and boxing.  Ice hockey players, soccer players who use their heads to direct the ball, and baseball players who are hit in the head frequently with pitched or batted balls might also be CTE victims.
• Because not every athlete who has participated in, or been a victim of cumulative sub-concussive impacts has experienced dementia or the loss of brain function, there is much more work to do before researchers can figure out the whole puzzle.

What We Need to Do in the Meantime

There are many good things happening in sports management already as a result of these findings:

• The NFL has funded further research at BU, which has created the Center for Traumatic Encephalopathy to conduct the research.
• A number of sports, including football and baseball, are starting to keep people with concussions from returning back to active sports participation too quickly.  I was pleased that the New York Mets and the Minnesota Twins kept Jason Bay and Justin Morneau out of action for the remainder of the 2010 season.  This was particularly painful for the Twins, who could have used Morneau’s incremental and sizable contribution in the playoffs.
• There is more active dialogue about how to keep the intensity and attractiveness of these sports while reducing safety risks for participants.

The best article I have seen recently on this last subject appeared in William Rhoden’s October 24, 2010, column in the sports section of the New York Times, a column entitled “Hall of Famer’s History of Compassionate Hitting.” Rhoden profiled the story of Willie Lanier, a Hall of Fame middle linebacker from the Kansas City Chiefs from the late 1960’s to the late 1970’s, The gist of the article is that Lanier was fortunate to have had a concussion early in his career and refrained from being as reckless and violent for the remainder of his career as he could have been.

The most important insight Lanier gained and shared with his fellow players was that keeping people of high skill and quality playing, rather than injuring them, benefited everybody.  If everyone successfully knocked the most skilled players out of competition for extended periods of time, there would be retaliation, and, over time, the quality of people competing would decline.  Lanier also recognized, as has Mike Golic, of the Mike & Mike in the Morning show on ESPN radio, that, to some degree, the violent hits result because players have not learned how to tackle properly.

That being said, this is a difficult issue.  Putting aside what I consider to be an overreaction of some players and commentators that the NFL risks turning tackle football into flag football, the legitimate issue is that football is a high-speed game played by abnormally large and strong men in which a traditional tackle may not always be possible in the context of a particular play.  Moreover, as noted above, the real issue is not the occasional violent hit that results in a concussion, but the broader problem of cumulative sub-concussive impacts.

On the cumulative force problem, the NFL needs to look at a whole range of issues, including the 3-point stance, which creates more force at the point of impact for both offensive and defensive linemen, as well as the people they hit, and the equipment used in the game.  The main equipment culprit is the current hard plastic helmet with the hard metal face protection system.  The hard plastic helmet protects against certain blows to the head, although its absorptive capability is not as good as it could be, but it is a lethal weapon when aimed at the chest or head of an opponent.

The other equipment issue is the problem of the face protectors, which create both an opportunity for an opponent to grab and twist a player’s head and another hard object to plow into an opponent’s chest or head.  One commentator mentioned that Joe Paterno of Penn State, the winningest college coach in the history of college football  proposed that the NCAA and the NFL go back to the helmet used before face masks were made larger and harder.

This is not an easy subject to address.  The economics of both college and professional football depend heavily on the excitement that the controlled violence football games present to viewers and participants.  Eliminating violence is neither practical nor desirable, but controlling it so that it generates excitement without an accompanying risk to the long-term health of athletes is a more realistic goal.  It is not a goal that will be reached quickly, but we are beginning a more productive journey because of the great work done by Boston University and other research institutions and the proactive response of the NFL.