Governance Advice for Hospital Boards: Population Health

"For 60 or 90 days of post-discharge care?"

Writing in the April 26 issue of JAMA, Michael Jillinek of Lahey Health has some important advice for healthcare organization boards of directors.

As income shifts from fee-for-service to global payments, the insurance risk transfers that underlie much of "population health" are an important threat to these enterprises' viability.

After a compact and well-written summary of the growth of population health, he offers six suggestions for these boards:

1. Plan on having "forthright discussions" about the difficult tradeoffs between still-remunerative fee-for-service activities (such as high-dollar imaging, lucrative surgical services) and having to invest in the Triple Aim (care coordination personnel, improving quality measures for persons with chronic illness).

The Population Health Blog suspects most boards will ask why they can't have both the FFS cake and the global payment icing. If that's the case, these boards need to plan on having forthright and very lengthy discussions. It's organizationally difficult to have one mission on the 4th floor of the hospital and another in the emergency room.

2. If the organization's employees are enrolled in a "self-insured" health plan, bring them into a population health program sooner rather than later.

Not only is this an important opportunity for a board to understand the revenue versus savings versus expenses involved in driving the clinical and care experience outcomes of population health, its only right to take this for a personal test drive before subjecting your patients to it.

3. Look for common ground between old fee for service and new global payment arrangements.  The author suggests reducing readmissions is a good start.

The PHB suggests boards ask their management teams to also pursue the care coordination "chronic care management" payments offered by CMS.

4. Start demanding population health metrics from your management team, "such as details of total medical expenditures."

More details on the work of measurement can be found here.  The PHB has also humbly suggests here that health organizations should be prepared to invest significant resources - and discipline - into the process.

5. Invest in primary care, care coordination teamwork and pursue "population health pilot programs."

Since the PHB believes well-intentioned CMS' programs are star-crossed (see here and here), it suggests working with local commercial insurers for starters.  As it reviews resources like this, they seem to have a better track record. 

6.  Ask your management team to be open population health contracting.

Hear hear, says the PHB.  But it also cautions that the board needs to have individuals with the kind of industry knowledge necessary to provide oversight of these contracts.  

Image from Wikipedia

Five Reasons to be Bullish About Theranos

Pushing back

When the Population Health Blog watched Theranos CEO Elizabeth Holmes push back during a CNBC broadcast against a Wall Street Journal report about her diagnostics testing company, it began to pay attention.

 

As the PHB understands it, Theranos is a privately held and fabulously priced biotech company built on two value propositions:

 

1) proprietary technology that enables parallel testing to be done on a weenie blood sample obtained from a single finger-prick.  

 

2) direct-to-consumer availability of blood testing outside of the dreary hassle of doctor ordering, laboratory queuing, expert interpreting and insurance reimbursing. Instead, customers can stop by their corner pharmacy, scan the menu, select some tests, use VISA or Mastercard and use the results as they see fit.

 

According to the Journal, Theranos' technology isn't necessarily ready for prime time.  It appears that while the company obtained the Food and Drug Administration approval for its proprietary technology, it's limited to testing for herpes. There are allegations that for all the other bloodwork, the results can be inaccurate and that the company is relying on the standard vein-puncture blood draws to service its consumers. 

 

The FDA is asking for more information, Walgreens has paused and super-litigator David Boies has joined the company's board.  Connect the dots and this Silicon Valley start-up is starting to look a bit tarnished.

 

Rather than join in the schadenfreude, the Population Health Blog has five reasons to be contrarily optimistic about Theranos:

 

1. All medical advances follow the Hype Curve of innovation, euphoria, disillusionment and equilibrium:

 

 



Thernos' travails in the trough are not only part of the natural life cycle of a health tech company, it's also a good reminder to only go public after the disillusionment has passed.  A plateau of cash flow productivity lies ahead.

 

2. The second value proposition still stands. While the notion of letting an unsophisticated lay-person interpret the meaning of an (for example) elevated adrenocorticotropin hormone level, Ms. Holmes seems to be unwittingly arguing that this another step toward "actionable" shared decision making. While the market sorts that out, a) there is considerable consumer interest and b) educational consumer-friendly resources are becoming increasingly available. While self-testing can complicate the doctor-patient relationship, it can also help it.  And if it drives consumers to Walgreen's Healthcare Clinics, so much the better

 

3. Speaking of the second value proposition, consider an unpalatable alternative: Regional health system monopolies, where consumers can get any test they want, just so long as it's through their doctors, at their labs - and done the old fashioned way.   

 

4. In looking at its ten best practices for the boards of health care companies, the PHB is going to give these heavy-hitters the benefit of the doubt. It figures that in their interactions with the C-suite and especially with their interactions with the FDA, the directors have all the resources they need to bring skepticism, rely on dual data reporting, know about human research, perform audits and access research expertise. They should know about maintaining the right tone at the top and understand how incentives can help and hinder corporate integrity. Assuming business reporters can drop the nattering negativity (like this) and instead confirm that those key governance principles  are in place, Theranos should do OK.

 

5. And one of the Theranos board members is a physician.  While time away from hands-on practice may have blunted Dr. Frist's clinical acumen, the PHB has heard him talk in conferences: he still knows of what he speaks.  As noted by the PHB here, physicians bring a unique perspective to the boardroom, including understanding patient-centric outcomes, helping the CEO navigate the clinical side of the industry, bringing a diverse viewpoint, giving insight to the competition's strengths and weakness and helping fellow board members further their healthcare education.

 

The PHB's assessment of Theranos:

 

Hype Cycle image from Wikipedia

Wildebeest image from Wikipedia
Wall Street bull image from Wikipedia