Tag Archives: cost of healthcare

A Positive Comment (Finally) on Obamacare

Healthcare reform is certainly receiving its share of abuse. Whether the conversation is local or national, private or public, one is sure to hear how Obamacare is nothing but bad news — job destruction and the end of one’s ability to direct personal healthcare. Rarely do you hear a positive comment.

Until now, that is.

Read on to learn more about a market development that actually looks consistent with Obamacare’s objective of making healthcare delivery more efficient and less expensive.

Quality

One of the changes found in the voluminous law is the requirement for the government to begin considering the quality of care when making reimbursements under its insurance program, Medicare. A section of the law creates incentives for providers to pay more attention to the quality of their care, to receive a greater payment for their services. These incentives encourage what has become known as accountable care organizations, or ACOs. ACOs are not necessarily new legal entities, but rather are descriptions of healthcare delivery systems that place an emphasis on quality of care to reduce expense.

Seems like a reasonably good idea, but how do these same quality efforts work in the private commercial market? Not so well.

First, how can the initiatives be tracked when the patients are insured by third-party carriers? Who is rewarded when a provider does a good job, limiting readmissions and health costs? Who even knows when they do a good job? Second, how does community rating distinguish between those providers applying quality low-cost care and those running up the tab to enrich their bottom line?

Fast answer: Quality-care incentives being encouraged by Medicare are largely lost, and certainly not encouraged, when patients are covered by a fully insured or fixed-cost insurer.

What about high-deductible plans that match with the providers’ quality, efficiency and health efforts? No, these, too, are limited by rules imposed by Obamacare on the fixed-cost insurance market.

Community health plans

If the door is shut on providers trying to apply ACO strategies to the fixed-cost commercial market, what can be done? After all, if providers have reworked their businesses to focus on quality and efficiency, it seems illogical to apply these efforts in only the Medicare reimbursement market.

Fortunately, innovation is finding its way to provider systems, under the name of “community health plan.” A community health plan is a network, established by a regional medical provider, offering members of its community superior and affordable healthcare through a plan using only that provider or other like-minded regional providers. These new community health plans overcome the obstacles found in the fixed-cost insurer market and enable all the quality-care efficiencies to be applied in the commercial market.

Think about it: Community health plans were first developed because providers wanted traction with their local communities. They wanted local patients and buyers to call and buy from them first. That’s why many have already adopted a community health plan or at least looked into one years ago.

What providers found, however, was mountain-sized red tape, inconsistent application to their objectives and new rules related to Obamacare that made the idea of a community health plan a bad one.

Enter the stop loss group captive, or “medical captive.” A medical captive is a reinsurance vehicle that pools a layer of self-funded health benefit risk.  The medical captive solution enables providers to offer their community a health plan immediately. No regulatory red tape. Provider have a commercial market health plan where quality-care initiatives can be objectively monitored so cost savings and efficiency is not a guess or lost to a third-party insurer. Cost-saving rewards arising from quality and efficiency can be measured quarterly if not monthly under the medical captive approach. A provider’s cost-saving ideas receive real-time feedback.

The medical captive is built on a self-funded chassis that also delivers benefits over the traditional market. The post-Obamacare insurance environment includes community rating and restricted plan designs, but self–funded insurance programs avoid these potholes. Put another way, a self-funded insurance program fits nicely with the provider’s ACO efforts and allows most of the Medicare-inspired initiatives to be realized in the commercial market. So long as the medical captive is the financing vehicle being used by the provider’s community health plan, the disconnect between Obamacare’s quality initiatives and the commercial insurance market are resolved.

Who?

Hospitals are attracted to the medical captive as a form of community health plan for several reasons. First, the narrow network is gaining ground as a viable solution for keeping medical expenses under control. Employers and employees are now receptive to limiting choice to the local provider in exchange for a lower price. This is good news for the hospital without an existing health plan that is looking for traction with its local employers. The hospital-sponsored narrow network is an approach that is simple to implement with the medical captive. In addition, hospitals with existing community health plans of the fixed-cost variety now are looking to add the medical captive as another choice. Frequently, the hospital’s investment in claim paying services, network and, of course, ACO strategies seamlessly integrate into the medical captive.

Larger physician practices find themselves in a place similar to that of many hospitals in their quest to retain and grow their customer base. Offering a health plan with a capitated physician service component (with a set fee per person, no matter what care they need) is easily accomplished with a medical captive. Physician practices can quickly distinguish their practices from the rush of hospitalists with a health plan that incorporates much of their treatment philosophies, including ACO solutions. The flexibility of the medical captive built on a self-funded platform enables creativity in plan design and buyer incentives that mesh nicely with efforts by physician practice efforts directed at reducing high-cost diseases. Hospital services can then be delivered to the buyers through the health plan on a contracted basis. Measuring the effectiveness of the physician practice efforts at cost control is readily verified by reference to the medical captive underwriting results. It’s not hard to understand why larger physician practices are quickly moving to the medical captive as part of the solution for reinventing healthcare delivery.

Shared objectives

Everyone agrees with the objective of lowering the cost of healthcare. Not everyone, however, agrees with or understands what goes into the cost of healthcare. The cost and purchase of healthcare is more complicated than buying a pair of shoes, unfortunately. Most consumers do not see what it actually costs to receive a medical procedure or purchase a medicine. This is because many do not directly pay or see the cost of the care, but rather the buyers pay a fixed cost or premium and then enter a buffet of healthcare providers. Cost efficiency is a low priority and only mentioned at renewal time or when the overall price trend for the fixed cost interferes with the buyer’s budget.

Looking at Obamacare, we should be encouraged that healthcare providers are growing closer to the financing of care. If the law is encouraging the formation of new healthcare financing mechanisms that offer objective and immediate feedback on quality, cost-saving solutions, we are starting to reach our shared objective.  When buyers and sellers take even one step closer to achieving the same goal, healthcare starts looking more like buying a new pair of shoes.

25 Axioms Of Medical Care In The Workers Compensation System

  1. The right medical care at the right time is always in the best interest of the injured worker and almost always will result in the lowest claims costs.
  2. The right medical care at the right time will (almost always) result in an earlier return to work with less permanent residual disability.
  3. Evidence-based medicine is the right care for the legitimately injured workers. (There is a hierarchy on how to apply evidence-based medicine).
  4. To control worker's compensation medical costs requires both a fee schedule and an ability to control the frequency and the appropriateness of treatment. One without the others usually results in massive increase in medical costs for the system.
  5. The medical treatment fee schedule should be clear, easy to use, accurate and reflect the latest technology.
  6. A fee-for-service system may result in incentives for physicians to over-treat, inappropriately.
  7. In many jurisdictions Worker's Compensation is generally the last fee-for-service system.
  1. As long as workers compensation uses a fee-for-service system, medical utilization review is needed to make sure that the physicians will treat adhering to evidence-based medicine.
  2. Pharmacy utilization is problematic because of the “Medicalization” of the general population. (Medicalization is the direct advertising of symptoms and diagnoses to the general population by drug manufacturers, resulting in an overuse and/or misuse of some types of drugs and therapies).
  3. There is a significant problem with “off label use” of drugs in the worker's compensation system. (Off Label is the use of a drug for treatment that was not the reason for its approval from the FDA).
  4. Medical decisions should be made by medical professionals. Most Workers' Compensation judges, attorneys, and claims adjusters have little to no formal medical training and are not medical professionals.
  5. Poorly (inappropriate) placed incentives will result in poor medical outcomes. (There are several studies that demonstrate that allowing physicians to do self-referrals or to dispense pharmacy goods from their offices will usually result in a utilization of unnecessary services or inappropriate usage of drugs).
  6. Even if the doctor is not dispensing the drugs, opiates require regular visits to the doctor for renewal of the prescription and also may involve expensive drug testing; so there is a financial interest on the part of some doctors to prescribe opiates.
  7. Some physicians who prescribe opiates do not fully appreciate the addictive power of the drugs that they are using or the difficulty in detoxing the patients.
  8. There are currently enough treating physicians and specialty physicians in most urban areas; however there are not enough physicians (treating, orthopedic or neurosurgeons, etc.) in the rural areas to meet the demand. This problem will only get worse as the population ages and more doctors retire. It will also get worse if physicians leave workers' compensation due to the demand for their services due to the implementation of the federal universal health care programs.
  9. Many surgeons and other physicians want to perform their craft (do surgery, provide injections, etc.). They truly believe that their surgery or injections will work even if the prior treatments have not been successful or if current evidence-based medicine says surgery is not appropriate.
  10. Every patient looks like a good candidate for an MRI when there is an MRI machine in the doctor's office.
  11. Not every person with a surgical or potentially surgical condition is a good surgical candidate. Though pre-surgical psychiatric evaluations are required for spinal cord stimulators (post spine surgery), the same is not true for many other surgeries.
  12. It is difficult for a patient who is in intractable pain to believe that strong medications (including opiates) are not appropriate or are not good.
  13. It is difficult for a patient who is in intractable pain to believe that not having back surgery will have the same ultimate result as having surgery when the surgeon is saying (with confidence) that the surgery will cure all. Even though current evidence-based medicine says differently.
  14. Because “doing something is better than doing nothing” when the patient is in intractable pain, if the surgeon says surgery will not be successful, the injured worker will attempt to find someone who will say that the surgery “will be more successful than not having surgery,” and will then attempt to have the surgery.
  15. Patient advocacy is the application of appropriate treatment and patient encouragement that allows the patient to remain as functional and productive as possible.
  16. Patient advocacy does not always mean the pursuit of treatment a patient desires.
  17. Patient advocacy may require the physician to decline to do the treatment sought by the patient when that treatment is inappropriate.
  18. In Workers'Compensation, there are many (known and unknown) underlying non-industrial, psyche/social issues that may hinder or completely stop optimum medical recovery.

How Much Does Health Care Cost? More Than You Can – or Want – to Imagine

In my mind’s eye, I’ve started imagining U.S. health care spending as the Blob from the 1950s horror movie of the same name: the monstrous mass at the edge of town, consuming everything in its path. It’s expanding before our eyes, oozing all over the economy, threatening our future, and no one knows exactly how to stop it.

The other reason the Blob is a good analogy is that we no longer find it scary when there are many more modern, realistic threats (aliens, viruses, nuclear and chemical weapons) that worry us. The citizens in the movie weren’t frightened either, until it started eating them. So, after having a laugh and dismissing the Blob as a harmless story, imagine some ominous music in the background and a green, sticky substance oozing under your front door.

The Blob of health care spending continues to grow whether we acknowledge it or not. Despite recent news that our cost trend has slowed somewhat in recent years1 2 and hopes that reform will decrease costs (it won’t; early projections from the exchanges are 25% higher)3, health care spending remains one of the greatest threats to our national security and prosperity.

Unfortunately, there is neither political will nor industry incentive to limit the monster’s appetite. It is up to each of us to stop feeding its seemingly unlimited ability to consume budgets. First, let’s remind ourselves how big this monster has become and examine what we give up as a result.

How Big Is It?
The answer is that health care spending is now bigger than we can comprehend. Literally. The number is three trillion dollars per year4. That’s not a number most of us can grasp. One trillion equals one thousand billion. The idea that we are spending many times that number needs examples to understand.

Try this: if you spent $1 million dollars every single day, it would take you over 8,200 years to spend three trillion. Or, if you and 82 friends each spent $1M per day, it would take you collectively 100 years to spend $3 trillion.

Or try this: 3 trillion seconds won’t tick by for over 950 CENTURIES (95,000 years)!

Or: If we blink once every five seconds, it still would take 6,000 people living to 100 years of age to blink 3 trillion times.

More to the point, $3 trillion is almost $10,000 every year for every man, woman and child in the country.

Perhaps the most daunting part is that we spend that much each and every year, and the annual amount has quadrupled since 19905. Plus, health care now supplies one in nine jobs6. That means eight people do everything else, in every other job, in every other industry, for every one job in health care. The ratio is 8:1. Where will the ratio stop? 7:1? 6:1? Or will the Blob keep growing?

Compared To What?
From another perspective, let’s compare our health care spending with that of other countries. We spend 1.5 to 2 times as much of our Gross Domestic Product (GDP) (almost 18%) on health care than other industrialized nations, which average under 10%7. This means the Blob consumes one in every five dollars we spend on everything; a ratio of 4:1, four on everything else, one on health care. Other countries average 9:1. This means other nations can spend more on important investments, while we feed the monster. Even if we achieve a strong future economy, that disadvantage will be difficult to overcome.

Let’s also compare to spending on other national interests. Public medical spending now exceeds our budget for Social Security or Defense8, despite the amazing fact that the U.S. spends more on defense than the next ten highest-spending countries combined9.

Reading, Writing Or Ritalin®?
Most disturbing, the amount our government spends on health care has increased eleven times faster than education spending over the last 50 years, and we now spend 33% more on health care than education (8.2% of GDP versus 6%)10. This hasn’t been a conscious choice to put arrhythmia ahead of arithmetic, but that’s how the Blob works … a slow advance, gobbling up resources. The trade-off may feed the hungry monster today, but at what cost to our global competitiveness in a future labor market? Remember this represents only public spending on health care, ignoring the 40% paid privately.

Entitlements and Interest Are Crowding Out Other Spending

Total Government Healthcare Spending Increases Are Staggering

Each Of Us Feeds The Health Care Blob
Neither government nor medicine will save us from the extreme financial threat of health care. We have to do it ourselves.

Of course medicine (the so-called Medical-Industrial Complex that IS the Blob) will keep telling the public that they need more and better care; another surgery, another medicine, another exam will make us feel better. And of course that message makes us feel cared for and justified in our continued over-use of over-priced services. While someone else pays, we shrug and get another test, just to be on the safe side.

But the battle against the Blob can’t be won by asking the Blob itself to go on a diet, or asking legislators who are sponsored by the Blob to limit its consumption. And, like in the movie, the public doesn’t perceive the magnitude of the threat; until it may be too late.

What will it take to tame the monster? Each of us asking questions, pushing back on the system, objecting to outrageous pricing, and taking care of ourselves. Do your part: feed the Blob a little less this month.

This article was first posted on Altarum.org.

References

1 Ryu AJ, Gibson TB, McKellar MR, Chernew ME. The slowdown in health care spending in 2009-11 reflected factors other than the weak economy and thus may persist. Health Aff (Millwood). 2013;32(5):835-40. Epub 2013/05/08.

2 Cutler DM, Sahni NR. If slow rate of health care spending growth persists, projections may be off by $770 billion. Health Aff (Millwood). 2013;32(5):841-50. Epub 2013/05/08.

3 Hancock J. Maryland Offers Glimpse At Obamacare Insurance Math. Kaiser Health News [Internet]. 2013 May 20, 2013.

4 Munro D. U.S. Healthcare hits $3 trillion. Forbes [Internet]. 2012 May 20, 2013.

5 Hartman M, Martin AB, Benson J, Catlin A. National health spending in 2011: Overall growth remains low, but some payers and services show signs of acceleration. Health Aff (Millwood). 2013;32(1):87-99. Epub 2013/01/09.

6 Altarum Institute. Health Sector Economic Indicator Briefs 2013 May 20, 2013.

7 PBS NewsHour. Health costs: How the U.S. compares with other countries. October 22, 2012.

8 Meeker M. A Basic Summary of America's Financial Statements, February 2011. May 20, 2013.

9 Cory Booker says U.S. military spending is greater than the next 10-12 countries combined. The New Jersey Star-Ledger PolitiFact [Internet]. 2013 May 21, 2013.

10 Meeker M. A Basic Summary of America's Financial Statements, February 2011. May 20, 2013.

Unintended Consequences Of Exchange Rate Filings

For most states offering health care exchanges, rate filings were due by May 1, 2013. Each carrier hoping to operate within the exchange had to finalize their benefit offering and related rate filing. Some of the results are gradually emerging as regulators review the filings. Some have been rejected, some have been accepted and approved, some are going through various stages of review and revision. The interesting result of this process is finding out what rates will be and what costs carriers expect.

Prior to the actual submission process, multiple reports were issued prognosticating what rate levels might emerge. Some of these reports suggested that the anticipated morbidity levels (i.e., claim levels) for those enrolling in these programs would be higher than current individual benefit programs. This was logical to most — the hard part was the anticipation of what was a reasonable load in light of what other companies might assume and use in their pricing.

We learned of estimates ranging from a low of at or above 10% to a high approaching 45% – 50%. An important consideration is the nature of the current individual products offered in the marketplace (i.e., are they individually underwritten or were they guarantee issue). In those states where health plans and carriers were permitted to medically underwrite the product, the transition to a guarantee issue product will be greater than in those states where the product was already a guarantee issue product.

Early results from several states show that some major carriers assumed lower than expected morbidity factors, with other carriers attempting to withdraw their filings and resubmitting more competitive rates. We are not aware of any exchange where carriers decided to withdraw and raise rates.

The unintended consequence of this is very interesting. Rates will be lower than many experts predicted. The market pressures have been significant with companies trying to reduce their rates. Whether this is the result of competitive pressure or a knee-jerk reaction to stay in the market, it is unclear at this time what this will do to financial performance. Under health care reform, carriers are at risk to enroll individuals that have a higher health status and risk profile. These individuals were uninsured in the past and now are going to enroll in some program or be subject to financial penalties.

For those individuals who were skeptical about the cost effectiveness of health care reform, this will have an interesting impact on premium levels. For those who anticipated some cost reductions, it is unclear that they anticipated this type of response. It is our understanding that complete rate results will be released in the State of California later this week. It will be very interesting to see how different carriers developed their rates.

The bottom line is that carriers have responded in somewhat of an unexpected way, a rather bullish approach which will have a favorable impact on health premiums.

Healthcare's Age of Agility Will Shuffle Market Leadership

Surgeon and author, Dr. Atul Gawande outlined how, at the turn of the 20th century, more than forty per cent of household income went to paying for food, and food production consumed roughly half the workforce. The drive to change that began in a small town in Texas where an array of new methods of food production were tested. The results were stunning. Today, food accounts for 8% of household budgets and 2% of the workforce.

As a swarm of small innovations led to the transformation of farming, so too is a rapidly building wave of innovative new care and payment models leading to similar breakthroughs in healthcare. The winners in the next epoch of healthcare will be those that have agility in contrast to the lumbering nature of traditional healthcare systems.

In old line models, attempting a new care or payment model meant long planning and development cycles. The cost and complexity of testing new models prevent many from being tried. Demonstrating how healthcare hasn’t experienced the benefits of modern, cloud-based software, the leading HealthIT vendor is known to charge $100 million and up for its software and it takes a year or two to start realizing any benefit. [See also Health Systems Spending Billions to Prepare for the Last Battle]

Iterative Testing And Refinement Will Prevail
There’s a striking parallel between the transformation of healthcare and what happened with advertising campaigns as a result of traditional media getting disrupted by digital media.

Once upon a time, because the stakes were high with large ad campaigns, 90% of the effort around an ad campaign was in the planning/building of a campaign — i.e., creating ads, focus grouping creative/promotions, planning where to place ads, etc. When ads were created and it was decided where to run the ads, marketers sat back and watched to see how it would play out with little ability to change the course of a campaign.

Today, as little as 20% of the marketing effort is done upfront before putting elements to the test. The Internet is much more effective at testing offers and ad creative than a contrived focus group. Likewise, smart marketers can tap very sophisticated tools to optimize their ad spending so that the actual place ads run can be radically different than what an ad director may have thought initally.

I’d expect a similar transition to happen in healthcare. As Dr. Farzad Mostashari (National Coordinator for Health IT) said, “what’s transformative isn’t just harvesting & analyzing Big Data — it’s instrumenting what we do, testing predictions, A/B trials…”

It’s well understood that the mega healthIT systems (e.g., a $900M implementation was announced not long ago in the Northeast) take a couple years to implement. The reason for the long implementation, in part, is due to all of the decisions that have to be made regarding customization. The stakes are high as it’s only logical to do system-wide changes when 100’s of millions are at stake, leading some healthcare providers to have weak operating results as a result of healthIT costs as Zina Moukheiber reported. The market leader is noted for its customizability. However, once customized, it’s also noted for its rigidity. That is, if a workflow changes, it’s a major project to change the supporting healthIT to support the new workflow.

Where processes are well understood and predictable (e.g., surgeries), applying a manufacturing mindset is very appropriate. It’s akin to setting up an assembly line at an auto plant at great expense. Once that is done, it can be used for a long period of time and is worth the upfront investment. The danger comes in when it comes to chronic disease management (where more than 75% of healthcare dollars are spent). With accountable models and recognition that the patient or family members have the greatest impact on outcomes (i.e., not healthcare professionals), setting up a rigid system is a recipe for disaster.

If there’s one thing we know for certain, it’s going to take iteration for many years to hone how to tackle chronic conditions as it involves complexity of the variety humans present to the healthcare system. In an agile system that has modern software economics (i.e., dramatically lower cost), it’s feasible to do smaller scale tests. If they prove successful, they can be expanded. Listening to a recent podcast from the Institute for Healthcare Improvement on reducing readmissions echo’ed this point — i.e., addressing an issue like this will take a series of changes vs. one silver bullet.

The rigid mega healthIT systems are a vestige of the “do more, bill more” model of reimbursement, particularly given that healthcare is a supply-driven market (e.g., MDs who own a stake in imaging equipment order scans at three times the rate of MDs who don’t). Spending nine figures doesn’t sound as bad when you have capital projects planned in excess of $1 Billion. Perhaps we should refer to the legacy model as the “build more, do more, bill more” model. Any health analyst will tell you that the cure for healthcare’s hyperinflation is NOT building more healthcare facilities. It would be as if a fire department argued that the way to solve a wave of structural fires was to buy more fire fighting equipment. Indeed, that might help, however there’s a much more cost-effective approach such as having buildings inspected for fire prevention capabilities.

In their book, The Innovator’s Prescription, Clayton Christensen and Dr. Jason Hwang point out how applying technology into old business models has only raised costs. Thus, buying new technology isn’t a silver bullet if it’s put into an old business model. Rather, the new technologies need to go hand-in-hand with agile, new processes. The organizations who optimize their approaches for a more agile model will prevail.

Plugging new technology into old business models has caused health care costs to rise rather than fall

Images are courtesy of Jason Hwang, M.D., M.B.A. Co-author of The Innovator’s Prescription.

Dramatic Gains From New Care And Payment Models
Innovators such as Iora Health, WhiteGlove Health and Qliance rethought the care delivery and payment models from the ground up. Their results have been impressive. For example, Qliance has Net Promoter Scores higher than Google or Apple, while reducing the direct costs of healthcare (i.e., their service coupled with a high deductible wrap-around policy) 20-40%. More impressively, they have reduced utilization of the most expensive downstream costs (surgical, specialist and emergency visits) 40-80%. Iora has reported similar outcomes with some of the toughest patient populations out there. [See “David Clause” in Obamacare Ready to Slay the Healthcare Cost Beast for more on the outcomes Iora and Qliance have reported.]

The next wave of innovators are taking advantage of second-mover advantage as the wave of healthtech startups provide them off-the-shelf software that is an order of magnitude less investment than the first wave of innovators. It’s a couple orders of magnitude less expensive than legacy healthIT. More importantly for the innovators is the speed that they can not only stand up the new technology but also easily iterate based on real world experience. Rather than months or years, it’s hours or days. This is a key component of IT agility. They also make the most of investment others make rather than be threatened by them. A simple example: WebMD is used by over 100M consumers per month. Clinicians can curate information that they think will be useful for patients from WebMD and others (e.g., medical societies) who’ve made large investments in consumer-friendly content. Healthcare can no longer afford to reinvent the wheel. [See Khan Academy Approach to Solve Wicked Problem in Healthcare for examples of new approaches taken.]

Change is already happening faster than many expected. Oliver Wyman’s recent paper highlighted the rapidity of the market shift in The ACO Surprise (PDF). When I was presenting to the Pioneer ACOs over the summer (see summary here), it was already apparent to the pioneering organizations that their new models required new systems. They went on to state they didn’t expect to get anything for the new requirements from their traditional healthIT suppliers for at least the next two years. Meanwhile, the market shift is taking place much quicker than that.

New York Digital Health Accelerator Is A Model To Emulate
Zina Moukheiber highlighted a program that is a key plank of perhaps the largest effort in the country to reinvent healthcare delivery and payment.

The New York Health Home program was designed to make obsolete the traditional uncoordinated and unaccountable “system” that has cared for Medicaid patients in New York. Managing a $50B budget gives Dr. Nirav Shah (NY’s state Commissioner of Health) the clout to attract hundreds of companies that want to enable the reinvention of healthcare. Dr. Shah and other leaders in New York’s public and private sector recognized that with an entirely new set of objectives a new set of technology requirements naturally emanates from that. Through the New York Digital Health Accelerator (NYDHA), they are supporting the growth of agile startups to meet these new requirements. [Disclosure: My company was one of the 8 companies selected for the accelerator program.] Just two months into the program, there are pilots and deployments with the accelerator companies underway in the leading healthcare providers in New York.

The graphic below depicts the transition from the slide rule to the mainframe and then back out to mobile devices. Dr. Shah’s comments in the video above echo’ed the shift from an old “mainframe” method of healthcare delivery to a more distributed “smartphone” model.

Centralization followed by decentralization in computing

New business models require new technology. As David Whitlinger (head of the New York eHealth Collaborative) highlighted in the video above, his organization has built a state health information network but what it needs are the applications riding on top of that network to realize its full value. The startups in the NYDHA will be the first to get access to the statewide network due to their agility in taking advantage of the state’s health information exchange.

A new ecosystem of disruptive business models must arise