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economics

When Giants Stumble

When giants stumbleHDR Sunset

Local Cleveland channel News 5 reporter Cassandra Nist posted today:

The Cleveland Clinic announced Wednesday morning that they will be cutting $330 million from their 2014 budget.

“This is a process and the Cleveland Clinic is focused on driving a more efficient healthcare system. The goal is to make healthcare more affordable [and] efficient to patients,” Cleveland Clinic spokeswoman Eileen Sheil said.

The Cleveland Clinic acknowledges that there will be a reduction in the workforce, however the numbers are unknown at this time.

Shiel said this is “not unique to the Cleveland Clinic“ and that it is ”happening to hospitals across the nation.”

Our large healthcare providers —health systems and big hospitals —are in trouble. Public and political concern about hight costs are putting pressure on providers to lean out their organizations. (The true source of much of that cost may be out of their control, by the way). Simultaneously, we are living through a sea change in how care is being delivered. We’re not as far away from the smart phone physical as one may think.

Let’s also not forget population health. Forget concerns about about bridging the gap between the payment models. Do we really know how to take our existing large, complex healthcare ecosystem and turn it 180 degrees towards prevention and wellness?

Recently, while speaking to a group of hospital leaders, I shared an analogy I’ve been kicking around in my brain: these systems are giants and they won’t suddenly fall over. Instead, like Atlas, they will become increasingly unable to bear their the weight and will begin to stumble. Some, from time to time, might even drop to a knee to catch their breath.

Is Cleveland Clinic the first giant to stumble?

I’m all for cutting the fat and being more efficient. But how much of that is spin and how much reflects concerns around constrained reembursement and a changing care model?

Not to be all grey clouds and Andy Rooney here… These giants are giants for a reason. I have great faith in their sophistication, leadership and clinical abilities. Unlike small community hospitals, I doubt we’ll see any of them fall down outright. The smart ones, like Cleveland Clinic, are already thinking about:

  • Population health - Cleveland Clinic’s lauded bundled payment program for Lowes and Walmart is a clever example.
  • Patient engagement - Cleveland Clinic’s highly regarded Empathy video shows a serious commitment to the human side of healthcare.
  • Integrated model - The clinic model, with its employed physicians and team-based care, continues to make a lot of sense. I think we’ll see large health plans follow Lowes and Walmart, with renowned clinics like Cleveland Clinic, Mayo Clinic, Stanford, and Johns Hopkins, become preferred centers of excellence for these plans (further challenging community systems and hospitals).

Book review: Thinking, Fast and Slow

I heard about Daniel Kahneman’s Thinking, Fast and Slow from friend and ePatient superstar e-Patient Dave. It’s the first, what I’ll call, real book I’ve dug into since finishing my MHA in January.

And, it has blown me away!

In Thinking, Kahneman outlines our brains’ two basic modes of thinking: system 1 and system 2. System 1 deals with instincts, gut reactions and heuristics. System 2 is the slower (Kahneman says lazy) part of our mind which is capable of more complicated reasoning.

We read, most often, through system 1 which recognizes words quickly, as patterns. System 1 is why we are open to suggestion (your left leg feels a little numb right now, doesn’t it?….see!).

System 2 is the part of our brain which can reason through fact and fiction. But only when we engage it. Kahneman demonstrates system 2 early in the book by having readers write a three digit number and mentally begin adding 1 to each digit. According to Kahneman we actually have a physiological response —our pupils dilate as we engage system 2 to work through the basic math.

Here’s what I’ve found most interesting:

System 1 works best with absolutes. Kahneman refers to this is WYSIATI, what you see is all there is. For example, we see a label reading 90% fat free as positive and forget there is also 10% which is fat. We see 90% fat free, that must be all that matters.

System 2 is more conscious and can hold multiple options at the same time.

This ties in to my growing understanding of pluralism —the concept of two or more truths coexisting. For instance, a patient can be both hopeful and scared at the same time. The challenge is, according to Kahneman, only system 2, the more lazy part of the mind, is capable of understanding that both emotions can coexist. Our tendency is to rely on system 1 which focuses on what is in front of us. In the case of the patient above, it may be a look of fear on their face. Boom, that’s it. System 1 identifies fear and that’s what we go with. The patient is scared and that’s what I’ll deal with.

Without engaging system 2, we might not also identify hopefulness, or optimism, or doubt, or any other coexisting emotions.

These two systems are not limited to how we process perceptions about emotions. We face the same challenges in examining facts, causation and data in general. In fact, that is what much of the book deals with.

Kahneman has a gifted ability, much like Malcolm Gladwell, to distill complex science into what almost feels like common sense. Despite its length, it is a quick, enjoyable read.

You can get it on Amazon here: Thinking, Fast and Slow

health, behavior, and the economy of obesity

Remember the post I opened about loving pizza? Yeah, well I guess my pepperonis are coming home to roost. It is becoming increasingly apparent our struggles with weight gain in this country, at least in terms of a health epidemic, is an economic problem. Eating healthy simply costs more than eating crap. As long as we subsidize corn, we are effectively enablers in an economic addiction to cheap food, poor health and death.

Last week I had the privilege to speak to executives and sales teams at a large financial company. The title of the talk is Innovation as a Requirement for Success in Healthcare. I have not put the slides online, it was mostly a "TED-style" talk and so the visuals do not stand too well on their own. I did share an interesting slide from a JAMA report on actual causes of death. We usually see reports on morbidity - heart attack, cancer, stroke, etc. This particular JAMA report attempted to determine the real root causes of death. For instance, was the lung cancer the direct result of a lifetime of smoking. The study concludes 40% - the bulk majority - of US deaths are due to behaviors. The top three causes are tobacco, obesity / sedentary lifestyle, and alcohol.

Thanks to Ben Miller for first alerting me to the JAMA study on his blog. If you have access, you can find the JAMA article on their site. 

In the talk, I used the JAMA slide as an example of how patient behavior contributes to challenges our healthcare system faces. I went on to talk about food choices in general - a mini soapbox opportunity. If you have seen Food, Inc or read The Omnivores Dilemma then you are already up to speed on how the price of food contributes to poor health.

Food, Inc. is available for free streaming on Amazon Prime as well as Netflix

In Pollan's Omnivores Dilemma, he looks at the price of corn as the most significant contributor to its ubiquity; and its ubiquity as a major cause of  obesity in America. Corn, largely thanks to advancements in genetic modifications as well as the innovation of nitrogen fertilizer, is a prolific crop. So prolific, as it turns out, we have so much excess the federal government pays farmers not to grow it. What do we do with all that corn? In addition to being broken down into many of the  multisyllabic, unidentifiable ingredients in processed food, we are now putting it in gasoline, plastics and more. Why? Because its cheap!

Want a primer? Read Polan's essay here

The artificially low price of corn enables Hostess to sell Twinkies for pennies. Cheap corn lets McDonlads sell you a supersized McWhatever for less than $5.00. Least I be labeled un-American for lambasting a buttered ear of corn at a cookout, it is worth noting we are talking about an entirely different species. For the record, I loved buttered ears of corn. Frankly I love anything buttered.

Last week the USDA in conjunction with the Economic Research Service published a report titled: The Effect of Food and Beverage Prices on Children’s Weights. In the report, researches conducted a longitudinal study of the body mass index of kindergarteners and the Quarterly Food-at-Home Price Database. The results are predictable. Cheap, low quality, highly caloric food contributes negatively to BMI.

In addition, lower prices for dark green vegetables and lowfat milk are associated with reduced BMI. The effect of subsidizing healthy food may be just as large as raising prices of less healthy foods.

From the report's Implications

There are three main implications of our findings. First, they support the idea that food prices have small, but statistically significant effects on children’s BMI. Lower prices for soda, starchy vegetables, and sweet snacks have likely led to increases in children’s BMI. The reverse is true for some healthier foods such as lowfat milk and dark green vegetables. Others have found that lower real prices for fruits and vegetables predict lower weight (Powell and Bao, 2009; Auld and Powell, 2009) or a smaller gain in BMI for young school-age children (Sturm and Datar, 2005, 2008). By separating the price of dark green vegetables from higher calorie starchy vegetables, we find that the price effect is not the same for all vegetables.

For the visual impact, consider the relative inflation of fresh fruits versus carbonated drinks.

While you'll never convince me drinking a liquid from another animal is normal (and yet I love cheese, I am paradox!) , check out the findings on drink consumption tends:

I would be the last person to admonish anyone's tastes or food preferences. As I write this, I'm looking at a plate which just a few scant minutes ago was throne to a wonderful slice of pepperoni and jalapeño pizza. Have I told you about my thing for Sour Patch Kids? OHMYGODTHEYAREAWESOME. However, we have a relative luxury in my household - we can afford leafy, healthy, full-of-summer-sun vegetables. We belong to a CSA farm.  We shop at Whole Foods and buy organic veggies. And non of that is cheap. While our personal choices may at times be poor, we have the ability to eat well and within our budget.  When a head of broccoli costs more than a whole meal at McDonalds how do we ever expect to address the behavioral causes of health problems and death in this country?