Rock Health 2011 Demo Day

Image by mariachily via Flickr

I was fortunate enough to be able to attend the Rock HealthHealth Innovation Summit onJan.20th. It was the third day of a conference that highlighteddevelopment, design, and business issues around the potential for health care transformation through technology. The room was full, and the audience stayed until the end, even on a Friday afternoon.

Why? Because they knew something big was up. What’s up is the awareness of the Rock Health accelerator and the move to change a system only a young person from outside the industry could even hope to change. For three days, enthusiastic developers listened to cynics like me talk about business models, chasms, and challenges. I hope our doubts didn’t make a dent in their drive.

A year ago, there was no Rock Health, but more important, there was no community pulled together around the cause of health care innovation brought about by young people largely focused on digital and mobile technologies. A scant one year later, there is a vibrant health tech community in San Francisco, supported by large hospital systems, insurance providers, VCs, angels, entrepreneurs and mentors. The need is recognized, but until Rock Health, there hasn’t been a community. Health 2.0, another wonderful step in the direction of change, focused more on showcasing change than on financing or mentoring change.

The second class in the Rock Health program kicks off this week. Some of the grads from the first have already received additional funding or gotten to revenue.

They won’t all succeed. They have no concept of how complicated this industry is. But here’s the most important point: Rock Health has drawn together all the people inside and outside the system who want it to change, who are willing to take chances, and willing to support the effort to move the needle.

And thus I feel like 2011 was a tipping point for health care as an industry. After last year, for many reasons, it can’t remain the same. The larger providers and payers have already begun to circle the wagons around Obama’s health care reform law, because they are realists and know it’s not going to be repealed completely no matter who gets elected. So they’ve begun the journey toward bundled payments, Accountable Care Organizations, medical practice acquisitions, and better electronic health records. The battleships are slowly changing direction.

And the best part, Rock Health was founded and is run by women — the very people who make most of the health care decisions anyway.

 

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The difficulties that health technology innovators will have breaking into the health care industry were no more clearly illustrated than by the talk given by Dr. Sam Ho, Chief Medical Officer of United Health Benefits Group, on the third day of San Francisco-based health incubator Rock Health’s  Health Innovation Summit. After two days of exciting stuff about design and development, CEO day presented the cruel reality of the market .

Dr. Ho began by admitting the system was broken. Payments, he admitted,  didn’t align with objectives, and outcomes were an afterthought.  But now things are in the process of change, partly because of the passage of Obamacare (although he didn’t mention it by name), partly because of the too-temporary tenure of  Dr. Donald Berwick at CMS, and partly because in a worldwide recession, we can’t afford our health care costs any longer.

So the big players, fearing innovation from without, have decided to try to innovate from within, and came up with a slogan called “The “Triple Aim:”  a slogan that embraces how to improve the individual experience, improve population health, and control inflation of per capita costs. Dr. Ho believes these three aims are separate now, but they must be aligned  to succeed.

For United Health, this means Care Management Programs, Transparency and Premium Designation Programs, Hi Performing Preferred Networks, Value-Based Benefits, and Value-Based Contracting. These can be read as forms of rationing and cost shifting by the more cynical among us. However, for him,  it mans developing more and more incentives for changing consumer behavior. For example, patent premiums will get lower and benefits richer if consumers enroll in a diabetes plan and stick to it. If they manage their blood pressure or lipid levels, they will also have richer benefits. But what if they try and fail? I’m all for outcomes-based medicine, but we have to be careful we are measuring things that are within the control of either patient or provider. And how do we judge?

United Health is moving from a volume-based payment system to providers to an outcomes-based system. Providers have historically been paid on how much they do, but now the better they do, the more they will get paid. What will this mean for really sick patients? Will doctors be less anxious to treat them, for fear it will impact their outcome-based compensation?
This is all the more frightening when I hear that Dr. Ho is not a true believer in technology as a way of helping solve health care’s problems. Ho cautions us that  any type of innovation has to fit these already-moving shifts, which can be translated as “don’t try to innovate, just try to fit into what we are already calling innovation.”
Thus, he tried to warn his audience of (mostly) Millennials: if your innovation doesn’t fit into our box, we won’t let you in.
I hope the excited young entrepreneurs at Rock Health didn’t hear this talk the way I did.

 

 

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