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UPCOMING: Clinical wireless and PDA use

This is the first in an occasional post to let you know what I’m working on behind the scenes. I’m trying to get to grips with the huge topic of wireless computer use by clinicians.  If you have access either to any recent data about this topic, or are privy to (or actually using) any interesting use of clinical PDAs, tablets, laptops, etc, etc, in a clinical setting, especially if it combines Wi-Fi with WAN, please email me.  Thanks.

I’m hoping to get this piece out on THCB  in the next week or two (i.e. if I impose a vague but public deadline upon myself, it might actually happen!).

TECHNOLOGY: What’s behind WebMD missing its numbers?

This morning WebMD, the de facto giant of the transaction processing and physician office software markets, announced that its earnings and revenues for the next two quarters will be below expectations.  The stock price traded down about 10% in early trading.

What’s puzzling is that this shortfall is due to lower than expected  revenue growth. Most analysis (such as cited in this post) seems to be showing that IT spending in health care is increasing quite fast. Consensus forecasts for WebMD had been 13% annual revenue growth to about $1.1 billion. However, that number will be significantly lower, and revenue growth is likely to be in the single digits. What’s problematic for Wall Street is that WebMD has done most of the reorganization and cost-cutting that it needed to after its chaotic emergence from the Internet bubble. (For more on that and WebMD’s structure see this post). Plus the new numbers do not include any impact from the smoldering DOJ investigation into accounting irregularities at Medical Manager before WebMD bought it.

So it’s probably fair to conclude that this is a market-wide rather than company-specific slow down. WebMD cited the delaying of full HIPAA implementation as slowing the increase in its data transactions. Maybe, but don’t forget most of those are Rx transactions which have been all electronic long before HIPAA was around, so the lower than expected growth is probably on the provider side.  The other area doing worse than expected was physician office software. Overall this suggests that physicians are not using HIPAA as an excuse to totally revamp their office software, and that–despite signs that some physicians are adopting technology in their clinical work–slow, incremental evolution is still the likely pace of change in that environment.

INDUSTRY: Healthsouth–Scrushy speaks out

I’ve commented (perhaps too much) about the Healthsouth affair and how the vagaries of Medicare reimbursement led many different types of for-profit (and probably also non-profit) providers to go well over the top in attempting to cash in. The difference between the for-profits and the non-profits is that Wall Street demands continual growth in the numbers for the for-profits, and once the initial savings an ancillary company makes moving care out of hospitals to lower overhead facilities are assumed, growing "same-store" revenues and profits is very hard. See my earlier synopsis of that problem here.

The reason I bring this up again is that yesterday Richard Scrushy went on 60 Minutes to defend himself. Remember for a second that this wasn’t just a case like at Tenet of unnecessary upcoding (although they were billing group sessions as individual sessions so Healthsouth was doing that).  This was straight fraud–telling investors and the world that revenues and profits were one number while knowing that in reality they were lower, and changing thousands of documents so that the lies added up. Scrushy’s story is that all FIVE of his CFOs and a bunch of other senior staff lied directly to him about the numbers, and are lying now when they say Scrushy told them to alter them. Furthermore, he say that his stock sales at 3-4 times the current market price, netting him around $100 million, were mere coincidence, even though they did happen a month before the numbers finally started to tell the truth. (Actually this reminds me a little of another southern CEO’s protestations).

How will he do in court? Well, the fact that he hired a former actor from The Wonder Years who was 29 years old and had no corporate experience as his Chief Marketing honcho, and allegedly funded a series of Christian rock groups (see the third story down here!) and his wife’s habadashery company with Healthsouth money does look a touch suspicious. Meanwhile he was suing not only one poor sap on the Yahoo message board who claimed to have had an affair with his wife (he lied), but also Kim Landry, an ex-employee who suggested that Healthsouth’s stock would collapse.  Sounds like she had it about right! However, OJ Simpson is still walking the streets.

About the only thing I can think of in Scrushy’s defense is that there doesn’t seem to have been anyone prepared to go to the Feds to become a protected whistleblower.  I guess one of those CFOs wishes he’d thought of that now! Anyway, enough from me on this whole appalling issue, even if it is quite funny.  There’s a whole lot more here. 

Disclaimer: I had surgery at a Healthsouth ASC facility in San Francisco in March 2002, everyone treated me very well, there was no sign of the Wonder Years or any Christian rock at any time, and the drugs were great!

POLICY & PHARMA: Opposing drug re-importation is political loser for big Pharma

All that you need to know is in today’s Harris Poll. 77% of Americans think that it’s unreasonable for pharma companies to try to make it impossible for American consumers to buy drugs from Canadian pharmacies over the Internet. Yet only 7% of Americans have done so.

If I was running a public policy group at PhRMA I’d be thinking of ways to try to beat a graceful retreat here. After all, do you think President Dean’s FDA will be quite as helpful as the current one? Better to have Canadian prices on imports rather than get this far enough up the American political consciousness that we end up with Canadian-style pricing here.

TECHNOLOGY: Tim Oren’s analysis of Sili valley development

As  healthcare person connected to Silicon Valley by geography and osmosis, I’m always amazed why I don’t quite "get it" and hence why I’m not driving a Porsche, owning 6 houses and lying on the beach like some folks I know.  Tim Oren is a self-confessed Silicon Valley old fart Gray Beard, who really gets technology and writes the excellent Due Diligence blog. (I’ve argued with him about health care and he’s the only guy in the Bay Area who voted for Arnie but don’t let that put you off!). Tim’s recent post about how tech innovations come out of nowhere, "You never know where you’re going till you get there" is wonderful, and I just had to quote this line here:

    I served on the program committee for ACM Hypertext ’91 in San Antonio. We hold the distinction of relegating a certain prototype by a Mr. Tim Berners-Lee into the poster and demo track, since (as I recall the discussion), it didn’t present much theoretical novelty, and the user interface sucked. Well, it did.

Those of my health care readers who don’t know what this is referring to must subject themselves to the public ridiculing of asking me! But go read Tim’s article.

QUALITY QUICKIE: Another study on medical errors

AHRQ, the Agency for Healthcare Research and Quality has put out another study on medical errors This one has a slightly different methodology than the IOM’s 1999 "To Err is Human" study. The researchers estimated that the study’s findings mean about 32,600 deaths result from various specifically defined medically-caused injuries in the U.S. each year.

The IOM’s estimates are of 44,000 to 98,000 deaths.  Some of the difference is due to the AHRQ’s methodology and choice of data set. (Here’s the abstract).  Their data set was much larger than those used by the IOM, and was based on administrative and billing data but didn’t include chart review.  The IOM study was based mostly on various other studies that included chart review.  In addition the new data focuses on "injuries" resulting from specific procedures and as far as I can tell doesn’t include adverse drug reactions, so the actual number of total deaths is likely to be much higher.

It’s also worth noticing that the attempts to find the truth in what’s really going on are hampered by the age of the data, and the type of data collected. But the direction in which all the data points is very clear. It’s dangerous in that big white building, and going into hospital can be very hazardous for your health.  Thankfully, from all anecdotal evidence I’m hearing about/seeing, providers are getting the message and are working on getting the CPOE systems, drug databases and workflow systems into the hands of clinicians.  Hopefully, this will mean that those error or "injury" rates will start coming down.

On a childish aside, if you check out AHRQ’s URL you’ll notice it used to be called the The Agency for Health Policy and Research. Think about that for a moment.  Shouldn’t research come before policy, you say?  Well they were going to name it that way until someone noticed it’s acronym would be AH-CRaP).

PHARMA: The orphan blockbuster costs $800m

Forbes is pumping out a lot of interesting articles on the pharma market these days.  In an article called The Diagnosis For Medical Diagnostics they raise the issue of pairing diagnostics with drugs.  The basic problem is that as drug development becomes more specialized, genetic-based diagnostic testing pinpoints who the drugs will work for.  So the drugs will be more likely to work in those patients and have better results. This is a good thing! 

However, if we know who the drugs will work for, we’ll also know that the same drug won’t work so well for other patients. It’s likely therefore that newer drugs will only work for a smaller share of patients with any particular condition. For the drug to be profitable either the it must cost more per patient or less to develop.  The CEO of Genta quoted in the article doesn’t believe that the cost of drug development–the $800m in the title–is going to come down, which means that their drugs (and presumably many others) are going to cost significantly more per patient than currently available less effective drugs.  And as Jane Sarasohn Kahn mentioned in this recent post, "It’s not clear really who will be willing to pay for innovation". Given that patients are gong to want these new drugs, this leaves both the pharma cos and the rest of us with a big problem–particularly if Medicare is going to pay for drugs (uncertain, but likely) and seniors are going to vote (damn certain!).

PHARMA: Follow up to the Pipeline Post

Health care expert and all-round wonderful person Jane Sarasohn-Kahn of Think-Health has some added thoughts about what’s likely to be happening inside the pharma industry to deal with the "pipeline problem" discussed in this recent post. Jane suggests you keep your eye on three related developments:

    1.  A lot more co-marketing agreements between pharmas (a la Bayer and GSK’s venture into Levitra, Viagra’s competitor for the moment)

    2.  Pharmas are looking to biotech for new formulations, but they’re also looking to smaller pharmas too for licensing deals.  This will be important over the next few years.  Obviously, biotech will be important in the longer term, but the juries are still out on so many very expensive drugs. We will be hitting the wall on who is going to pay for those expensive bio drugs, and I anticipate that will be a big area of contention.  It’s not clear really who will be willing to pay for innovation.

    3.  We can’t switch too many more drugs to OTC as allergy and GI were the low hanging fruit here.  We’ll get a bit more savings out of switches, but then you get into another category of drugs that really does require professional input — depression/mental health, migraine, anti-infectives (gotta watch out for resistance there and over-indulging the paeds population whose mothers aren’t patient enough when it comes to ‘watchful waiting’ over ear infections), cancer, HIV/AIDS, etc.

TECHNOLOGY: Follow up to Wireless Vulnerability

I’ve been having a background email conversation with Lisa Williams who covers many medical blogs as part of her blog Learning the Lessons Of Nixon and kindly refers back to me. (Lisa does seem to think this is a blog just about scandals in health care. I keep trying to tell people that this is an objective blog about the entire health industry, but they’ll call it the way they see it, and there have been a few naughties lately!). Regarding my post on Wi-Fi security, Lisa writes:

    I was at a healthcare facility — a hospital which will remain unnamed — and found an unsecured wireless LAN by accident. It should be noted, however, that access to a LAN emphatically does not mean that you can get access to patient records.  Each system which does something for users — an email system, a database containng records, a billing system — may be connected to a network, but just because you’re on that network doesn’t mean it’s any easier for you to get into that system if you are not authorized to be there.  It’s sort of like houses on a road: Just because you can get on a street where there are houses doesn’t mean that you can automatically let yourself in to any house. It’s worse, even, because being on a computer network won’t give you the same cues that a system with data is nearby, the way your eyes will if you are walking down a street that there is a house nearby — you won’t know if there’s a door or where it is, or if you get there, how to open it. The example you gave regarding your own LAN only shows how unsecure consumer software is; most people don’t bother to have a password when they boot up their machine, and so, when connected to a network, that machine is wide open.  But almost any program in a work setting requires logon.  So, by all means, secure your network, but the best security is always provided at the "house" level rather than at the "road" level.

    It’s worth noting that workers in many healthcare settings do have Windows laptops that aren’t much (or any) different than what you or I have at home.  Would those contain personal information on a patient? What about email?  Sure.  I suspect the "big" systems that are central to containing registries of health data require *at least* password authentication, and have other forms of security.  The problem is securing PCs.  My husband works for a company that lets you configure hundreds of PCs over a network simultaneously.  Who are the biggest new customers? Hospital chains and HMOs.  Sure, they probably use it to install the latest virus patch, but I wouldn’t be surprised to have someone use it to say, Okay, everybody’s PC that we own here is going to have X security software and settings, period.   

    If the individual PCs aren’t secure, then wireless does increase the risk, because walking around with an ethernet cable looking for a jack in a hospital or doctor’s office is gonna attract some attention!  And sitting there with a wifi device isn’t.

I’d only add that the Laptop PC security management problem Lisa brings up will be expanded by the numerous PDAs and smartphones that will be making their way into clinicians’ hands in the next few years.

TECHNOLOGY: A surgeon as a futurist?

Speaking as an ex-real and current hack futurist, this title disturbs me.  However, jumbled up in this interview with ex-Yale surgeon Richard Satava are a bunch of very interesting concepts. He discusses the potential impact of smart dust, radio-tagging (RFID) and remote telemetry, xenotransplantation, nano-technology and organ regeneration on the future of human health.  If after reading it you fell like someone threw a bucket of science-fiction technology water all over you, I recommend that you hop over to Robert Mittman’s Technology Foresight columns on the iHealthbeat site, which give you more measured and controlled sips of each concept. (You need to register but it’s free and there’s a wealth of stuff there–thanks Wellpoint!)

In particular take a look at the articles on smart dust, RFID, and nanotechnology.  Robert is a professional forecaster (rather than just playing one on Yale Medicine News) and delivers a more rational explanation of the pace of change within each technology sector–not that Satava’s vision isn’t a lot of fun.