Archive for May, 2009


Tuesday, May 5th, 2009

Charles Darwin turned 200 recently. By all accounts he nailed evolutionary biology first time around, in his The Origin of Species, showing how species evolve to survive in their unique environment. His work is still widely accepted (except for a few people here and there) as the blueprint for how evolution works. The core of his research stemmed from a visit to the Galapagos Islands, where he observed strange and unusual creatures, perfectly adapted to the unique environment in which they evolved. How would Darwin react to visiting American health care? He would surely feel his theory was vindicated, because health care is full of weird species perfectly evolved for a strange environment.

Here are a few examples of weird health care species that are thriving in their niche:


Cardiac catheterization with balloon angioplasty is a procedure that saves a lot of lives, if done quickly after a heart attack, but there seems to be no benefit to a prophylactic balloon angioplasty done in patients who have no symptoms. Yet the catheterizers busily do these procedures all day long, even though they read the medical journals and go to the scientific meetings where all the evidence is laid out that the procedures they are doing don’t make much sense. They keep doing the procedures because they can, they are in the cath lab anyway, it doesn’t do much harm and they get paid for it.

Revenue Cycle Managers

Armies of consultants optimize revenues for hospitals and other large providers. They scour for opportunities to code, capture and charge more. By diligently pursuing every last dollar, they can justify their own fees and still boost the revenue of their clients. Doctors, too, find that the single best financial outcome from putting in an electronic medical record is increasing revenue capture. This is how we are going to use electronic health records to save money: by helping providers find more revenue. Say what?

By the way, the really smart consultants actually work for the providers and show them clever ways to increase revenue, then they apply the same skills to helping the health plans (which pay the bill) by teaching the health plans how to find ways to minimize the newly inflated invoices they receive. This species is thriving.

Medicaid Enrollment Form Fillers

About 150,000 of these creatures work in American health care. They fill out forms for prospective Medicaid enrollees and have a union-mandated productivity target of filling out two forms a day. To be fair, the forms are long and complex and require a lot of documentation. Until the recent market meltdown, it was easier to get a sub-prime mortgage than to get Medicaid.

Some would argue that the forms are long and complex to discourage people from applying, because if they apply successfully then taxpayers have to pay for the Medicaid benefit. The strategy seems to be working: About a third of the uninsured in many states are people who are eligible for public programs but who for a variety of reasons don’t apply. Yet we have a thriving number of people who administer the program and who are reluctant to embrace the automation that would make their jobs redundant. With the recent massive injections to Medicaid and the rising unemployment rolls, this species should do well.

Octuplet Manufacturers

There is a small group of multiple embryo in-vitro fertilizers, who despite professional guidelines and scientific evidence to the contrary, implant five, six, seven, eight embryos in “want to be” mothers, even when those mothers already have five, six, seven or eight children. The most highly developed of this species do the IVF work on a private, cash only, fee-for-service basis then send the impregnated mother back to Kaiser to have the babies and run up a large cost in the neonatal intensive care unit.

Repeat Testers

This species replicates the work done by fellow species members. It all seems like wasted motion, but actually it works really well. Doctors order tests that have already been done by other doctors on the same patients because they don’t know the tests were done, can’t access the results, don’t ask the patient, don’t agree with the tests that were ordered, don’t want to be sued for missing something, or are really eager for the ancillary revenue. This enables the species to thrive when their normal forage habitat (visit fees) are inadequate to meet income expectations.

Clinic Closers

Some children’s hospitals that have outpatient clinics with Medicaid reimbursement find it better to send patients to an affiliated federally qualified community clinic. Instead of getting paltry Medicaid reimbursement, the federally qualified clinic gets a fee that is three or four or five times more than the Medicaid fee.

NICU Runners

Prenatal care and normal deliveries are often not viable economically for hospitals. Many people in the baby business have to make it up on having a thriving neonatal intensive care unit that can bill a lot for very intensive care of low-birth-weight infants. Lack of investment in comprehensive prenatal care; rising numbers of births among teenage mothers, older mothers and obese mothers; and impressive and expensive neonatal care techniques creates continued demand for NICU services. Just make sure the NICU babies have some form of public or private insurance.

Large Molecule Makers

Pharmaceutical companies battered by generic substitution, growing cost-sharing for brand name drugs and blockbusters coming off patent are all in pursuit of a new environmental niche called biologicals or specialty pharmaceuticals that are developed through the tools of modern molecular biology rather than old-fashioned chemistry. Companies develop these large molecule drugs that are targeted at small populations and provide new therapeutic options for patients with previously untreatable diseases and symptoms, mostly in the cancer area.

Manufacturers have figured out a new pricing structure: They charge by the atom. Therapy for a year can cost tens of thousands if not hundreds of thousands of dollars per year. Because their drugs have large molecules, and they are promising improvements in treatment, they have set the price as high as the sky; no one wants to say no to improvements in care for dread diseases, no matter what the cost. Until now. The niche may be less viable as new policies encourage scientific studies comparing the comparative effectiveness of new technology against existing treatment, and as a new administration zeroes in on affordability of health care.

The combination of toxic incentives, Byzantine regulation, questionable ethics, lack of evidence and organizational dysfunction creates a rich series of environmental niches in which weird species can thrive. No one would design creatures like this, but they have evolved to survive in their unique environment. Left alone, like the Galapagos, these creatures will continue to prosper, but if the health care environment changes, particularly the reimbursement system, then all these creatures will have to evolve to survive.

Ian Morrison is an author, consultant and futurist based in Menlo Park, Calif. He is also a regular contributor to H&HN Weekly.