Solving the Wanamaker Problem for Healthcare (keynote file)


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Finding a solution to Wanamaker's complaint, "Half of my advertising doesn't work, I just don't know which half" fueled the consumer internet revolution. We are now in the process of finding and solving a similar dilemma in healthcare. I offer some lessons from Silicon Valley for Healthcare

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  • I recently published a short booklet/ebook on how data science is transforming healthcare.\n
  • It discusses some big ideas from Silicon Valley that I believe will shape the future of health care, both on the payment and business side and on the clinical side. \n\nMany of you know way more about health care than I will ever learn, so I’ll focus on the lessons from the technology community.\n\n\n
  • I want to start with this quote from 19th century department store magnate John Wanamaker, who was said to have remarked, “Half the money ...” Faced with a healthcare system that is breaking under the strain, we ask “How can we just pay for the things that work?”\n
  • Google’s Pay Per Click model solved the Wanamaker Problem for advertising--we pay for clicks, not just impressions.\n
  • Accountable Care is an attempt to do for healthcare payments in the US what Google did for advertising.\n
  • Investor Chris Sacca, who used to run special projects for Google, remarked “What I learned...”\n\nWe see this pattern everywhere in healthcare innovation today.\n
  • Public awareness of the power of data to transform healthcare has been building.\n\nMost of you must have seen Atul Gawande’s writeup of the enormous savings that Dr. Jeffrey Brenner was able to achieve in Camden, NJ by using data to figure out why some patients were costing the system a disproportionate amount of money. \n
  • Or Gawande’s most famous piece, the Cost Conundrum, in which he highlighted the fact that quality of care is, if anything, inversely correlated with cost.\n
  • The irony, of course, is that Gawande himself works as a surgeon for one of the largest health care providers in Massachusetts, which has used its market power to demand higher than normal reimbursements. Here’s a quote from the Attorney General’s report.\n
  • This is an illustration of the perverse incentives that still remain in our healthcare payment system. Paul Levy, the former CEO of the Beth Israel Deaconess Medical Center, described this situation well.\n
  • I want to move on, and to talk a bit about where all this is taking us - towards systems that are algorithmically driven and therefore must be “algorithmically regulated.” I’m told that “regulation” has become a dirty word in Washington, and that we should just talk about making markets work better. Well, I’m not going to back down. One of the things that make markets\nwork better is the right kind of regulation. Your car’s carburetor or fuel injection system is a regulatory system. The autopilot of an airplane is a regulatory system, and the Google self-driving car is a regulatory system, using algorithms (i.e. rules) and feedback loops to keep on course.\n
  • Paul Levy has some warning words about regulation.\n
  • And you need to keep changing the rules to keep up with reality, and drive towards outcomes.\n
  • This whole model of using data to decide what works is at the heart of one of the most powerful methodologies to hit Silicon Valley. The Lean Startup model isn’t about running cheap startups, it’s about figuring out “the minimal viable product” that you can build that will give you validated learning about the market. You measure and test, and use that data to refine your ideas, and improve your offering incrementally to perfect it as quickly and cheaply as possible, with as little wasted cost and effort.\n
  • This shift requires new competencies of companies. The field has increasingly come to be called “Data Science” - extracting meaning and services from data - and as you can see, the set of skills that make up this job description are in high demand according to LinkedIn. They are literally going asymptotic.\n
  • I want to move on to the topic of personalized medicine. I won’t go into the details of what’s scientifically and clinically possible here - there’s going to be a lot of that in this conference. I want to talk about the social changes that are required for us to get maximum value from the science.\n
  • Now I want to move on to the promise of personalized medicine.\n
  • What we see from initiatives like PatientsLikeMe\n
  • and 23andMe is how much cutting edge consumers want to get involved in their own health care or the health care of their loved ones.\n\nAs Shakespeare said, “the hot blood leaps over the cold decree.” Consumers are charging ahead to learn more about their own health, and they know from their experience on the internet how much more value can be created when they do it together.\n
  • This is the real social revolution - sharing work on stuff that matters.\n
  • One of the big movements here is the movement to own our own data. This needn’t be a complex piece of technology. The VA’s Blue Button initiative cut the Gordian knot by adopting the simplest possible format for a medical record - an ascii file.\n
  • It turns out that there’s one big loophole in the move to get patient records into the hands of patients. And that’s in the area of lab results. Because of conflicts between HIPAA and CLIA and various state laws, patients have rights to their lab results in only a few states.\n
  • There’s a simple solution, a proposed federal rule that would harmonize state and federal laws. However this rule has not yet been finalized.\nSo with the help of Ann Waldo, we’ve been organizing a petition to HHS secretary Kathleen Sebelius to get this rule finalized.\n\n·         O'Reilly has long supported open source and open data, because access to information is the key to innovation and progress.\n·         Information enables people, and information that provides feedback about ourselves is especially valuable.\n·         Too often health information is opaque, not transparent - patients can't even get access to their own medical records!  We all know stories of people not being able to get records in an easy, quick way at the time they’re medically needed.\n·         Also, the lack of ready access to one’s medical records inhibits health technology progress, for many of the great useful tools and apps in development rely on patients being able to access and direct their records.\n·         That's why O'Reilly has been putting together a letter that urges the government to finalize a regulation that will allow individuals to get a copy of their own test results directly from labs.  [Today, people don’t have the same rights to get their lab results as other their other medical records – it depends on state law, and most states do not allow it.]\n·         For me as a person, for us as a company, this idea is a no-brainer - I hope it will be for you, too.\n·         It's beyond time for people to have real - ideally, real-time - access to their medical records.  Including their test results.\n·         I invite you to sign on to this letter and take the opportunity to help shape policy in Washington.  I urge you to talk to my colleague Ann Waldo about the details. \n·         [TBD – You can sign on electronically through ______, and you’ll also find copies of the letter and sign-on sheets in the hallway.]\n\n
  • You can sign this letter outside in the exhibit hall on paper, or you can go online here. We already have several hundred high profile signatories. You can add your own signatures to add weight to the request.\n
  • We really have to re-think privacy. We need to move from thinking we can build a Maginot Line around medical information and keep it secret. Instead, we need to design systems for a world in which most things can be known, and we can and not do with that knowledge--much more like the rules governing insider trading.\n
  • I want to talk as well about the Quantified Self movement as an important part of this personal data picture.\n
  • Companies like FitnessKeeper (an OATV portfolio company) are becoming fitness hubs, integrating data from multiple quantified self devices into a kind of consumer-controlled personal health profile.\n
  • Neumitra, Rob Goldberg\n
  • Now it’s easy to dismiss this subclinical health monitoring as just a toy. But remember what the giants of the industry of the time said about the personal computer.\n
  • Personal computers, open source software, the Maker movement were all created by people doing it because it was deeply fun. The entrepreneurs and VCs arrive several years later.\n
  • So take the quantified self movement seriously as a sign of the future.\n
  • The consumerization of health care has the potential to unlock an entrepreneurial revolution.\n\nApple showed us the power of this kind of transformation when they turned the smartphone into a platform with the introduction of the iPhone app store.\n
  • Jennifer Pahlka, the founder and executive director of Code for America, recently asked a question about government that also resonates for healthcare. “What if...?” \n\n\n
  • Code for America runs a service year program that brings talented web developers and designers to work with cities\nfor a year. Last year, fellow Scott Silverman, who had previously worked at Apple, explained why he had applied to the program.\nHe said...\n
  • So let’s ask this question:\n
  • You might think that I’m talking about iphone and ipad apps - and yes, they can be important.\n
  • But sometimes a better interface is just a simple matter of changing the workflow of how people interact with the system. It’s not the app, it’s the service. Zocdoc lets you make ad hoc doctor’s appointments quickly and easily. I recently had a problem that I had to check out before getting on a plane, and no time to visit my regular physician. I was able to find a doctor halfway between my meeting at Google and the airport, and get the job done.\n
  • OATV portfolio company Sherpaa is a NYC startup that is working to put in place low cost medical concierge services as part of a company health plan.\n
  • Healthloop is looking at creating new ways for doctors to check up on their patients to see how they are doing between visits.\n
  • Looking further ahead, new information retrieval UIs like Google’s Project Glass can be game changers - in specialized settings where access to a computer can be seen as a powerful kind of human augmentation. I expect it to be used in professional settings before it becomes popular as a consumer device. (In social settings, it will require even more profound resets of behavior than the “always-on” mobile phone.)\n
  • You can see a preview of where this is taking us in the Apple Store. Where most stores (at least in America) have used technology to eliminate salespeople, Apple has used it to augment them. Each store is flooded with smartphone-wielding salespeople who are able to help customers with everything from technical questions to purchase and checkout. Walgreens is experimenting with a similar approach in the pharmacy, and US CTO Todd Park foresees a future in which health workers will be part of a feedback loop including sensors to track patient data coupled with systems that alert them when a patient needs to be checked up on. The augmented home health worker will allow relatively unskilled workers to be empowered with the much deeper knowledge held in the cloud.\n
  • Apple is one of the great simplifiers. They had a brilliant insight--much of the interface for the iPod was taken out of the device and put into iTunes.\n
  • I want to finish with a quote from Steve Jobs. The heart of what we want to do is think about the essence, the deep context of what people are trying to do, and build products from that. We are redesigning the healthcare system. What an amazing opportunity. I’m so glad to be here, cheering you on.\n
  • Solving the Wanamaker Problem for Healthcare (keynote file)

    1. Solving the Wanamaker Problem for Healthcare Tim O’Reilly O’Reilly Media StrataRx October 16, 2012
    2. How Data Science is Transforming Healthcare • Changing healthcare business models • Enabling new scientific breakthroughs • Empowering patients • Changing tradeoffs between privacy and efficacy
    3. Big ideas from Silicon Valley that will shape the future
    4. Solving The Wanamaker Problem for Healthcare “Half the money I spend on advertising is wasted; the trouble is I dont know which half.” - John Wanamaker (1838-1922)
    5. “What I learned from Google isto only invest in things thatclose the loop.” - Chris Sacca
    6. “Price increases, notincreases in utilization,caused most of theincreases in health carecosts during the past fewyears in Massachusetts.Higher priced hospitals aregaining market share at theexpense of lower pricedhospitals, which are losingvolume. The commercialhealth care marketplace hasbeen distorted bycontracting practices thatreinforce and perpetuatedisparities in pricing.”
    7. “A friend of mine jokingly said, "Whats all this talkabout the US health care system being inefficient? Ifwe consider that the system was designed to transfermoney from consumers to the various parts of thehealth care industry, we are twice as effective as theworld average! Why would we expect that a freeenterprise health care system designed by hospitals,doctors, pharmaceutical and device companies, ITfirms, and industry consultants and suppliers would doanything other than maximize transfers of this sort?"Paul Levy,
    8. Feedback Loops and “Algorithmic Regulation”
    9. There should be a number of preconditions before one seeks to use financialincentives or penalties to influence behavior. If these conditions are not met,the financial tools will either not work or will have unintended consequences.What might those conditions be? Lets start with a few:1) Have a clear sense that the metric to be measured is determinative of theresult sought.2) Ensure that the recipient of the financial payment or debit controls the workflow associated with the metric.3) Be confident that the recipient is likely to be influenced in the correctdirection by the financial incentive.4) Ensure that the amount of the financial incentive is sufficiently meaningful tothe recipient that it is likely to influence his or her behavior.5) Consider how to avoid the unintended consequences of the financialincentive, e.g., impacts on other metrics that are of concern.Paul Levy,
    10. The secret of algorithmic data systemsis to focus on real time measurement of outcomes
    11. The Lean Startup The goal of a Lean Startup is to move through the build-measure-learn feedback loop as quickly as possible.
    12. Personalized Medicine
    13. • patientslikeme and collaborative clinical trials
    14. This is the real “social revolution”
    15. • copy of letter about lab results
    17. The spread of sensors• sensor platform slide
    18. “The PC is just a toy.” -Ken Olsen, Digital Equipment Corporation
    19. OMG, I could have my own computer!
    20. Innovation often starts not with entrepreneurs, but with people having fun, who believe in an impossible future
    21. What happens when you throw open the doors to partners More than 50,000 iPhone applications in less than a year! Now at 688,000
    22. “What if we felt aboutgovernment the way we feelabout our iPhones?” - Jennifer Pahlka,
    23. “I believe that interfaces to governmentcan be simple, beautiful, and easy touse.” - Scott Silverman 2011 Code for America Fellow
    24. What if interfaces for both doctors and patients were simple, beautiful, and easy to use?
    25. Steve Jobs on Design “In most people’s vocabularies, design means veneer. It’s interior decorating. It’s the fabric of the curtains and the sofa. But to is the fundamental soul of a man-made creation that ends up expressing itself in successive outer layers of the product or service." commodity.html?hp=&pagewanted=all