BlackSwans20081223

The Black Swans of HIT for 2008
www.hittransition.com
1
Welcome to Flash Point Health IT Webinars
TODAY
Changes the Industry Won't Predict
AUDIO: (800) 935-3856
SUPPORT: hittransition.com/webinarnow
the webinar will begin shortly…
Presenter:
Martin Jensen
COO, Chief Analyst
Healthcare IT Transition Group
Moderator:
Michael Christopher
Senior Development Analyst
Healthcare IT Transition Group

2
Disclaimer
I am not an attorney
Nothing here constitutes legal advice
You can read the regulations and guidance
and may come up with different conclusions
You should consult an attorney about any
matters relating to regulatory compliance

3
Taleb’s Black Swan
“One single observation can invalidate
a general statement derived from
millennia of confirmatory sightings of
millions of white swans. All you need is
one single (and I am told, quite ugly)
black bird.”*
* This quote and the Black Swan concept come from Nassim Nicholas
Taleb, “The Black Swan,” © 2007. See also
http://www.fooledbyrandomness.com/

4
Three characteristics of the
Black Swan
An outlier – beyond the realm of regular
expectations
Extreme impact
Explanations are concocted after the
fact: “retrospective predictability”

5
A Taxonomy of Swans
White Swans
Black Swans
Grey “Swans” (er, Geese)

6
White Swans
“The Norm”
Predictable, momentum-driven continuation
of the past
Trends, not revolutions
Arithmetic progressions over time:
“X%/year”
Deviations do not cause major
disruptions: The world’s tallest man
enters a room of 100 people, but the
average height does not change
substantially

7
Black Swans
Unexpected by common wisdom or
conventional models
Unpredictable, except in retrospect (lucky
predictions make reputations)
Paradigm shifts
Have geometric effect on environment: “X%
overnight!”
Deviations break models and
expectations: The world’s richest man
enters the room…

8
Grey Geese
Predictable, but not predicted; invisible,
but imminent
Unrecognized, substantial White Swans:
“We should have known…”
Black Swans whose appearance and timing
is unknown, but whose eventual arrival can
be assumed: “Something’s gotta give”
Trend with a geometric driver: The hockey
stick
Deviations have significant impact
(“goose”), but can be mitigated with
risk management and close observation

9
Analytical Approach
What we can and can’t tell you about the Black
Swans of Healthcare IT
Overall driver will be economic, not
regulatory or collaborative
Simplicity will gain power over
complexity
Feedback loops and enabling events
over rules and mandates
Web vs. VAN*, AOL vs. Compuserve
Wikipedia vs. Encarta
Facebook, YouTube, etc.
* Acronym Key:
VAN = Value Added
Network, AOL= America
Online

10
Analytical Approach
What we can and can’t tell you about the Black
Swans of Healthcare IT
But…
Black Swans, by definition, can’t be
predicted
Grey Geese, however, are waddling
among us
And there may be “first mover” advantages
to Black Swan sightings
Even Taleb acknowledges that you can
protect yourself from the bad swans and
exploit the good swans

11
Swan Dive: Protecting yourself from
the Negative Black Swan
Court sense: Tracking the movements
around you
Basket minding: Putting your eggs in a
really safe place (if you can
find one)
U and ME? Questioning
your assumptions
If the worst happens,
are we in a position
to weather it?

12
Swan Song: Taking advantage of the
Positive Black Swan
Minimize exposure to small risks in
both directions
Maximize advantage to leverage large
risks (including the “put” option)
If the best happens, are
we in a position exploit it?
The Sign of the Swan:
Can we make a market
out of the chaos?

13
HIT* Policy: Stealthy Swans
and the Missing Memo
Tight-lipped federal
regulators and divided
government
Bipartisan gridlock:
Election cycles kills good
intentions
Clue: If healthcare is allowed to be #1
domestic policy concern, who wins?
* Acronym Key:
HIT=Healthcare Information Technology

14
HIT Policy: Stately
Swans and the
Flock Effect
Incremental vs.
paradigm-shifting
legislation
State innovations and de facto
standards
Eligibility
ePrescribing
Health ID Cards

15
Campaign 2008:
Tracking the Elusive HIT
Political Swan
Where the candidates stand
(hint: behind the voters and lobbyists)
Patients-as-consumers yields to
consumers-as-voters
Employers’ and payers’ embrace of
universal healthcare gives permission
to both parties (at a price)

16
Employers Abdicating
Role as Funder?
Historical Transitions
Managed Care
Fungible employment
terms: Downsizing,
Outsourcing, Part-timing,
Offshoring
Self-funded TPA/ASO* model
HDHP/HSA/CDHC
* Acronym Key:
TPA=Third Party
Administrator; ASO =
Administrative Services
Only. HDHP=High
Deductible Health Plans;
HSA=Health Savings
Account, CDHC=Consumer-
Directed Health Care.

17
Employers Abdicating
Role as Funder?
Current developments
Erosion of government
funding puts pressure
on commercial market
Offloading of retiree
benefits to unions
Employer push priorities with dollars:
eVisits, Medical tourism, preventive
care/population health

18
The Consumer
Driven Health
Care Swan
Migration of the
fittest: Adverse
selection as a
driver
All-in or opt-out: Primary care and the
payer value proposition
Employers demand new tools
Differential effects of HDHP based on
specialty and care settings

19
The Consumer-Driven
Health Care
Swan
Red Tuesday:
January 1, 2008
The Great Reckoning:
Sharpen your pencils
for 2008 managed
care contracting

20
Consumer-Driven
vs. Consumer-Directed
Politicians sell “Driven;” Industry buys “Directed”
Assumption #1: Consumers have
enough information: “Transparency”
Assumption #2: Costs are largely the
result of price-protected decisions
“Sensitivity”
Assumption #3: Consumers will act
individually in more-or-less predictable
ways: “Agency”

21
CDHC: Consumers Will Do the
Driving
Reality #1: Consumers won’t – and
can’t – have enough information to
guide non-trivial medical decisions
Reality #2: Choices of “average
consumer” is a relatively small factor in
terms of total healthcare costs
Reality #3: Consumers are likely to act
collectively (incl. legally and politically)
or hire surrogates to advocate on their
behalf

22
Medicare Swans:
Hiding in plain sight (beneath a mountain
of feathers)
What you thought you’d earned: RACs*
take it back
Present on Admission requirement may
drive upstream data capture, process
improvements
The 10% physician cut and the HIT
mandate: But will it sell systems?
ePrescribing incentives and imperatives
* Acronym Key:
RAC=Recovery Audit
Contractor

23
HIT Technology Swans:
Large effects from small changes or abrupt
manifestations of long-term trends?
Health 2.0: HIT goes viral
Microsoft’s HealthFault and
GoogleHealth: PHR* as an advertising
medium vs. PHR-as-a-verb
Cleopatra and the ASP: Just another
pretty face or is she a pharaoh?
Security issues: architecture-as-policy
Will transparency hit the payer
market?
* Acronym Key:
PHR = Personal Health
Record, ASP=Application
Service Provider

24
HIT Vendors: Swans for Sale?
Clearinghouse consolidation continues
Mergers and acquisitions driven by
“management plateau” phenomenon
Impact of viral sharing,
buzz marketing and
2.0 scrutiny

25
HIT-Enabled Market
Disruption
Destination: Bangkok,
Bangalore, Cleveland?!
“Nighthawking”
Tele-everything for
rural health
Re-manualization: “Hello, Mr. Payer?
This is Ravi. There seems to be a
problem with your claim editing
system….”

26
Your Doctor is on the Phone: Cellular
Technology and HIT delivery
Ubiquity is #1: What’s your cell
phone number?
Standards on greased skids
Rich interface and memory, but not
a storage or input device (yet…)
Applications
eVisits
Go-anywhere teleradiology
PHR-as-a-verb: Appointments, reminders,
anonymous Q&A…

27
Coming to a Big Box Near You: The
Retail Clinic Swan has more
surprises in store
Produce sale: Low-hanging
fruit at low, low prices
Flu Shots
Ear Infections
MRIs…?
HIT Advantages
Many partners, one system?
Road warriors: Have EHR, will travel
Referral networks a secondary market?
Is the Cleveland Clinic going retail?

28
The Commodity of Trust
Cannot be manufactured,
bought, sold or duplicated
An implicit pre-requisite
for exchange…
…or a silent deal-killer
An arena in which
non-profit organizations, with strict
rules for transparency, ownership, and
public accountability are at a
competitive advantage over commercial
enterprises

29
The Commodity of Trust
Infrastructure enablers
Technologies (https, PGP*, HL7)
Relationships, endorsements, trusted
authorities
Laws, precedents and show trials
Contracts, shared liabilities,
professional standards
State-level Opt-in vs.
Opt-out
* Acronym Key:
PGP=Pretty Good Protocol,
HL7=Health Level Seven

30
An Ear to the Pond: Swan sightings
from the blogosphere
HIStalk
Vendor insights and running commentary
The Health Care Blog
Health 2.0 and beyond
Conmergence
The ultimate HIT wonk blog
Chilmark Research
IT trends in the healthcare sphere

31
Non-Swans: Incentives, Quality,
Transparency and
other fowl ideas
No new money for
healthcare: P4P*
without the P
Lack of standards:
Application complexity
as a cost
Spreadsheets vs. billboards: “We’re
#1!” (with an asterisk) * Acronym Key:
P4P=Pay For Performance

32
Non-Swans: Hype Cycle on
Training Wheels
70 Portals and No Beach:
PHR a la Microsoft, Google
WEDI Health ID Card: Boxy, but good
HIPAA Standards: Umbrage-and-edit
ICD-10: Code-dependency
AHIC: A source of swans?
HITSP: A White Swan spinning many
plates
Black Standards Swan on
the way?
* Acronym Key:
AHIC=American Health
Information Community,
HITSP=Healthcare
Information Technology
Standards Panel

33
But what to do?

34
Provider Swan Management
Micropractice (HIT opt-in)
Concierge Medicine (Insurance opt-out)
Medical Home (flawed quality model)
P4P process engagement, battle for
standards, substance
Real time adjudication,
real patient collections

35
Provider Swan Management
Retail front door: Engage
with inventory, quality,
trust, relationships
Shields Up: Smarter
revenue cycle tools for
front-end denials and
back-end recoveries
Demand recognition for HIT and quality
programs via lower malpractice rates
Expand your market geographically via
data exchange, telemedicine

36
Payer Swan Management
Push for peer compliance
and enforcement (!) to
leverage HIT investments
De-portalize provider
interactions
Claims status and eligibility via EDI*
Revisit 835 remittance advice crosswalks
P4P consistency
All-payer real-time adjudication
* Acronym Key:
EDI=Electronic Data
Interchange

37
Payer Swan Management
Establish ePrescribing as a top priority
Conduct internal process audits and
throw out non-productive SOPs*
Hands-off disease management:
Sick people are afraid of you
– Get over it.
Push for universal coverage
and make regular deposits
to the Bank of Good Will
* Acronym Key:
SOP=Standard Operating
Procedure

38
800 lb Gorilla evolves into Two-Ton Teddy?

39
Vendor Swan Management
Brace for budget gridlock
Conjure 12-month credible ROI*
Give legacy an early retirement
Position for low-cost interoperability,
transition management, scalable growth
Prepare a fresh case for click fees
Use trust as a differentiator
Free market competition: FOSS and the
other VISTA (the one that works)
New market: Patient advocacy tools and
services? * Acronym Key:
ROI=Return On Investment, FOSS=Free and Open Source Software,
VISTA=Veteran’s Health Information Systems and Technology Architecture

40
Vendor Swan Management
Finally….
Even if you
can’t sell
the software,
you can
probably sell
the company

41
Swans from Beyond: External
factors that could drive HIT up or
down
Communicable disease outbreak
Multiple Katrina-level disasters
Large-sector financial collapse:
Housing? Dollar? Chinese
foreclosure cookie?

42
Swans from Beyond: External
factors that could drive HIT up or
down
Health industry developments
Fraud-as-business-model blowback
Provider lawsuits push payer HIT
Second-tier impact of patient pay shortfalls:
“Medical Bankruptcy 2.0”
Diabetes news and care vs. cure
Electromagnetics and other high-tech
therapeutic swans

43
Upcoming from HITTG
Flashpoint Topics for 2008
RHIO Finance and Fundraising
Real-Time Adjudication
Competing Against Retail Clinics via HIT
Now Available!
The Health IT Grant Resource Directory™
Over 4,000 sources for RHIO and Community HIT
Visit www.hittransition.com for more information
Free: Subscribe to the
HITSync Digest of Health IT:
http://hitsync.hittransition.com
Martin Jensen
martinjensen@hittransition.com
(918) 630-4417
Michael Christopher
mchristopher@hittransition.com
(918) 406-3998

BlackSwans20081223

Recommended

Recommended

More Related Content

Similar to BlackSwans20081223

Similar to BlackSwans20081223 (20)

BlackSwans20081223