Healthcare Tsunami!

Tom Peters/ Planetree/ 10.11.2002

HealthCare2001

Consumerism X Demographics X IS/Internet X Info Consolidators X

Genetics & Devices Revolution = YIKES!

“Golden Age” of Patient-centric, Genetics-driven Healthcare Looms!

Current status: $1.3T. 40M+ uninsured. 90K killed and 2M injured p.a. in hospitals. 85%

treatments unproven. Cure depends on locale in which treated. 50% prescriptions do not work.

2X docs. 2X hospitals. IS primitive. Accountability & measurement nil.

And everybody’s mad and feels powerless: Docs, patients, nurses, insurers, employers,

pharma & device cos, hospital administrators and staff.

1. Consumerism (Patient-centric Healthcare)

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

Amen!

“The Age of the

Never Satisfied Customer”

Regis McKenna

“The Web enables total transparency. People with

access to relevant information are beginning to challenge any type of

authority. The stupid, loyal and humble customer, employee, patient

or citizen is dead.”

Kjell Nordstrom and Jonas Ridderstrale, Funky Business

“Online Medical Records Seen Empowering

Patients”

Source: Headline, Boston Globe, 07.31.2000, re 1K docs and 700K

patients @ CareGroup

“Parents, doctors, stockbrokers, even military leaders are starting to

lose the authority they once had. There are all these roles premised on access to privileged information. …

What we are witnessing is a collapse of that advantage,

prestige and authority.”Michael Lewis, next

Reuters (12.11.01): “Teens and young adults are flocking to the Web for

health-related information as much as they are downloading music and playing games online and

more often than shopping online, according to a national survey

from the Kaiser Family Foundation.”

“A seismic shift is underway in healthcare. The Internet is

delivering vast knowledge and new choices to consumers—raising their

expectations and, in many cases, handing them the controls.

[Healthcare] consumers are driving radical, fundamental change.”

Deloitte Research, “Winning the Loyalty of the eHealth Consumer”

“We expect consumers to move into a position of dominance in the early

years of the new century.”

Dean Coddington, Elizabeth Fischer, Keith Moore & Richard Clarke, Beyond Managed Care

Today’s Healthcare “Consumer”:

“skeptical and demanding”

Source: Ian Morrison, Healthcare in the New Millennium

“Medical care has traditionally followed a ‘professional’ model, based on two assumptions: that patients are unable to become

sufficiently informed about their own care to allow them a pivotal role, and that medical judgments

are based on science.”

Joseph Blumstein, Vanderbilt Law School

“He shook me up. He put his hand on my shoulder, and simply said,

‘Old friend, you have got to take charge of your own medical care.’ ”Hamilton Jordan, No Such Thing as a Bad Day

(on a conversation with a doctor pal, following Jordan’s cancer diagnosis)

“It may be the most far-reaching evolution of them all: the metamorphosis of passive patient into consumer – and well-informed,

assertive consumer at that. The defining axiom of traditional medicine – ‘doctor’s

orders’ is being turned on its head. These days it’s the patients who are armed, the

doctors who must get wired to keep nimble.” “E-health is the new house call.”

Richard Firstman, “Heal Thyself,” On Magazine (04.01)

“The New MegaConsumerism”: HMO backlash (“talent” demands plans with more

choice). Alternative Medicine, Wellness & Prevention race to the top of the charts. Info availability (disease, health,

docs, support groups, outcomes). Boomers (“I’m

in charge!” Discretionary $$$$ to spend: cosmetic

surgery, vision improvement, fertility, etc.). Self-care (chronic disease). High expectations

(genetics, etc.) …

Consumer Imperatives

ChoiceControl (Self-care, Self-management)

Shared Medical Decision-makingCustomer Service

InformationBranding

Source: Institute for the Future

“Savior for the Sick”

vs.

“Partner for Good Health”

Source: NPR/VPR 08.15.00

“The ‘curative model’ narrowly focuses on the goal of cure. …

From many quarters comes evidence that the view of health

should be expanded to encompass mental, social and

spiritual well-being.” Institute for the Future

“In many ways, the nursing profession is the most qualified to respond to current changes in the health system. Nurses’ training focuses more on the

behavioral and preventive aspects of health care than does that of

physicians.” Institute for the Future

Determinants of Health

Access to care: 10%Genetics: 20%

Environment: 20%

Health Behaviors: 50%Source: Institute for the Future

2. Demographics: The BOOMERS Reach 55!

“NOT ACTING THEIR AGE: As Baby Boomers

Zoom into Retirement, Will America Ever Be the

Same?”USN&WR Cover/06.01

50+

$7T wealth (70%)/$2T annual income50% all discretionary spending

79% own homes/40M credit card users41% new cars/48% luxury

$610B healthcare spending/74% prescription drugs

5% of advertising targetsKen Dychtwald, Age Power: How the 21st

Century Will Be Ruled by the New Old

Boomer World

“From jogging to plastic surgery, from vegetarian diets

to Viagra, they are fighting to preserve their youth and

defy the effects of gravity.”M.W.C. Howgill, “Healthcare Consumerism, the

Information Revolution and Branding”

“Pick up any copy of Glamour or Men’s Health, and you’ll see pages of advertisements encouraging readers

to enlarge their breasts, retard baldness, correct their vision,

improve their smile, or relieve stress through herbs, massage therapy,

acupuncture—you name it.”Coddington, Fischer, Moore & Clarke,

Beyond Managed Care

Message Boomer: (1) “There are

l-o-t-s of us.” (2) “We have

the $$$$$$. (3) “We’re/I’m in charge!” (4) “We’ll take no

guff from from anyone.”

(5) “We know … the emperor has no clothes.”

3. The IS/Web REVOLUTION

InfoHealth Revolution

Consumerism (research, consultation, B2C, etc.)

Clinical Info Systems (guidelines and outcome measurement, etc.)

100% Web-based (internal) SystemsElectronic Medical Records

Patient-physician email-consultationTelehealth-Remote Monitoring

(biosensors, home testing, etc.)

Telemedicine (consultation, invasive treatment, “global medical village,” etc.)

“We’re in the Internet age, and the average

patient can’t email their doctor.”

Donald Berwick, Harvard Med School

“In an era when terrorists use satellite phones and encrypted email, US gatekeepers stand

armed against them with pencils and paperwork, and archaic computer systems that don’t

talk to each other.”Boston Globe (09.30.2001)

Want email consultation: 90% patients, 15% docs.

Evidence: Patients do not pester docs. Time is saved. No one has sued (shows “care & connection”—

the absence of which is the major cause of suits).

Source: New York Times/06.06.02

Telemedicine …

Reduces days/1000 patients and physician visits for the chronically ill

Decreases costs of managing chronic disease

Expands service areas for providers

Reduces travel costs to and from medical ed seminars

Douglas Goldstein, e-Healthcare

“Without being disrespectful, I consider the U.S. healthcare

delivery system the largest cottage industry in the world. There are

virtually no performance measurements and no

standards. Trying to measure performance … is the next revolution in healthcare.”

Richard Huber, former CEO, Aetna

“A healthcare delivery system characterized by idiosyncratic

and often ill-informed judgments must be restructured

according to evidence-based medical practice.”Demanding Medical Excellence: Doctors and

Accountability in the Information Age, Michael Millenson

“As unsettling as the prevalence of inappropriate care is the enormous amount of

what can only be called ignorant care. A surprising 85% of everyday medical

treatments have never been scientifically validated. … For instance, when family

practitioners in Washington were queried about treating a simple urinary tract infection, 82

physicians came up with an extraordinary 137 strategies.”

Demanding Medical Excellence: Doctors and Accountability in the Information Age, Michael Millenson

“Quality of care is the problem, not managed care.”

Institute of Medicine (from Michael Millenson, Demanding Medical Excellence)

CDC 1998: 90,000 killed

and 2,000,000 injured from nosocomial

[hospital-caused] drug errors & infections

1,000,000 “serious

medication errors per year” … “illegible handwriting, misplaced decimal points, and missed drug

interactions and allergies.”

Source: Wall Street Journal/ Institute of Medicine

Various studies: 1 in 3, 1 in 5, 1 in 7, 1 in 20 patients “harmed by

treatment”

Demanding Medical Excellence: Doctors and Accountability in the Information Age, Michael Millenson

“In a disturbing 1991 study, 110 nurses of varying experience levels took a written test of their ability to

calculate medication doses. Eight out of 10 made calculation mistakes at

least 10% of the time, while four out of 10 made mistakes 30 % of the

time.”Demanding Medical Excellence: Doctors and Accountability

in the Information Age, Michael Millenson

RAND (1998): 50%, appropriate preventive care. 60%,

recommended treatment, per medical studies, for chronic

conditions. 20%, chronic care treatment that is wrong.

30% acute care treatment that is wrong.

YE GADS! New England Journal of Medicine/ Harvard Medical Practice Study: 4% error rate (1 of 4 negligence). “Subsequent investigations around the

country have confirmed the ubiquity of error.” “In one small study of how clinicians perform when patients

have a sudden cardiac arrest, 27 of 30 clinicians made an error in using the defibrillator.” Mistakes in

administering drugs (1995 study) “average once every hospital admission.” “Lucian Leape, medicine’s

leading expert on error, points out that many other industries—whether the task is manufacturing

semiconductors or serving customers at the Ritz Carlton—simply wouldn’t countenance error rates like

those in hospitals.”—Complications, Atul Gawande

“In health care,

geography is destiny.”

Dartmouth Medical School 1996 report, from Demanding Medical Excellence: Doctors and

Accountability in the Information Age, Michael Millenson

Geography Is Destiny

E.g.: Ft. Myers 4X Manhattan—back surgery. Newark 2X New Haven—

prostatectomy. Rapid City SD 34X Elyria OH—breast-conserving surgery. VT, ME, IA: 3X differences in hysterectomy by age 70; 8X tonsillectomy; 4X prostatectomy. Breast cancer screening: 4X NE, FL, MI

vs. SE, SW. (Source: various)

Geography Is Destiny

“Often all one must do to acquire a disease is to enter a country where a disease is

recognized—leaving the country will either

cure the malady or turn it into something else. … Blood pressure considered treatably high in the United States might be considered normal in England; and the low blood pressure treated with 85 drugs as well as hydrotherapy and spa

treatments in Germany would entitle its sufferer to lower life insurance rates in the

United States.” – Lynn Payer, Medicine & Culture

“Practice variation is not caused by ‘bad’ or ‘ignorant’ doctors. Rather, it is a natural

consequence of a system that systematically tracks neither its processes nor its outcomes,

preferring to presume that good facilities, good intentions and good training lead automatically

to good results. Providers remain more comfortable with the habits of a guild, where

each craftsman trusts his fellows, than with the demands of the information age.”

Michael Millenson, Demanding Medical Excellence

PARADOX: Many, many formal case reviews …

failure to systematically/ systemically/ statistically

look at and act on evidence.Complications, Atul Gawande

Deep Blue Redux*: 2,240 EKGs … 1,120 heart attacks.

Hans Ohlin (50 yr old chief of coronary care, Univ of

Lund/SW) : 620. Lars Edenbrandt’s

software: 738.

*Only this time it matters!

Probable parole violations: Simple model (age, # of previous offenses, type of crime)

beats M.D. shrinks.

100 studies: Statistical formulas > Human

judgment. “In virtually all cases, statistical thinking

equaled or surpassed human judgment.”—Atul Gawande,

Complications

“Most physicians believe that diagnosis can’t be reduced to a set of generalizations—to a ‘cookbook.’ … How often does my intuition lead me astray? The radical implication of the

Swedish study is that the individualized, intuitive approach that lies at the center of modern medicine is flawed—it causes more mistakes

than it prevents.” —Atul Gawande, Complications

Leapfrog Group/med errors: “Not since Jackson Hole Group guru

Paul Ellwood, Jr., M.D., coined the term ‘HMO’ in 1970 has one idea so

fully captured the imagination of the healthcare industry.”—

HealthLeaders/06.2002

Leapfrog Group:

CPOE/Computerized Physician Order Entry*ICU staffing by trained intensivists**EHR/Evidence-based Hospital Referral***

*Duh I: Welcome to the computer age.**Duh II: How about using experts?***Duh III: If you do stuff a lotta times, you tend to get/be better. Source: HealthLeaders/06.2002

Computerized Physician Order

Entry/CPOE: 5% of U.S.

hospitals

source: HealthLeaders/06.02

Empire Blue Cross and Blue

Shield: 4% quarterly bonus for hospitals that meet Leapfrog’s CPOE and

ICU-staffing standards.

Source: HealthLeaders/06.2002

The VHA gets it! E.g.: Laptop at bedside calls up patient e-records from one of 1,300 hospitals. Bar-coded wristband confirms meds. National Center for Patient Safety in Ann Arbor. Docs and researchers

discuss optimal treatment regimens—research center in Durham NC. Doc measures & guidelines; e.g.,

pneumonia vaccinations from 50% to 84%. Blame-free system, modeled after airlines. “What’s needed in the U.S. is nothing short of a medical revolution and

the VHA has gone further than most any other organization to revamp its culture and systems.”—

Rand/Source:WSJ 12.10.2001

The Benefits of … FOCUSED EXCELLENCE

Shouldice/Hernia Repair: 30-45 min, 1% recurrence.

Avg: 90 min, 10%-15% recurrence.

Source: Complications, Atul Gawande

4. The “Consolidators”: Fat or Thin?

“Virtual health care webs force providers to focus on their areas of excellence and to

invest in areas where they can generate a sustainable

competitive advantage.”

Healthcare.com:Rx for Reform, David Friend, Watson Wyatt Worldwide

WebMD (or heirs

and assigns)

“The future of hospitals is murky. A combination of technological advances,

managed care, and changes in Medicare reimbursement policy

means that the underlying demand for inpatient services

will continue to fall.”Institute for the Future

5. Genetics, Devices, the Future of Big

Pharma

“Recognizing that a single misspelled gene means the difference

between being poisoned and being cured was the

first victory for the new science of pharmacogenetics.”

Newsweek (06.25.01)

Genetic data: 2X every 6 months.

Source: FT, 11.27.2001

“Pharmacogenomics could

fundamentally change the nature of drug discovery and marketing,

rendering obsolete the pharmaceutical industry’s practice of spending vast amounts of time and

money to craft a single medicine with mass-market appeal.”

The Industry Standard (05.28.01)

E.g., Genentech’s Herceptin, useful in 25% of advanced breast cancer cases.

Would probably have been uneconomic if subjected to 9X

patients in phase III clinical trials.

Source: FT (11.27.01)

Pharmacogenomics: End of Blockbusters by End-of-Decade (Reuters/5-22)

Barrie James, Pharma Strategy Consulting: “We’re moving from a blunderbuss approach to laser-

guided munitions, and it marks a sea change for the industry. The implications for existing

business models are devastating.” Allen Roses, SVP Genetic Research, GlaxoSmithKline:

“minibuster.” Rob Arnold, Euro head of life sciences, PWC: “Once you start dealing with minority

treatments, small biotechs who are more nimble and don’t need $500-million-a-year drugs to make

money could be at a real advantage.”

“BIG DRUG MAKERS TRY TO POSTPONE

CUSTOM REGIMENS. Most drugs don’t work well for about half the patients for whom they are

prescribed, and experts believe genetic differences are part of the reason. The

technology for genetic testing is now in use. But the technique threatens to be so disruptive to the

business of big drug companies – it could limit the market for some of their blockbuster

products – that many of them are resisting its widespread use.”

The Wall Street Journal (06.18.2001)

Forbes100 from 1917 to 1987: 39 members of the Class of ’17 were alive in ’87; 18 are in ’87 F100; the 18 F100

“survivors” underperformed the

market by 20%; just 2 (2%), GE & Kodak, outperformed the market from

1917 to 1987.

Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market

“Imagine the day that your surgeon performs your heart bypass sitting at a computer thousands of miles from the

operating table. That day may come sooner than you think.”

Newsweek (06.25.01)

“There is no question in my mind that the future of heart

surgery is in robotics.”

Dr. Robert Michler, OSU Med Center, upon the FDA’s approval of robotic partial-

bypass surgery

6. Conclusion.

“Golden Age” of Patient-centric, Genetics-driven Healthcare Looms!

Current status: $1.3T. 40M+ uninsured. 90K killed and 2M injured p.a. in hospitals. 85%

treatments unproven. Cure depends on locale in which treated. 50% prescriptions do not work.

2X docs. 2X hospitals. IS primitive. Accountability & measurement nil.

And everybody’s mad and feels powerless: Docs, patients, nurses, insurers, employers,

pharma & device cos, hospital administrators and staff.

HealthCare21Tom Peters/03.26.2002

HealthCare21: 21 Ideas for Century211. Hospitals kill people. (And those they don’t kill, they wound.) (And they deny it.) (ERRORS RULE!)2. Hustling ambulances kill pedestrians—and don’t save patients.3. Doctors are spoiled brats—who don’t like measurements. Or any form of “interference.” Docs are also cover-up artists … par excellence (the REAL Hippocratic Oath: “DON’T RAT ON A FELLOW DOC”). 4. Most prescriptions don’t work … for the PARTICULAR individual in question.5. THERE IS LITTLE “SCIENCE” IN “MEDICINE.” (See state to state variations, country to country variations, the general lack of agreed upon treatments.)6. You could save thousands of lives—if you just outlawed handwritten prescriptions.7. “Detailers” will disappear … when GenX docs arrive.

HealthCare21 (Cont.)8. IS/IT in hospitals is sub-primitive (despite enormous expenditures).9. ELECTRONIC MEDICAL RECORDS … PERIOD. (PLEASE.)10. Systemic IS/IT is horrid—links between docs, insurers, providers, patients.11. The Web WILL Liberate. (Info = Power.) (BELIEVE IT.) 12. 80M BOOMERS RULE. ($$$$$. Desire for c-o-m-p-l-e-t-e CONTROL. NOW. “LEADERSHIP” OF AGING PROCESS.)13. “Drug Discovery” processes at Big Pharma are … hopelessly over-complicated. (???: Bye Bye … Big Pharma.)14. 90% of the fix: HARVEST THE LOW-HANGING FRUIT. “They” are … NOT … the Enemy. Damn it.15. Insured “consumers” are spoiled brats … who act as if H.C. is a Free Good. (MAKE THE BASTIDS PAY … at least a little more than a little.)

HealthCare21 (Cont.)

16. Genetic engineering & biotech change … EVERYTHING. (Within 10 years.)17. New Medical Devices change … EVERYTHING. (Within 20 years.)18. IS/IT changes … EVERYTHING. (Within 10-15 years.)19. New Docs change … EVERYTHING. (Within 10-15 years.)20. New Patients change … EVERYTHING. (Within 5 years.)

*

*

Thank You!