Medical Business Models Needed


The most frustrating aspect of covering health care at ZDNet, for me, was the constant repetition of “no,” and the constant repetition of excuses.

I got it from “patient privacy advocates” who keep us chained to paper. From “fat is beautiful” advocates spreading diabetes and heart disease. From doctors who claimed all automation is evil, and from a host of entrenched interests who see only their own little corner of the world.

I’m glad to be out of it, frankly, covering renewable energy, where entrepreneurs say “yes” and know they’re doing well by doing good.

But there is something I want to talk about before I leave. Business models. If anything unites my whole career, from 1978 to now, it is the study of entrepreneurs and business models. These are the main change agents in a capitalist society. And nothing needs change as much as health care.

In Mark Knopfler’s song “Boom Like That,” the McDonald brothers have the formula for success, but Ray Kroc is the entrepreneur who knows how to get “one of these in every town.”

While covering health IT at ZDNet for almost four years I found several folks who came close to the formula for health care the McDonald brothers perfected in Bakersfield.

Jay Parkinson was one. His Hello Health has a lot of the elements that made the McDonald brothers a success. It lifts the management and IT hassles from the doctor, leaving him free to practice medicine.

But Parkinson is short on capital, and on operations expertise. A truly efficient doctor is at the top of a pyramid of para-professionals who do most of the patient care. If he’s seeing every patient he can’t spend more than a few minutes with each one. But if someone with a $30-50,000 salary is seeing your patients they can take their time, develop a trust relationship, and call in the doctor only when he or she is needed.

Every good business works this way. It’s easy to condemn the whole idea by saying “McDonald’s makes unhealthy food,” but the only way forward is through an automated business practice.

We know it works. When Ralph Snyderman replaced sick care with wellness care at Duke, Duke saved money.

Get all the data you can. Treat people while they are still well. Get them the coaching they need to exercise and eat right, so they can avoid the chronic conditions that represent so much of our national health care bill.

What I found is that takes a scaled system. Not just a scaled IT system – a scaled business system. Kaiser has one. Intermountain has one. They capture billions of dollars in savings every year by simply practicing wellness.

That’s what health reform was really all about. Bring everyone into the system, eliminate risk rating, and the route to profit comes from practicing wellness, not handling sickness. It comes from bottom line growth, not top line growth.

Uncertainty over reform’s future threatens this business model, but we have no choice but to let that model prevail. As Dr. Klepper notes, the old system was breaking all of us – our health, our fortunes, our doctors.

Screaming no is no longer an option.

Dana Blankenhorn recently left his post as an incisive health columnist at ZDNet. He blogs on a variety of topics here.

One thought on “Medical Business Models Needed

  1. First of all Dana, let me say that I am very sorry to hear that you are leaving the HIT world. I enjoyed reading your blog and sometimes felt compelled to respond.

    I do agree in principle that a workable business model is sorely needed in health care, and I also agree that there are many naysayers who are screaming “NO” because they are doing rather well personally in this broken system.

    I do not agree that we are looking, or should be looking for a McDonalds type solution, and the examples of venerable institutions you mention are anything but.
    I also don’t agree that physicians are inherently opposed to technology, or that privacy advocates are all crazy loons with covert interests in the status quo.

    Physicians are adopting new technologies on a daily basis. Those just happen not to be HIT related. Instead of writing them off as Luddites, or bribing them into submission, it would behoove us to try and understand why.
    Privacy advocates, although some are louder than others, are by and large not opposed to HIT either. They just want some checks and balances in place where the patient is protected from powerful financial interests and indentured servitude to those who purport to provide health and wellness care as part of their much larger “business model”.

    On a philosophical level, it may be possible to obtain better results in health care by surrendering certain freedoms and rights to either employers or governments. This is, and has always been, true about many life amenities like food, housing, clothing and such. Somehow Americans are not eager to do that. There must be a better solution and it is not “fast health care” outlets.

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