DOTmed – An Interview with Brian Klepper

Loren Bonner , DOTmed News Online Editor

August 15, 2013

ALP_H_BK_0010DMN: After Steven Brill’s blockbuster article in Time Magazine came out a few months ago, it feels like everyone is interested to know the real scoop on hospital pricing and what’s driving up the cost of health care. I think you have some opinions on this. Can you share your thoughts?

BK: Egregious hospital unit pricing is certainly one driver, but the truth is that over the last several decades, every health care sector has devised ways to extract money from the rest of us that they’re not legitimately entitled to. I’ve written extensively about the Specialty Society Relative Value Scale Update Committee (or RUC), the secretive AMA committee that has jiggered the relative value scheme that Medicare, Medicaid and most commercial payment systems are based on, driving up cost. 

In my day job, I see health systems buying stakes in Pharmacy Benefit Management (PBM) firms, jacking up the generic pricing to their own members by 200% or more then telling their members that they’re managing their cost. Physicians are doing unnecessary procedures on patients, which not only costs a great deal but puts those patients at risk of physical harm. Primary care reimbursement has been driven down by Medicare and the commercial plans, which decreases visit time and increases the rate of specialty referrals and in turn produces much more costly care unnecessarily. Health plans push “choice” in networks, but having the right to go to a lousy doctor or hospital does nobody any favors, except by driving the cost up for less effective and efficient care. I could provide many, many more examples.

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Are You Ready for Intense Price Competition?

Note from Brian: The article below describes my recent keynote address to a large meeting of imaging center administrators, and appears in the Sept 2012 Radiology Today. I’m reposting it because it accurately reflects, in depth, the message that I tried to deliver.

Remarkably, the audience was evenly divided in their evaluations. Half thought it was a very important but difficult to hear talk. The other half thought I was a jerk and it was the worst talk they’d ever heard. My take on this is that the responses reflected an industry that has become comfortable with a lack of accountability and market forces, and that is highly threatened by change.

Jim Knaub

Published in Radiology TodaySeptember 2012, 13:8, p18

A keynote speaker told administrators to expect businesses threatened by ever-increasing healthcare costs with new approaches that will change how imaging organizations compete.

When Brian Klepper, PhD, delivered his keynote speech to the audience at the AHRA annual meeting in Kissimmee, Florida, last month, it was not the feel-good speech of the summer. Klepper, whose companies develop and manage worksite primary care clinics for employers and manage specialty care for those employees, told the audience that his company had recently negotiated a deal in Indiana for $450 MRI exams in a market that had technical fees ranging between $1,750 and $3,200. That was the opposite of a warm and fuzzy message to the 900 or so imaging administrators attending the meeting at the Gaylord Palms Resort and Convention Center.

“Somebody like me is going to come in to your market, and your volumes are going to plummet because there is no way you can compete against a $450 imaging price when you’re currently used to getting $2,800 or whatever you’re getting,” Klepper told the audience. “That is the problem.”

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Barking Up the Wrong Tree: Affordability, Not Cost Growth, Is The Real Policy Challenge

Jeff Goldsmith

Posted 5/7/12 on The Health Affairs Blog

A recent spate of commentaries on the continuing health spending moderation raise an important policy question:  If the cost curve is well and truly bent, why are we investing so much of our policy energy on bending it further, when the more pressing problem is the declining percentage of Americans that can afford our health system’s astronomical costs?

Health spending the past two reported years (2009 and 2010) have grown in the high 3 percent range, the lowest growth rates since Dwight Eisenhower’s last year in office (1960), five years before Medicare.Medicare’s actuaries have pointed to the recession as a root cause.  Yet even Medicare spending growth has subsided to about 5 percent in 2010, a  development hard to attribute to recession since so few Medicare patients have first-dollar cost exposure. This analyst’s extensive industry contacts suggest no spending rebound in 2011 and 2012, despite an aging population and fee-for-service’s pernicious volume-increasing incentives in full force.

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Misdiagnoses Common (Per WSJ)

Tom Emerick

Posted 1/17/12 on Cracking Health Costs

Good article in the WSJ by Laura Landro called “What if the Doctor Is Wrong”, corroborates what I’ve been saying all along.  A large number of patients are seriously misdiagnosed.  Click here to read the article.

As with my last post about USA Today covering how most of the money in a health plans is spent by very few members, I’m very pleased the WSJ is covering the serious problem with how large numbers of patients are diagnosed, or should I saymisdaignosed.

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6 Big HealthTech Ideas That Will Change Medicine in 2012

Josh Constine

Posted 1/1/12 on TechCrunch

“In the future we might not prescribe drugs all the time, we might prescribe apps.” Singularity University‘s executive director of FutureMed Daniel Kraft M.D. sat down with me to discuss the biggest emerging trends in HealthTech. Here we’ll look at how A.I, big data, 3D printing, social health networks and other new technologies will help you get better medical care. Kraft believes that by analyzing where the field is going, we have the ability to reinvent medicine and build important new business models.

For background, Daniel Kraft studied medicine at Stanford and did his residency at Harvard. He’s the founder of StemCore systems and inventor of the MarrowMiner, a minimally invasive bone marrow stem cell harvesting device. The following is rough transcript of the 6 big ideas Kraft outlined for me at the Practice Fusion conference.

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Digitizing Human Beings

Eric Topol

First posted on The Health Care Blog on 12/26/2011

Our day-to-day lives were reformatted when the consumer mobile wireless device era, beyond cell phones, was ushered in by iPods in 2001 and followed in short order by Blackberries, smartphones, e-readers, and tablets. Nurturing our peripatetic existence, we could immediately and virtually anywhere download music, books, videos, periodical, games and movies. Television is soon to follow. But these forms of digital communication and entertainment are a far cry from digitizing people.

This decade will be marked by the intersection of the digital world with the medical cocoon, which until now have been largely circulating in separate orbits. The remarkable digital infrastructure that has been built—which includes broadband Internet, cloud and supercomputing, pluripotent mobile devices and social networking― is ripe to provide the framework for a most extraordinary upgrade and rebooting of medicine.

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Home HPV Testing – A New Tool for Cervical Cancer Screening

Patricia Salber

Posted 11/2/11 on The Doctor Weighs In

There are an increasing number of do-it-yourself (DIY) technologies that allow individuals to test for different diseases (e.g., HIV) or monitor chronic conditions (e.g., diabetes, hyperlipidemia).  Now home testing for human papillomavirus (HPV) has been added to the mix.  The reason why this is important is that a recent large randomized trial has shown that home-based sampling for HPV is three times as sensitive as conventional Pap smears in detecting advanced HPV-related lesions or cancer.  For invasive cancer, the home HPV sampling was more than four times as sensitive as cytology.

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