Healthcare Tsunami

Tom Peters/06.20.01

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. 70M uninsured. 90K killed and 2M injured p.a. in hospitals. 85% treatments

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

work. 2X docs. 2X hospitals. IS primitive. Accountability & measurement nil. And everybody’s mad and feels powerless:

docs, patients, nurses, insurers, employers, hospital administrators

and staff.

1. Consumerism (Patient-centric Healthcare)

“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

Anne Busquet/ American Express

Not: “Age of the Internet”

Is: “Age of Customer Control”

Amen!

“The Age of the

Never Satisfied Customer”

Regis McKenna

“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)

“If healthcare organizations don’t wake up, smell the coffee – and get online with real services, transactions, and

more for these e-consumers to do – the newly empowered e-consumers will

become even more disgruntled with the hornet’s nest of paperwork that plagues

the system.”Douglas Goldstein, e-Healthcare

“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)

“What’s needed are comprehensive strategies that leverage the latest

technology and provide the services that eHealth consumers are demanding,

including convenience and customized services such as online physician

interaction or online management of health benefits and customized disease

management programs.”

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

“Consumerism”: HMO backlash (e.g., plans with more choice). Alternative Medicine, Wellness & Prevention bias. 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

“E-consumers …

want knowledge

are already connected

want convenience

want it to be all about themwant control.”

Douglas Goldstein, e-Healthcare

“Savior for the Sick”

vs.

“Partner for Good Health”

Source: NPR/VPR 08.15.00

“No one currently ‘owns’ the eHealth Consumer. It’s an

open playing field.”Deloitte Research, “Winning the Loyalty

of the eHealth Consumer”

“We find that eHealth consumers are willing to pay

– and even switch health plans – for the services they

most want.”Deloitte Research, “Winning the Loyalty

of the eHealth Consumer”

“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

“A 7-year follow-up of women diagnosed with breast cancer

showed that those who confided in at least one person in the 3

months after surgery had a 7-year

survival rate of 72.4%, as compared to 56.3% for those who

didn’t have a confidant.”Institute for the Future

Internet User, F41

$63,000 HHI64% work FT54% moms

6 hours/week onlineSource: NetSmart Research

“Self-medication is the wave of the future, whether the [pharmaceutical] industry

likes it or not.”

Wall Street Journal (5-23)

DTC > Professionals

ClaritinPravachol

ZybanEvista

PropeciaPrilosecPrimera

Source: JAMA

Make time for your most important

asset. Your health.

Ad for Mayo Clinic Executive Health Program/Jacksonville, Orlando Airport

“Online Medical Records Seen Empowering

Patients”

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

patients @ CareGroup

Determinants of Health

Access to care: 10%Genetics: 20%

Environment: 20%

Health Behaviors: 50%Source: Institute for the Future

Message: Patients aren’t.

Consumers [will] rule.

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

Info 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

Henry Lowe, U. of Pitt. School of

Medicine: “Broadband, Internet-based,

‘multimedia’ electronic medical

records”

“Doctors Without Borders”

World Clinic/Dr. Daniel Carlin: e-mail consultation & treatment for ex-pats, global execs, etc. Developing world: “They have the primary care doctors,

but no infrastructure to train specialists. We become the

specialists.” More: “Telemedicine Kiosks in Central America.” Etc.

*On Magazine 04.01

Telemedicine: E.g. …

HANC* [Home Assisted

Nursing Care]

*BP, ECG, pulse, temp

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

Detroit Med Center: $100M IS Makeover

Experiment: Surgical residents equipped with Palm IIIxe. Med Director: “It’s not unusual to have

a team of 5 or 6 residents responsible for the patients of 25 doctors. For each resident, that

could mean seeing 40 patients spread across 10 floors and 5 buildings.” Records work was

manual; but “Now you export the list of patients to your Palm, with the room number for each

patient and with lab results from the last

72 hours.”

“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

“With little fanfare, a gathering revolution is transforming the everyday

practice of medicine. Owing more to laptops than lab coats, this

is an information revolution, one that is beginning to yield answers to the

most basic questions that haunt those who are sick: Who shall live and

who shall die?”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)

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.

CDC 1998: 90,000 killed and 2,000,000 injured

from nosocomial [hospital-caused] drug

errors & infections

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

“Established state-of-the-art cancer care – about

which there is no longer any debate – is

erratically applied.”Source: Institute of Medicine’s National Cancer Policy Board

“In health care,

geography is destiny.”

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

Accountability in the Information Age, Michael Millenson

“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

“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

“With meticulous detail, historical accuracy, and an uncommon

understanding of the clinical field, Millenson documents our struggle

to reach accountability.”

Journal of the American Medical Association, on Demanding Medical

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

“Patient by patient, problem by problem – drug reactions, hospital

caused infections – Salt Lake City’s LDS Hospital has attacked treatment-

caused injuries and deaths. One of the secrets of LDS’s success is a custom-

built clinical computer system that may serve as a national model for how

to save patient lives.”Demanding Medical Excellence: Doctors and Accountability

in the Information Age, Michael Millenson

Message: (1) Effective &

encompassing use of IT is the healthcare revolution. (2) Get on

all-the-way on board or get discarded. (3) The situation as

it stands is pathetic.

4. The “Consolidators”: Fat or Thin?

WebMD (or heirs

and assigns)

“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

“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

“America has twice as many hospitals and physicians as

it needs.”Med Inc., Sandy Lutz, Woodrin Grossman

& John Bigalke

Message: Somebody is

gonna get this right!

5. Genetics & Devices

Genetics & Devices

Pharmacogenomics (“mini”busters, rational drug design, personalized medicine,

gene therapy, vaccines--20% to 50% prescriptions not work)

Neural Stem Cells

Minimally invasive surgeryAdvanced imaging

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.”

“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)

“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)

“BIG DRUG MAKERS TRY TO POSTPONE

CUSTOM REGIMENS. Most drugs don’t work well for about half ther 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)

“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

Message pharacogenomics:

(1) There is a drug revolution

coming. Pretty damn fast. (2) My

bet: Most Big Pharma will get run over!

Message Summary: (1) An unparalleled time for

imagination and bold action. (2) A time of unprecedented

opportunities. (3) A time

of unprecedented risk.