Competitor analysis
Analysis frame
Competitor analysis
Government analysis
Power
Long view
Disruption
Influential amplifiers
Financial analysis
Strategic idea network
Patient analysis
Payer analysis
Rules
Health information exchange analysis
Electronic health records

Competitor analysis

Summary

The competitor analysis segments provider types by Porter generic competitive strategy: quality differentiation, cost leadership, innovation focus, business model, for-profit focus, geographic niche; and discusses new entrants.  Significant flows across the value delivery system are detailed. 


Introduction

The health care industry has a complex VDS is value delivery system.   including cooperating and competing payers, providers and physicians. 
 


The health care provider analysis includes:



Provider business analysis
US health care providers are increasingly affected by:
Driving hospital disintermediation is the shift of operations from one network provider to another lower cost connected network provider.  The first network provider leverages the cost benefits of the shift to increase its profitability but becomes disrupted.  The lower cost network provider gains revenue flows, expertise and increases its active agents.  Over time this disruptive shift will leave the higher cost network as a highly profitable shell, but the agents that performed the operations that migrated to the low cost network will be ejected from the network.  For a company that may imply the costs of layoffs.  For a state the ejected workers imply increased cost impacts and reduced revenue potential which the state are trading off for improved operating efficiency. 
:



Customer segmentation analysis
Hospital agency can only be understood when viewed in terms of the political constraints on cost growth, generation of jobs, reimbursement is the payment process for much of US health care.  Reimbursement is the centralizing mechanism in the US Health care network.  It associates reward flows with central planning requirements such as HITECH.  Different payment methods apportion risk differently between the payer and the provider.  The payment methods include:
  • Fee-for-service,
  • Per Diem,
  • Episode of Care Payment, 
  • Multi-provider bundled EPC,
  • Condition-specific capitation,
  • Full capitation.  
 and pricing forces that dominate US health care. 

The dramatic pressures on health care providers are altering how they are structured and make money. 




The current US is the United States of America.   health care network is costly and underperforming. 

Providers are being pressured by political actions to reduce medically driven unsustainable growth in the national debt, to move away from their low risk, is an assessment of the likelihood of an independent problem occurring.  It can be assigned an accurate probability since it is independent of other variables in the system.  As such it is different from uncertainty. 
FFS is fee-for-service payment.  For health care providers the high profits were made in hospitalizations, imaging and surgery.  Due to its inducing excessive treatment activity it may be replaced by FFV bundled payment.   'shop' business model.  They can restructure from a focus on acute care hospital transactional services to leverage bundled payments is where the purchaser disburses a single predefined payment to cover certain combinations of hospital, physician, post-acute, or other services performed during an episode of care relating to a particular condition (unlike capitation).  This bundling is assumed (Sep 2018) to allow the value delivery system to optimize around low cost high quality long term health care.  With one bundled payment physicians & hospitals must coordinate care and reduce the unit costs to remain profitable.  And to avoid taking on risk of expensive complications physicians & hospitals are incented to standardize and focus on quality.  This optimization is dependent on quantifying the value of the outcome of the episode of care.  Previously FFS payments induced excessive treatment activity.  Bundled payment is included in CMS ACE demonstrations and BPCI initiatives.  There are significant impacts on IT. 
  1. It is argued that effective pricing of the bundle requires marketing data which must be extracted from the historic transaction base.  
  2. Billing and payment systems must be updated to handle the receipt and distribution of the bundled payments. 
  3. Care delivery must be re-architected to reduce costs and improve quality. 
  4. Monitoring sensors can be used to feed reports to ensure re-architected operations conform.  
, or by tightly integrating with a PAC is a Post-Acute Care provider.  A three-day hospital admission and discharge are prerequisite requirements to receiving Medicare PAC services.  Acute care hospitals become portals to the PAC business.  Referrals are key.  PAC includes different types of facility focused on different severity of illness (high to low):
  • Long term care Hospital (LTCH),
  • Inpatient rehabilitation facility (IRF),
  • Skilled nursing facility (SNF),
  • Home health agency (HHA) - most acute care hospitals and EMR providers have strategies for integration with home based care,
  • Outpatient rehabilitation.  SNF and HHA represent 80% of discharges and expenditures.  Assisted living is not part of federal Medicaid, but states often include it through a waiver. 
network, or as a PCMH is patient centered medical homes:
  • Describes a reorganization of the health care delivery system to focus on the patient and care giver supported by EHR infrastructure and some form of process management which will be necessary to coordinate interventions by each of the functional entities resources to treat the patients specific problems.   The disadvantage of a PCMH is the administrative and technology cost needed to support its complex processes.  The PCMH
  • Was promoted as a way to incent more PCP which had been seen as a low reward role by medical students.  HCI3 argues this use of PCMH is flawed.  PCMH is driven by the medical home models of the ACA.  In this model the PCMH is accountable for meeting the vast majority of each patients physical and mental health care needs including prevention and wellness, acute care, and chronic care.  It is focused on treating the whole person.  It is tasked with coordinating the care across all elements of the health care system, including transitions and building clear and open communications.  It must ensure extended access and availability of its services and patients preferences about access.  It must continuously improve quality by monitoring evidence-based medicine and clinical decision support tools (NCQA).  Many argue that to be effective it must be connected to a 'medical neighborhood'.  The PCMH brings together the specialized resources and infrastructure required to develop and iteratively maintain the care plans and population oriented system descriptions that are central to ACA care coordination. 
    •  
or an ACO is an Accountable Care Organization. These are accredited bundles of companies which together try to offer Dartmouth-Hitchcock like business models (Dec 2015, Sep 2016) focused on wellness, improving the provision of primary care to a large group of Medicare patients, and rewarding doctors for preventing problems.  Advocate health illustrates the idea.  Robert Pearl notes that the transition is difficult: hospitals that find their efficiency improving should reduce the number of doctors they utilize.  But any doctors that are pushed out of the ACO will likely take their patients with them, undermining the revenues that support the FFV business.  The ACA regulates qualification to be a Medicare ACO.  Individual organizations within a Medicare shared savings ACO continue to submit their own claims and are paid by Medicare for FFS.  But the ACO is eligible for shared savings.  Within the shared savings program the CMS innovation center has setup advanced payment ACOs.  As an alternative to shared savings, in a Pioneer ACO, over time 50% of the FFS payments flow directly to the ACO as a bundled payment.  CMS has established quality measures for ACOs for Medicare.  The CMS program's purpose is to reward providers for reducing total cost of care for patients through prevention, disease management, and coordination. 
  • CMS initiated its Physician Group Practice Demonstration in 2005.  By 2008 the congressional budget office reported on Bonus-eligible organizations. 
  • CMS defines ACOs as organizations that "create incentives for health care providers to work together to treat an individual patient across care settings - including doctors' offices, hospitals and long-term care facilities."
  • CMS has developed APMs which include ACOs, and advanced APMs where the ACOs must be risk bearing. 
  • CMMI accepts providers' proposals to test various payment systems including shared savings and partial capitation.  
  • Private market ACOs have formed including: Providence Health & Services, Blue Shield California, Anthem Blue Cross, United Health Care, BCBS Minnesota, BCBS Illinois, Humana, CIGNA, Main Health Management Coalition, BCBS Massachusetts, Aetna.  
.  The increased clinical and financial risk, is an assessment of the likelihood of an independent problem occurring.  It can be assigned an accurate probability since it is independent of other variables in the system.  As such it is different from uncertainty. 
/uncertainty is when a factor is hard to measure because it is dependent on many interconnected agents and may be affected by infrastructure and evolved amplifiers.  This is different from Risk.   taken on in this series of organizations must be managed.  In the limit we reach the total capitation is a global payment for all care for a patient during a specified time period.  It forces the provider of care to take a high risk.  Managing the risk implies successful population health management. 
(with an alternative quality contract (AQC) is:
  • A 2009 payment arrangement developed by Blue Cross Blue Shield of Massachusetts.  It was developed to support change.  It differs from capitation in including upside measures for patient safety, appropriateness of care and patient satisfaction.  Its key components are:
    • Integration across the care continuum
    • Accountability for performance measures for ambulatory and inpatient care.  Includes a 10% incentive for performing. 
      • Performance measures are selected that are: Nationally accepted, Vary across providers, Include sufficient data on provider being measured, measured at the level that can influence the outcome. 
    • Global payment for all medical services with health status adjustment and with margin retention. 
    • Five year contract to create a sustained partnership 
) blended integrated health systems.  The progress of the Vivity joint venture will demonstrate the opportunity and threat.  

The risk is heightened by the continuing increase in chronic illnesses with more than three interacting problems, described by Lehigh Valley health.  This growth in chronic problems could overwhelm the available number of bed and nurses and require particularly sophisticated treatment management to cope with the additional complexity.  Many hospitals are exploring how to counteract this trend in their patient base by improving wellness as described by Cleveland Clinic's CEO Toby Cosgrove. 

Analysis of CAS by Dorner indicates complex problems require time to observe and accurately model.  While individual doctors might agree: Laguna Honda's Dr. Sweet; the trend is to reduce the time spent with each patient and to respond quickly.   

Health care is a major component of the states' local job strategy. 

The merging of payers is likely to increase the pressure for health care providers to consolidate. 
Network effects are exacerbated by the development of narrow networks - When all health insurance plans are comparable on line people are expected to choose narrower less costly plans.  This has the effect of encouraging providers and PCP to compete to be part of the narrow plan by reducing their charges and driving down the prices of the plans.  By limiting the number of providers/doctors offered in the plans the few that are included should get more business.  Across the US in 2015 39% of health plans offered in public exchanges are narrow (30 - 70% of areas providers) or ultra-narrow (30% or less of providers).  In large cities narrow networks are even more common.  Typically if consumers go outside of the choices offered in their narrow network they will be responsible for the high bills.  There are problems induced by narrow network constraints:
  • Queuing issues - while a surgeon and a hospital may be in-network other agents in an operation, such as anesthesiologists or anesthetists, may not have the same set of insurance contracts.  Even if a subset do, once these are allocated to a task the hospital must then manage a complex set of resource constraints to keep its ORs running.  If it does this by ignoring the 'out of network' status of these necessary resources the patient will be impacted by a high bill.  
  • Success is more likely when the plan maintains a broad list of PCPs but a narrow list of specialists and hospitals (Oct 2016). 
. 
The low cost of capital, from 2008 to 2016, makes acquisition a highly attractive strategy to do any consolidation. 

The bundled payments restructuring allows hospitals to separate their 'diagnosis' oriented solution shop and value-added repair based businesses.  Cleveland clinic's Cosgrove envisions increased leverage of transportation to deliver patients to the appropriate optimized hub for treatment.  Interstate licensing may facilitate this vision.

A core interest of the hospital group in extending back to 'employ or link in' the PCP is a Primary Care Physician.  PCPs are viewed by legislators and regulators as central to the effective management of care.  When coordinated care had worked the PCP is a key participant.  In most successful cases they are central.  In certain Medicare ACO models (Pioneer) PCPs are committed to achieve meaningful use requirements.  Working against this is the: replacement of diagnostic skills by technological solutions, low FFS leverage of the PCP compared to specialists, demotivation of battling prior authorization for expensive treatments. 
and similarly out to the specialists is to capture patient referrals while limiting financial risk is composed of different aspects of the hospital systems overall risk.  It includes:
  • Contractuals
  • Patient accounting and collections
  • Risk based reimbursement
. 

Disruption is an increasing threat for full service hospitals.  Lower cost business models: Urgent care centers is an efficient and less costly 'alternative' to the ER.  There is no accepted standard.  Urgent care clinics also compete with Primary care based on extended hours and accessible locations including Medical Malls.  Most have a physician on staff and treat ailments like feavers, sprains and sinus and urinary tract infection, but they also can perform X-rays, stitch up cuts and set broken bones.  Unlike an ER they can not admit patients to a hospital.  Some also offer services like pre-employment drug screening and summer camp physicals. 
, Standalone surgery centers; are capturing business and investment. 





Christensen argues that each business model can only be optimized once they are separated.  He sees diseases as typically intersecting more than one 'system' within the body.  Typical hospital organizations encourage specialists to focus on one of the 'systems' and deal with both diagnosis and treatment.  But studying the disease from the perspective of only one of those systems, therefore, can't develop an integrated solution consonant with the integrated nature of the disease.  Christensen notes that Texas Heart Institute, Cleveland Clinic Institutes, and Mayo Clinic have separated out solution shops.  For the un-optimized hospitals Christensen argues they will find wrong prescription drugs and devices that were the result of inaccurate, incomplete diagnoses by a stream of individually operating specialists.  Steele & Feinberg agree with this assessment.  24 by 7 Branded Urgent Care (1, 2) may ramp the disruption.  CVS and Wal-Mart intend to enter the health care provider market offering low cost alternatives to traditional PCP is a Primary Care Physician.  PCPs are viewed by legislators and regulators as central to the effective management of care.  When coordinated care had worked the PCP is a key participant.  In most successful cases they are central.  In certain Medicare ACO models (Pioneer) PCPs are committed to achieve meaningful use requirements.  Working against this is the: replacement of diagnostic skills by technological solutions, low FFS leverage of the PCP compared to specialists, demotivation of battling prior authorization for expensive treatments. 
etc.  Personal experience suggests that the situation is even worse than Christensen describes: 
In line with Christensen skilled nursing facilities can be seen to be seperating into short stay rehab facilities and long term stay facilities. 

But the U.S. government and U.S. health care have been part of a single complex adaptive system (CAS) for many years and the recent legislation has solidified this integration.  The core schematic structures that shape the health care network are medical school education, US federal and state laws.  The health care providers are phenotypic instances of these schematic structures and the HIE a Health Information Exchange is responsible for the transmission of health care-related data among facilities, health information organizations and government agencies according to national standards.  They are designed to address legal, organizational and technical challenges that would otherwise impede the sustainability of health information interchange.  An HIE is a component of the HIT.  It must enable reliable and secure transfer of data among diverse systems and facilitate access and retrieval.  The two main types are private and public exchanges.  Private exchanges may be able to leverage homogeneous IT infrastructure to facilitate data sharing.  Public exchanges are likely to be heterogeneous.  RHIO provide the regional organizations to support such HIE.  They are there to ensure that infrastructure amplification initiates.  The government will ensure that low healthcare density areas are served by public HIE infrastructure.  Both centralized and federated technical solutions were initially considered for implementation by the RHIOs for deploying HIE as specified in the Markle Foundation's NHIN common framework.  Common framework clients such as appropriately architected HIE use SOAP messaging to interact with their local SNO's ISB and RLS.  The HIE SOAP query transactions follow the HL7 Query Model.  Alternatively some HIE's are now using direct messaging to support interoperation.  HIE deployment goals have been phased (1 - supporting care transitions, 2 - Quality and care management, 3 - Population health).  Some HIEs will support "EHR-lite" as part of their functionality.  HIE does not yet solve some difficult challenges:
  • Safeguarding the security of health information.  Currently HIEs conforming to the common framework only provide locations of clinical data held remotely.  
  • Providing effective life cycle management.  The HIE is dependent on the local set of entities to provide updates that match the current state of the entity data. 
, and interfaces, provide them with controlled ways to expose some state, and present signals, is an emergent capability which is used by cooperating agents to support coordination & rival agents to support control and dominance.  In eukaryotic cells signalling is used extensively.  A signal interacts with the exposed region of a receptor molecule inducing it to change shape to an activated form.  Chains of enzymes interact with the activated receptor relaying, amplifying and responding to the signal to change the state of the cell.  Many of the signalling pathways pass through the nuclear membrane and interact with the DNA to change its state.  Enzymes sensitive to the changes induced in the DNA then start to operate generating actions including sending further signals.  Cell signalling is reviewed by Helmreich.  Signalling is a fundamental aspect of CAS theory and is discussed from the abstract CAS perspective in signals and sensors.  In AWF the eukaryotic signalling architecture has been abstracted in a codelet based implementation.  To be credible signals must be hard to fake.  To be effective they must be easily detected by the target recipient.  To be efficient they are low cost to produce and destroy. 
for interactions with other CAS agents.  Fraud and billing errors are monitored within CMS is the centers for Medicare and Medicaid services.  .  Medicare is a social insurance program that guarantees access to health insurance for Americans aged 65 and over, and younger people with disabilities and end stage renal disease or ALS.  Medicare is currently missing a cap on out-of-pocket costs and direct prescription drug coverage.  It includes:
  • Benefits
    • Part A: Hospital inpatient insurance.  As of Dec 2013 Medicare pays for home care in only limited circumstances, such as when a person needs temporary nursing care after a hospitalization.  Part A covers 20 days of inpatient rehabilitation at a SNF after discharge from inpatient care at a hospital. 
    • Part B: Medical insurance for non-hospital services including: doctor visits, tests, injectable drugs, ambulances, physical therapy;
    • Part C: Medicare Advantage 
    • Part D: indirect prescription drug coverage The MMA prohibits Medicare from directly negotiating drug prices. 
  • Eligibility
    • All persons 65 years of age or older who are legal residents for at least 5 years.  If they or a spouse have paid Medicare taxes for 10 years the Medicare part A payments are waived.  Medicare is legislated to become the primary health plan. 
    • Persons under 65 with disabilities who receive SSDI. 
    • Persons with specific medical conditions:
      • Have end stage renal disease or need a kidney transplant. 
      • They have ALS. 
    • Some beneficiaries are dual eligible. 
    • Part A requires the person has been admitted as an inpatient at a hospital.  This is constrained by a rule that they stay for three days after admission.  
  • Sign-up
    • Part A has automatic sign-up if the person is drawing social security.  Otherwise the person must sign-up for Part A and Part B. 
    • Should sign-up for Part B during the Initial Enrollment Period, of seven months centered around 65th birthday, online or at a social security office.  But if still covered by spouse's insurance or not yet retired then may only join during the 3 month general enrollment period (January to March) each year, with coverage initiated the following July.  Incremental yearly 10% penalties apply for not signing up at 65.  These penalties apply to all subsequent premiums. 
  • Premiums
    • Part A premium
    • Part B insurance premium
    • Part C & D premiums are set by the commercial insurer.  
's CPIC investigates fraud.  RAC is recovery audit contractor program created by the MMA of 2003.  It is intended to identify and recover invalid FFS Medicare claims payments.   recovery from billing errors is a significant issue to Hispitals in 2014. 

Hospitals can use their platform is agent generated infrastructure that supports emergence of an entity through: leverage of an abundant energy source, reusable resources; attracting a phenotypically aligned network of agents. 
structure, position and power within this unusual network to their benefit.  For example the regulatory effects, increasing costs of drugs and hospitals scale and scope have driven independent oncologists to affiliate with them. 


Patient centered hospitals
What makes a hospital experience great?  The factors include:


Just because there is one connected network does not limit the types of agents that operate the network.  Indeed the wide variety of environments across different states and rich and sparse regions allows different forms of agent to compete effectively.  But some trends like people getting larger has resulted in a general need for flexible rooms that accomodate all sizes (Aug 2015). 

Some providers, notably Geisinger, have been exploring their CAS structure.  Geisinger used a Boem quality process to introduce and leverage schematic structure allowing them to increase the robustness of clinical processes.  Geisinger are now using extended phenotypic alignment through their PNH (PCMH is patient centered medical homes:
  • Describes a reorganization of the health care delivery system to focus on the patient and care giver supported by EHR infrastructure and some form of process management which will be necessary to coordinate interventions by each of the functional entities resources to treat the patients specific problems.   The disadvantage of a PCMH is the administrative and technology cost needed to support its complex processes.  The PCMH
  • Was promoted as a way to incent more PCP which had been seen as a low reward role by medical students.  HCI3 argues this use of PCMH is flawed.  PCMH is driven by the medical home models of the ACA.  In this model the PCMH is accountable for meeting the vast majority of each patients physical and mental health care needs including prevention and wellness, acute care, and chronic care.  It is focused on treating the whole person.  It is tasked with coordinating the care across all elements of the health care system, including transitions and building clear and open communications.  It must ensure extended access and availability of its services and patients preferences about access.  It must continuously improve quality by monitoring evidence-based medicine and clinical decision support tools (NCQA).  Many argue that to be effective it must be connected to a 'medical neighborhood'.  The PCMH brings together the specialized resources and infrastructure required to develop and iteratively maintain the care plans and population oriented system descriptions that are central to ACA care coordination. 
    •  
) and xG strategies to transform PCP is a Primary Care Physician.  PCPs are viewed by legislators and regulators as central to the effective management of care.  When coordinated care had worked the PCP is a key participant.  In most successful cases they are central.  In certain Medicare ACO models (Pioneer) PCPs are committed to achieve meaningful use requirements.  Working against this is the: replacement of diagnostic skills by technological solutions, low FFS leverage of the PCP compared to specialists, demotivation of battling prior authorization for expensive treatments. 
s.  It does not seem too much of a stretch to expect them to support their Pennsylvania geographic cluster's revenue base developments and public health is the proactive planning, coordination and execution of strategies to improve and safeguard the wellbeing of the public.  Its global situation is discussed in The Great Escape by Deaton.  Public health in the US is coordinated by the PHS federally but is mainly executed at the state and local levels.  Public health includes:
  • Awareness campaigns about health threatening activities including: Smoking, Over-eating, Alcohol consumption, Contamination with poisons: lead; Joint damage from over-exercise;
  • Research, monitoring and control of disease agents, processes and vectors by agencies including the CDC. 
  • Monitoring of the public's health by institutes including the NIH.  This includes screening for cancer & heart disease. 
  • Development, deployment and maintenance of infrastructure including: sewers, water plants and pipes.  
  • Development, deployment and maintenance of vaccination strategies.  
  • Development, deployment and maintenance of fluoridation. 
  • Development, deployment and maintenance of family planning services. 
  • Regulation and constraint of foods, drugs and devices by agencies including the FDA.  
 activities.  Currently their population base is older, poorer, sicker, more rural, and less transient than the national median.  Geisinger's integrated approach does not seem to be affecting that according to the Clayton Christensen Institute.  As of 2013 Philadelphia's economic troubles are impacting its school system.  In comparison Stanford Hospital clearly benefits from feedback such as environmental enhancements created by the radio cluster build out of Stanford University (Medical Center), Silicon Valley and biotech. 

Internally the representation of EHR refers to electronic health records which are a synonym of EMR.  EHR analysis suggests strengths and weaknesses:
  • The EHR provides an integrated record of the health systems notes on a patient including: Diagnosis and Treatment plans and protocols followed, Prescribed drugs with doses, Adverse drug reactions;
  • The EHR does not necessarily reflect the patient's situation accurately. 
  • The EHR often acts as a catch-all.  There is often little time for a doctor, newly attending the patient, to review and validate the historic details. 
  • The meaningful use requirements of HITECH and Medicare/Medicaid specify compliance of an EHR system or EHR module for specific environments such as an ambulatory or hospital in-patient setting. 
  • As of 2016 interfacing with the EHR is cumbersome and undermines face-to-face time between doctor and patient.  Doctors are allocated 12 minutes to interact with a patient of which less than five minutes was used for recording hand written notes.  With the EHR 12 minutes may be required to update the record!
and other state within proprietary data base applications constrains the ability of the health care network to instantiate new phenotypic combinations since some of the agents have incompatible infrastructure.  If such constraints become significant to the legislators and regulators they can adjust the schemata, or introduce constraints and flows to encourage the standardization of these representations.  But that is not a current focus of government. 

Externally the effective interaction of agents that make up the extended phenotypic network appears to have sufficient representation and signalling mechanisms (HIE analysis) available to support adaptive in evolutionary biology is a trait that increased the number of surviving offspring in an organism's ancestral lineage.  Holland argues: complex adaptive systems (CAS) adapt due to the influence of schematic strings on agents.  Evolution indicates fitness when an organism survives and reproduces.  For his genetic algorithm, Holland separated the adaptive process into credit assignment and rule discovery.  He assigned a strength to each of the rules (alternate hypothesis) used by his artificial agents, by credit assignment - each accepted message being paid for by the recipient, increasing the sender agent's rule's strength (implicit modeling) and reducing the recipient's.  When an agent achieved an explicit goal they obtained a final reward.  Rule discovery used the genetic algorithm to select strong rule schemas from a pair of agents to be included in the next generation, with crossing over and mutation applied, and the resulting schematic strategies used to replace weaker schemas.  The crossing over genetic operator is unlikely to break up a short schematic sequence that provides a building block retained because of its 'fitness';  In Deacon's conception of evolution, an adaptation is the realization of a set of constraints on candidate mechanisms, and so long as these constraints are maintained, other features are arbitrary. 
interactions. 






There are differing ways the providers can be deployed: Cost leadership, For profit differentiation, Quality differentiation, Business model focus,  Medical innovation focus;   



Medical system quality differentiation strategies

Geisinger is an example of a differentiated superorganism integrated health plan and care delivery network.  Similar businesses include: Intermountain Healthcare, VA - Department of Veterans Affairs.  Includes the Veterans Health Administration. 
Health System.  Mayo Clinic, Virginia Mason, and Cleveland Clinic  are alternative business structures that integrate the care delivery network but cooperate & compete with independent health plan businesses. 

Notable events involving these hospital networks include: Porter describes the risks of differentiation:
  • The cost differential between low-cost competitors and the differentiated firm becomes too great for differentiation to hold brand loyalty.  Buyers thus sacrifice some of the features, services, or image possessed by the differentiated firm for larger cost savings;.
  • Buyers' need for the differentiating factor fails.  This can occur as buyers become more sophisticated. 
  • Imitation narrows perceived differentiation, a common occurrence as industries mature. 
Of course the unusual nature of health care transactions means that Porter's strategic mechanisms are obscured at best. 


Hospitals have been encouraged to deploy conforming EHR refers to electronic health records which are a synonym of EMR.  EHR analysis suggests strengths and weaknesses:
  • The EHR provides an integrated record of the health systems notes on a patient including: Diagnosis and Treatment plans and protocols followed, Prescribed drugs with doses, Adverse drug reactions;
  • The EHR does not necessarily reflect the patient's situation accurately. 
  • The EHR often acts as a catch-all.  There is often little time for a doctor, newly attending the patient, to review and validate the historic details. 
  • The meaningful use requirements of HITECH and Medicare/Medicaid specify compliance of an EHR system or EHR module for specific environments such as an ambulatory or hospital in-patient setting. 
  • As of 2016 interfacing with the EHR is cumbersome and undermines face-to-face time between doctor and patient.  Doctors are allocated 12 minutes to interact with a patient of which less than five minutes was used for recording hand written notes.  With the EHR 12 minutes may be required to update the record!
systems through HITECH the Health Information Technology and Economic and Clinical Health Act 2009.  Central to the act is the establishment of the Medicare and Medicaid EHR incentive programs which make available $27 Billion over 10 years to encourage eligible professionals and hospitals to adopt and meaningfully use certified EHR technology.  It is assumed that over time use of the new infrastructure will grow exponentially.  HITECH established a formal mechanism for public input into HIT policy - the HITPC and HITSC.  Hitech is a key evolved amplifier driving the migration to and installation of Epic and Cerner EHR systems. 
financial incentives and meaningful use is the set of standards defined by CMS Incentive Programs that governs the use of electronic health records and allows eligible providers and hospitals to earn incentive payments by meeting specific criteria.  It aims to ensure that ARRA subsidies for HIS are used to generate health improvements.  It is staged:
  1. 2011-2012 Data capture and sharing - Criteria focus on electronically capturing health information in a standardized format.  Using that information to track key clinical conditions.  Communicating that information for care coordination processes.  Initiating the reporting of clinical quality measures and public health information.  Using information to engage patients and their families in their care.  Achieving meaningful use stage 1 requires meeting all core and selected menu objectives. 
  2. 2014 Advance clinical processes - More rigorous health information exchange requirements.  Increased requirements for e-prescribing and incorporating lab results.  Electronic transmission of patient care summaries across multiple settings.  More patient-controlled data.  A patient portal is required.  CMS hospital core measures, CMS hospital menu set measures, NPRMs of stage 2 meaningful use and certification criteria have been announced (2013).  
    • MU2 requires EHR systems to support direct messaging to send PHI to registered users. 
  3. 2016 Improved outcomes - Improving quality, safety, and efficiency, leading to improved health outcomes.  Decision support for national high-priority conditions.  Patient access to self-managed tools.  Access to comprehensive patient data through patient-centered HIE.  Improving population health.  
 requirements. 
The EHR systems help hospitals:

 
  • Geisinger notes the powerful synergies between its stable population, health plan (GHP), EHR refers to electronic health records which are a synonym of EMR.  EHR analysis suggests strengths and weaknesses:
    • The EHR provides an integrated record of the health systems notes on a patient including: Diagnosis and Treatment plans and protocols followed, Prescribed drugs with doses, Adverse drug reactions;
    • The EHR does not necessarily reflect the patient's situation accurately. 
    • The EHR often acts as a catch-all.  There is often little time for a doctor, newly attending the patient, to review and validate the historic details. 
    • The meaningful use requirements of HITECH and Medicare/Medicaid specify compliance of an EHR system or EHR module for specific environments such as an ambulatory or hospital in-patient setting. 
    • As of 2016 interfacing with the EHR is cumbersome and undermines face-to-face time between doctor and patient.  Doctors are allocated 12 minutes to interact with a patient of which less than five minutes was used for recording hand written notes.  With the EHR 12 minutes may be required to update the record!
    and the medical organization's structure.  But this integration with GHP places Geisinger's business in conflict with the major health plans. 

    • Geisinger demonstrates how Deming/JIT principles can be applied to the delivery of health care.  Geisinger's reengineering resulted in technology supported PCMH is patient centered medical homes:
    • Describes a reorganization of the health care delivery system to focus on the patient and care giver supported by EHR infrastructure and some form of process management which will be necessary to coordinate interventions by each of the functional entities resources to treat the patients specific problems.   The disadvantage of a PCMH is the administrative and technology cost needed to support its complex processes.  The PCMH
    • Was promoted as a way to incent more PCP which had been seen as a low reward role by medical students.  HCI3 argues this use of PCMH is flawed.  PCMH is driven by the medical home models of the ACA.  In this model the PCMH is accountable for meeting the vast majority of each patients physical and mental health care needs including prevention and wellness, acute care, and chronic care.  It is focused on treating the whole person.  It is tasked with coordinating the care across all elements of the health care system, including transitions and building clear and open communications.  It must ensure extended access and availability of its services and patients preferences about access.  It must continuously improve quality by monitoring evidence-based medicine and clinical decision support tools (NCQA).  Many argue that to be effective it must be connected to a 'medical neighborhood'.  The PCMH brings together the specialized resources and infrastructure required to develop and iteratively maintain the care plans and population oriented system descriptions that are central to ACA care coordination. 
      •  
    based ACO is an Accountable Care Organization. These are accredited bundles of companies which together try to offer Dartmouth-Hitchcock like business models (Dec 2015, Sep 2016) focused on wellness, improving the provision of primary care to a large group of Medicare patients, and rewarding doctors for preventing problems.  Advocate health illustrates the idea.  Robert Pearl notes that the transition is difficult: hospitals that find their efficiency improving should reduce the number of doctors they utilize.  But any doctors that are pushed out of the ACO will likely take their patients with them, undermining the revenues that support the FFV business.  The ACA regulates qualification to be a Medicare ACO.  Individual organizations within a Medicare shared savings ACO continue to submit their own claims and are paid by Medicare for FFS.  But the ACO is eligible for shared savings.  Within the shared savings program the CMS innovation center has setup advanced payment ACOs.  As an alternative to shared savings, in a Pioneer ACO, over time 50% of the FFS payments flow directly to the ACO as a bundled payment.  CMS has established quality measures for ACOs for Medicare.  The CMS program's purpose is to reward providers for reducing total cost of care for patients through prevention, disease management, and coordination. 
    • CMS initiated its Physician Group Practice Demonstration in 2005.  By 2008 the congressional budget office reported on Bonus-eligible organizations. 
    • CMS defines ACOs as organizations that "create incentives for health care providers to work together to treat an individual patient across care settings - including doctors' offices, hospitals and long-term care facilities."
    • CMS has developed APMs which include ACOs, and advanced APMs where the ACOs must be risk bearing. 
    • CMMI accepts providers' proposals to test various payment systems including shared savings and partial capitation.  
    • Private market ACOs have formed including: Providence Health & Services, Blue Shield California, Anthem Blue Cross, United Health Care, BCBS Minnesota, BCBS Illinois, Humana, CIGNA, Main Health Management Coalition, BCBS Massachusetts, Aetna.  
     with All-or-nothing bundled offers.  The lack of success of 2012 pioneer ACO pilots can differentiate Geisinger's strategy if it is successful.  With its hiring of David Feinberg they are aiming to expand the value of their health plan. 

    Geisinger funds two direct research organizations to ensure some germ-line, a master copy of the schematic structures is maintained for reproduction of offspring.  There will also be somatic copies which are modified by the operational agents so that they can represent their current state.   'mutation' medical processes are present. 

    Mayo Clinic sold Mayo Clinic Health Solutions to Medica in 2017.  Cleveland clinic 2015 is reticent to offer a health plan but is reluctantly deploying an ACO. 

    The costs of medical errors, increasingly focused by the ACA is the Patient Protection and Affordable Care Act amended by the Health Care and Education Reconciliation Act of 2010 (Obama care).  In part it is designed to make the health care system costs grow slower.  It aims to do this by: increasing competition between insurers and providers, offering free preventative services to limit the development of serious illnesses, constraining patients' use of expensive services, constraining the growth of payments to Medicare providers and piloting new ways for PCPs to manage patient care to keep patients away from costly E.D.s.  It funds these changes with increased taxes on the wealthy.  It follows an architecture developed by Heritage Action's Butler, Moffit, Haislmaier extended by White House OMB health policy advisor Ezekiel Emanuel & architect Jeanne Lambrew.  The Obama administration drafting team included: Bob Kocher; allowing it to integrate ideas from: Dartmouth Institute's Elliot Fischer (ACO).  The ACA did not include a Medicare buy in (May 2016).  The law includes:
    • Alterations, in title I, to how health care is paid for and who is covered.  This has been altered to ensure
      • Americans with preexisting conditions get health insurance cover - buttressed by mandating community rating and
      • That they are constrained by the individual mandate to have insurance but the requirement was supported by subsidies for the poor (those with incomes between 100 & 400% of the federal poverty line).  
      • Children, allowed to, stay on their parents insurance until 26 years of age. 
    • Medicare solvency improvements. 
    • Medicaid expansion, in title II: to poor with incomes below 138% of the federal poverty line; an expansion which was subsequently constrained by the Supreme Court's ruling making expansion an optional state government decision. 
    • Hospital Readmissions Reduction Program (HRRP) which was enforced by CMS mandated rules finalized in 2011 and effected starting Oct 2012.  
    • Medical home models.  
    • Community transformation grants support the transformation of low income stressed neighborhoods to improve their lifestyles and health. 
    • Qualifications for ACOs.  Organizations must:
      • Establish a formal legal structure with shared governance which allows the ACO to distribute shared savings payments to participating providers and suppliers. 
      • Participate in the MSSP for three or more years. 
      • Have a management structure. 
      • Have clinical and administrative systems. 
      • Include enough PCPs to care for Medicare FFS patient population (> 5000) assigned to the ACO. 
      • Be accountable for the quality and cost of care provided to the Medicare FFS patient population. 
      • Have defined processes to promote: Evidence-based medicine, Patient-centeredness, Quality reporting, Cost management, Coordination of care; 
      • Demonstrate it meets HHS patient-centeredness criteria including use of patient and caregiver assessments and individualized care plans.  
    • CMMI Medicare payment experimentation.  
    • Requirements that pharmaceutical companies must report payments made to physicians (Sunshine Act). 
    • A requirement that chain restaurants must report calorie counts on their menus. 
    's pay-for-performance represents a number of programs:
    • Value-Based Purchasing Program which includes mandatory pay-for-performance where a percentage of hospital inpatient payments are withheld and then earned back based on achieving quality metrics.  Withholds begin at 1% in 2013 and rise to 2% by 2017. 
    • HRRP which penalizes Hospitals with a readmission rate that is greater than expected.  Penalties capped at 1% of total DRG in 2013, 2% in 2014 and 3% in 2015. 
    • CMS is also using a high HAC percentage as a penalty - 1% penalty deducted from DRG payment (HACRP) starting in 2015 to encourage reduction of HACs. 
    • MCMP EHR deployment in physician practices. 
    penalties, onto hospital's Medicare is a social insurance program that guarantees access to health insurance for Americans aged 65 and over, and younger people with disabilities and end stage renal disease or ALS.  Medicare is currently missing a cap on out-of-pocket costs and direct prescription drug coverage.  It includes:
    • Benefits
      • Part A: Hospital inpatient insurance.  As of Dec 2013 Medicare pays for home care in only limited circumstances, such as when a person needs temporary nursing care after a hospitalization.  Part A covers 20 days of inpatient rehabilitation at a SNF after discharge from inpatient care at a hospital. 
      • Part B: Medical insurance for non-hospital services including: doctor visits, tests, injectable drugs, ambulances, physical therapy;
      • Part C: Medicare Advantage 
      • Part D: indirect prescription drug coverage The MMA prohibits Medicare from directly negotiating drug prices. 
    • Eligibility
      • All persons 65 years of age or older who are legal residents for at least 5 years.  If they or a spouse have paid Medicare taxes for 10 years the Medicare part A payments are waived.  Medicare is legislated to become the primary health plan. 
      • Persons under 65 with disabilities who receive SSDI. 
      • Persons with specific medical conditions:
        • Have end stage renal disease or need a kidney transplant. 
        • They have ALS. 
      • Some beneficiaries are dual eligible. 
      • Part A requires the person has been admitted as an inpatient at a hospital.  This is constrained by a rule that they stay for three days after admission.  
    • Sign-up
      • Part A has automatic sign-up if the person is drawing social security.  Otherwise the person must sign-up for Part A and Part B. 
      • Should sign-up for Part B during the Initial Enrollment Period, of seven months centered around 65th birthday, online or at a social security office.  But if still covered by spouse's insurance or not yet retired then may only join during the 3 month general enrollment period (January to March) each year, with coverage initiated the following July.  Incremental yearly 10% penalties apply for not signing up at 65.  These penalties apply to all subsequent premiums. 
    • Premiums
      • Part A premium
      • Part B insurance premium
      • Part C & D premiums are set by the commercial insurer.  
     & Medicaid is the state-federal program for the poor.  Originally part of Lyndon Johnson's 1965 Bill, eligibility and services vary by state.  Medicaid currently pays less for care than Medicare, resulting in many care providers refusing to participate in the program.  Less than 10 percent of Medicaid recipients, those in long-term care including nursing homes where 64% are dependent on Medicaid, use one-third of all Medicaid spending which is a problem.  The ACA's Medicaid expansion program, made state optional by the SCOTUS decision, was initially taken up by fifty percent of states.  As of 2016 it covers 70 million Americans at a federal cost of $350 billion a year.  In 2017 it pays for 40% of new US births. 
    business, provide a significant opportunity for JIT based error removal as well as complexity management with integrated clinical teams supported by checklists.  With Geisinger's integration of physician and hospital staff this should be relatively simple to organize and execute.  For the majority of hospitals with MSO is either a physician's management services organization or a hospital's medical staff organization. 
    based power structures it may be more challenging. 


    The PCMH (PCMH) The Patient-centered medical home
    • Describes a reorganization of the health care delivery system to focus on the patient and care giver supported by EHR infrastructure and some form of process management which will be necessary to coordinate interventions by each of the functional entities resources to treat the patients specific problems.   The disadvantage of a PCMH is the administrative and technology cost needed to support its complex processes.  The PCMH
    • Was promoted as a way to incent more PCP which had been seen as a low reward role by medical students.  HCI3 argues this use of PCMH is flawed.  PCMH is driven by the medical home models of the ACA.  In this model the PCMH is accountable for meeting the vast majority of each patients physical and mental health care needs including prevention and wellness, acute care, and chronic care.  It is focused on treating the whole person.  It is tasked with coordinating the care across all elements of the health care system, including transitions and building clear and open communications.  It must ensure extended access and availability of its services and patients preferences about access.  It must continuously improve quality by monitoring evidence-based medicine and clinical decision support tools (NCQA).  Many argue that to be effective it must be connected to a 'medical neighborhood'.  The PCMH brings together the specialized resources and infrastructure required to develop and iteratively maintain the care plans and population oriented system descriptions that are central to ACA care coordination. 
    integration (ProvenHealth Navigator (PHN) with xG) is particularly important because it provides a capture point for integrating the patient population.  Through differentiated reputation Geisinger can bring potential patients and better processes and infrastructure to PCP is a Primary Care Physician.  PCPs are viewed by legislators and regulators as central to the effective management of care.  When coordinated care had worked the PCP is a key participant.  In most successful cases they are central.  In certain Medicare ACO models (Pioneer) PCPs are committed to achieve meaningful use requirements.  Working against this is the: replacement of diagnostic skills by technological solutions, low FFS leverage of the PCP compared to specialists, demotivation of battling prior authorization for expensive treatments. 
    s who can offer referrals to Geisinger's treatment regimes.  Geisinger must resolve conflicts between its Epic investments and its xG strategy. 

    Mayo Clinic has spun out Ambient Clinical Analytics. 

    This is driving the organizations to seek more information about their patient population, and techniques to manage the patients approach to staying healthy (PHM is population health management.  It aims to use big data to extend the EHR infrastructure to provide cost effective personal treatment.  This implies reengineering the health care payment and delivery process.  
    • IT tools must be developed. 
    • Administrative structures must be updated. 
    • Clinical processes must be redesigned and accepted.  Successful workflow process reengineering will depend on integration with existing workflows and presence of added value! 
    • Payment mechanisms must be overhauled ensuring that the physicians get incented to move on from FFS.  
    • It must be financed.  It is not obvious where this will come from!  Providers like fixed costs.  ROI seems limited atleast initially.  Subscriptions may work for both vendors and providers. 
    ) where Geisinger (or Kaiser) can apply their relatively large pool of talented resources to implement an effective vision. 
    Tools that help incent the patient population to make healthy choices will become valuable.  But that will mean understanding what healthy choices are?  See How UPMC similarly and visibly focuses on IT and its health plan is using predictive health analytics aims to improve patients' healthcare outcomes and contain costs by using modeling technology integrating lifestyle information with patient data and modeling healthcare outcomes.  At the population level the hope is to create a total view by combining and structuring big data.  Then by segmenting the data at the cohort and patient level by risk, interventions and programs tailored to each person can be designed, supported by integrated care coordination.  A Shewhart cycle is then used to iteratively learn and optimize the process.  .  Currently most extended networks do not integrate across the care continuum. 

    The totally integrated 'blend' when viewed as a Porter generic strategy appears conflicted.  But superorganism shared schematic planning, signal based cooperation, differentiated forms (of clinical microsystems is a small group of people who work together on a regular basis to provide care to discrete subpopulations including the patients.  It has clinical and business aims, linked processes, shared information environment and produces performance outcomes.  They evolve overtime and are often embedded in larger organizations.  They are viewed by the Microsystem academy as a Complex Adaptive System.  They are the building blocks which form hospitals.  ), and networked effects is highly competitive in a rich environment.  Geisinger's behavioral transformation processes focus on this.  The capitation is a global payment for all care for a patient during a specified time period.  It forces the provider of care to take a high risk.  Managing the risk implies successful population health management. 
    based reimbursement is the payment process for much of US health care.  Reimbursement is the centralizing mechanism in the US Health care network.  It associates reward flows with central planning requirements such as HITECH.  Different payment methods apportion risk differently between the payer and the provider.  The payment methods include:
    • Fee-for-service,
    • Per Diem,
    • Episode of Care Payment, 
    • Multi-provider bundled EPC,
    • Condition-specific capitation,
    • Full capitation.  
     allows the internal business models to be separated as at Cleveland Clinic and Mayo Clinic.  Multiple profit oriented businesses within the overall group structure can explore niches at the edge of chaos such as Cleveland's Lerner collage of medicine work with IBM's Watson, but it is a compromise compared to a VC plus startups system. These superorgamisms can leverage the low cost of transportation to optimize and compete widely with less efficiently organized providers as explained by Cleveland Clinic's Cosgrove and at UCLA Health (1, 2, 3).  While the idea of transporting patients to the optimal center seems important its ramifications must be understood:
    • How does a family, or friends, get to visit the patient?  Who pays for their transport, lodging, loss of revenue etc.?  UCLA Health describes their solution to Joseph Mitchelli. 
    • How is the transport organized? 

    Cleveland Clinic's "centers of excellence" network connect strategy is leveraged by employers aiming to provide high quality compeititive care with reference priced constrains a policy holder to a reimbursement for the reference price of a treatment rather than the specific hospitals billed price.  Patients have to pay the difference.  It can allow subscribers broader access to different health care providers than narrow networks.  It is only applicable for elective procedures where the patient can shop around (Aug 2016). 
    cost control (Aug 2016). 


    The Vivity joint venture (Sep 2014) aims to build a regional HMO is a health maintenance organization.  Originally HMOs were fashioned after Dr. Paul Ellwood's admiration for group practices such as: Kaiser Permanente, Mayo Clinic; which employed salaried physicians and charged fixed fees rather than FFS.  Ellwood argued that this architecture helped keep subscribers healthy which he termed a health maintenance organization.  President Nixon was convinced by Ellwood signing the HMO Act.  But the legislated HMO did not have to conform to Ellwood's group practice architecture.  Instead by 1997 for-profit commercial insurance companies operated two-thirds of the HMO business.  The legislated HMO:
    • Provides or arranges managed care for:
      • Health insurance
      • Self-funded health care benefit plans
      • Individuals
    • Acts as a liaison with health care providers
    • Covers care rendered by those doctors and others who have agreed by contract to treat patients in accordance with the HMO's guidelines and restrictions in return for access to patients.  Treatment choices were often driven by insurance company rules.  Financial incentives often based the contracted physician income on success in reducing expenses rather than health outcomes.  There are a variety of contracts with physicians:
      • Closed panel plan
      • Open panel plan
      • Network model plan
    • Covers emergency care regardless of the providers contracted status. 
    /ACO is an Accountable Care Organization. These are accredited bundles of companies which together try to offer Dartmouth-Hitchcock like business models (Dec 2015, Sep 2016) focused on wellness, improving the provision of primary care to a large group of Medicare patients, and rewarding doctors for preventing problems.  Advocate health illustrates the idea.  Robert Pearl notes that the transition is difficult: hospitals that find their efficiency improving should reduce the number of doctors they utilize.  But any doctors that are pushed out of the ACO will likely take their patients with them, undermining the revenues that support the FFV business.  The ACA regulates qualification to be a Medicare ACO.  Individual organizations within a Medicare shared savings ACO continue to submit their own claims and are paid by Medicare for FFS.  But the ACO is eligible for shared savings.  Within the shared savings program the CMS innovation center has setup advanced payment ACOs.  As an alternative to shared savings, in a Pioneer ACO, over time 50% of the FFS payments flow directly to the ACO as a bundled payment.  CMS has established quality measures for ACOs for Medicare.  The CMS program's purpose is to reward providers for reducing total cost of care for patients through prevention, disease management, and coordination. 
    • CMS initiated its Physician Group Practice Demonstration in 2005.  By 2008 the congressional budget office reported on Bonus-eligible organizations. 
    • CMS defines ACOs as organizations that "create incentives for health care providers to work together to treat an individual patient across care settings - including doctors' offices, hospitals and long-term care facilities."
    • CMS has developed APMs which include ACOs, and advanced APMs where the ACOs must be risk bearing. 
    • CMMI accepts providers' proposals to test various payment systems including shared savings and partial capitation.  
    • Private market ACOs have formed including: Providence Health & Services, Blue Shield California, Anthem Blue Cross, United Health Care, BCBS Minnesota, BCBS Illinois, Humana, CIGNA, Main Health Management Coalition, BCBS Massachusetts, Aetna.  
     comparable to Geisinger's offerings. 








    Medical system cost leadership strategies

    Kaiser is an example of 'cost leadership' superorganism business strategies that assume all the risk. 


    Since 1944, [Kaiser] Permanente health system, a group practice is an integrated health care organization with salaried physicians and bundled pricing.   Early examples included Kaiser Permanente and the Mayo Clinic. 
    , has been composed of three associated operations:
    1. A health plan, which initially contracted with insurers.  It is nonprofit is a tax strategy selected by many hospitals in the US.  These hospitals, which include: Cleveland Clinic, Johns Hopkins, Massachusetts General, Mayo Clinic; are exempt from federal and local taxes because they provide a level of community benefit.  They are considered charitable institutions and benefit from tax-free contributions from donors and tax-free bonds for capital projects, explains Bellevue Hospital's Dr. Danielle Ofri.  Prior to 1969, community benefit had to include charity medical care, but then the tax code was altered to allow many expenses to qualify as community benefits including: Accepting Medicaid insurance at a hospital estimated loss; and charitable care became optional.  The ACA encouraged hospital networks to consolidate and with this additional pricing power, revenue at the top seven nonprofits has increased 15%, while charitable care decreased 35%. 

    2. Permanente, hospital infrastructure owner and operator.  It is nonprofit, but generates large revenues and margins
    3. Permanente Medical Group is a for-profit partnership that employs the doctors.  Such a managed care contracts together its subscribing patients with particular groups of doctors and hospitals who agree to provide contracted care for a particular price which the managed care organization reimburses.  It was based on the group practice organizations: Kaiser, Mayo Clinic; operations.  The initial HMOs, supported by the HMO act and PPOs has subsequently been joined by other forms of managed care.  Original capitation based implementations were problematic with only Kaiser succeeding.  Managed care is now enhanced by inclusion of upside measures as in alternative quality contracts.   operation, in contrast with the ubiquitous FFS is fee-for-service payment.  For health care providers the high profits were made in hospitalizations, imaging and surgery.  Due to its inducing excessive treatment activity it may be replaced by FFV bundled payment.   operations of 1944, was anathema to the AMA is the American Medical Association. 
      ; with all three operations tied together by Eugene Trefethen with a contract in 1955. 
    The for-profit medical group drives Kaiser Permanente's business model to seek margin.  This encourages behaviors that limit care, a characteristic that was noted by Nixon aid, John Ehrlichman, when they were focused on the HMO act is the Health Maintenance Organization Act of 1973 which amended the PHSA to provide assistance for the creation of HMOs including:
    • Money for development
    • An override of specific restrictive state laws
    • A mandate offered to specific employers to offer an optional HMO plan as part of their employee benefits package. 
    .  Kaiser had 6 HMO is a health maintenance organization.  Originally HMOs were fashioned after Dr. Paul Ellwood's admiration for group practices such as: Kaiser Permanente, Mayo Clinic; which employed salaried physicians and charged fixed fees rather than FFS.  Ellwood argued that this architecture helped keep subscribers healthy which he termed a health maintenance organization.  President Nixon was convinced by Ellwood signing the HMO Act.  But the legislated HMO did not have to conform to Ellwood's group practice architecture.  Instead by 1997 for-profit commercial insurance companies operated two-thirds of the HMO business.  The legislated HMO:
    • Provides or arranges managed care for:
      • Health insurance
      • Self-funded health care benefit plans
      • Individuals
    • Acts as a liaison with health care providers
    • Covers care rendered by those doctors and others who have agreed by contract to treat patients in accordance with the HMO's guidelines and restrictions in return for access to patients.  Treatment choices were often driven by insurance company rules.  Financial incentives often based the contracted physician income on success in reducing expenses rather than health outcomes.  There are a variety of contracts with physicians:
      • Closed panel plan
      • Open panel plan
      • Network model plan
    • Covers emergency care regardless of the providers contracted status. 
    qualified regions by 1977, and subsequently added: Mid-Atlantic, District of Columbia, Maryland, Georgia.  But during the 1990s Kaiser abandoned aspects of its business in: Texas (total business) in 1998, North Carolina (health plan) in 2002 and a health plan in the Northeast in 2000.  And It was growing more slowly than other managed care groups: DaVita HealthCare Partners. 

    Adopting Geisinger's Epic integration strategy in 2003, Kaiser transformed its quality model and expanded the strategic value of its health plan.  


    It formed as a series of regional operations and this is still reflected in its structures.  Like global telcos such as Vodafone the operations are power centers which resist doing anything company wide that might reduce their power.  Hence about the only IT infrastructure that is truly global across Kaiser is the Epic EHR refers to electronic health records which are a synonym of EMR.  EHR analysis suggests strengths and weaknesses:
    • The EHR provides an integrated record of the health systems notes on a patient including: Diagnosis and Treatment plans and protocols followed, Prescribed drugs with doses, Adverse drug reactions;
    • The EHR does not necessarily reflect the patient's situation accurately. 
    • The EHR often acts as a catch-all.  There is often little time for a doctor, newly attending the patient, to review and validate the historic details. 
    • The meaningful use requirements of HITECH and Medicare/Medicaid specify compliance of an EHR system or EHR module for specific environments such as an ambulatory or hospital in-patient setting. 
    • As of 2016 interfacing with the EHR is cumbersome and undermines face-to-face time between doctor and patient.  Doctors are allocated 12 minutes to interact with a patient of which less than five minutes was used for recording hand written notes.  With the EHR 12 minutes may be required to update the record!
    branded HealthConnect by Kaiser. 


    Notable events involving these hospital networks include: Porter describes the risks in overall cost leadership:
    • To maintain its position a cost leader must reinvest in modern equipment;
    • Ruthlessly scrap obsolete assets;  This is seen in the IT drive to consolidate onto a common platform. 
    • Avoid product line proliferation;
    • Remain alert for technological improvements.  Kaiser is supporting Epic by joining Healtheway; 
    • It must sustain cost declines based on scale by effective PDCAs;  
    • Technological change can nullify its past investments and learning; 
    • Low-cost learning by new entrants and followers imitating can reduce their cost advantage; 
    • Inability to see required product or marketing change because of attention placed on cost;
    • Inflation in costs that narrow the firm's ability to maintain enough of a price differential to offset competitors' brand image and other approaches to differentiation. 

    Hence Kaiser must ensure it benefits from total integration (which is a challenge with its regional based power structure).  This focus allows Kaiser to invest in infrastructure amplifiers, including IT and salaried physicians; so that it can PDCA end-to-end processes, and identify best practices from amongst its operations. 


    Hospitals have been encouraged to deploy conforming EHR refers to electronic health records which are a synonym of EMR.  EHR analysis suggests strengths and weaknesses:
    • The EHR provides an integrated record of the health systems notes on a patient including: Diagnosis and Treatment plans and protocols followed, Prescribed drugs with doses, Adverse drug reactions;
    • The EHR does not necessarily reflect the patient's situation accurately. 
    • The EHR often acts as a catch-all.  There is often little time for a doctor, newly attending the patient, to review and validate the historic details. 
    • The meaningful use requirements of HITECH and Medicare/Medicaid specify compliance of an EHR system or EHR module for specific environments such as an ambulatory or hospital in-patient setting. 
    • As of 2016 interfacing with the EHR is cumbersome and undermines face-to-face time between doctor and patient.  Doctors are allocated 12 minutes to interact with a patient of which less than five minutes was used for recording hand written notes.  With the EHR 12 minutes may be required to update the record!
    systems through HITECH the Health Information Technology and Economic and Clinical Health Act 2009.  Central to the act is the establishment of the Medicare and Medicaid EHR incentive programs which make available $27 Billion over 10 years to encourage eligible professionals and hospitals to adopt and meaningfully use certified EHR technology.  It is assumed that over time use of the new infrastructure will grow exponentially.  HITECH established a formal mechanism for public input into HIT policy - the HITPC and HITSC.  Hitech is a key evolved amplifier driving the migration to and installation of Epic and Cerner EHR systems. 
    financial incentives and meaningful use is the set of standards defined by CMS Incentive Programs that governs the use of electronic health records and allows eligible providers and hospitals to earn incentive payments by meeting specific criteria.  It aims to ensure that ARRA subsidies for HIS are used to generate health improvements.  It is staged:
    1. 2011-2012 Data capture and sharing - Criteria focus on electronically capturing health information in a standardized format.  Using that information to track key clinical conditions.  Communicating that information for care coordination processes.  Initiating the reporting of clinical quality measures and public health information.  Using information to engage patients and their families in their care.  Achieving meaningful use stage 1 requires meeting all core and selected menu objectives. 
    2. 2014 Advance clinical processes - More rigorous health information exchange requirements.  Increased requirements for e-prescribing and incorporating lab results.  Electronic transmission of patient care summaries across multiple settings.  More patient-controlled data.  A patient portal is required.  CMS hospital core measures, CMS hospital menu set measures, NPRMs of stage 2 meaningful use and certification criteria have been announced (2013).  
      • MU2 requires EHR systems to support direct messaging to send PHI to registered users. 
    3. 2016 Improved outcomes - Improving quality, safety, and efficiency, leading to improved health outcomes.  Decision support for national high-priority conditions.  Patient access to self-managed tools.  Access to comprehensive patient data through patient-centered HIE.  Improving population health.  
     requirements. 
    The EHR systems help hospitals:

     
    They are still seeking to limit costs and treatments where they cannot influence patient performance.  Kaiser argues that healthcare must be practiced in far lower cost reengineered environments such as at home via Tele-health.  It seems likely that Kaiser will suffer from the centralized planning problem that will undermine its process oriented quality strategy. 

    Sovaldi (sofosbuvir) is Gilead Sciences hepatitis-C drug.  It is the first effective cure with acceptable side effects.  Sofosbuvir was originally developed by Pharmasset which sold the rights to Gilead for $11 billion.  In 2014 Sovaldi costs $84,000 for a typical course of treatment. 
    treatment pricing has highlighted that even Kaiser's Insurance policies with their yearly membership and premiums are misaligned with treatments that cure rapidly and benefit long term health of the patient and nation. 
    Kaiser may also struggle to drive up quality in its nursing partnerships. 

    If providers conclude they must sustain this approach It should be expected that provider's goals will be in conflict with those of the food, tobacco, farming and agro value delivery system. 





    The ACO is an Accountable Care Organization. These are accredited bundles of companies which together try to offer Dartmouth-Hitchcock like business models (Dec 2015, Sep 2016) focused on wellness, improving the provision of primary care to a large group of Medicare patients, and rewarding doctors for preventing problems.  Advocate health illustrates the idea.  Robert Pearl notes that the transition is difficult: hospitals that find their efficiency improving should reduce the number of doctors they utilize.  But any doctors that are pushed out of the ACO will likely take their patients with them, undermining the revenues that support the FFV business.  The ACA regulates qualification to be a Medicare ACO.  Individual organizations within a Medicare shared savings ACO continue to submit their own claims and are paid by Medicare for FFS.  But the ACO is eligible for shared savings.  Within the shared savings program the CMS innovation center has setup advanced payment ACOs.  As an alternative to shared savings, in a Pioneer ACO, over time 50% of the FFS payments flow directly to the ACO as a bundled payment.  CMS has established quality measures for ACOs for Medicare.  The CMS program's purpose is to reward providers for reducing total cost of care for patients through prevention, disease management, and coordination. 
    • CMS initiated its Physician Group Practice Demonstration in 2005.  By 2008 the congressional budget office reported on Bonus-eligible organizations. 
    • CMS defines ACOs as organizations that "create incentives for health care providers to work together to treat an individual patient across care settings - including doctors' offices, hospitals and long-term care facilities."
    • CMS has developed APMs which include ACOs, and advanced APMs where the ACOs must be risk bearing. 
    • CMMI accepts providers' proposals to test various payment systems including shared savings and partial capitation.  
    • Private market ACOs have formed including: Providence Health & Services, Blue Shield California, Anthem Blue Cross, United Health Care, BCBS Minnesota, BCBS Illinois, Humana, CIGNA, Main Health Management Coalition, BCBS Massachusetts, Aetna.  
     potentially allows a 'virtual' structure to create a Kaiser like superorganism.  Partners healthcare are a vanguard for much of the ACO logic.  Essence group gain quality credibility from their ACO framework.  However, it is hard to see how the effects of the organizational partitions can be removed contractually or operationally.  M. Blum questions the ACO structure.  Another illustrative example of an ACO business dilemma is expressed by a SNF is skilled nursing facility. 
    and reinforced by a HHA is home health agency. 
    .  The Medicare is a social insurance program that guarantees access to health insurance for Americans aged 65 and over, and younger people with disabilities and end stage renal disease or ALS.  Medicare is currently missing a cap on out-of-pocket costs and direct prescription drug coverage.  It includes:
    • Benefits
      • Part A: Hospital inpatient insurance.  As of Dec 2013 Medicare pays for home care in only limited circumstances, such as when a person needs temporary nursing care after a hospitalization.  Part A covers 20 days of inpatient rehabilitation at a SNF after discharge from inpatient care at a hospital. 
      • Part B: Medical insurance for non-hospital services including: doctor visits, tests, injectable drugs, ambulances, physical therapy;
      • Part C: Medicare Advantage 
      • Part D: indirect prescription drug coverage The MMA prohibits Medicare from directly negotiating drug prices. 
    • Eligibility
      • All persons 65 years of age or older who are legal residents for at least 5 years.  If they or a spouse have paid Medicare taxes for 10 years the Medicare part A payments are waived.  Medicare is legislated to become the primary health plan. 
      • Persons under 65 with disabilities who receive SSDI. 
      • Persons with specific medical conditions:
        • Have end stage renal disease or need a kidney transplant. 
        • They have ALS. 
      • Some beneficiaries are dual eligible. 
      • Part A requires the person has been admitted as an inpatient at a hospital.  This is constrained by a rule that they stay for three days after admission.  
    • Sign-up
      • Part A has automatic sign-up if the person is drawing social security.  Otherwise the person must sign-up for Part A and Part B. 
      • Should sign-up for Part B during the Initial Enrollment Period, of seven months centered around 65th birthday, online or at a social security office.  But if still covered by spouse's insurance or not yet retired then may only join during the 3 month general enrollment period (January to March) each year, with coverage initiated the following July.  Incremental yearly 10% penalties apply for not signing up at 65.  These penalties apply to all subsequent premiums. 
    • Premiums
      • Part A premium
      • Part B insurance premium
      • Part C & D premiums are set by the commercial insurer.  
    -certified ACO experiments have not demonstrated a likelihood of long term return on investment or sustainability.  The cost of necessary infrastructure was higher than the shared savings is the Medicare Shared Savings Program.  The program began in 2012 with 3 year term contracts.  ACO Physician groups and hospitals are eligible to participate but there must be primary care physicians in the ACO.  Participating ACOs must serve > 5000 Medicare beneficiaries.  The potential for a bonus payment is based on Medicare cost savings and quality metrics.  Two payment models are available.  Only one has downside risk involved.  CMS included 'robust' quality measures to monitor the quality of care provided and beneficiary satisfaction (see fact sheet 'Improving Quality of Care for Medicare Patients: Accountable Care Organizations'). 
    payments obtained!
    Like Kaiser, ACO strategists will see home care and Tele-health is the use of remote health care.  It includes telepharmacy and clinical telehealth for stroke and psychiatry.  It also includes sessions between primary care providers and patients and assisted caregiving such as medication reminders and DME usage monitors. 
    , which is increasingly being deployed, as key ways to limit costs, support margins and control readmission have become a source of increased revenue for hospitals.  But with government interested in reducing the US health care cost curve ACA's HRRP (pay-for-performance), BPCI and CTI and Interact discharge initiative have all increased the focus on unnecessary readmissions.  Now the end-to-end process is under scrutiny with hospitals reengineering discharge (RED) and PAC providers using RAI and TCN. 
    penalties. 

    If an ACO becomes the dominant health care organization in an area it should obtain better payer include four types:
    • From the 1930s the insurers Blue Cross and Blue Shield catalyzed health care activity by paying a daily per diem to hospitals for the diagnoses and treatments the hospital's dispensed.  At their inception in 1966 Medicare and Medicaid followed this reimbursement model. 
    • From 1983 Medicare and Medicaid switched to the PPS reimbursement mechanism.  This forced alignment of the supplier, diagnosis, treatment, billing and reimbursement processes.  The health care network is still structurally aligned around PPS.  Under scrutiny of ProPAC and its successor MedPAC,  as well as pressure of the BBA after 1997, the payments per DRG have been steadily reduced until it was below the cost of care, forcing hospitals to seek margin from their other payers.  Medicare outlier payments benefited hospitals that inflated charges and thus became eligible. 
    • Employers as they experienced cost shifting from the hospital's increased product charges moved their employees over to managed care based payment. 
    • Private payers pay hospitals directly for their diagnosis and treatment.  Typically this group has little power.  There are default rates for private payers - typically 40% of billed charges that are not covered by a fixed payment or a fee schedule.  For the uninsured poor until 2004 they obtained little discount on the hospital's chargemaster list price, because insurers and CMS required to be charged the lowest value offered to any patients.  Medicare has now relaxed this constraint. 
    contracts and payment rates.  Geisinger has found structuring as an ACO to be valuable.  As an ACO gains PCP is a Primary Care Physician.  PCPs are viewed by legislators and regulators as central to the effective management of care.  When coordinated care had worked the PCP is a key participant.  In most successful cases they are central.  In certain Medicare ACO models (Pioneer) PCPs are committed to achieve meaningful use requirements.  Working against this is the: replacement of diagnostic skills by technological solutions, low FFS leverage of the PCP compared to specialists, demotivation of battling prior authorization for expensive treatments. 
    s and patients it will then be beneficial for other specialists to become part of the organization to benefit from the rates and access to patients obtained.  To enter the ACO on good contractual terms the specialists may have to organize as a super group is an integrated single practice combining independent specialists and specialist organizations with one tax identification number.  They aim to improve market power for the specialists by capturing essential agents and so making the SuperGroups participation in a value delivery system necessary for the delivery of efficient, effective health care.  The focus on a single specialty can improve efficiency and effectiveness.  They can avoid Stark laws and Kickback statutes but are often limited in the total percentage of specialists they can encompass and may need an antitrust assessment.  They can organize as centrally managed medical groups with pooled revenues or as a set of autonomous operating divisions (practices) within a group practice 'without walls' where only centralized expenses are allocated.  But such organizations are often unstable due to the independent nature of the experts they leverage and constrain.  And it can be difficult to build the original super group since it must combine different cultures, billing arrangements, debt profiles, payment contracts, IT systems, values and approaches to quality.   or clinically integrated network is a legally acceptable clinical integration of hospital, physicians and/or other dedicated health care providers who deliver services focused on quality, performance, efficiency and value to the patient.  In comparison with a SuperGroup it also increases market power while sustaining expert agent independence.  But it is hard to manage and requires significant infrastructure expense to support clinical integration and management of utilization and financial uncertainty.  Initial setup will have to manage the problem of prior contracts the new members have with IPA, PHO or ACOs.  An alternative to a clinically integrated network is a messenger model network.  The Joint Commission specified an OPPE requirement for general performance improvement.  Network providers must develop and sustain clinical initiatives that enhance access to care, clinical quality, cost control and the patient experience by:
    • Coordination across the network, 
    • Implementing evidence-based clinical protocols,
    • Improving efficiency in the delivery of care,
    • Partnering with payers to develop contracts that drive definable clinical improvement and add value to patients. 
    .  This will also help with developing focus and thus specialty value-add that is likely to be necessary to obtain significant future rewards from the ACO and payers.  There is consequent need for information and control systems that can identify and highlight best practices to support networked clinical integration. 

    When it is less certain that an ACO will be successful it is likely that specialists will aim to undermine Medicare ACOs to stop power shifting to the PCPs.  Spurred to organize they can contractually constrain: service level, payment guarantees, levels and risk, easy termination, beneficial dispute resolution, require access to audit trails, limit covenants and offset patient decisions to go to out of network specialists. 





    Hospital network power

    Sutter Health is an example of a hospital strategy based on network effects. 


    Notable events involving these hospital networks include:



    Medical system Innovation focus strategies
    UCSF, Johns Hopkins, Harvard affiliated Partners Healthcare, UCLA Health, and NYULMC are examples of a niche business AMC is Academic medical center.  They perform education, research and patient care.  They include one or more health professions schools, such as a medical school and a hospital.  The major AMCs are represented by the United HealthSystem Consortium.   The costly strategies of the AMCs and increased difficulty of finding enough targeted patients for research studies (Aug 2017) is forcing integration with larger hospital systems.  AMCs offer researchers clinical research support: Virus vectors (Nov 2017);
    strategy focused on innovative medical science and technology.  The business alignment with innovation is the economic realization of invention and combinatorial exaptation.  It operates across all CAS, being supported by genetic and cultural means.  Creativity provides the mutation and recombination genetic operators for the cultural process.  While highly innovative, monopolies: AT&T, IBM; usually have limited economic reach, constraining productivity.  This explains the use of regulation, or even its threat, that can check their power and drive the creations across the economy. 
    provides a 'do the right product' quality focus and a channel for leading edge drugs and devices to deploy through.  The research focus reduces the constraining fear of mistakenly killing a patient which otherwise forces doctors to carefully follow historic precedent.  


    Notable events involving these hospital networks include: Porter describes the risks of focus:
    • The cost differential between broad-range competitors and the focused firm widens to eliminate the cost advantages of serving a narrow target or to offset the differentiation achieved by focus;
    • The differences in desired products or services between the strategic target and the market as a whole narrows;
    • Competitors find submarkets within the strategic target and out focus the focuser. 




    Strengths: Weaknesses
    Opportunities: Threats


    The following analysis discusses the gross implications of the attributes of the SWOT matrix (Imbalances).
    Cluster 1 -  ?? (W9, W10, W22, S2, S3, S4, O2, O11, O16, O17, O18, O21, O22, T6, )

    Cluster 2 - ?? (W13, W14, W15, W16, )

    Cluster 3 - ?? (W1, W17, S5, )

    Cluster 4 - ?? (W18, W19, O6, O7, )

    Un assigned (S1, W2, W3, W4, W5, W6, W7, W8, W12, W20, W21, O1, O3, O4, O5, O8, O9, O10, O12, O13, O14, O15, O16, T1, T2, T3, T4, T5, T7, T8, T9, T10, T11, T12, T13, T14)




    Like Geisinger with its xG startup many of these hospital groups are looking to spinoff technologies and startups from their health care IT incubators and so gain access to HCIT is health care information technology.  The AHRQ argues HCIT consists of a complex set of technologies, policies, standards and user sets.  Technically they represent it as a set of layers: Application: CPOE, CDS, e-prescribing, eMAR, Results reporting, Electronic documentation, Interface engines, etc.; Communication: Messaging standards (HL7, ADT, NCPDP, X12, DICOM, ASTM, etc,) Coding standards (LOINC, ICD10, CPT, NDC, RxNorm, SNOMED CT, etc.), Process: HIE, MPI, HIPAA security & privacy, etc.; Device: Tablet and PC, ASP, PDAs, Bar Coding, etc.; 
    revenues.  A value delivery system is forming with clusters of providers such as UHC, and health care technology incubators such as AVIA. 


    UCLA describes how investment in research and EBM is evidence based medicine where explicit and judicious use of current best practice evidence is used in making decisions about the care of patients.  There are differences in the application to individuals and populations.  Still the goal was to replace subjective use of basic and clinical research with:
    • Prioritization of clinical trial results to build conclusions. 
    • Adoption of processes that translated epidemiological methods to physician decision making. 
    • Widely used but innapropriate procedures were abandoned.  
    • There is now explicit evaluation of evidence of effectiveness before issuing practice guidelines.  A rational for adoption is required.  
    • HHS appointed USPSTF to develop evidence based recommendations. 
    processes can be used to make treatments, such as People-Animal Connection, robust in the face of budget cuts.  At Laguna Honda equivalent therapy strategies (the barnyard, the greenhouse, and the aviary) were undermined by cost cutting and regulations aimed at cleanliness.  Without evidence of benefits the Laguna Honda programs were easily constrained. 

    UCLA Health also focuses on JIT. 

    UCLA Health show how an exceptional leader aims to develop plans and strategies which ensure effective coordination to improve the common good of the in-group.  John Adair developed a leadership methodology based on the three-circles model. 
    's differentiation strategy can build and leverage a great culture is how we do and think about things, transmitted by non-genetic means as defined by Frans de Waal.  CAS theory views cultures as operating via memetic schemata evolved by memetic operators to support a cultural superorganism.  Evolutionary psychology asserts that human culture reflects adaptations generated while hunting and gathering.  Dehaene views culture as essentially human, shaped by exaptations and reading, transmitted with support of the neuronal workspace and stabilized by neuronal recycling.  Damasio notes prokaryotes and social insects have developed cultural social behaviors.  Sapolsky argues that parents must show children how to transform their genetically derived capabilities into a culturally effective toolset.  He is interested in the broad differences across cultures of: Life expectancy, GDP, Death in childbirth, Violence, Chronic bullying, Gender equality, Happiness, Response to cheating, Individualist or collectivist, Enforcing honor, Approach to hierarchy; illustrating how different a person's life will be depending on the culture where they are raised.  Culture:
    • Is deployed during pregnancy & childhood, with parental mediation.  Nutrients, immune messages and hormones all affect the prenatal brain.  Hormones: Testosterone with anti-Mullerian hormone masculinizes the brain by entering target cells and after conversion to estrogen binding to intracellular estrogen receptors; have organizational effects producing lifelong changes.  Parenting style typically produces adults who adopt the same approach.  And mothering style can alter gene regulation in the fetus in ways that transfer epigenetically to future generations!  PMS symptoms vary by culture. 
    • Is also significantly transmitted to children by their peers during play.  So parents try to control their children's peer group.  
    • Is transmitted to children by their neighborhoods, tribes, nations etc. 
    • Influences the parenting style that is considered appropriate. 
    • Can transform dominance into honor.  There are ecological correlates of adopting honor cultures.  Parents in honor cultures are typically authoritarian. 
    • Is strongly adapted across a meta-ethnic frontier according to Turchin.  
    • Across Europe was shaped by the Carolingian empire. 
    • Can provide varying levels of support for innovation.  Damasio suggests culture is influenced by feelings: 
      • As motives for intellectual creation: prompting detection and diagnosis of homeostatic deficiencies, identifying desirable states worthy of creative effort.
      • As monitors of the success and failure of cultural instruments and practices
      • As participants in the negotiation of adjustments required by the cultural process over time 
    • Produces consciousness according to Dennet. 
    to achieve broad excellence.  This builds on itself in various ways:



    The 26 hospitals in the National Comprehensive Cancer Network calls itself "the arbiter of high quality cancer is the out-of-control growth of cells, which have stopped obeying their cooperative schematic planning and signalling infrastructure.  It results from compounded: oncogene, tumor suppressor, DNA caretaker; mutations in the DNA.  In 2010 one third of Americans are likely to die of cancer.  Cell division rates did not predict likelihood of cancer.  Viral infections are associated.  Radiation and carcinogen exposure are associated.  Lifestyle impacts the likelihood of cancer occurring: Drinking alcohol to excess, lack of exercise, Obesity, Smoking, More sun than your evolved melanin protection level; all significantly increase the risk of cancer occurring (Jul 2016). 
    care."  It creates widely used practice guidelines for cancer treatment. 
    However, even at these elite centers current use lags best practice (intraperitoneal ovarian cancer is a relatively uncommon disease but is often fatal.  It has been associated with use of talcum powder (May 2016).   treatment 2006 - 2015).  And the participants have still found themselves involved in an innovation is the economic realization of invention and combinatorial exaptation.  It operates across all CAS, being supported by genetic and cultural means.  Creativity provides the mutation and recombination genetic operators for the cultural process.  While highly innovative, monopolies: AT&T, IBM; usually have limited economic reach, constraining productivity.  This explains the use of regulation, or even its threat, that can check their power and drive the creations across the economy. 
    , technology and marketing arms race (Dec 2015). 

    Nanoparticle drug delivery is slowly moving towards a targeted metastatic cancer killer (Mar 2016).  Ligandal uses logically similar model for CRISPR is clustered replicating interspersed silent palindromic repeats; a technique for exact targeting, cutting and editing of DNA based on leveraging bacterial enzymatic defenses against viruses generalized to any DNA sequence in a prokaryotic or eukaryotic cell.  It was identified during studies of a bacterial adaptive immune system.  In that system bacterial proteins grab parts of a virus that has infected them and record it within the palindromic structures that mark an array of inserted viral DNA used as a log persisted over generations.  If a new infection occurs the viral DNA is compared with the sequences and if a match exists the CAS proteins break up the viral DNA initiating its destruction.  This bacterial system was then updated and repurposed by the researchers to support targeted genetic engineering.  As explained by Dr. Doudna, the CRISPR proteins and the 20 nucleotide RNA template migrate into the nucleus where they rapidly target DNA which complements the RNA template and the Cas9 enzyme performs the edits.  Being a bacterial system CRISPR Cas9 does not target eukaryotic heterochromatic DNA well.  It is not fully understood how they find the target sequence so quickly.  It has been shown that Cas9 will bind to sites with a 5-8 base match but then it releases rapidly without cutting.  To cut, Cas9 has to reconfigure, which does not occur in the mismatch situations.   deployment (Nano conference). 

    And the testing statistical frameworks (Bayesian is an iterative form of statistics invented by Thomas Bayes.  It uses a 'prior' statistic to represent the prior situation and then performs a calculation that integrates the probability of new events occurring into a 'posterior' probability.  This posterior becomes the prior for the next iteration with the application of the Bayesian identity xpost = xprior*y/(xprior*y + z(1-xprior)).  The magic in Bayesian statistics is in accurately generating the prior xprior and the current event probabilities y and z.  R. A. Fischer was so skeptical of the legitimacy of the prior that he advocated an alternative statistical framework and experimental process.  ) and publishing methodology being used in science is undermining (Aug 2015) the leverage hospitals can obtain from a leading edge diagnosis and treatment based focus.  Often lack of validation allows powerful business models (stents to treat angina) to continue unchallenged. 
    Conversely Memorial Sloan-Kettering cancer center was able to build focused genomic databases of patients which reduced misdiagnosis of minority populations (Aug 2016). 

    North Shore's Lenox Hill HealthPlex is a funnel of profitable patients through its standalone ED is emergency department.  Pain is the main reason (75%) patients go to an E.D.  It has traditionally been part of an acute care hospital but recently is being deployed standalone as a catchment funnel to the owning hospital.  The EMTALA legislation requires E.D. treatment to stabilize every person seeking treatment by most hospitals.  Unreimbursed care is supported from federal government funds.  E. D. profitability has been helped by hospitals contracting with 3rd party companies who are able to improve margins through surprise billing.  The standalone E.D. competes with the positioning and brand power of lower cost urgent care clinics.  Commercial nature of care requires walk-ins to register to gain access to care.  With the focus on treatment of pain, E.D.s are a major distributor of opioids (5% of opioid prescriptions) and a major starting point of addiction in patients but are cutting back (Jun 2016). 
    s to the North Shore Hospitals.  Standalone EDs also undermine the positioning of low cost urgent care clinics is an efficient and less costly 'alternative' to the ER.  There is no accepted standard.  Urgent care clinics also compete with Primary care based on extended hours and accessible locations including Medical Malls.  Most have a physician on staff and treat ailments like feavers, sprains and sinus and urinary tract infection, but they also can perform X-rays, stitch up cuts and set broken bones.  Unlike an ER they can not admit patients to a hospital.  Some also offer services like pre-employment drug screening and summer camp physicals. 
    which are trying to reengineer the ED.  NYULMC is using the same strategy at Long Island College Hospital. 

    The pressure to integrate to combat narrow networks - When all health insurance plans are comparable on line people are expected to choose narrower less costly plans.  This has the effect of encouraging providers and PCP to compete to be part of the narrow plan by reducing their charges and driving down the prices of the plans.  By limiting the number of providers/doctors offered in the plans the few that are included should get more business.  Across the US in 2015 39% of health plans offered in public exchanges are narrow (30 - 70% of areas providers) or ultra-narrow (30% or less of providers).  In large cities narrow networks are even more common.  Typically if consumers go outside of the choices offered in their narrow network they will be responsible for the high bills.  There are problems induced by narrow network constraints:
    • Queuing issues - while a surgeon and a hospital may be in-network other agents in an operation, such as anesthesiologists or anesthetists, may not have the same set of insurance contracts.  Even if a subset do, once these are allocated to a task the hospital must then manage a complex set of resource constraints to keep its ORs running.  If it does this by ignoring the 'out of network' status of these necessary resources the patient will be impacted by a high bill.  
    • Success is more likely when the plan maintains a broad list of PCPs but a narrow list of specialists and hospitals (Oct 2016). 
    and the shift to population health aims to segment a patient population by treatment acuity and patient derived impact to raise outcomes efficiently without being rejected like the early HMOs.  Small numbers of patients follow life styles which impact themselves and the health care network very significantly.  Specialized treatment regimens focused on these high impact patients can improve outcomes and lower costs for these patients and the rest of the geographic patient cluster and the health care network.  Population health includes techniques for understanding the health characteristics of a patient population by leveraging analytics, business intelligence etc. so as to determine the patient population's health trends.   management (PHM is population health management.  It aims to use big data to extend the EHR infrastructure to provide cost effective personal treatment.  This implies reengineering the health care payment and delivery process.  
    • IT tools must be developed. 
    • Administrative structures must be updated. 
    • Clinical processes must be redesigned and accepted.  Successful workflow process reengineering will depend on integration with existing workflows and presence of added value! 
    • Payment mechanisms must be overhauled ensuring that the physicians get incented to move on from FFS.  
    • It must be financed.  It is not obvious where this will come from!  Providers like fixed costs.  ROI seems limited atleast initially.  Subscriptions may work for both vendors and providers. 
    ) to manage chronic disease makes data silos a big issue.  Any resulting Big Data encompasses the IT systems and processes necessary to do population based data collection, management and analysis.  The very low cost, robust, data storage organized by infrastructure: HADOOP; allows digital data to be stored en mass.  Data scientists then apply assumptions about the world to the data, analogous to evolved mechanisms in vision, in the form of algorithms: Precision medicine, Protein folding modeling (Feb 2019) assumes coevolutionary methods can be applied to identify contact points in a protein's tertiary structure.  Rather than depending on averages, analysis at Verisk drills down to specifics and then highlights modeling problems by identifying the underlying CAS.  For the analysis to be useful it requires a hierarchy of supporting BI infrastructure:
    • Analytics utilization and integration delivered via SaaS and the Cloud to cope with the silos and data intensive nature. 
    • Analytics tools (BI) for PHM will be hard to develop.  
      • Complex data models must include clinical aspects of the patient specific data, including disease state population wide.  
      • A key aspect is providing clear signals about the nature of the data using data visualization. 
    • Data communication with the ability to exchange and transact.  HIEs and EMPI alliance approaches are all struggling to provide effective exchange. 
    • Data labeling and secure access and retreival.  While HIPAA was initially drafted as a secure MPI the index was removed from the legislation leaving the US without such a tool.  Silos imply that the security architecture will need to be robust. 
    • Raw data scrubbing, restructuring and standardization.  Even financial data is having to be restandarized shifting from ICD-9 to -10.  The intent is to transform the unstructured data via OCR and NLP to structured records to support the analytics process. 
    • Raw data warehousing is distributed across silos including PCP, Hospital system and network, cloud and SaaS for process, clinical and financial data. 
    • Data collection from the patient's proximate environment as well as provider CPOE, EHRs, workflow and process infrastructure.  The integration of the EHR into a big data collection tool is key. 
    strategy (UPMC) will encourage IT solutions to the silo issue.  SMART is substitutable medical applications and reusable technology from SMART Health IT. 
    on FHIR is fast healthcare interoperability resources (fire) an HL7 standard defining a set of 'resources' that represent granular clinical concepts.  The items include:
    • Clinical
      • General: AdverseReaction, AlergyIntolerance, CarePlan, Condition, Family/History, Procedure, Questionnaire,
      • Medications: Medication, MedicationPrescription, Medication/Administration, MedicationDispense, MedicationStatement, Immunization, ImmunizationRecommendation
      • Diagnostics: Observation, DiagnosticReport, DiagnosticOrder, ImagingStudy, Specimen
      • Device Interactions: DeviceObservationreport
    • Administrative
      • Attribution: Patient, RelatedPerson, Practitioner, Organization
      • Entities: Device, Location, Substance, Group
      • Workflow Management: Encounter, Alert, Supply, Order, Order/Response
      • Financial:
    • Infrastructure
      • Support: List, Media, Other, Provenance, SecurityEvent, (Binary)
      • Document Handling: Composition, DocumentReference, DocumentManifest
      • Exchange: MessageHeader, OperationOutcome, Query
      • Conformance: Conformance, Profile, ValueSet, ConceptMap (informative)
     is one Government initiated example. 


    Johns Hopkins hospital at home is a Johns Hopkins initiated program which deploys hospital services at home such as intravenous antibiotics, oxygen, breathing treatments, and diagnostic tests to treat patients with urinary and skin infections, pneumonia and heart failure.  Doctors visit daily and nurse practitioners visit once or twice a day and remotely monitor the patients.  Cost savings vary between 19 and 44 percent.   program is reducing costs for chronic care. 



    Partners Healthcare has used geographic concentration to build regional power based on customers wanting access to its lead hospitals.  The strategy limited insurance companies ability to demand lower prices since Partners required all or nothing integration with its network. 




    Hospital business model focus strategies
    Both specialists and service line is a strategic focus and structuring by a general hospital to optimize for the most locally profitable areas of diagnosis and treatment such as: Cardiovascular, Neurology or Cancer; to respond to competition from specialist focused health care facilities such as the Texas heart institute and local low cost outpatient facilities.  It does not abandon other services which the community as a whole needs but limits the losses they generate.  A successful service line can: Diagnose and treat a high volume of service specific problems ensuring quality and efficiency, be profitable enough to gain additional investment and attract top physicians.  To be effective service line strategies require:
    • A clear view of the hospital's competitive environment. 
    • Visibility of the revenue, costs (activity based rather than top down) and benefits of particular procedures and bundles of care.  Cost estimates are often averaged by hospital accounting models. 
    • Effective management of PCP referrals to the hospital and its competitors. 
    • Changes to the: Organization structure, Incentive plans for doctors, Relationship with physicians (potentially including co-management) - who must own the problems of their service line, Business development, HCIT - which will need to capture all details of a service, HR who will need to support the employees during and after the transition. 
    focused generalists can leverage this focus generic strategy. 

    PCMH is patient centered medical homes:
    • Describes a reorganization of the health care delivery system to focus on the patient and care giver supported by EHR infrastructure and some form of process management which will be necessary to coordinate interventions by each of the functional entities resources to treat the patients specific problems.   The disadvantage of a PCMH is the administrative and technology cost needed to support its complex processes.  The PCMH
    • Was promoted as a way to incent more PCP which had been seen as a low reward role by medical students.  HCI3 argues this use of PCMH is flawed.  PCMH is driven by the medical home models of the ACA.  In this model the PCMH is accountable for meeting the vast majority of each patients physical and mental health care needs including prevention and wellness, acute care, and chronic care.  It is focused on treating the whole person.  It is tasked with coordinating the care across all elements of the health care system, including transitions and building clear and open communications.  It must ensure extended access and availability of its services and patients preferences about access.  It must continuously improve quality by monitoring evidence-based medicine and clinical decision support tools (NCQA).  Many argue that to be effective it must be connected to a 'medical neighborhood'.  The PCMH brings together the specialized resources and infrastructure required to develop and iteratively maintain the care plans and population oriented system descriptions that are central to ACA care coordination. 
      •  
    structured value delivery systems such as Lehigh valley's community care teams and AtlantiCare's special care center aim to use coordination to support efficient handoffs between specialists. 

    Businesses can target the employer funded patient niche with added focus. 

    A variety of hospitals aim to specialize on particular areas of complex care: Cardiovascular care specialists such as Texas Heart, Cancer centers such as MS-KCC; 



    Notable events involving these hospital networks include: At its core PCMH aims to focus attention on the patient, and ensure the PCP is a Primary Care Physician.  PCPs are viewed by legislators and regulators as central to the effective management of care.  When coordinated care had worked the PCP is a key participant.  In most successful cases they are central.  In certain Medicare ACO models (Pioneer) PCPs are committed to achieve meaningful use requirements.  Working against this is the: replacement of diagnostic skills by technological solutions, low FFS leverage of the PCP compared to specialists, demotivation of battling prior authorization for expensive treatments. 
    has the support to manage the care of a complex case.  It builds infrastructure to leverage:

    There are some constraints and incoherencies in the PCMH:


    The AtlantiCare special care center also reduces its billing costs by being paid a flat fee per 'hot spot is a highly connected agent with an outsize influence.  In medicine these are very high cost patients often with very poor personal health care strategies (Sep 2017). The logic of hot spots is reviewed by Atul Gawande.  Glenn Steele & David Feinberg describe how Geisinger has successfully identified and reduced the cost impact of its hot spot patients.  Robert Pearl argues the strategy has limited applicability in the current health care network.  He asserts a revolution can/must happen that will help this strategy to become broadly applicable.  Ezekiel Emanuel asserts practice transformations have allowed chronic care operations: CareMore; to identify and support hotspot patients in the community.  ' patient by the sponsoring health funds.  The goal of the center is to keep the patients healthy enough they do not need hospital and ER is emergency department.  Pain is the main reason (75%) patients go to an E.D.  It has traditionally been part of an acute care hospital but recently is being deployed standalone as a catchment funnel to the owning hospital.  The EMTALA legislation requires E.D. treatment to stabilize every person seeking treatment by most hospitals.  Unreimbursed care is supported from federal government funds.  E. D. profitability has been helped by hospitals contracting with 3rd party companies who are able to improve margins through surprise billing.  The standalone E.D. competes with the positioning and brand power of lower cost urgent care clinics.  Commercial nature of care requires walk-ins to register to gain access to care.  With the focus on treatment of pain, E.D.s are a major distributor of opioids (5% of opioid prescriptions) and a major starting point of addiction in patients but are cutting back (Jun 2016). 
    visits.  The individual transactions at the care center are designed to be low cost and highly flexible.  More transactions must occur.  The key to success is staffs that are focused on patient service.  Patients do not get charged to visit the center.  Regular health care incents and trains the opposite.  The key requirements are:
    • Open scheduling to guarantee same day access to acute patients.  A meeting where all clinicians talk about their notes on each patient scheduled to visit that day. 
    • Software specialized for tracking of patients [failure/success] in achieving their goals.  
    • Specific staffs were focused on helping the patients achieve the goals.  
    • Health coaches who contact the patients very regularly and help them stay on track.  
    • Follow up calls were made within 24 hours of a visit.  
    It is not clear how AtlantiCare becoming part of the Geisinger health system will affect these activities. 

    Lehigh valley's coordination aims to support effective transfers through the hospital stay and after discharge effectively moving the patient to the most appropriate facility for their needs.  It leverages care coordinators and IT infrastructure including the EHR refers to electronic health records which are a synonym of EMR.  EHR analysis suggests strengths and weaknesses:
    • The EHR provides an integrated record of the health systems notes on a patient including: Diagnosis and Treatment plans and protocols followed, Prescribed drugs with doses, Adverse drug reactions;
    • The EHR does not necessarily reflect the patient's situation accurately. 
    • The EHR often acts as a catch-all.  There is often little time for a doctor, newly attending the patient, to review and validate the historic details. 
    • The meaningful use requirements of HITECH and Medicare/Medicaid specify compliance of an EHR system or EHR module for specific environments such as an ambulatory or hospital in-patient setting. 
    • As of 2016 interfacing with the EHR is cumbersome and undermines face-to-face time between doctor and patient.  Doctors are allocated 12 minutes to interact with a patient of which less than five minutes was used for recording hand written notes.  With the EHR 12 minutes may be required to update the record!
    .  Can the use of coordination overcome the structural inefficiencies of not being deployed in a team structure?  It is also not clear how costs are managed and patients are incented to focus on wellness is a health care oriented employer based strategy for reducing health care costs and encouraging wellbeing.  Wellbeing has traditionally been a focus of public health.  . 


    Specialized focused providers such as the Hospital for Special Surgery in New York, and even Cleveland Clinic's focused Institutes can contract directly with employers such as Walmart, leveraging the transport infrastructure to bring patients to centers of excellence. 73% of AHA is the American_hospital association. 
    /ACHE is the American College of Healthcare Executives.   CEO's said they would contract directly with employers.  This pressure should facilitate the consolidation and disruption of the profit hospital management companies.  24*7 Branded Urgent Care is another reengineered niche undermining the constrained hospital ED is emergency department.  Pain is the main reason (75%) patients go to an E.D.  It has traditionally been part of an acute care hospital but recently is being deployed standalone as a catchment funnel to the owning hospital.  The EMTALA legislation requires E.D. treatment to stabilize every person seeking treatment by most hospitals.  Unreimbursed care is supported from federal government funds.  E. D. profitability has been helped by hospitals contracting with 3rd party companies who are able to improve margins through surprise billing.  The standalone E.D. competes with the positioning and brand power of lower cost urgent care clinics.  Commercial nature of care requires walk-ins to register to gain access to care.  With the focus on treatment of pain, E.D.s are a major distributor of opioids (5% of opioid prescriptions) and a major starting point of addiction in patients but are cutting back (Jun 2016). 
    s, and PCP is a Primary Care Physician.  PCPs are viewed by legislators and regulators as central to the effective management of care.  When coordinated care had worked the PCP is a key participant.  In most successful cases they are central.  In certain Medicare ACO models (Pioneer) PCPs are committed to achieve meaningful use requirements.  Working against this is the: replacement of diagnostic skills by technological solutions, low FFS leverage of the PCP compared to specialists, demotivation of battling prior authorization for expensive treatments. 
    practices. 

    Reengineering ED use
    The high cost of ED is emergency department.  Pain is the main reason (75%) patients go to an E.D.  It has traditionally been part of an acute care hospital but recently is being deployed standalone as a catchment funnel to the owning hospital.  The EMTALA legislation requires E.D. treatment to stabilize every person seeking treatment by most hospitals.  Unreimbursed care is supported from federal government funds.  E. D. profitability has been helped by hospitals contracting with 3rd party companies who are able to improve margins through surprise billing.  The standalone E.D. competes with the positioning and brand power of lower cost urgent care clinics.  Commercial nature of care requires walk-ins to register to gain access to care.  With the focus on treatment of pain, E.D.s are a major distributor of opioids (5% of opioid prescriptions) and a major starting point of addiction in patients but are cutting back (Jun 2016). 
    makes it a major focus for improvements.  NYT Dec 2013 reports on Raleigh NC attempts to limit inappropriate ED use by the mentally ill.  And NYT Sep 2013 op-ed notes 40 percent of ED is emergency department.  Pain is the main reason (75%) patients go to an E.D.  It has traditionally been part of an acute care hospital but recently is being deployed standalone as a catchment funnel to the owning hospital.  The EMTALA legislation requires E.D. treatment to stabilize every person seeking treatment by most hospitals.  Unreimbursed care is supported from federal government funds.  E. D. profitability has been helped by hospitals contracting with 3rd party companies who are able to improve margins through surprise billing.  The standalone E.D. competes with the positioning and brand power of lower cost urgent care clinics.  Commercial nature of care requires walk-ins to register to gain access to care.  With the focus on treatment of pain, E.D.s are a major distributor of opioids (5% of opioid prescriptions) and a major starting point of addiction in patients but are cutting back (Jun 2016). 
    visits are more cost effectively handled with home visits.  Companies such as Carna are providing doctors and nurse practitioners supported by customer care software that uses algorithms to help differentiate between cases that are safe to handle at home and those that require the ED.  There is also for profit competition from urgent care clinics is an efficient and less costly 'alternative' to the ER.  There is no accepted standard.  Urgent care clinics also compete with Primary care based on extended hours and accessible locations including Medical Malls.  Most have a physician on staff and treat ailments like feavers, sprains and sinus and urinary tract infection, but they also can perform X-rays, stitch up cuts and set broken bones.  Unlike an ER they can not admit patients to a hospital.  Some also offer services like pre-employment drug screening and summer camp physicals. 
    with Wall Street financing. 
    But hospital systems focused on innovation are using standalone EDs to undermine this reengineering and capture more patients. 


    Specialist intuitive job shops leverage low error rates to gain a competitive advantage

    Specialists can avoid many of the complex costs associated with general hospitals:


    • Hospitals handle patients with communicable infections.  So they must be able to implement isolation procedures, maintain supplies of barrier gowns etc. and carefully manage waste items.  These costs are typically avoided by competitors such as focused specialist hospitals (Texas heart etc.) and surgical centers. 

    Cancer centers: MS-KCC; build complex relationships with scientists, federal agencies and suppliers of specialist diagnostics and treatments. 


    Focused general hospitals!
    The use of service lines is a strategic focus and structuring by a general hospital to optimize for the most locally profitable areas of diagnosis and treatment such as: Cardiovascular, Neurology or Cancer; to respond to competition from specialist focused health care facilities such as the Texas heart institute and local low cost outpatient facilities.  It does not abandon other services which the community as a whole needs but limits the losses they generate.  A successful service line can: Diagnose and treat a high volume of service specific problems ensuring quality and efficiency, be profitable enough to gain additional investment and attract top physicians.  To be effective service line strategies require:
    • A clear view of the hospital's competitive environment. 
    • Visibility of the revenue, costs (activity based rather than top down) and benefits of particular procedures and bundles of care.  Cost estimates are often averaged by hospital accounting models. 
    • Effective management of PCP referrals to the hospital and its competitors. 
    • Changes to the: Organization structure, Incentive plans for doctors, Relationship with physicians (potentially including co-management) - who must own the problems of their service line, Business development, HCIT - which will need to capture all details of a service, HR who will need to support the employees during and after the transition. 
    to tighten the focus of a general hospital: Mayo Clinic, Geisinger, El Camino Hospital; can never directly match the efficiency of a specialist: Standalone VASC (Aug 2016);  But it fills a key need of the community it serves.  Recognition of that need can provide the community general hospital with its own focused strategic advantages to add to the effective execution of the service lines.  The key requirements are:





    Government sustained, safety net focus
    Safety net hospitals are hospitals which care for a financially challenged patient population.  There are about 300 safety-net hospitals including: Grady memorial, Harris Health, Mcleod; in the US providing longer term care to the poor and indigent than regular for-profit and non-profit acute care hospitals.  This arrangement allows the other hospitals to focus on the needs of their insured customers.  Once acute treatment of a life-threatening illness, which will be funded by Emergency Medicaid, has completed, longer term treatment depends on the support of a safety net hospital.  This dependency is being undermined by HRRP (Dec 2018). 
    such as Grady Memorial, benefit from high volumes of acute patients, helping specialists build operational expertise. 


    Notable events involving these hospital networks include:





    Medical system for profit differentiation strategies
    HCA, HMA + CYH, LPNT, UHS and Tenet (THC) strategy: These for profit hospital management companies have leveraged FFS is fee-for-service payment.  For health care providers the high profits were made in hospitalizations, imaging and surgery.  Due to its inducing excessive treatment activity it may be replaced by FFV bundled payment.   into a powerful mechanism for capturing treatment revenue.  They can benefit from ACA is the Patient Protection and Affordable Care Act amended by the Health Care and Education Reconciliation Act of 2010 (Obama care).  In part it is designed to make the health care system costs grow slower.  It aims to do this by: increasing competition between insurers and providers, offering free preventative services to limit the development of serious illnesses, constraining patients' use of expensive services, constraining the growth of payments to Medicare providers and piloting new ways for PCPs to manage patient care to keep patients away from costly E.D.s.  It funds these changes with increased taxes on the wealthy.  It follows an architecture developed by Heritage Action's Butler, Moffit, Haislmaier extended by White House OMB health policy advisor Ezekiel Emanuel & architect Jeanne Lambrew.  The Obama administration drafting team included: Bob Kocher; allowing it to integrate ideas from: Dartmouth Institute's Elliot Fischer (ACO).  The ACA did not include a Medicare buy in (May 2016).  The law includes:
    • Alterations, in title I, to how health care is paid for and who is covered.  This has been altered to ensure
      • Americans with preexisting conditions get health insurance cover - buttressed by mandating community rating and
      • That they are constrained by the individual mandate to have insurance but the requirement was supported by subsidies for the poor (those with incomes between 100 & 400% of the federal poverty line).  
      • Children, allowed to, stay on their parents insurance until 26 years of age. 
    • Medicare solvency improvements. 
    • Medicaid expansion, in title II: to poor with incomes below 138% of the federal poverty line; an expansion which was subsequently constrained by the Supreme Court's ruling making expansion an optional state government decision. 
    • Hospital Readmissions Reduction Program (HRRP) which was enforced by CMS mandated rules finalized in 2011 and effected starting Oct 2012.  
    • Medical home models.  
    • Community transformation grants support the transformation of low income stressed neighborhoods to improve their lifestyles and health. 
    • Qualifications for ACOs.  Organizations must:
      • Establish a formal legal structure with shared governance which allows the ACO to distribute shared savings payments to participating providers and suppliers. 
      • Participate in the MSSP for three or more years. 
      • Have a management structure. 
      • Have clinical and administrative systems. 
      • Include enough PCPs to care for Medicare FFS patient population (> 5000) assigned to the ACO. 
      • Be accountable for the quality and cost of care provided to the Medicare FFS patient population. 
      • Have defined processes to promote: Evidence-based medicine, Patient-centeredness, Quality reporting, Cost management, Coordination of care; 
      • Demonstrate it meets HHS patient-centeredness criteria including use of patient and caregiver assessments and individualized care plans.  
    • CMMI Medicare payment experimentation.  
    • Requirements that pharmaceutical companies must report payments made to physicians (Sunshine Act). 
    • A requirement that chain restaurants must report calorie counts on their menus. 
    driven reductions in uninsured but must develop new strategies to cope with meaningful use is the set of standards defined by CMS Incentive Programs that governs the use of electronic health records and allows eligible providers and hospitals to earn incentive payments by meeting specific criteria.  It aims to ensure that ARRA subsidies for HIS are used to generate health improvements.  It is staged:
    1. 2011-2012 Data capture and sharing - Criteria focus on electronically capturing health information in a standardized format.  Using that information to track key clinical conditions.  Communicating that information for care coordination processes.  Initiating the reporting of clinical quality measures and public health information.  Using information to engage patients and their families in their care.  Achieving meaningful use stage 1 requires meeting all core and selected menu objectives. 
    2. 2014 Advance clinical processes - More rigorous health information exchange requirements.  Increased requirements for e-prescribing and incorporating lab results.  Electronic transmission of patient care summaries across multiple settings.  More patient-controlled data.  A patient portal is required.  CMS hospital core measures, CMS hospital menu set measures, NPRMs of stage 2 meaningful use and certification criteria have been announced (2013).  
      • MU2 requires EHR systems to support direct messaging to send PHI to registered users. 
    3. 2016 Improved outcomes - Improving quality, safety, and efficiency, leading to improved health outcomes.  Decision support for national high-priority conditions.  Patient access to self-managed tools.  Access to comprehensive patient data through patient-centered HIE.  Improving population health.  
     constraints, at least while the Administration and Senate are Democratic.  Counter cyclical revenue generation, growth from the aging population demographics, and cash generation from high priced services, along with consolidation is popular with shareholders including hedge funds is an investment fund that accepts investments from a limited number of accredited individual or institutional investors.  Hedge funds are able to use investment methods that are not allowed for other types of fund. 
    : Glenview.  CYH and Tenet both target major purchases in 2013.  CYH bid for HMA was accepted.  They have the opportunity during the shift from FFS to shared risk to push independent PCP is a Primary Care Physician.  PCPs are viewed by legislators and regulators as central to the effective management of care.  When coordinated care had worked the PCP is a key participant.  In most successful cases they are central.  In certain Medicare ACO models (Pioneer) PCPs are committed to achieve meaningful use requirements.  Working against this is the: replacement of diagnostic skills by technological solutions, low FFS leverage of the PCP compared to specialists, demotivation of battling prior authorization for expensive treatments. 
    s and specialists towards direct employment and profit oriented medical strategies but they may just increase the cost structure and undermine profitability.  More likely they will consolidate, and then disintermediate is the shift of operations from one network provider to another lower cost connected network provider.  The first network provider leverages the cost benefits of the shift to increase its profitability but becomes disrupted.  The lower cost network provider gains revenue flows, expertise and increases its active agents.  Over time this disruptive shift will leave the higher cost network as a highly profitable shell, but the agents that performed the operations that migrated to the low cost network will be ejected from the network.  For a company that may imply the costs of layoffs.  For a state the ejected workers imply increased cost impacts and reduced revenue potential which the state are trading off for improved operating efficiency. 
    to sustain profits unless constrained by the F.T.C. - is either:
    • Federal Trade Commission.  Setup during the Wilson administration.  Its powers include blocking mergers due to antitrust concerns using the powers of the Clayton act. 
    • Follicular thyroid cancer. 
    (sep 2014). 

    CYH has spun off its rural hospitals as Quorum Health (Aug 2015). 

    Consolidation of IT infrastructure of merged provider networks is likely judged key to removing complexity and cost and improving flexibility and IT responsiveness to the businesses.  It is not clear that the hospital business executives will agree. 




    Geographic niche hospital strategies
    The traditional community hospitals: El Camino Health; provide a platform is agent generated infrastructure that supports emergence of an entity through: leverage of an abundant energy source, reusable resources; attracting a phenotypically aligned network of agents. 
    supporting:
    • Development of a network of businesses which could support current, and attract new, residents with the support of the hospital. 
    • A population of independent doctors who gained low cost access to capital intensive medical infrastructure.  They could explore proximate niches enabling evolutionary pressure to build. 
    But these hospital's business model may be undermined by other evolved amplifiers:
    Notable events involving these hospital networks include:
    The supportive local, state and federal regulatory environments limited the competitive forces on the independent doctors undermining the drive to enter additional niches and encouraging extended phenotypic alignment. 


    Hospitals have been encouraged to deploy conforming EHR refers to electronic health records which are a synonym of EMR.  EHR analysis suggests strengths and weaknesses:
    • The EHR provides an integrated record of the health systems notes on a patient including: Diagnosis and Treatment plans and protocols followed, Prescribed drugs with doses, Adverse drug reactions;
    • The EHR does not necessarily reflect the patient's situation accurately. 
    • The EHR often acts as a catch-all.  There is often little time for a doctor, newly attending the patient, to review and validate the historic details. 
    • The meaningful use requirements of HITECH and Medicare/Medicaid specify compliance of an EHR system or EHR module for specific environments such as an ambulatory or hospital in-patient setting. 
    • As of 2016 interfacing with the EHR is cumbersome and undermines face-to-face time between doctor and patient.  Doctors are allocated 12 minutes to interact with a patient of which less than five minutes was used for recording hand written notes.  With the EHR 12 minutes may be required to update the record!
    systems through HITECH the Health Information Technology and Economic and Clinical Health Act 2009.  Central to the act is the establishment of the Medicare and Medicaid EHR incentive programs which make available $27 Billion over 10 years to encourage eligible professionals and hospitals to adopt and meaningfully use certified EHR technology.  It is assumed that over time use of the new infrastructure will grow exponentially.  HITECH established a formal mechanism for public input into HIT policy - the HITPC and HITSC.  Hitech is a key evolved amplifier driving the migration to and installation of Epic and Cerner EHR systems. 
    financial incentives and meaningful use is the set of standards defined by CMS Incentive Programs that governs the use of electronic health records and allows eligible providers and hospitals to earn incentive payments by meeting specific criteria.  It aims to ensure that ARRA subsidies for HIS are used to generate health improvements.  It is staged:
    1. 2011-2012 Data capture and sharing - Criteria focus on electronically capturing health information in a standardized format.  Using that information to track key clinical conditions.  Communicating that information for care coordination processes.  Initiating the reporting of clinical quality measures and public health information.  Using information to engage patients and their families in their care.  Achieving meaningful use stage 1 requires meeting all core and selected menu objectives. 
    2. 2014 Advance clinical processes - More rigorous health information exchange requirements.  Increased requirements for e-prescribing and incorporating lab results.  Electronic transmission of patient care summaries across multiple settings.  More patient-controlled data.  A patient portal is required.  CMS hospital core measures, CMS hospital menu set measures, NPRMs of stage 2 meaningful use and certification criteria have been announced (2013).  
      • MU2 requires EHR systems to support direct messaging to send PHI to registered users. 
    3. 2016 Improved outcomes - Improving quality, safety, and efficiency, leading to improved health outcomes.  Decision support for national high-priority conditions.  Patient access to self-managed tools.  Access to comprehensive patient data through patient-centered HIE.  Improving population health.  
     requirements. 
    The EHR systems help hospitals:

     

    Long Island college hospital is an example of an urban hospital whose:
    Rural hospitals are recipients of DOA - U.S. Department of Agriculture. 
    Food, Nutrition & Consumer Services, low cost financing. 

    Rural hospitals, such as Mercy Hospital Independence Kansas, are under huge pressure from an aging (more chronically ill and costly) shrinking population and ACA is the Patient Protection and Affordable Care Act amended by the Health Care and Education Reconciliation Act of 2010 (Obama care).  In part it is designed to make the health care system costs grow slower.  It aims to do this by: increasing competition between insurers and providers, offering free preventative services to limit the development of serious illnesses, constraining patients' use of expensive services, constraining the growth of payments to Medicare providers and piloting new ways for PCPs to manage patient care to keep patients away from costly E.D.s.  It funds these changes with increased taxes on the wealthy.  It follows an architecture developed by Heritage Action's Butler, Moffit, Haislmaier extended by White House OMB health policy advisor Ezekiel Emanuel & architect Jeanne Lambrew.  The Obama administration drafting team included: Bob Kocher; allowing it to integrate ideas from: Dartmouth Institute's Elliot Fischer (ACO).  The ACA did not include a Medicare buy in (May 2016).  The law includes:
    • Alterations, in title I, to how health care is paid for and who is covered.  This has been altered to ensure
      • Americans with preexisting conditions get health insurance cover - buttressed by mandating community rating and
      • That they are constrained by the individual mandate to have insurance but the requirement was supported by subsidies for the poor (those with incomes between 100 & 400% of the federal poverty line).  
      • Children, allowed to, stay on their parents insurance until 26 years of age. 
    • Medicare solvency improvements. 
    • Medicaid expansion, in title II: to poor with incomes below 138% of the federal poverty line; an expansion which was subsequently constrained by the Supreme Court's ruling making expansion an optional state government decision. 
    • Hospital Readmissions Reduction Program (HRRP) which was enforced by CMS mandated rules finalized in 2011 and effected starting Oct 2012.  
    • Medical home models.  
    • Community transformation grants support the transformation of low income stressed neighborhoods to improve their lifestyles and health. 
    • Qualifications for ACOs.  Organizations must:
      • Establish a formal legal structure with shared governance which allows the ACO to distribute shared savings payments to participating providers and suppliers. 
      • Participate in the MSSP for three or more years. 
      • Have a management structure. 
      • Have clinical and administrative systems. 
      • Include enough PCPs to care for Medicare FFS patient population (> 5000) assigned to the ACO. 
      • Be accountable for the quality and cost of care provided to the Medicare FFS patient population. 
      • Have defined processes to promote: Evidence-based medicine, Patient-centeredness, Quality reporting, Cost management, Coordination of care; 
      • Demonstrate it meets HHS patient-centeredness criteria including use of patient and caregiver assessments and individualized care plans.  
    • CMMI Medicare payment experimentation.  
    • Requirements that pharmaceutical companies must report payments made to physicians (Sunshine Act). 
    • A requirement that chain restaurants must report calorie counts on their menus. 
    driven reductions in Medicare is a social insurance program that guarantees access to health insurance for Americans aged 65 and over, and younger people with disabilities and end stage renal disease or ALS.  Medicare is currently missing a cap on out-of-pocket costs and direct prescription drug coverage.  It includes:
    • Benefits
      • Part A: Hospital inpatient insurance.  As of Dec 2013 Medicare pays for home care in only limited circumstances, such as when a person needs temporary nursing care after a hospitalization.  Part A covers 20 days of inpatient rehabilitation at a SNF after discharge from inpatient care at a hospital. 
      • Part B: Medical insurance for non-hospital services including: doctor visits, tests, injectable drugs, ambulances, physical therapy;
      • Part C: Medicare Advantage 
      • Part D: indirect prescription drug coverage The MMA prohibits Medicare from directly negotiating drug prices. 
    • Eligibility
      • All persons 65 years of age or older who are legal residents for at least 5 years.  If they or a spouse have paid Medicare taxes for 10 years the Medicare part A payments are waived.  Medicare is legislated to become the primary health plan. 
      • Persons under 65 with disabilities who receive SSDI. 
      • Persons with specific medical conditions:
        • Have end stage renal disease or need a kidney transplant. 
        • They have ALS. 
      • Some beneficiaries are dual eligible. 
      • Part A requires the person has been admitted as an inpatient at a hospital.  This is constrained by a rule that they stay for three days after admission.  
    • Sign-up
      • Part A has automatic sign-up if the person is drawing social security.  Otherwise the person must sign-up for Part A and Part B. 
      • Should sign-up for Part B during the Initial Enrollment Period, of seven months centered around 65th birthday, online or at a social security office.  But if still covered by spouse's insurance or not yet retired then may only join during the 3 month general enrollment period (January to March) each year, with coverage initiated the following July.  Incremental yearly 10% penalties apply for not signing up at 65.  These penalties apply to all subsequent premiums. 
    • Premiums
      • Part A premium
      • Part B insurance premium
      • Part C & D premiums are set by the commercial insurer.  
     reimbursements is the payment process for much of US health care.  Reimbursement is the centralizing mechanism in the US Health care network.  It associates reward flows with central planning requirements such as HITECH.  Different payment methods apportion risk differently between the payer and the provider.  The payment methods include:
    • Fee-for-service,
    • Per Diem,
    • Episode of Care Payment, 
    • Multi-provider bundled EPC,
    • Condition-specific capitation,
    • Full capitation.  
     with dozens shutting (Oct 2015). 








    Key flows in the health care provider network is the owned health system and its extended network of partners.  
    The key plans (P), flows (F), signals, is an emergent capability which is used by cooperating agents to support coordination & rival agents to support control and dominance.  In eukaryotic cells signalling is used extensively.  A signal interacts with the exposed region of a receptor molecule inducing it to change shape to an activated form.  Chains of enzymes interact with the activated receptor relaying, amplifying and responding to the signal to change the state of the cell.  Many of the signalling pathways pass through the nuclear membrane and interact with the DNA to change its state.  Enzymes sensitive to the changes induced in the DNA then start to operate generating actions including sending further signals.  Cell signalling is reviewed by Helmreich.  Signalling is a fundamental aspect of CAS theory and is discussed from the abstract CAS perspective in signals and sensors.  In AWF the eukaryotic signalling architecture has been abstracted in a codelet based implementation.  To be credible signals must be hard to fake.  To be effective they must be easily detected by the target recipient.  To be efficient they are low cost to produce and destroy. 
    (S), constraints (C), infrastructure amplifiers (IA) and evolved amplifiers (EA) through these hospital management companies are: