Customers! Brought To You By Payment Reform (Finally)
Last week I attended the Startup Health New York Roundtable at the offices of Edelman, the global PR firm located right up the block from Health 2.0’s NYC digs.
The meeting was titled “Bridging The Gap Between Health Entrepreneurs and Government” and was attended by 2 really important change agents thinking about health care in the government: Todd Park and Joe McCannon. As most of you know Todd is the “Chief Technology Officer” at the Department of Health and Human Services (actually more an entrepreneur-in-residence than anything else) and Joe is Group Director of Learning and Diffusion in the Innovation Center at the Centers for Medicare & Medicaid Services.
Overall I thought this was one of the best health events I’ve attended in a while and I think Steve (Krein) and Unity (Stoakes) deserve a big shout out for organizing a great meeting. The reason I think this event was so good was I got to hear key government people talk frankly about what’s going on behind the scenes and why that’s going to be important for the private sector. (Networking was also top notch with a lot of familiar faces in the room including: @edshin, @pjmachado, @chcosts, @sarahkrug1, @sladenyc, among others.)
From what I heard there are 2 big things are going on:
- First, payment reform is finally here. Under the Affordable Care Act (ACA) the Centers for Medicare and Medicaid (CMS) is finally empowered to change the way the government pays for health care. Prior to ACA we were stuck in a fee-for-service paradigm that encourages more health care rather than better health care. Joe talked about how CMS is implementing new models (bundled payments, shared savings, etc.) that encourage “health maximization” over “volume maximization” and create incentives for providers and health institutions to embrace health information technologies. CMS is the biggest health payor and reforms made by the government are very likely to diffuse into the private sector and the rest of the market.
- Second, big data is just getting started. Todd talked again about all the work that the government is doing to liberate health data that is being collected by a wide range of agencies. What made this discussion different, however, was how detailed he was in discussing these efforts. He talked about the pending release of Medicare physician quality data and the creation of a “Physician Compare” to launch in 2013, and he also talked about the Blue Button initiative and how it had helped answer key questions about patient access to their data under HIPAA. Todd mentioned that we should expect even more data to come from government sources soon.
The most important take-away from the talk, however, was the revelation that leaders at provider and payor organizations are now very interested in new digital health technologies as they pursue ways to provide health more efficiently and effectively. Todd and Joe mentioned that they have spoken with countless health system and payor CEOs who are looking for ways to exploit these new technologies. Moderator, Thomas Goetz (Executive Editor at Wired), asked whether these big stakeholders were willing to even talk with small technology companies and the answer to that question was an emphatic “yes”.
In the past I think starting a Health 2.0-type company was a crap shoot because there simply weren’t enough customers to support a new and disruptive ecosystem of companies. I think that’s changing (and quickly!) and I think this new reality creates huge opportunities for entrepreneurs in the space. Todd said that there has never been a better time to be a health care entrepreneur and I very much agree.