by Tony Chen

I will be out of pocket for a couple of days - I've been busier than usual working on some projects for work. Will be back soon to introduce a new blogger that has recently joined the Hospital Impact team. In the meantime, check out the World Health Care Blog, including my post on recent news themes.

by Tony Chen

I've been enjoying some interesting posts from Paul Levy's blog. For an organization like his, it's amazing that he's able to provide so much transparency from his position. Some great recent posts:
- Here's an example of a valid patient compliant and how to respond in a responsible and professional way.
- Here's Paul's take on P4P. As hospitals, we are price-takers, not price-setters, so we have to take what we can get.
- Here's a patient story on why he really doesn't trust his surgeon.
- Here's a good example that reminds us that not all patient safety problems require big, complicated solutions - sometimes it's just a little extra attention.
- Here's Paul's career advice around whether to pursue a JD or MPH and what to read.

Have a great weekend!

by Tony Chen

There's been some good conversations going on here at hospital impact and across the healthcare blogosphere right now:
- I continue to get comments on the "If Disney Ran Your Hospital" series, including a recent comment from Fred Lee, the author, and Chris, someone who helped published the book. Though there was some criticism about the book, a lot of people have benefited from it. I've heard that 60,000+ copies have been sold.
- Nick's post on the Passive Aggressive Organization really seem to hit a nerve with a lot of people, in and outside of healthcare.
- My recent post of Private Equity and M&A in Healthcare has generated some very interested discussion. One asset manager has chimed in on the real reason for LBO: to hide their fraudelent ways.
- There are some excellent comments in the recent post about healthcare 2.0. You know a concept has finally arrived when there's a conference around it - check it out, our friend Matthew Holt is helping to put it together. Check out the ScienceRoll blog that covers a lot of interesting health 2.0 concepts, including tons of screenshots from Second Life.
- The World Healthcare Blog has put up 20 posts in the last 48 hours. Check out the podcasts from Michael Porter, WalMart, Google, and tons of others.

by Tony Chen

Last week, I posted an entry on the most innovative hospital in the country. Today let's see what we can learn from the most innovative retailer in the world - do you know who it is? What store makes more revenue per square foot than Tiffany & Co, Best Buy, Neuman Marcus, and Saks? You might not intuitively think that the masters of product design are also masters of retail:

Apple is the best retailer in America, making more than $4,000 of annual sales per square foot in 2006. (Tiffany's is 2nd, at a mere $2,666 per sq ft) Read this great article in Fortune on how Apple came to make the controversial decision to go into retail and how they nailed it.

One the most important things Apple did was to build a store in their warehouse for testing. In other words, they approach store concept/design the same way they approach their product design. It has to be human-centric. Among many other insights, here were a few key take-aways for me:

- They designed the store around customer needs, not around product functionality. Their first "test-store-in-a-warehouse" was laid out by product category (i.e. how their company is structured internally). Immediately they knew it wasn't going work - people don't care about the actual machine/hardware, they just care about what they can do with it.
- They learned one of their best insights from outside of retail - hotels. When asked to name the "best service experience", 16 of 18 focus group participants named hotels. So, to inject that Four Seasons flavor of friendliness/service, they added the "Genius Bar" - "let's put a bar in our stores. But instead of dispensing alcohol, we dispense advice."
- They focused only on 20 products, and cut all the other clutter. Computers are complex enough - they keep it visually simple and attractive.
- They paid a premium for the best locations. And by best locations, it is mainly accessibility and visibility. They realized most people won't invest 20 minutes to drop by an Apple store, but they may invest 20 footsteps. Once they're in, the store, the service, and products are pretty compelling.

We all know that hospitals of the future will be drastically more retail than it is now. So, what questions should we be asking as we put together a hospital retail strategy? The main take-away for me is the laser-sharp focus on the consumer. Every little detail about how the store is designed is to add value to the consumer - learning about new products, having an "aha!" moment, getting some small bug fixed. Yes, it costs more to design it, the build it, and to operate it. But their results speak for themselves - their closest competitor has to increase revenue per square foot by 50% to match them.

In some sense, hospitals have been following this advice, except that we've treated the physicians as the end-user, not the patient.

And rightfully so, as thus far, it's really the physician who has more choice and can shop around. Nonetheless, Apple has shown us that everyday consumers notice when things are designed just for them - they vote with feet and will eventually rule (or at least largely influence) the healthcare landscape.

by Tony Chen

Well, it's been a lot of fun doing Hospital Impact recently partly because I get to explore many nooks and crannies of the burgeoning blogosphere business. This blog gives me the chance to learn about blogging / media / publishing just as much about healthcare. So, today we go on a slight detour off our "business of healthcare" track and check out the business of blogging. The blogosphere is alive and kicking and people are starting to figure out business models to monetize blogs in new ways.

Some recent developments:

- Hospital Impact content is licensed by Newstex, a blog aggregator company that makes my blog and many others available to LexisNexis users worldwide. In January, ~150 folks did searches through LexisNexis and ended up on hospital impact posts. That's $5 for me, enough to pay my hosting costs.

- Hospital Impact content is also available via Blogburst, another blog aggregating company whose customers are big media outlets like Reuters, FoxNews, USAToday, and others. When editors see a good post, they'll put it up on their news sites. Take a look at the main Reuters Health page, and you'll see a recent post selected from Hospital Impact. Almost 1,000 people have viewed hospital impact content right on the Reuters site. I only get paid if hospital impact is one of the top 100 blogs referenced by these outlets - that's highly unlikely, given our niche audience. However, our fellow blogger Fard might have a chance - he was #92 last time I looked.

- As you'll see on the right, I've started running google ads (yes, I'm selling out, but to be fair, I've held out longer than most). I think the links are actually fairly targeted, but still deciding whether it just clutters the page too much.

- The popular social media giant MySpace recently entered the news business. They, too, are utilizing blogs as news sources. Hospital Impact has a story up on their front news page for health. Nonetheless, no one seems to be reading MySpace news at all.

- Fun! Memorial Hospital and Health System of South Bend, Indiana is quoting hospital impact on their main website.

- Some company in Arizona offered me $500 for the url www.hospitalimpact.org. (don't worry, I did not accept. Add a zero and maybe we can start talking).

- It's really through hospital impact that I have the honor of blogging over at the World Health Care Blog. Honestly, the last 2 weeks of posts there from all my fellow bloggers have been the best healthcare blogging I've ever seen. Definitely worth a read.

- A couple of months ago, an editor from a health IT magazine paid me to put one of my posts into his magazine. Sure, why not!

- It's really humbling to see hospital impact as a source for Advisory Board and FierceHealthcare news items. Increasingly, I see particular posts sourced for university blackboards.

- 200-300 folks a day stumble upon hospital impact through google searches. Some recent searches: tony chen enh (weird!), clinic in drug store, true incent of father and daughter regarding breastmilk sucking, hardwiring excellence, disney hospital, hospital marketing, world health blog, revolution health, hospital management getting departments to work together. The power of google is amazing - all businesses must incorporate "search engine optimization" in their web marketing strategy (and blogging can be a big part of that!)

Okay, enough hort-tootin'. At the end of the day, blogging is a lot like sports. 0.000001% of all people who play sports get paid to play sports. The rest of us play because it's good exercise, it's social, and it's just plain fun.

Now back to our regularly scheduled program...

by Nick Jacobs

In an October 1, 2005 article in the Harvard Business Review, "The Passive Aggressive Organization" by Gary L. Neilson, Bruce Pasternack and Karen E Van Nuys, we learn about the characteristics of, you guessed it, passive aggressive organizations. My immediate response to the article was something like this, "Wow, this sounds exactly like a lot of the places where I have worked." (And some of the places where I work now.) For your sake, go online and buy it for $6 because what you'll be reading here is my version of a summary that surely won't do it justice.

When you observe a few of these symptoms in your organization, you surely will know where you are working:

7 Traits of a Highly Passive-Aggressive Organization

1. Senior management leaves unclear lines as to where accountability lies.

2. Employees put forth only enough effort to look compliant.

3. Managers are absolved for almost anything they do.

4. Employees wait interminably for a "project go ahead," and then their actions are accompanied by a sea of second guessing.

5. To learn, to share and to achieve are actions that are not encouraged.

6. There is either too much or too little control at the top.

7. Employees can't understand why their promising projects can't get traction.

The article goes on to say that the lack of confrontation is only a disguise for intransigence. In many companies a failure to align incentives and goals is generally seen as a primary contributor to this culture. It further states that the observer will frequently see agreement without co-operation which leads to the impression of compliance.

It's also clear that leadership is POOR at completing employee evaluations, and, in many companies, the failure to align incentives with goals is rampant.

So, you might ask, how can this culture be fixed?

Leadership must identify, verify and admit that they have a problem, and then work in a dedicated fashion to address each of the symptoms delineated above.

The article recommends bringing in an outsider, the new sheriff in town. It also suggests creating a team of seven up and comers who are assigned the seven most important tasks needed to be accomplished during a turn around. This team must be empowered by the senior leadership members, and be permitted to fly.

It's not easy. It's not necessarily fast, and if it's not addressed, it will take the organization to the brink of failure. So, good luck.

by Tony Chen

"What kind of hospitals do you consider when you are looking for really innovative ideas?" That was the question I received recently from a physician leader. My answer: "Innovation comes in all different shapes and sizes. While most people might think of Mayo and Cleveland Clinic as the most innovative, you'd be surprised at how innovative some small community hospitals can be."

What about you? Who would you vote for as the most innovative hospital in the country?

Here's the hospital that has my vote: Memorial Hospital and Health System in South Bend, Indiana (note the neat url address).

It's not every day that you see a hospital with "Innovation" as one of its core values. I spoke with their VP of marketing and innovation strategy, Diane Stover, earlier this week. Boy, was I in for a treat! She explained the process of how their hospital eventually embraced innovation as a key strategic platform. They specifically looked outside of healthcare and visited the likes of 3M, Microsoft, Whirlpool, and many others. They saw innovation as the way to take their future into their own hands. They realized that innovation was the most sustainable way to retain and attract the best talent - to create an environment whereby employees get to do something that really stirs them. This has got to be the most impressive "organizational culture" transformation I've ever seen. Here are some stories that need to be told!

World-Class Healthcare Development Partner
Memorial has managed to set up one of the nation's top healthcare R & D centers. Baxter, DuPont, LandsEnd, WalMart, and several other big names you'd recognized are already their alliance partners. Essentially, we all know that healthcare is growing leaps and bounds. These companies need specific clinical expertise & patient access/insights to develop their products further. Memorial becomes their product development partner, their source for patients/focus group members, and their clinical expert advisors. You may ask: why wouldn't a company partner with a Mayo or Stanford instead? Simple, Memorial acts fast - they are set up to delight these corporate partners.

The Experience Economy
I'm not sure if Diane has a FACHE certification or not. But it doesn't matter because she has a unique certification in the Experience Economy. What a forward-looking competency that all hospitals should have in house! Similar to the "If Disney Ran Your Hospital" paradigm, we have to realize that as hospitals, we aren't just providing a service. We have to be masters at designing experiences - experiences that delight patients and their families.

Partnership with IDEO
Diane and her CEO had a deal - if a company's name came up 3 separate times, they'd check them out. One company was IDEO, the masterful design and product development firm and maybe one of the most innovative firms in the world. They went visit IDEO and was so inspired by their strategy by design concepts that they halted a $40MM heart/vascular center construction. Yes, I'll say it again - they halted construction (can you imagine the headaches?). They realized that they couldn't build this new building without incorporating the human-centered design elements. They hired IDEO and redesigned the building. Today, any new capital project that is submitted has to have a facility design as well as an experience design.

Innovation can be defined in many different ways - in patient care, in technology, in workflow, in corporate culture. Please share with us your innovation story in the comments! What hospital do you think is the most innovative in the country, and why?

by Tony Chen

You walk into your local drugstore to pick up a prescription. Next to the pharmacy, where there used to be a wall of decongestants, now there's a "retail clinic" with plasma TVs displaying your menu of services, a touch-screen kiosk, and a smiling nurse practitioner waiting to assist you.

Like wildflowers blooming in spring, retail clinics have been popping up all over the country. By the end of this year, there will probably be close to 800 clinics across the country. If things go well, experts believe these clinics will exist by the thousands (maybe tens of thousands) and be almost as ubiquitous as your local drug store or bank. One magazine calls them McClinics.

As a healthcare consumer & healthcare blogger, I realized that no one in the healthcare community is really giving the "unbiased" story about these clinics. So here we go (feel free to let me know if you think I'm just as biased).

I've talked to physicians, I've visited these clinics, I've talked to nurse practitioners who work there. Here's what I've been telling my friends who've asked me about 'em.

What do these retail clinics offer me?

Quick, convenient care for the most common everyday ailments and injuries. Strep throat, bronchitis, ear infections, the flu, cold sores, athlete's foot, and other simply diagnosed run-of-the-mill illnesses. Also, you can get vaccinations and basic health screenings. And the best part is that you can usually get in and out in less than 30 minutes. If you need meds, the pharmacy is just right across the aisle.

How much will it cost? Do they take insurance?

They do take insurance. But even if you don't have insurance, the cost will be typically in the $30-60 range. And obviously, this would be cheaper than a physician or ER visit.

How do I know if I should go there instead of seeing my doctor?

These retail clinics are ideal for you if you (1) have a hard time getting in to see your physician and/or (2) already know what you have & need. For example, you know your kid has an ear infection and just needs some meds. Pop in the drug store, stop by the clinic, get the meds at the pharmacy, and get home in 45 minutes. Pretty convenient, right? This is a great option especially if it'll take a week to get a physician appt.

However, there are some disadvantages. First, you should know that if you have other symptoms or you somehow don't fit their criteria for treatment, the nurse practitioner will refer you to your physician or to an ER. So, there's a ~10% chance that you go, wait in line, be seen by the NP, and then still have to go see your physician. Of course, this is for your own good (and keeps you from suing them).

Secondly, to state the obvious, you are being seen by a nurse practitioner, not a physician. Especially if you have a complex health history, isn't it better to be seen by a physician who has known you for years and knows your health history? Might your doc find something through knowing your "intangibles?" As such, these clinics are best for people who are generally healthy with isolated everyday illnesses.

What has the response been so far?

Overall, there seems to be a growing acceptance of these clinics by patients as well as healthcare providers. Initially, there was some concern about quality and about continuity of care. In addition, some physicians feel that these clinics essentially "cherry-pick" the some of the basic services that they provide. The quality concerns have been addressed through strict guidelines for the scope of treatment. The continuity of care concerns are mostly addressed by the fact that these clinics always send your information to your primary care physician.

At the end of the day, consumers have been voting with their feet. A recent WSJ poll shows that 90% of patients who utilize retail clinics were satisfied with quality, 83% were satisfied with the convenience. There have been countless news articles recently that highlight satisfied patients, mainly due to convenience and price. (Here are a few articles from Tennessee, Wisconsin, and Louisiana.

Don't get me wrong - I'm a big fan of having a great relationship with my primary care physician. But I've got to admit: as a busy new father, I weigh the risks against the time/convenience factors. Yes, for the right occasion, I would use these clinics, too.

Next time you're picking up some milk and potato chips at Walgreens, get that wart removed and finish off your hep B vaccination.

by Nick Jacobs

We are living in a health care system that embraces episodic care, that does not reward or reimburse prevention, and that is currently on the precipice. It was the Treaty of Descartes that originally insisted upon the separation of the mind and spirit from the body in our hospitals.

As we observe the near turmoil that currently represents our health care system, we find ourselves attempting to hold onto beliefs and values that are no longer valid. This lack of validation causes concern and anger among many. Instead of just being afraid of these changes, many of us have become desperate victims as we attempt to project our past into a new, unknown future.

Although culture absolutely hates to apologize, science continues to unintentionally eat away at our values, beliefs and civilizing touch stones. Scientific truth is only true until the next discovery. Medical interventions are only valid until a more sophisticated more accurate intervention is developed. The world is FLAT.

As leaders we must create a vision for a better future, and then be able to tell persuasive stories about that vision. As leaders we must produce ideas that fit reality for the future, and those ideas must emanate from deeply engrained beliefs. It is also imperative that we truly espouse those beliefs through our daily lives, to have the integrity of commitment to responsibility, compassion and guidance. Finally, we must develop the skills to sort between what is good and what is not and then value what needs to be respected.

As we plot a course through these unknown areas and move toward a better future, let these thoughts be our starting point: In health care we must embrace the fact that we are in a kindness industry and that we should be committed to connections and to love.

Blacksburg, my hometown.

Before yesterday, Va Tech was known for our football, for being nestled in the Appalachian mountains, and for being the 1st community in the US to be internet-wired. On Saturday mornings, the place for breakfast is a little family restaurant, Gillie's. From now on, we'll be known as the site of the deadliest shooting in US history.

To all the media: please be respectful. Hindsight is 20/20.

My dad retired from VA Tech just a few years ago. He used to teach a 9am class in that Norris Building. I actually took one class on the 2nd floor of Norris. Our thoughts and prayers go out to those students and their families.

by Tony Chen

Now I may be a little biased (I've met 2 of the 3 authors of this article and really respect/like them), but this article in Healthcare Design Magazine is simply the most compelling article I've read on the future of hospital facilities.

A few key take-aways for me:

- We all already know that outpatient care will grow much faster than inpatient care. Certain outpatient services will grow REALLY fast. PET/CT volume will increase 120% in 10 years! A ton of surgical procedures as well as oncology will grow dramatically.

- The 2-day hospital stay will become a mainstay. 2-day discharges will almost triple in 10 years. Should hospitals set up staffing / flow / dedicated units solely for the 2-day patient?

- Healthcare is notoriously complex and extraordinarily interlinked. Nonetheless, some services are completely unrelated. Thus, care facilities must be strategically decentralized and strategically adjacent. This is a gross oversimplication, but it's like the advice you hear about your desk & productivity. Use it everyday? Keep it within arms length. Use it monthly? Put it in a file. Use the same group of things together once a month? Put it all in a box in your drawer.

- Hospitals are typically set up by service lines. Since most service lines are dominated by inpatient care, outpatient care / strategy never gets enough attention. At best, outpatient care developments are uncoordinated. Why not put someone in charge of all OP services for all service lines (like this hospital)?

- Too many hospitals are designing their facilities with growth-limiting oversight and don't even know it. When I read this article, I couldn't help but think about Blokus (the only board game I play now - it's a game about fighting for space). Like many strategy games, every decision you make to put down a piece limits you and/or opens doors for future expansion.

- This article would make my wife really happy. She's been "an inspiration" for me to plan better.

- As they say, begin with the end in mind. The end is made much more clear in this article through all the data, so definitely read up!

Combine this strategic facilities intelligence with the Planetree philosophy, and you start getting at the ideal hospital of the future.

by Tony Chen

Ever since the term "web 2.0" was termed in 2004, there has been an inordinate amount of chatter about what web 2.0 really is and its true impact. No one's really defined it clearly, but I think the web evolution essentially falls into 3 generations:

Web 1.0 - information is communicated from company to individuals (i.e. your basic website). The web becomes one big encyclopedia of sorts.
Web 2.0 - information is communicated between company and individuals AND between individuals. This is the "Post a Comment"/"Start a Blog"/Skype/YouTube web. If web 1.0 is a book, web 2.0 is a live discussion.
Web 3.0 - it's not information anymore, it's intelligence, artificial intelligence. You'd interact with it almost like another person. The web won't just blindly do what we tell it do to, it'll think for you. (Read this NYT article for the least complex explanation I could find. It's still difficult to visualize)

Web 3.0 presents some amazing opportunities in healthcare. Imagine being able to be diagnosed by your computer. Imagine going to Cosco, scanning a barcode with your web-enabled phone, and being instantly notified that this purchase is HSA-eligible. One day, you'll type into some (probably google-like) interface, "I want to find an orthopedic surgeon who's done at least 350 hip surgeries, who operates on Saturdays, who takes Humana insurance, who has never been sued, and enjoys playing golf" and wa-la! your results would be back with an offer to set up an appointment.

Anyway, I digress - we don't have to worry about web 3.0 just yet. Let's get back to 2007 and see where healthcare is with 2.0. The primary question really is: where on the web do you go to interact with others about healthcare-related topics?

Honestly, there aren't many out there, but here's the list in order of popularity (The alexa rank gives a ballpark sense of how popular the site is. The lower the rank, the more popular the site. For example, yahoo's #1, followed by msn, google, and youttube. As a reference, hospital impact is ranked in the 800,000-900,000 range)

WebMD (alexa rank = 1,205)
WebMD is probably the most comprehensive health resource for everyday consumers as well as physicians, nurses, and educators. Like several other sites on this list, it's not a "pure" 2.0 website. Nonetheless, the blogging community and chat forums are very active. Go to their type 2 diabetes forum, and you'll probably find 2 or 3 conversations that have started in just the last hour. When I have a health problem, webmd is one of the 1st places I turn to - to find out whether or not I should go see my doc and to understand how to self-treat. I especially like the section on what to ask your doctor if you have certain conditions.

Healthline (alexa rank = 6,223)
Healthline is also more of a web 1.0 site than a 2.0, with its vast amount of information on every single type of disease (though a lot of it is simply ADAM-sourced information). Sign up for free, and you can get personalized newsletters from experts that you select. Online community is created through members being able to rate/review articles. So, you can quickly find the articles others found the most useful.

RevolutionHealth (alexa rank = 18,338)
I've written extensively about RevolutionHealth previously. I've had my doubts, but I have to say that this site is the only major 2.0 site out there. Among other things, They are really trying to create the world's largest healthcare-related virtual community,- sort of healthcare's version of Facebook or LinkedIn. You can rate doctors/hospitals/treatments, you can create a blog or comment on someone else's, you can invite others as "friends," and you can start any health conversation. As much as I have criticized this site, I'm still excited about the potential. If they can find that "magic" that made YouTube, MySpace, and Facebook so popular, how great would this be - the only place you'd need to go for your healthcare information & community needs. (update: read NYT's article on RevolutionHealth from 4/16/07 - thanks Bob)

RateMD (alexa rank = 60,631)
As the title suggests, rate doctors and see how others did before you. As of today, there are almost 240,000 ratings on 88,000 physicians. Not bad, considering there are ~300,000 physicians in the US. With 1,000+ new ratings each day, this site is starting to get to that critical mass of users where it becomes the unchallenged leader in the space. Nonetheless, I wish they could make it a little more visually appealing.

PatientsLikeMe (alexa rank = 366,691)
As the site name suggests, this is a "pure" 2.0 website whereby patients going through the same disease can find each other, mutually share progress, and collectively discover the best answer to questions as a community. Maybe most importantly, patients can track outcomes. Currently, the site is only activated for patients with ALS, MS, or Parkinson's, but I suspect that they will expand as these first 3 communities become impactful. See FierceHealthcare's write-up on them as well.

EnhancedMD (alexa rank = 5,000,000+)
Very intriguing company that starts to smell like a "web 3.0" site - personalized, understandable, medical advice that utilizes "natural language recognition tools." Translation: type in everyday medical questions, and it'll spit out advice. The first application will be "DoubleCheckMD Drugs," which will deliver personalized medication evaluation for symptoms and drug interactions. This one is another one I picked up on from FierceHealthcare's list of top health IT innovators.

WhoIsSick (alexa rank = n/a)
At this intriguing little site, you can input your flu-like symptoms and see if others are having similar symptoms. Right now, there are only 1,000 "sicknesses" in current view. Considering this site only started in Feb/Mar 2007 and coverage it's already received, I'm hopeful that WhoIsSick will one day be a great resource for communities, hospitals, and healthcare providers.

There you have it! So what did I miss? Where do you go for healthcare community & answers?

I'd be remiss if I also didn't mention a few other sites. I didn't include these either because they weren't healthcare-specific or weren't really 2.0 enough. So... the honorable mentions:
Wikipedia (alexa rank = 11)
JustAnswer (alexa rank = 18,175)
American Cancer Society Message Boards (alexa rank for cancer.org = 18,809)
American Diabetes Association Message Boards (alexa rank for diabetes.org = 33,270)
Yahoo Health & Welness Groups

As an aside, I was inspired to put up this post after I saw a very similar list for real estate.

UPDATE: A couple of other health 2.0 companies worth looking at!
MedBillManager (alexa rank = 496,792) - Manage your bills and compare them with others!
OrganizedWisdom (alexa rank = 472,099) - health-focused social networking site where you can interact with other patients and access physician-reviewed materials.
Daily Strength (alexa rank = 1,479,067) - another health-focused social networking site organized by health interest (currently ~500 groups).

by Tony Chen

Is it me or has there been a tidal wave of healthcare-related private equity and investment deals recently?

Here are the highlights of recent healthcare private equity & privatization activities:
- HCA went private for $21B - the biggest LBO in history at the time.
- USPI went private for $1.8B - by far, they are the largest surgery center operator in the country
- Texas Pacific Group, a private equity firm, bought HealthSouth's surgery division for $945M
- Many speculate that we aren't done yet. I'm betting on LifePoint as the next big deal to break - this would be ~$2.5B deal.

On the M&A side of things, there's been quite a bit of activity
- Triad & CHS $7.1B Merger (which really could count as a privatization)
- CVS bought MinuteClinic for $180MM or so. I think this signals a strategic bet from CVS management - they think that healthcare is the product/service differentiator they've been looking for to drive the next wave of in-store traffic growth.
- Hospitals also continue to buy each other out - there has been a lot of activity of late. 2006 was a banner year with 57 hospital transactions. Since the bottom-out of 2003, hospitals continue to be active. Turned-around or desperate-for-a-turnaround hospitals are the most attractive targets.
- Maybe the hottest area (but under the radar) is senior care - more are opening and many are being bought out at record prices. There's less red tape, a lot of market fragmentation, and baby boomers flooding the gates.

I won't even get into the other sectors of healthcare, except to say that CVS bought Caremark for $26.5B and Pharma companies announced 10 deals in February worth $7.5B. It's a good time to be a dealmaker.

What all of this tells me is this:
* We shouldn't be surprised as this is a cyclical phenomena. I've heard experts talk of the 10-year cycle, and right now we are on the upswing.
* I don't think this is specific to healthcare, though healthcare is one of the hottest sectors right now for VCs.
* The outsiders (the financiers) and the insiders (hospital leadership) are looking at the same businesses. But the outsiders see more value in these businesses. Is the hospital industry going through a strategy make-over?

guest post by Amy Tenderich of diabetesmine

Tony wrote to me recently asking for some insights on what hospitals can possibly do to better treat/ encourage /help patients with diabetes. Thank you for the opportunity to air this issue, as hospital care for diabetics is (believe it or not) notoriously bad!

The core problem is terrible glucose control while hospitalized, whether the patient is conscious or not. The conscious ones are often miffed because they’re forced to follow some set protocol rather than being allowed to manage their diabetes themselves, which generally they do best. The unconscious patients often either go unmonitored, or are allowed to run unacceptably high.

At a recent seminar on diabetes patient gripes, one woman told me: “When I was hospitalized for surgery, the doctors insisted that I remove my insulin pump! Then they gave an order that I should receive 2 units of insulin for every 40pts blood glucose over 180 – but I’m extremely insulin-sensitive. One nurse was ready to inject me right after dinner! Why can’t they let me manage my diabetes? I know what I'm doing!”

Meanwhile, a nurse who comments on my blog regularly reports that the surgeons she works with like to say, “You can never have too much sex or blood glucose.” I guess keeping the patients extra-high avoids any possible risk of hypoglycemia.

Yikes!

“A blood glucose >200 mg/dL in the hospital patient causes increased morbidity and mortality,“ Dr. Bruce Bode told DCU editors last year. “In the 21st century, blood glucose >200 mg/dL in the hospital will be considered malpractice.”

What exactly can be done to remedy this? I queried a few of my expert contacts, including Kelly Close of Close Concerns and Dr. Steven Edelman of TCOYD, to compile some points that should offer a good springboard for improvement:

* Check the BG (blood glucose) of everyone who checks in, not just those who are already diagnosed, as many people are diagnosed with diabetes while in the hospital being treated for something else

* Institute a policy to allowing patients with both type 1 and type 2 on insulin to remain in control of their own insulin adjustments. Hospital rules will call for some type of protocol, but it should be one where a doctor approves the suggestions made by the patients themselves (they obviously know their diabetes better than anyone else)

* If the patient is on an insulin pump, speak to them about it if they are able to speak. Let them help decide whether removing the pump for certain treatments is necessary and/or beneficial

* Be respectful of, but not terrified of, hypoglycemia. Again, there are numerous horror stories about the very high blood glucose rates that hospital patients run. Up until a couple of years ago, the guidelines of the American Stroke Association actually recommended treating only blood glucose over 200 mg/dL (implying that any level up to that is OK!)

* Promote tight glycemic control standards. Tools like new continuous glucose monitors and software programs for intravenous insulin dosing should help. (See also the ADA’s Call to Action hammered out by the experts last year)

* Obtain the special certification for quality inpatient diabetes treatment established last year by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and the American Diabetes Association (ADA)

* Pay the nurses more so that they stay in their jobs! These individuals provide the real hands-on care and advocacy, and are thus the real leaders on the tight glycemic control front

* Take advantage of that “teachable moment” during hospitalization in which patients who’ve undergone a life-altering experience may be more open and willing to consider learning how to use insulin or otherwise intensify their care.

The way I understand it, there is a boatload of research indicating the importance of tight glycemic control in the ER and the ICU (thought leader here is Dr. Greet van den Berghe) – but less evidence is gathered on the hospital "floors," where the risks seem less treacherous.

One hospital that I’m told gets high marks on tight glycemic control across the board is Providence St. Vincent Medical Center in Oregon, led by Dr. Tony Furnary, who’s referred to as “the father of tight glycemic control.”

Thank you, Father Anthony, for your efforts – ‘cause the hospital can be a terrifying enough place for us patients without having to worry that our glucose control will go haywire. Bottom line is, if the patient is conscious and willing, please let them take diabetes monitoring into their own hands!

* Amy Tenderich is co-author of the new book, Know Your Numbers, Outlive Your Diabetes.

by Tony Chen

I've been avoiding this post for some time now. It's one of those topics that is sensitive, potentially uncomfortable, and definitely has multiple layers.

So, there's a lot of ways I could address this - I could writes pages upon pages about my experience as a Chinese kid growing up in southwest Virginia. I could write about how Chinese families typically view hospital administration as a career (though my family is very supportive). I could even talk about how I'm probably hypersensitive about being the only non-Caucasian in town hall meetings.

I just deleted a couple of paragraphs. All I'll say is that most of the "racism" I experience is self-imposed and lives in my head only. And I'm really enjoying my job, my progressive organization, and the fact that my path is a path less traveled for someone of my background. Mostly, I want to hear about other people's experiences with paths less traveled or being in the minority - please share in the comments. or if you prefer, send me an email (tony at hospital impact dot org) and I can post your experience completely anonymously.

UPDATE: A few anonymous comments I've received so far:

"In fact, the only time I've caught even a whiff of racism is on the odd occasion that an LCD projector doesn't work right and some people instantly look to me to fix it, rather than put in a call to IT."

The discrimination I sense in hospital administration seems to stem more from clinician vs. non-clinician conflicts ...which is likely another topic entirely.

I've worked very hard to establish a sterling repuation in the organization, but don't feel absolutely sure that race didn't play some part in some way, shape, or form. My hypertension comes more from feeling like I better do an amazing job than being the only non-Caucasian, but I often take notice of the fact that I'm the only non-Caucasian.

With much introspection, I've come to realize that I've experienced very little racism in the hospital.

Hospital administration positions are still dominated by middle-aged Caucasian men. The reality is that hospitals are conservative and risk-adverse organizations and senior level hospital administrators are almost viewed like elected officials. So it's difficult to have a minority or homosexual be the "face" of such an organization.

Just like any other ethnic background, a lot of Asian-Americans are most 'racist' or biased against their own race

I lack the 20+ years of experience of seasoned professionals in this field, and I am still working on completing my graduate degree. Strike one. I am a female, which carries certain stereotypes in the professional world, such as being too compassionate for co-workers, or “caring” too much about my work (hey, I’ve got passion, what can I say?). Strike two. To top it all off, I’m trying to prove to colleagues that not only is marketing a viable and fascinating field of study in and of itself, but also that it has important implications for the future of this industry. Strike three.

I feel as if this career path is reminiscent of grade school gym class, where I didn’t fit in and was always picked last for dodgeball. But, like you, I’m beginning to realize that most of this nonsense is all in my head.

by Tony Chen

(UPDATE: Amy Tenderich's post on what hospitals can do better to care for diabetes patients can be found here)

I can't help but notice that diabetes has been showing up on front pages all week long. Here are some recent headlines:

Reuters: Diabetes complications swelling US healthcare costs
USAT: Diabetes can lead to a host of consequences
HealthDay: Diabetes may lead to precursor of Alzheimer's
ChicagoTrib: Employers gang up on diabetes

By far, the biggest news was this:
UKTimes: Diabetics cured by stem cells. As with most studies like this, real treatments are still years away. Plus, this particular treatment is for Type 1 diabetes only (only 5-10% of all diabetes cases) and probably only for newly diagnosed patients. Nonetheless, this is a great development and a new hope.

All of that to say: diabetes is already a big deal and will only get bigger. Check out these amazing statistics on diabetes from the American Diabetic Association. More folks are getting it, more folks are getting it earlier, and more folks are living longer - that means a lot more complications. Diabetes is already to most common comorbidity in the US - hospitals need to be ready to provide diabetes care within complex cases.

UPDATE: Another drug in testing has been shown to be effective for TYPE 2 diabetes.

On that note, check in tomorrow - Amy Tenderich of diabetesmine (probably the most popular healthcare blog in the country) will weigh in on how hospitals can better care for diabetes patients. Amy's been busy of late. Besides winning all kinds of awards for her blog, writing an open letter to Apple, and being interviewed on Medscape, she's co-written a book called Know Your Numbers, Outlive Your Diabetes.

For those with diabetes, what has your experience been? Does your hospital do anything different/special with diabetes patients?

by Tony Chen

I have the opportunity to be one of the bloggers at the World Health Care Blog, the blog leading up to the World Healthcare Congress.

The rest of the blogging crew includes:
- Matthew Holt of The Health Care Blog
- Emily DeVoto of the Antidote
- Vince Kuraitis of e-CareManagement
- Derek Lowe of In the Pipeline
- David Williams of Health Business Blog
- Scott MacStravic of a lot of books/articles and guest blogger at HFMA Views
- Lloyd Davis of PerfectPath

Among us 8 bloggers, you've got several PhDs, a WSJ Must Read blog, a Forbes Best Blog, a dozen or so books written, several dozen speeches made at conferences, a couple of companies founded, and one accordian concert performed. (note: I only contributed to one thing on this list - guess which one...)

My favorite quote from the blog so far comes from Vince:

Professor Gerard Andersen of Johns Hopkins describes the big picture of changing health system needs:

* 1900 to 1950 — Infectious diseases
* 1950 to 2000 — Episodic care
* 2000 to 2050 — Chronic care

About 6 or 7 years ago the light bulbs went on at Medicare — they recognized the upcoming challenges of baby boomers aging, increasing chronicity, and out of control costs. Medicare beneficiaries with chronic conditions incur health care expenses highly disproportionately; the more chronic conditions, the higher the costs.

I'll have to chew on this for a while and post something in response later.

by Nick Jacobs

Okay, so here's the list: The infection rate at our hospital dropped to 1% or below seven years ago and has never risen significantly since then. Even with an acuity rate that hits 1.7 and above periodically, our length of stay hangs in at around 3.4 to 3.5 days per patient. Mortality rates for adjusted acuity is below many peer hospitals. The very unique thing that is going on at our facility is an openness to creating a healing environment that is sometimes against conventional wisdom. It's a philosophy of care.

It's not about too many FTE's for adjusted occupied bed or spending too much money on decorative wood or fountains, live plants or skylights. It's about creating a healing environment that embraces family and friends as visitors 24 hours a day seven days a week. It's about music, aroma, massage, reiki and pet therapy. It's about double beds in the OB department, complimentary access to the work out center for patient families in hospice and OB, bread breaking in the hallways, popcorn in the lobbies and staff members that demonstrate their genuine love for the families and visitors in hallways. It's about dinner buffets in the hallways, live music, beautiful environmental design and live plants from our greenhouse.

This is not brain surgery. It is not overspending or creating the Taj Mahal. It's a philosophy of loving, caring, nurturing and respecting people as fellow human beings and, as leaders, it's about understanding that you can improve your bottom line by improving your commitment to what you know is correct. "Do unto others as you would have others do unto you."

For more on Planetree, see Nick's previous posts:
No one is a number
Now that I'm a hospital CEO, time to pursue my dream
Planetree - touchy feely or just good common sense
What happened in 1974 that makes me so passionate about Planetree
Implementing Planetree
Implementing Planetree II: Demystifying healthcare

by Tony Chen

10. 10 Things Your Hospital Won't Tell You - these are the typical hospital horror stories that are starting to get old. Why isn't there a list of 10 Things That Your Hospital Does that are amazing? Maybe the next best thing is some great hospital stories from patients.

9. Here are the Top 10 Trends in Healthcare, medicine, and pharmaceuticals whereby they say sleep is the new sex. Restless leg syndrome, depression, ambien CR, sleep centers. More sleep = more productivity

8. Here are the top 10 healthcare trends for physicians - a lot of emphasis on accessibility through more technology and more mobility. Five out the 10 are related to the internet.

7. How about the Top 10 Issues confronting hospital CEOs from ACHE. #1 $$$ of course. #2 - resurging back is physician/hospital challenges.

6. The Top 10 healthcare Trends for the 21st Century from the Institute of Global Futures Nothing you haven't heard before, but a good refresher list.

5. Top 10 Business Trends for the New Future from the Institute of Global Futures Even though this is a business list, it's surprising how many apply to hospitals - all of them.

4.
Top 10 Careers for the next 10 years - yup, you guessed it, 4 of which are healthcare

3. Top 10 most important trends in business Again, these are business trends (e.g. disruptive innovation, open-source business, innovation incubation), but they all apply to healthcare. For too long, hospitals operate as hospital-centered cultures, instead of patient-centered cultures.

2. FierceHealthcare's Top 10 Health IT Innovators. I guarantee you won't know all 10. Check out PatientsLikeMe.

1. this list of course... (i.e. I could only find 9)

by Tony Chen

Check out this new "social media" healthcare site Who Is Sick?. If people really used this quickly, I could see how this could be powerful. Your kid comes home from school sick, you go online and see that 26 other kids in the area did, too. Maybe this is could funded by the CDC or a retail clinic consortium to track real-time sicknesses?

by Nick Jacobs

NPI numbers.

Just last week our CFO was expressing her deep concern over the fact that CMS was about to enforce a provision of the Health Insurance Portability and Accountability Act that would have required all claims to be accompanied by a national provider identifier or NPI.

When I asked for a further explanation from those present in the room who had expressed their concerns, I was informed that "They are requiring an NPI number on every form, but the forms don't have a place for the numbers." They clearly explained that it was the proverbial Catch 22. My chorus of accounts said, "They say we have to do it, but the billing companies aren't ready and some of the docs aren't ready and neither is CMS."

The most difficult part of the discussion for this CEO went something like this, "If we were not compliant, our funding would be interrupted." Okay, that was something that was very clear to me.

My first e-mail today came from our COO and it read a little like the prison scene where the governor calls at 11:59 PM just prior to the guard throwing the switch and says, "Okay, stay of execution."

CMS has, in fact, pushed back the deadline back by one year. Of course, there are still those who don't believe they can be ready even 12 months from May, but, for those of us who were just looking for a place to put the number, please join me in a big sigh of relief.

UPDATE: (from a hospital financial manager) No, CMS did not exactly come out and say that it is delayed for one year. What they are doing is announcing a "non-enforcement" approach for up to one year, that would still allow providers to receive their payments. However, to take advantage of this a covered entity must file "complaints" against other covered entities/business partners that are not yet compliant. A covered entity could be a provider, payer, clearinghouse, etc. Both sides must then develop contigency plans and show good faith efforts that they are working towards compliance. So, we may still want to be prepared for some sort of cash flow interruption until we hear more details about this "delay".

by Tony Chen

I was on the bandwagon, but now I'm off. Almost...

"Steve Case launching RevolutionHealth is like Napoleon invading Russia" - a prominent healthcare blogger

In my humble opinion, RevolutionHealth is suffering from the same malaise that 99% of most social media start-ups suffer from - user fatigue. There's always a lot of hype in the beginning, but if you don't have that "magical" formula that keeps people coming back, utilization drops off quickly. Sooner or later, the community just dies a slow death. Just look at their physician ratings - one month ago, there were at 4,600. Now, they are barely at 5,000.

Some companies try to revive or jump-start community by having their own folks be actively involved in the community - commenting on people's posts, engaging with people electronically. But inevitably, that's not real community. I can't be sure if RevolutionHealth did that, but why are so many of the commenters from McLean, VA?

2 more questions:
(1) is healthcare big enough in the average joe and jane's minds for it to be a viable social media by itself? I personally think so, but RevolutionHealth doesn't have it... yet.
(2) can you really apply the tried-and-true "put consumers in control, and you'll win" business strategy in healthcare?

Granted, it's still sort of the "trial period." But I've noticed that once you've launched and people have tried it out. It's that much harder to get people to try it again. They continue to say that they have some amazing partnerships will be announced. So we shall see.

By Nick Jacobs

Pierre Abelard:

The beginning of wisdom is found in doubting; by doubting we come to the question, and by seeking we may come upon the truth.

I've come to learn that the truth is where we seek it, and part of the problem with extremely high intelligence can be that it sometimes gets in the way of progress. All of my former valedictorian, senior leaders were so wrapped up in perfection that failure for them was an A-. They were terrified to make the wrong decision, and analysis paralysis was not only the norm, it was an obligation. Don't try new things. Be the 1000th person to do it. Don't ever take a chance. Don't make a decision that could come back to haunt you. Health care's herd mentality to the maximum.

Instead, failure to those of us who "live on the edge" is a way for us to grow and accomplish what we need to accomplish. It is important to realize that every accomplishment is preceded with plenty of failures. The key is to keep focused on the ball. To move it forward and to make sure that you surround yourself with winners.(For a sample of this discussion in the paraphrased words of one of my greatest mentors, Leland Kaiser)

Edward de Bono:

It is better to have enough ideas for some of them to be wrong, than to be always right by having no ideas at all.