Recently I was at a social event and ended up sitting next to a long time friend who is also in the healthcare industry, though he is a ‘dark side’ guy whose company provides information technology solutions to payers.  I am still his friend, though he is on constant probation because of his day job.

About halfway through the dinner, another guy at the table asked the predictable, ‘So, what do you guys do for a living?’ question. 

‘I’m a gun runner,’ my friend replied. ‘For the insurance companies,’ he finished after a long pause.

That is one of the many reasons he is my friend.  I’ve never heard him actually give a straight answer to a question, and the replies are generally either witty or provocative or both.  Maybe it has something to do with him being an ex-military intelligence officer.

The poor man who asked a nice, polite dinner question was very puzzled, especially since my friend delivered this line without a hint of irony or a smile.  I had to laugh as the guy tried to figure out the follow-up response to an answer that he clearly did not expect.

As is often the case, a good witty reply is also provocative, and this one did set me to thinking.

First, I think my friend was being very honest in his assessment of what he delivers to his clients, the major health plans.  He provides weapons for the fight.  And he is not selling pea shooters.  His company provides very expensive, highly complex software and services to help insurance companies do what they do – pay claims, manage approvals and authorizations, and the like.

But there is so much more involved in this gun running than many physicians realize.

This battle, and please forgive me if I stretch the military analogy too far, is fought with data as the bullets.  Payers buy big weapons.

What payers sift from those claims payment and care coordination systems is powerful information to help them continue to increase their control and influence of the health care delivery system.  From assessing the risk-adjusted cost of a particular physician; to knowing just how to tweak a plan design to get the desired member behavior; to knowing what they should and should not pay for every CPT code, the payers, with the help of people like my friend, get stronger every day.

This is about so much more than the reimbursement rate listed in the contract, but often physician practices don’t even realize the depth of their informational disadvantage.

The old saw about ‘bringing a knife to a gun fight’ doesn’t began to capture the disparity, unless the gun in question is mounted to a Blackhawk helicopter getting multiple video and infrared feeds from an array of drones  flying a few miles overhead.  The mismatch is large and getting larger.

We’ve written in the space before about the structural disadvantages that may make small practices a thing of the past, but when we see physicians not wanting to spring for the cost of a Daisy BB gun, which is how I would describe many EHR products that just barely cleared the Stage One ONC certification requirements, even when the little shooter comes with a big mail in rebate (that HITECH subsidy), our dire predictions may not be dire enough. 

Here is the simple equation:

1. Healthcare is now fundamentally a data business.

2. Those with the best data (best capabilities for collecting, understanding, and using the data) win.

3. Providers, even hospitals and bigger practices, are behind and the payers are slowing down to let us catch up.  We’ve get to hustle.

My friend, the gun runner, leads a pretty big company (about $2B) and they are just one of many weapons dealers that sell to payers, not providers, because the payers have more money.

As I thought about my friend’s response, and I did think he should put that on his business card as a conversation starter, a second insight emerged.

Nothing is hotter right now than talking about ‘accountable care organizations.’  It is a lot more fun to ‘vision-cast’ about the future than to figure out how to actually get your physicians to do CPOE so you can get your HITECH incentive payments. And it fulfills the secret fantasy of those of us on the light side to kill those nasty payers.  We’ll just take over their work (and their share of the money) and then we won’t need them.

ACO’s, though still not fully defined, seem to be our answer.

Maybe they are.  I actually hope they are because the vision is right.  Put the responsibility for care in the hands of those who deliver it; and get the financial incentives right so they are rewarded for doing the right thing over the long haul.

There are a lot of people offering words of caution to would-be ACOs, and with good reason.  I won't repeat those here, but let me offer one more…

Get to know the gun runners.

If we are to transfer the work of the payers to provider-based ACOs, we need to understand one thing very clearly.  That word at the front of the ACO acronym, ‘accountable,’ is a code word for risk.  And risk means that if you don’t do it right, someone goes bankrupt. 

Gang, we’ve seen this movie before.  How many times did a payer delegate full risk to an IPA, only to have the IPA go bankrupt because they couldn’t manage the risks involved?

There is a reason why payers have made the gun runners wealthy.  You need complex systems, deep capabilities, consistent processes, unique skill sets, and certain cultures to be a good data-based business.  That is what payers are, and the gun runners helped them get there.

To do this right, to fully realize the gains in the envisioned ACO future, providers have to get as good at this as the payers are now.  And we have to get there fast.

There is some good news.

The technology required to do this has come so far since we played around with this during the Clinton healthcare era of the early 90s.  It is cheaper and can be delivered in more ways that work for us.

The payers have learned a lot of lessons that we can steal, allowing us to jump over some of their early mistakes and enter further up the learning curve.

There are a growing number of capable people who can provide the leadership to put the guns to work in the right way.

The gun runners, being the opportunistic capitalists that they are, are more than happy to sell their stuff to us.

But there are some challenges that we must overcome.

First, we have to finally and fully admit that this is a data business.  That offends our sensibilities as ‘deliverers of patient care,’ but even most of that is data-driven.  And the new forms of value that we will deliver to patients are increasingly pure information.  This means that we have to make investments, for sure, but it also means we have to bring in some people who really understand what this means and we have to give them a lot of control.  We have to follow their leadership, not treat them as staff flunkies.  I am not talking about the digit heads that make technology work.  I mean the visionary care providers who can figure out how to deliver 'information empowered care.'

We are at a capital disadvantage.  Payers are big, we are not.  Even most big hospital systems are small by payer standards.  So we’re going to have to get creative.  We have some inherent advantages as providers of care that we need to leverage to offset this hole.

Some of the silly things that keep providers from coming together to build the information capabilities to move into this future are just that…silly.  If we get gunned down (I know, the metaphor is getting tired) because we couldn’t resolve who was going to sit on the steering committee  of our virtual integrated delivery system then shame on us.

I am going to steal my friend’s line.

What do you do for a living?

‘I run guns for physicians and hospitals.  What kind of guns do you need?’