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    March 17, 2014

    Is it True Love or Stalking?

    We are on a forced, double time march toward 'population health management,' the new holy grail of the healthcare industry. If you are still walking around thinking you are cool by saying 'big data' in every other sentence to impress people, you are passé and so 2013. Improve your cocktail party standing by dropping some PHM references everywhere. And technology is the key, so if you really want to be hip, find a way to tie the use of mobile technology to population health management, and wa-la, your are almost to being invited to speak somewhere.

    I was having coffee the other day with a friend who is a healthcare IT guy. Like migrant farmers following the harvest, he had moved on from installing EHR systems for hospitals to a new firm that builds mobile PHM apps for a very well-known healthcare system.

    The stories were interesting and some of the things they can do with a smartphone are just stunning. It turns out that checking Facebook and playing Candy Crush is not their sole function. Who knew?

    But have you ever experienced that moment when you wondered if a person's affection for another person had crossed the line into something a little weird?

    'We are working on a really cool app,' he began. All trendy PHM solutions are an 'app' and almost all seem to start with diabetics and this one was no different. Since the app was integrated with the electronic record system of the massive healthcare organization, it would know that phone belonged to a person who was a diabetic. And with the app under construction, the person could turn on their camera, scan the horizon with their phone (literally), and the app would light up the nearby restaurants that served healthy food.

    I was about halfway into, 'Wow, that is pretty cool' when the 'No, that is creepy' indicator started beeping in my head.

    PHM is a big idea that is here to stay, but it is going to lead to a lot of discussions between healthcare policy types that argue this type of intervention is good and civil libertarians that push back on such intrusion.

    The line between true love and stalking is not always clear.

    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.
    March 17, 2014

    Take Your Banker to Lunch

    No, really. I mean it. And make it a nice lunch because you are going to have to ask for a big favor.

    ICD10 is rolling down the track and gathering speed. CMS has continued to affirm that there will not be another delay and at this point, we should take them at their word.

    Currently, practices with a well performing revenue cycle management process experience a denial rate on about 3-10% of their claims, depending on the specialty. Denials are a pain, but a fact of life. They require extra work to appeal and process, they delay cash flow, and if you are not diligent, real money leaks away.

    Experts, and whoever they are they tend to wear nice suits, are guesstimating that come October and the advent of ICD10, we may see denials spike to 40-50%. Ponder that for a moment.

    Assume that your RCM process is top notch. Assume that 100% of your denials get worked as they should and that most eventually get paid.

    But assume that 40-50% of your monthly cash flow backs up 30 to 90 days.

    How does the spreadsheet look? Ugly, right?

    Therefore, make dang sure your line of credit is in place. Do what you can between now and then to pay down you balance and squirrel away as much contingency cash as possible. Ask the banker what you need to do to extend it. Remind your partners that it might not be a good idea to buy a big boat this summer. And be really charming at the lunch.

    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.
    March 10, 2014

    Electronic Relationship

    Part of the value of having 'my' physician is that 'my' physician knows me.

    Yes, there is a big fat paper chart to help jog her memory, but it was her specific knowledge of me and my health issues that made me want to always go to 'my' physician.

    Contrast that with how online relationships with customers are changing as that knowledge gets out of one person's head and into a system.

    Pandora knows what songs I like and which I don't, so they offer up new tunes that are a lot like what I already enjoy.

    NakedWines knows what I have ordered in the past, and since I don't know squat about wines other than, 'Hey, it is not in a box,' they suggest others for me to consider.

    When using my phone, Google knows where I am and guesses that when I type in 'movies' I probably want to watch one at a nearby theater and am probably not writing a term paper on Hollywood.

    Granted, these interactions are a lot more simple and straightforward than a patient-physician relationship, but there are lessons here.

    As the physician's knowledge of the patient get digitized and accessible by someone else, that unique knowledge of 'me' as the basis for the relationship with the patient goes down. The value of convenience and price go up.

    I have long been a happy member of USAA, the insurance company. They have had some of the best customer service IT systems from early on and really use those to create differentiation. When I call about something, I do not need to talk to the same person every time because everything about me as a customer, including my previous conversations with them, is right at the fingertips of whoever answers the phone. For me, I have the complete sense of continuity of the relationship without having the hassle of waiting to connect with one specific person.

    So the question is, 'As the information about your patients moves from the head (or paper chart) of a specific physician into a system that can be used by anyone in your practice, how will you create the kind of value that makes the patient never want to leave your practice?'

    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.
    March 10, 2014

    A Wry Smile

    For many people, the concept of the ACO is nothing more than the next logical extension of the hospital-based integrated delivery system. After all, only these types of systems have the capital, scope and talent to take on risk and manage the health of a population.

    Someone forgot to tell some physicians.

    It turns out that many of the initial ACOs are formed by independent physician groups. Without any hospital partner.

    And some are doing right well, thank you.

    Their thinking goes like this…

    • The concept of an ACO is to deliver better care to a group of people at a lower cost. Sounds good.
    • Hospitals are only good at a few specific types of care delivery, and man, they are really expensive.
    • So, we’ll do this without a hospital partner, work like crazy to manage our patients so they don’t have to go to the hospital, and when they do, we'll just purchase some bed days from a low cost provider.

    'Dang,' says the AHA, 'we did not see that one coming.'

    'We did,' smiled the crafty physician groups.

    Some folks leading these physician-centered ACOs think they will use 20-25% less hospital services in this model. If so, that will leave a bruise on some hospital financials.

    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.
    March 10, 2014

    Who Are You?

    DaVita, the company we know as the dialysis and end-stage renal disease folks, are buying large physician practices and starting employer-focused primary care clinics.

    Optum, a division of United Healthcare, now owns several very large multi-specialty groups.

    Walmart and Walgreens and every retail outlet short of Jiffy Lube now have in-store walk-in clinics.

    American Well provides remote, video-conference based physician office visits.

    I could go on.

    Business history tells us that the most disruptive competitors, those that eat the market share of large swaths of an industry and get written up by the Harvard Business Review, are generally not the long established incumbents, but new players on the scene. Maybe they are start-ups and maybe they are big companies who decide to move into a new neighborhood, but either way they are outsiders.

    Healthcare was supposedly immune. We were a local industry, and on the physician side we were populated by small practices, whose physicians we saw at the grocery store and church and the basketball game.

    Guess what? As independent physician practices fight for market share (and yes, know it or not, you are fighting for market share), the boogey man just may not be who you think it is.

    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.
    March 10, 2014


    Being from Arkansas originally, I did not grow up with a lot of literature set in my native environment. Unless you count the camouflage clothing catalogue from Bass Pro Shop. So when we read 'Where the Red Fern Grows' in elementary school, it was a bit special because it was about us rednecks.

    I don't remember much about the book other than it being sad when the dog died. There was one story that has stuck with me, maybe because it makes a good point about the thinking of too many independent physicians, though I doubt I had this connection in mind when I was in the 4th grade.

    In the book, a young boy gets his first hunting dog and needs to get a raccoon pelt in order to train the dog? But how do you get a raccoon if your dog is not yet trained to hunt raccoons?

    It turns out there is a way. He is instructed by an old sage to go into the woods and find a fallen tree. There, he is to carve a hole down into the trunk of the tree and drop a shiny washer down into the hole, one that will barely fit. Then he is to take a few nails and hammer them in from the side so they stick out into the hole, making something of a trap.

    The raccoon, completely fascinated by the shiny object as they all are (free raccoon trivia here for our city readers…value added!), will tighten his hand into a tight fist and reach down past the nails and into the hole to pick up the washer. But with that in his grasp, he won't be able get his hand back out past the nails. The raccoon will literally not let go of the washer even as the boy walks up and clubs him upside the head.

    As silly as that sounds (Drop the washer and run, Bandit! The approaching boy is going to gut you and let his dog chew on your hide!), I was sitting with a group of physicians one night, talking about what it takes to survive in the future and this story came to mind.

    We had a long talk about how things are changing and they all seemed to agree. We discussed why independent practices have to get bigger, a lot bigger, if they are to control their own destiny and they seemed to agree. We talked about how none of them wanted to become an employee of the hospital and on this they all clearly agreed.

    Then we began to talk about how they could come together as an ACO or a group practice without walls, things that would give them some leverage without their losing most of the real autonomy in their practice. They seemed to get excited.

    Then we talked about a few things, relatively minor actually, that they would have to give up in order to make this all happen.

    Then the raccoons came out, holding on to stuff that was not important, most of which wasn't even very good anyway. But it was their stuff, so they wouldn't let go. Soon, the energy for coming together dissipated, everyone went home and nothing happened.

    Did I tell you the raccoon dies in this story?

    Tim Coan

    CEO and founder

    Tim Coan, ALN’s CEO, writes an insightful and witty blog weekly about a variety of topics relevant to independent physician practices.