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January 30, 2019

Wale Friction

I saw a rack of corduroy pants at the store the other day and had no idea the heavy ribbed fabric is back in style.  Some of our readers knew that; like me, some are surprised to learn it; one guy – you know who you are – just looked down at his trousers and smiled.  Dude, your wardrobe is so old it is now hip again.

The ridges, cords, are called ‘wales.’  Ask your hipster IT guy wearing cords if those are 8 or 16 wale.  He’ll freak. Seeing these again took me back to the question every boy forced to wear the indestructible pants in the 70’s asked himself: ‘If I hold my legs close enough together and run fast enough, can I generate enough friction with my cords to set my pants on fire?’

Yes ladies, we think these things.

Ironically, friction has been on my mind because it is a random topic that has shown up in several conversations lately.  Here are three, all concentrated in a very specific area and all from just the past two weeks.

A practice called looking for a consultant to help on the front end of their process because it is taking them 15 days to get their patients pre-authorized for surgery.  That is slowing cash flow and leaking some patients away forever.

A buddy who works with big pharma shared about one of his clients, maker of a cardiovascular drug, struggling with sales because physicians are having so much trouble getting patients approved for the drug by the insurance company that they just give up and write for something else.

On behalf of one of our clients, we got a couple of their tech wizards on a call with a friend of mine who is a hotshot at one of the big payers responsible for helping improve the claim transactions with providers.  We all were looking for ways to reduce the friction in the pre-auth/pre-cert process as it is killing both sides of the handshake – providers and the payers – as cost, delays, errors pile up everywhere.

These stories, all from the one task of getting approval to provide care to a patient, have two things in common:  humans and complex data.

The humans on one side have information: who the patient is, what we learned about their condition, what we want to do to help.  The humans on the other side have information: coverage the member has, what the approval protocols say.  Getting them connected, putting the information through the magic box, and deciding to get on with it generates more heat than a fat hippo running the 100-yard dash in 16 wale pin cords.

When we say healthcare is still way behind in technology, this type of friction is a great example of what we mean.  Industry – manufacturing, retail, financial services, media, everyone – solved the equivalent of these exchanges back in the 90’s.

Finally, here we come, the chubby semiaquatic mammal in the cut pile fabric jogging suit.

Tim Coan
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.
January 23, 2019

Not Grandma’s Phone

There is a video going around that shows two 17 year-old boys trying to figure out how to use a rotary phone.  Fellas, what do you think the word ‘dial’ means?

Is this what Grandma look like when she is trying to tell Siri, through Bluetooth as she drives down the freeway, that she can see the delivery man at her door through the webcam app on her phone, and that Siri should flash her automated porch lights three times to activate Grandma’s  automated signature on his hand-held device so that he can leave her case of prune juice there by the flower pot?

It is timely to think about what happens when one generation encounters the technology of another because Apple is in discussions with at least three Medicare Advantage plans about subsidizing their watch as a health tracker for the seniors on these plans.  Actually, to call it a ‘health tracker’ is a bit insulting; the Cupertino company’s positioning of their product is as an ‘intelligent health guardian.’

The use case for the watches, which range from $279-399, is pretty straightforward.  MA plans are capitated and on the hook for all costs for their members.  The Apple watch functions – fall detection, an electrocardiogram, who knows that else is in the works – don’t have to eliminate many trips to the ER to pay for themselves.  Last week, Apple CEO Tim Cook retweeted (isn’t this like the old telephone ‘party line’?) a post from a woman saying her husband’s Apple watch detected his a-fib and the subsequent trip to the ER found four major blockages, saving his life. Not a bad marketing story.

Apple already has various watch deals in place with Aetna and United around general wellness, and just announced a partnership with Zimmer Biomet, the orthopedic device manufacturer, to study the recovery of joint replacement patients.

These stories are specific examples of one of our big themes for 2019 – the rise of the platform players.

When I say ‘platform players,’ it is natural to think of Ascension and HCA and Sutter and Partners – the big integrated delivery systems.  You have one or two of five behemoths in your market.  And you have to figure out how to deal with them.

But Apple and Google and Optum (the UnitedHealth subsidiary) and others are platform players of a different ilk.  Their strategies – the assets they are building, the disruption they look to cause, the business models they are pursuing, the way they will approach the market – are not based on facilities or the accumulation of providers in a region, but instead rest on the value of information. 

Obvious Coan, they are tech companies.  But it is not about the watch…it is about the data.

The issue for independent physicians, and our industry in general, is that you can never compete head to head with these folks.

But, can you use what they are doing to advance your mini-platform? 

Better yet, can you be their partner?

Tim Coan
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.
January 15, 2019

My 2019 Cocktail Napkin Picture

I am writing today’s post from seat 6F on the Southwest Airlines flight from Denver to Sacramento.  The snow-covered Rockies are off to my right and I suddenly feel like Hemingway, waxing just a bit too poetic. 

Recently, Herb Kelleher, the hard-charging Texan who founded Southwest, passed away.  I should have a whiskey in Herb’s honor, but it is 9:00 in the morning and I have a business meeting when I land.  Maybe tonight.

Stories about Kelleher are legendary, but none more so than the famous cocktail napkin, a simple triangle sketched out in a bar (of course) by Herb and his partner Rollin King.  Dallas to Houston to San Antonio and then back to Dallas.  That launched what has clearly been the most successful US airline in the past several decades. There were a million decisions in the early days, but they were anchored in the ideas on the cocktail napkin. 

Today I want to outline my version of the napkin, the ideas that I will use guide our blog posts this year.  Sure, I’ll get distracted from time to time by news items that merit a commentary (Squirrel!), but these are, I believe, the big ideas that are reshaping healthcare and, I hope, provide a framework as you think about the strategy to control your own destiny.

  1. Reimbursement is changing.  It is not as dramatic as was forecast, nor is there going to be some one-size-fits-all rush to capitation.  But steadily and with increasing speed, how providers get paid is changing. Change the flow of money and everything else follows.
  2. It is all about the ‘platform.’  A hospital is a hospital, a practice is a practice, a drug store is a drug store.  Put a bunch of them together and you just have a bunch of them.  But stitch several different and complimentary things together and you get a platform, a multi-faceted asset that you can deeply embed into a segment of the market and monetize in several ways.  The mega platforms are changing the landscape and you better have a strategy to deal with them.  But you also must now be building more than a practice…you better be working on a mini platform.
  3. The technology is now starting to get interesting.  We’ve done the plumber’s work of digitizing the paper, we’re breaking through the walls and hooking up the pipes so we can share the bits and bytes.  Now, we are starting to see the real potential.  More than efficiency (we sort of skipped that part), now we are seeing real innovation.
  4. With all the above slamming together, we’re seeing the rapid fragmentation of the market into smaller and more precise segments, and the proliferation of new business models trying to own those segments.  The mega platforms want big segments; the mini platforms just need their little corner of the universe.  This is what has happened in many industries that went before us, so in the chaos there is some predictability.

So, this is the lens we’ll be using this year as we work to deliver something here to help you along in your journey. 

And thanks Herb.

Tim Coan
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.
January 8, 2019

A Pivot

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I have a conundrum.  Today is the 8th, so I am officially outside the socially acceptable window of a certain annual greeting, but as this is our first post of the year, it feels rude to not to say it.  Oh, the burdens of political correctness. 

What the heck…Happy New Year.  There, I feel better now.

The holidays always provide time for reflection and this year that included thinking about the little blog thing I’ve been doing for almost five years now.  In that time, I’ve written a smidge over 700 posts and 300,000 words.  That is about the same as in Ayn Rand’s The Fountainhead (311,596 words) and within striking distance of The Brother’s Karamazov (364,153 words), Dostoyevsky’s tome that I’ve been slogging through for months now. I tend to sip a whiskey and sit in a comfy chair when I read, so maybe that is why I get sleepy.

Verbosity, not transcendent impact, is what I have in common with Fyodor and Ayn.

As I thought about how I continue to make this exercise valuable to you in 2019, and by the way, I am honored that you make reading along some part of your rhythm, I concluded that the right answer is to dial back the frequency of my posts to around once a week and compliment the blog with some other writing.

I’ll confess, the demands of writing three times a week are getting a little heavy.  As I write this from a local coffee shop, a writer for ESPN who I regularly read is sitting a couple of tables over working on his post for tomorrow (today he wrote 167 words).  But that is his whole job. My ALN team has these unreasonable demands about me doing my ‘day job.’  Apparently thinking big thoughts and making lame connections between my kids, a movie, or some obscure historical fact and a healthcare issue is NOT why I get to keep hanging around here.  They actually expect me to do a little work.  Unreasonable, aren’t they?

But, as I talk to our clients and others in the industry, it is clear that we’re nowhere close to anything resembling stability.  If anything, we’re moving from garden variety change to a time of full-blown disruption.  The challenges in front in independent physicians are not getting easier anytime soon.

Therefore, I want to take part of my writing time and focus it on some deeper explorations of particular issues and risks coming at physician practices.  We do not yet know what form this will take, but it likely will look sort of like topical whitepapers that help frame up an issue in ways that will, hopefully, help the leadership team of a practice work through the big strategic decisions that confront them.  We’ll work on a couple of them this spring, throw them to you, and you can be the judge of whether we’ve added any value.

So, thanks again for being with us.  Let’s see what the year brings.

Tim Coan
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.
December 21, 2018

Many Thanks

MToday is our last post of 2018. I’ve written about 700 of these over the past five years and are honored beyond expression that you would take the time to read my thoughts and musings.  Thank you for giving me a few minutes and I hope that I have made it a worthwhile investment for you.

We want to wish you, your family and friends a very Merry Christmas and a boatload of 2019 blessings.

See you on the other side of the calendar flip.

Tim Coan
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.
December 19, 2018

Reindeer Games

Christmas is on final approach, so I am going to invite you to channel your inner child, the one from so many years ago who was really banking on this Santa guy to come through. Oh, come on…pretend for just a minute.

In Monday’s post about the court decision to invalidate the Affordable Care Act, we noted the President’s tweet to the 2019 Congressional leaders: ‘Mitch and Nancy, get it done!’

That got us digging back through the What Matters archives.  Sure enough, there on August 19, 2016 we wrote about this magical possibility of President Clinton and Speaker Ryan setting aside their political differences and hammering out a more viable health care policy.

Oops, I totally missed the election of President Trump, which is why I stay out of the prediction business.

But at the time, the thinking among some Washington insiders was that she would need to save Obamacare from itself and shore up some of the fundamental flaws; he would like changes that would mitigate coming fiscal and deficit risk; that might be just enough to lead to cooperation.

Now we fast forward to reality and a time when the idea of cooperation seems even further fetched that a rather large chimney sweep with a penchant for red velvet and flying sleighs.  But in the spirit of the holidays, allow me to ponder a similarly wild scenario for elves Trump, Pelosi and McConnell.

First, we know the Big Elf is fundamentally a deal maker, more than a policy purist.  And getting a deal done with people he has previously insulted (see Canada, maybe China) seems to bring a special joy.  Did you see the Trump, Pelosi, Schumer spat the other day?  Just saying.

Trump and the Republicans know that if the ACA is officially killed on appeal by the Supreme Court, they then own the whole issue, including finding a way to make the ban on preexisting conditions work economically for everyone.  That will be a trick.  Cutting a deal with Nancy to share that ownership might not be all bad.

McConnell has to be thinking about having this conversation in 2021 with Pelosi and President Biden/Sanders/TBD.  Having another Republican, even an unpredictable one, at the table now might not be all bad.

The real wildcard would seem to be Pelosi.  Do the Democrats have enough to gain to work on it now with Trump?  Can they really work on something this big with someone they are trying to impeach? Do they just wait for the inevitable control of the White House, just as it was in 2016…oh wait…that didn’t quite work out, did it?  Negotiating with Trump, who might really need a deal if that China thing doesn’t work out, might not be all bad.

Yes, I am hearing hoof beats on the roof.

Tim Coan
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.