Post-HIMSS Interview with NaviNet

2014 NAVINET EXPERT INTERVIEW SERIES

Laura McCaughey’s Interview with Janice McCallum on 2014 Outlook for Health Insurance Exchanges, Health Start-ups, and Need for Price Transparency Tools

Janice McCallum, Managing Director of Health Content Advisors, is a leading blogger and contributor to healthcare IT conversations on social media. Last night, Janice graciously spent time with us after Hillary Clinton’s HIMSS14 keynote address to discuss what surprised her in 2013, her thoughts about the progress of health insurances exchanges (HIX) to date, the most interesting start-ups she’s seen in the past few months, and what applications she expects to have the biggest influence on healthcare in 2014.

(1) What event/nonevent or trend surprised you the most last year?
I’ve lived through several periods of rapid change where digital technology radically improved access to information and transformed how we purchase goods and services. So, it’s not easy to surprise me; I’ve seen a lot!

But, to answer your question, I’d have to single out the problems with the Massachusetts Health Connector as it transitioned to an ACA-compliant health exchange last fall as the biggest surprise. The HealthCare.gov problems didn’t surprise me as much, since I had an inkling of how complex the set of data extraction and matching algorithms had to be. However, within Massachusetts (my home state), where we had ample experience with an existing insurance marketplace that we call the “Connector,” it took me by surprise that the transition to the ACA HIX was—and still is—such a disaster. Perhaps it was due to overconfidence, or more likely, it was due to the fact that Mass chose the same IT contractor as the federal government used for the launch of Healthcare.gov: CGI Federal. I don’t place the entire blame for early problems with the Healthcare.gov site on CGI’s shoulders, but it does appear that they had insufficient resources to complete either job on time. Overall, I’d say there’s plenty of blame to go around, but for now the focus has to be on moving forward and fixing the problems.

(2) Uncertainty and painful reality around health insurance exchanges (HIX) are keeping payers, providers, and patients up at night—and demanding a lot of problem-solving during the day. What advice would you give to health plan CIOs as they strategize to leverage technology to insulate their companies from the reality of HIX versus the model?
I can only offer high-level strategic advice, since I’m not an expert in the technology underpinnings of the exchanges. My advice is to learn from the successes and failures on HealthCare.gov and the state exchanges, adopt best practices from the successes, and avoid duplicating the mistakes made by others.

(3) You are quite active in the world of innovation. What are some of the most interesting start-ups you’ve seen in your travels over the past few months?
I see a lot of well-intentioned start-ups that aim to help patients/consumers manage their health—whether their audience consists of consumers managing chronic diseases, trying to maintain wellness, or fitness enthusiasts who want to analyze data to gain a competitive edge – or just a better understanding of the effects of exercise. However, I think it will be a couple of years before these consumer apps really take off, because it will require more connectivity between consumers, researchers, providers, and payers. More important, business models that offer benefits to consumers are needed. I’m concerned that the business model that is gaining momentum involves sending data to providers and payers who will use the data to dictate to patients/consumers what they must do to stay compliant with their health plan. Personally, I want to see a more inclusive model where motivated patients have full access to the data and their observations and analyses are taken seriously by payers and providers. At present, we don’t have an evidence base that is solid enough to jump to a model where health plans make decisions based on device data without involving the consumers, whose observations about the data could reveal insights about interactions or other factors that affect the interpretation of data.

Apart from devices and sensor data start-ups, I’d point to investments by Google Ventures for early-stage companies that merit watching. Their investments include One Medical Group, Foundation Medicine (which recently went public), InformedDNA, and About.me. On February 20, 2014, Google Ventures announced investments in two enterprise/mobile security companies—Ionic Security and ThreatStream. These applications certainly play a big role in healthcare enterprises. Also, I think Rock Health does a very good job of tracking and categorizing healthcare start-ups.

(4) What application do you expect to have the biggest influence on healthcare in 2014?
Apps that help consumers track healthcare expenses and aid in price transparency will be in demand in 2014 as high-deductible and health savings account (HSA) plans expand. Castlight Health is a player in the price transparency space and is a darling of the investment community, but it is targeted to the employer, not consumer, segment. I am more interested in tools that help consumers understand what an encounter with a provider or an episode of healthcare will cost. To really make an impact, apps will have to provide information to consumers before they make a decision to visit their general practitioner, urgent care center, a specialist, or choose some other path.

Apple’s planned Healthbook platform may be a game-changer in this space if they can go beyond consolidating data from apps and patient health records (PHRs) and connect that data with information from a consumer’s health plan. I think Intuit had planned to focus on the financial tracking aspect when they acquired Medfusion in 2010 to grow the Quicken Health Expense Tracker. But, that goal was short-lived when Intuit’s corporate strategy shifted away from the consumer market, and they sold Medfusion back to its founder.

To succeed in achieving the price transparency and out-of-pocket expense tracking objectives, these consumer application developers—Apple, HealthVault, and others—will have to collaborate with health plans in order to have access to the cost-sharing structures of each health plan. Policymakers and health plan executives keep emphasizing how important it is for consumers to make wise healthcare decisions. In 2014, I’d really like to see significant movement toward giving consumers access to information that helps them make better decisions about their health and their utilization of healthcare services.

This interview was originally published at http://www.navinet.net/blog/2014-navinet-expert-interview-series-janice-mccallum on February 27, 2014.

Google Health Post-Mortem

Last Friday, June 24, Google announced that it will shut down Google Health, which had become a much-hyped platform within the health IT community for storing one’s personal health and wellness data. Outside of the health IT community, Google Health made little impact.  I have read at least a dozen other articles that dissect the technical reasons and health IT insider viewpoints on why Google Health failed.  I’d like to discuss the reasons why Google Health never gained traction within Google.

I’ve followed Google from the very early days when they burst on the scene as a new search engine when nobody thought we needed a new search engine.  Google transformed search by using an algorithmic approach to identify the most relevant results.  Among the three key factors that differentiated Google from the pack were 1) algorithms that ranked pages based on popularity (Page Rank) and 2) scale: the larger the collection of sites that were crawled, the better the results (at the time circa 2000).  Since its introduction, Google’s algorithms have changed many times, but the fundamental fact that Google prefers to depend on programmable solutions that don’t require human intervention remains constant.  And, Google continues to chase large-scale opportunities where it can become an essential layer of the infrastructure.

Factor 3) is the business model. Remember the early 2000s when we all wondered how Google would make money?  After Yahoo acquired Overture in 2003, the revenue model was decided.  Keyword-driven advertising became the preferred method to monetize traffic on the popular search engine sites and scale matters in this model.    

With these three key factors in mind: algorithms not people, scale, and an advertising-driven revenue model, let’s consider why Google Health was destined for failure.

Google has done an excellent job of staying ahead in the “scale” category.  Google loves large repositories of data that it can monetize via advertising.  Google Books is an example. Once the legal hurdles have been worked out, Google Books will run without much human intervention –and has the bonus of providing an e-commerce revenue stream along with an advertising revenue stream.

Where Google got into some early trouble with Google Books was they wanted to side-step the hard work involved in working out agreements with publishers, so they did a deal with AAP and the Writers Guild that required authors and publishers to opt-out and take action if they wanted to set their own pricing terms.  When it came to orphan works, Google would be the presumptive copyright owner if the rightful owner couldn’t be located. So far, Google Books fits with the scale and business model elements. But, Google Books required a heavy initial investment in scanning books.  That certainly requires significant human effort, but Google was able to hire inexpensive labor and only older books needed to be scanned.  Newer books are available in electronic form, so once the initial investment is completed, the humans that place the books on the scanners will no longer be necessary. 

With Google Health I have to agree with Kent Bottles who wrote that Google found the degree of complexity in healthcare too great because it required too much specialized conversion programming and relationship-building with multiple stakeholders.  This variability that cannot be easily managed algorithmically is beyond Google’s chosen core competencies.

With respect to revenue models, Google said they would never put ads around PHR data in Google Health.  I think I still have a copy of the initial terms and conditions that stated that Google planned to monetize Google Health through data-mining aggregated patient data and then presumably selling the results to interested parties, with Pharma undoubtedly at the top of the list. In order for the mined data to be useful, scale and consistency of content types and formats would be necessary.  The revenue models could include keyword and display ads or content sales.

So, in effect, Google Health fell short on all three factors: scale, ability to use an algorithmic approach to content management and search, and revenue model.  Yes, health represents over 17% of our economy, so scale was still a possibility, but rate of adoption was slow—and was named as the primary reason for discontinuing the service.  Google will continue to reap benefits of health care searches via its advertising programs on its existing online and mobile search engines, but a Google Health product that was defined as a personal health data repository just doesn’t represent a big enough opportunity for Google. 

Like most of the healthcare publishing and health IT community, I was excited when I first heard that Google was establishing a health group.  Note, I first wrote about Google Health in 2006 when Google Health was envisioned as part of the Google Co-op program that had a crowdsourced model that encouraged publishers and subject matter experts to tag healthcare information.  Google Health took several turns during its short lifetime and who knows, it could come back in five or ten years once the healthcare industry grows up to resemble the financial services industry where the majority of customers log on to their computers to manage their accounts.  But, even then, its business model will have to measure up to Google’s broad business objectives for it to have any chance of succeeding.