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PulseTheThe Magazine forthe Wharton Health CareBusiness ConferenceFebruary 2012A Free Marketfor Health InformationThe Pulse discusses meaningful useand other health IT related issues withJonathan Bush, CEO of athenahealthpage 5An Update on Politics,Policy and Reform:The Uncertain Futureof the Patient Protectionand Affordable Care ActFormer U.S. Senate Majority LeaderWilliam H. Frist shares his views onhealthcare policypage 18The Rise of HealthTech AcceleratorsThe Pulse takes a look at theemergence of companies focusedon providing seed funding andmentorship to health entrepreneurspage 45
Table of Contents4Letter from the EditorsHealth Policy and Reform Environment5A Free Market for Health Information8Countdown to October 1, 2013: ICD-10 Conversion1345The Rise of Health Tech Accelerators52Innovation in Healthcare IT:Revolutionizing the Doctor Appointment56Training our Future Doctors:What’s Happening to the Medical Residents?18Entrepreneurial CornerAn Update on Politics, Policy and Reform:The Uncertain Future of the Patient ProtectionGlobal Perspective60Lessons from Micro Insurance in India63Senior Globetrotters:Medical Tourism and an Aging Populationand Affordable Care Act67The Future of Health Systems Technology27The Heart of the Matter:Kaiser Permanente’s Success with Integrated Care3035Wharton’s Healthcare Management Program71Conference Kick-Off a Success74Wharton Health Care ManagementProgram OverviewIntegrated Care: How CVS CaremarkGives Consumers More for LessNew Conference on the BlockWharton Health Care Alumni AssociationThe Rising Role of Retail Clinics in the Deliveryof Primary and Chronic CareBreaking New Ground:Cleveland Clinic Expands to Abu DhabiInnovation in Care Delivery24Gamification of Health75Wharton Health Care ManagementStudent OrganizationsBiotechnology Frontier38Internal and External Marketsfor Biotechnology Innovation4276Editors in Chief77Staff WritersThe Pharmaceutical Market and New HealthcareTrends in Emerging ChinaThe Pulse3
Letter from the EditorsSince the Pulse was last published a year ago, we have all watched and waited for thehealthcare reform dust to settle. Some questions have certainly been answered, but inmany ways the waters have grown murkier. With the preliminary stages of election seasonalready upon us, we are sure to see even more changes and developments in the comingmonths. Combined with a difficult economic environment and enormous pressure to cutcosts, improve care and prepare for changes, whatever they may be, major players in thehealthcare industry are doing their best to weather the storm. Yet through the uncertaintiesand challenges, new and abundant opportunities are materializing for healthcare providers,insurers, businesses, and consumers to innovate as they have never before; and that is thefocus of this year’s Pulse.In collaboration with the 2012 Wharton Health Care Business Conference, a student-runconference at the Wharton School of the University of Pennsylvania, we interviewed leadingexperts in various sectors of the healthcare industry in hopes of providing our readers withthe latest insights and perspectives. From interviews with leading physicians and politiciansto a conversation about the gamification of health, we believe that the Pulse provides excitingperspectives from the front lines and serves as an informative survey of the opportunities,risks and trends facing the industry.With thanks for the diligent work of our writers and editors, as well as the generous supportof our corporate sponsors, we believe that we have put together a magazine that takes the“pulse” of several industry segments and offers some measured insight as to what the futuremay hold.The Pulse staff would like to express our sincerest gratitude to June Kinney and the HealthCare Management faculty for their continued support. We hope that you enjoy the 2012edition of the Pulse!Sincerely,The Editorial TeamBen Herman Vivian Hsu Lindsay Rand4The Pulse
Health Policy and Reform EnvironmentA Free MarketforHealth InformationAn Interviewwith Jonathan Bush, CEO of athenahealthBy Thomas Osborneathenahealth specializes in providing easy-to-use medical billing, practice management,Electronic Medical Record (EMR), patient communication, and other cloud-based services tomore than 30,000 medical providers nationwide. The Pulse caught up with CEO Jonathan Bushto get his read on the implications of healthcare reform for his industry and Company.PULSE: The Health Information Technology for EconomicJonathan Bush: The HITECH Act was a real disappointment.and Clinical Health Act (“HITECH”) sets standards forWashington missed the mark in deciding what capabilitiesElectronic Medical Records and incentivizes providersan EMR should have. For example, they ask doctors to enterto demonstrate “meaningful use” of health informationtoo much data at the point of care. Not only does this take uptechnology. How have these developments impacteda lot of time, but we do not yet have much use for a lot of theathenahealth’s business?data they are collecting.The Pulse5
Washington tends to ignore the role of market forces inwe might have gone otherwise. But really, “meaningful use”healthcare. HITECH seems to be forcing doctors to useis just a game that Washington makes us play. It would havetechnology that doesn’t necessarily add value clinically orbeen neat to see how we could have used the cycles withoutfinancially and it’s incentivizing doctors to buy systems thatall that distraction.they might not otherwise be willing to pay for. In reality,people only do what works for them. “Meaningful use”PULSE: What would you have preferred to work on if youshould stem from what’s meaningful for doctors, not whathad your way?sounds good in Washington.Jonathan Bush: Care coordination. With current technology,PULSE: What are the risks of adopting Electronic Medical90,000 people per year die from complications related to badRecords with capabilities that don’t match what doctorsdata, and we wastefully repeat many tests. There’s a clearare looking for?need to exchange health information among providers.athenahealth is getting in there with our athenaCoordinatorJonathan Bush: Current EMRs reinforce the traditionalproduct, but we had to spend 36 million this year acquiringexpensive ways of delivering care. Our competitors’ systemsa company called Proxsys to make it happen.are designed to keep people locked into expensive carePULSE: How do you envisionmodalities by helping doctors get tothe highest level of reimbursement.They are like a loyalty stampthat keeps doctors coming backand providing more expensivetreatments. When they are designedwith that in mind, EMRs don’t reallymake health information moreuseful – they make it less useful.And with HITECH, the governmentis spending 30 billion keeping ourcompetition in business.“ In every information supplychain outside of healthcare thereceiver pays the sender. Forathenahealth’s technologychanging care coordination?Jonathan Bush: Our visionis to create a national healthsome reason, in healthcareinformation backbone – athere is no legal market forathenaNet. We want to combinereferrals – you go to jail if youpay for referrals.”PULSE: How effective do you thinkHITECH will be at getting more providers to use EMRs?“healthcare internet” – calledbusiness services with an onlineecosystem and take on much ofthe work that doctors hate doingthemselves. The goal is to make itprofitable to enter data. For thisall to work, providers need to be more profitable if theyare online and connected than if they are not online andJonathan Bush: We’re tracking our clients’ complianceconnected. Receivers and senders of patients should makewith meaningful use criteria and reporting their progressmore money when they coordinate online.publicly on our website. 98% of athenahealth clientsare compliant or will be soon. I think that’s pretty goodPULSE: How will athenaNet make that happen?considering that only 2% of doctors in America will evencome close to making it.Jonathan Bush: Our idea is that the patient’s informationshould be transferred along with the patient in referrals, and6PULSE: Do you see any benefits of the legislation?we think that adds enough value for doctors that they won’tJonathan Bush: HITECH had the short-term benefit of gettingmind paying for it. You see, in every information supply-a lot of people to think about Electronic Medical Records. Itchain outside of healthcare, the receiver pays the sender.also forced athenahealth into the EMR business quicker thanFor some reason, in healthcare there is no legal market forThe Pulse
Health Policy and Reform Environmentreferrals – you go to jail if you pay for referrals. The systemthe charge on bringing technology to small physicianpretends that healthcare is not a business, and people whopractices. Would you tell us more about how you got intopretend that healthcare is not a business are annoying.this space?Our product, athenaCoordinator, will be moving to aJonathan Bush: We’re the only ones on the charge. That’sreferral-based pricing model in which receivers of patientsbecause there are no entrepreneurs in healthcare or thepay the sender for access to the related medical records. Untilentrepreneurs are all playing the same old game. I startednow, coordinator cost a flat fee of around 800 per month.out by running a birthing clinic and I was frustrated by theUnder the new model, it will cost 300 plus 1 per order. Ifclaims process – I wanted to make it better. The moment ofthat order is a referral to another practice on athenaNet, thenepiphany came when I was trying to get an investment tothe receiver pays the 1 instead of the sender.expand the practice. The VC put a higher valuation on ourIT system than on the rest of the company, and I suddenlyPULSE: How will that change the total cost to providers?realized that I was in the software business. When we startedathenahealth, our original goal was to serve 10,000 OBGYNs.Jonathan Bush: For hospitals, this will be a new expense,Today, we’re serving 30,000 doctors of all specialties.but they will save effort on registration because all of thepatient’s data will be transferred. Specialists should roughlyPULSE: What advice do you have for aspiringbreak even. Primary care physicians will get an extra sourceentrepreneurs in healthcare?of income from sharing their data. Our goal is to make datareusable and sharing data profitable. This is totally separateJonathan Bush: Do work for people – just find work to do andfrom the government’s Health Information Exchanges: wego do it. Don’t wait for the government to do anything. Usewant to allow free competition in the market.the internet to make things better. Do good, and make money.PULSE: It seems that athenahealth is really leadingToo many would-be entrepreneurs in business school gowork for banks or consulting firms. Don’t go work for a bankor consulting firm.ProfileJonathan Bush serves as Chief Executive Officer, President and Chairman of the Board of Directors of athenahealth, Inc.Mr. Bush co-founded athenahealth in 1997 and has been a director since inception. Prior to joining the Company, Mr. Bushserved as an EMT for the City of New Orleans, was trained as a medic in the U.S. Army, and worked as a managementconsultant with Booz Allen & Hamilton. Mr. Bush obtained a Bachelor of Arts in the College of Social Studies from WesleyanUniversity and an MBA from Harvard Business School.The Pulse7
Countdown to October 1, 2013:ICD-10 ConversionBy Jamie MumfordWith the unprecedented convergenceimpact of the conversion to that of theICD-10-CM along with ICD-10-PCS byof health reform initiatives andmortgage crisis or the health industry’sOctober 1, 2013.regulatory requirements in theequivalent to Y2K. John Dugan, acoming years, including the HealthPartner in PricewaterhouseCoopers’This ruling represents a significantInformation Technology for EconomicHealthcare Advisory Practice,overhaul of the medical coding systemand Clinical Health (HITECH) Acthelps explain the magnitude of thisfor all HIPAA (Health Insuranceand the meaningful use program, theundertaking.Portability and Accountability Act)HIPAA 5010 standard, accountablecare regulations, and pay-for-covered entities, including healthcareBreaking Down the Codes:performance initiatives, the healthcare8providers, health plans, healthcareclearinghouses, and vendors. Sheerindustry is rapidly approaching yetTwo code sets dominate today’snumbers alone help to illustrate theanother deadline: converting to theofficial documentation of healthcaremagnitude of the ICD-10 conversion: theInternational Classification of Diseasesinterventions: one is ICD-9-CMcurrent ICD-9 coding set encompasses a10th revision (ICD-10). With less than(International Classification oftotal of 18,000 different codes (roughly24 months until the ICD-10 complianceDiseases, Ninth Revision, Clinical14,000 diagnosis and 4,000 proceduredate of October 1, 2013, hospitals,Modification). The ICD-9 code set can becodes), while ICD-10 supports overpayers, and vendors (largely healthcarefurther broken down into Volumes Oneeight times that number (roughlyIT and software companies) are gearingand Two for reporting diagnosis and68,000 diagnosis and 87,000 procedureup for a dramatic shift that will requiresymptoms (abbreviated CM for Clinicalcodes). The conversion to ICD-10 notsignificant planning, technology,Modification) and Volume Three foronly requires an increase in resources,resources, training, and collaborationreporting inpatient hospital procedurestraining, and system upgrades,across key industry stakeholders.(abbreviated PCS for Procedurebut also significant coordinationClassification System). On August 15,and transparency among the keyWhile industry experts anticipate that2008 the U.S. Department of Health andstakeholders in the healthcare industry.the long term benefits of the ICD-10Human Services (HHS) announced theconversion will outweigh the asso
An Interview with Jonathan Bush, CEO of athenahealth By Thomas Osborne Jonathan Bush: The HITECH Act was a real disappointment. Washington missed the mark in deciding what capabilities an EMR should have. For example, they ask doctors to enter too much data at the point of care. Not only does this take up a lot of time, but we do not yet have much use for a lot of the data they are collecting .
