Another Letter to Senators and Congressman; Health Care

The following was sent today regarding health care to my New Jersey Senators and Congressman.

"I have been a resident of New Jersey for thirty years and have resided at the same location for that period. I have doctoral degrees from MIT and the joint MIT/Harvard program in medicine. I taught at MIT until 1975 and then went into business. I returned to MIT in 2005 after I sold my companies. I have spent the last ten years of my active entrepreneurial career in Central Europe and am quite familiar with multiple health care systems. The current Administration's efforts are laudable because health care needs reform. The heavy handed approach of Hillary Clinton left a sour taste in the mouths of many. Hopefully the current Administration will be more open.

Having spent the last quarter of a century working in the field peripherally, as an investor and as an entrepreneur, I am personally aware of the many problems that are in the system.

Furthermore having returned to MIT, after thirty years, I can see the great advances that are on the immediate horizon. However, as a successful businessman and at heart an engineer, above all else, I see that there are things that require fixing and processes and procedures that need to be ordered and prioritized.

Unlike almost all of the current policy makers who seem to be worrying about how the pay for it, I believe that we should first understand what the "it" is and where it may be proceeding. Then, and yes possibly simultaneously, we can determine how to pay for "it". I believe it is an iterative process since we clearly see that many things are changing, all at the same time.

It is critical not to fall into the fatal trap of assuming that we are changing an old health care system, for the target is a moving target, and the motion of that target can be influenced for better or worse by your actions.

I have just published a set of White Papers on the health care issue1. The intent of the White Papers was two-fold: first, develop a simple analytical model to understand how it works and what the consequences of current thinking are. Second, to consider the alternatives of reducing demand and reducing costs as well as seeing what changes may fundamentally change health care as we know it. My conclusions are as follows in four simple steps:

1 STEP 1: DEMAND REDUCTION IN HEALTH CARE IS ACHIEVABLE AND IS REQUIRED TO ACHIEVE ANY GOAL. BY ADDRESSING PREVENTABLE AND REMEDIABLE DISEASES IT IS POSSIBLE TO REDUCE LONG TERM HEALTH CARE COSTS BY 25% OR MORE. DEMAND REDUCTION IS AN ESSENTIAL STRATEGY TO BE DEPLOYED IN ANY HEALTH CARE ENVIRONMENT AND IT IS ONE STEP THAT IS MOST SUCCESSFULLY PERFORMED WITH THE SUPPORT OF GOVERNMENT.

All the policy makers assume that demand is inelastic, namely the demand by people for health care is independent of price. A simple counter example is cigarette smoking. Taxes on cigarettes have driven male deaths from lung cancers down 35%-40% from their peak.

The counter to that is the epidemic in Type 2 diabetes driven almost solely by obesity. If we were to continue the trend, we will go from the current 8% of health care being spent on Type 2 Diabetes and its consequences, heart, kidney, neurological, eye, and other problems to almost 20% by 2030! Type 2 diabetes is a simple disease to cure, just lose weight, exercise and drop the carbohydrate intake.

Taxing carbs, as Governor Patterson of New York suggested, is a great first step. Banning carbs, high fructose corn syrup, and frankly many carbs, will do more for reducing health care costs than reducing everyone's LDL! This is a superb example of how Government can cut costs by using taxation as a negative modulator. Cigarette smoking and over eating if controlled can prevent the two major threats to cost explosion in health care. They are preventable disease and preventable by demonstrated Government action.

The second area of disease management if remediable diseases, namely those which if screening is used then the impact will be significant reductions in long term costs. In this case I have analyzed the list of top screenable cancers. I have analyzed this and determining that it is possible by universal screening, the cost can be reduced by 5%.

2 STEP TWO: THE COSTS OF THE SUPPLY SIDE OF HEALTH CARE CAN BE REDUCED BY A MULTIPLE OF MEANS, AND A TOTAL REDUCTION APPROACHING 15% TO 20% IS ACHIEVABLE. THIS WILL REQUIRE A COMBINE TECHNOLOGICAL, MEDICAL MINDSET, REGULATORY AND GOVERNMENTAL SET OF CHANGES.

Health care costs are assumed to be managed and controlled by external controls such as insurance companies and the Government. We argue that this is not the case. In fact there are facts to demonstrate that Government regulation is one of the significant drivers in the explosive overhead costs of health care.

Thus there are several things which will reduce the costs of health care delivery.

First, electronic medical records are critical but their development and introduction must be organic and evolutionary. Like the Internet, which was organically and evolutionarily developed via the Internet Engineering Task Force, the IETF, the EMR should see a similar development, facilitated but not controlled by the Government. It is well known that Government is not good at picking market winners and at managing ill defined programs. Thus the Government should facilitate and not manage.

Second, medical billing and collections should be fully integrated and automated. There is a plethora of such systems and medical practices are all too often placed in the position of financing insurance companies and Medicare via accounts receivable and bad debts. Third, a set of best practices oversight to reduce nosocomial infections, faulty diagnoses and misapplications of drugs is essential. The three of these and many more can reduce health care costs by 12-15%.

Third, there are many "housecleaning" issues that can dramatically reduce costs. These include control of nosocomial infections, misdiagnoses and treatments, and drug errors in hospitals. These issues have been around for years and account for well over 200,000 deaths per year in aggregate, not to mention well over a million cases of increased and costly morbidity.

We believe that the following specific actions are then required:

1. Billing Coordination

a.Implement single entry billing process

b.Implement short time payment

2.Electronic Medical Records

a.Develop profession supported EMR system

b.Utilize an IETF framework for implementation

c. Evolve it in time, not all at once

3.Nosocomial Infections, Mis-Diagnoses, Drug Errors

a.Implement best practices to reduce nosocomial infections

b.Utilize integrated EMR/Billing systems to reduce drug errors

c.Use the EMR as a means to track compliance with these areas requiring compliance

3 STEP THREE: THERE WILL BE A MASSIVE CHANGE IN HEALTH CARE RESULTING FROM THE APPLICATION OF GENETIC TECHNIQUES IN THE AREAS OF SCREENING, STAGING, TREATMENT AND PREVENTION. THESE CHANGES WILL RESULT IN AN UPHEAVAL IN THE VERY ARCHITECTURE OF HEALTH CARE DELIVERY IN THE UNITED STATES. IF THE US MAINTAINS A LEAD IN THIS AREA IT WILL ALSO PROVIDE A CRITICAL PART OF THE UPSIDE GROWTH POTENTIAL FOR THE US ECONOMY IN THE CENTURY TO COME.

Genetic testing can be used for screening, staging, treatment and prevention. These applications of genetic methods will be explosively expanded in the next ten years. After that will be genetic applications to treatment and prevention. Thus in a twenty year span we expect to see a dramatic change in the delivery of health care whereby disease we see causing the greatest burden can be dramatically and economically managed in a totally outpatient basis. Thus we argue that any health care policy must not only consider this effect in its development but must stress these efforts in its implementation.

1.Screening: The screening for the BRCA gene in breast cancer and of many other genes in cancers can provide the physician with better insight to how best to treat the disease. Companies like Correlagen in Cambridge screen for genes for which remediation can be achieved, not just telling the patient that they may have a problem. Screening can dramatically reduce certain disease mortality and morbidity and also create an environment for more focused management and monitoring.

2.Staging: Looking for the presence of a Philadelphia chromosome in CML and other genetic tests can assist in the staging of the disease once it is detected. In prostate cancer, for example the staging can be done with the following genes: (i) TMPRSS2 Promoter and TES Transcription, (ii) Androgen receptor pathways, and (iii) PTEN and HER2.

3.Treatment: New treatment methods using targeted genes are in thousands of clinical trials. Again in prostate cancer we have: (i) Immune based gene therapy, (ii) Cytotoxic gene therapy, suicide genes, and (iii) Conditionally replicating oncolytic adenoviruses.

4.Prevention: The use of the vaccine in cervical cancer to treat the influence of papilloma virus is a prime example.

We know that looking solely at the past as prologue to the future to be patently false. Consider two past examples; infectious diseases and psychiatry.

In the early part of the 20th century health care was dominated by the management of infectious diseases. New York City had its own Tuberculosis hospital, Sea View Hospital, which was filled with TB cases which the City cared for. With the introduction of an aggressive public health care system in New York and the ultimate development of drugs such as Rifampin and isoniazid, cures or at least strong containment of TB could be achieved. Thus it is no longer the case that one needs massive numbers of beds for TB patients.

The psychiatric centers such as Willow Brook Hospital on Staten Island in New York City were filled with psychiatric patients until the early 1970s. With the advent of drugs such as haloperidol and the like they closed in just a few years. The Commonwealth of Massachusetts had in 1965 a total of 45,000 hospital beds occupied every day. 25,000 of those were for psychiatric patients. By 1975, the psychiatric beds were reduced to 6,000 and today they are less than 1,000.

Thus, if we planned health care in 1965 for twenty years into the future using the past and not recognizing the impact of the new "technologies" then we would have been grossly in error! This is a clear warning as the Government approaches this task.

Also it is critical to understand that if the U.S. continues to dominate the genetic medical field that it is also establishing a base for a truly expansive economy throughout the current century. This is an area where the Government, through its funding and clinical support, can be of significant assistance. I see this also missing from the discussion of a plan by the current Administration.

4. STEP FOUR: RESTRUCTURING THE OVERALL HEALTH CARE APPARATUS IN THE U.S. CAN BE ACHIEVED IN AN INCREMENTAL MANNER. HOWEVER CERTAIN PRINCIPLES ARE REQUIRED.

Finally, I address the issue of a plan and the principles of a plan. I strongly believe that the above prior three issues must be discussed before or at least contemporaneously with the health plan structural issues. Otherwise the "what" one plans for is not a true reality or reflection of the future. In fact, planning for the wrong "what" can cause a great deal more harm to the optimal path discussed above.

The following I believe are essential for any evolving health care plan:

•Catastrophic Coverage: There should be coverage of catastrophic incidents such as cancers, stroke, and long term disabling diseases such as MS, ALS, Parkinson’s and Alzheimer’s. The costs of these catastrophic diseases are on average low but to those who are affected they are disastrous. They are not preventable and in the most part currently not curable. Any one or family in one of these cases should be financially protected and should be available with the best of care, medical and palliative.

•Universal: Like the Massachusetts Plan, it must require all to participate. Unless the requirement for coverage is universal it cannot work. Arbitrage will occur and the system will not work as an insurance system but almost akin to a hedge fund, with the taxpayers paying for those who lose their bet. Coverage should not be denied and pre-existing conditions should not be factored into rates. Having Type 1 diabetes is a matter of fate not a matter of choice. Yet as we have stated earlier certain choice results such as Type 2 Diabetes and lung disorders related to smoking may have excess premiums applied.

•Choice: The Plan(s) must allow choice so that a patient may choose their health care provider and hospital. The physician must also have broad flexibility, since any stringent application of evidence base medicine or comparative clinical effectiveness applied too broadly is destined to disaster. Choice should also be allowed to selection of plans. Plans should at a minimum cover catastrophic coverage and other drastic forms of coverage. However any broadly based coverage and out of pocket expenses should be discretionary.

•Motivate Removal of “Bad Habits”: Use economic rewards and taxes to remove such things as obesity and improve screening.

• Reward Good Health: There must be a system which incentivizes good health practices and dis-incentivizes bad ones.

•Establish Public Health Facilities: Utilize Public Health Clinics in place of the ER as a means of dealing with those in need of non-urgent care. Facilitate this by staffing with Medical School Graduates with tuition repayment.

•Evolve Enabling Technology: Mandating technology solutions means the Government is choosing winners and losers and this always leads to increased costs and reduced quality of care. Thus allow the health care community to evolve their own solutions within the community and not have a Federal mandate. Federal "czars" breed politically correct solutions to non-problems and these solutions line the pockets of favorites at the expense of the taxpayers.

Finally it is essential that any health care plan look forward and not backward. Addressing the payment mechanism without addressing the other three more critical elements is a major failure. It will just keep the past frozen in the future. The current assumption is that the provisioning of health care will be a natural extension of the current practice. This is an approach of accountants and economists. They are the archeologists of our economy. We need future looking insight not recriminatory looks at the past.

My concerns reflect those of one who has successfully run business as well as having been professionally and academically involved in medicine. The problem that I see with many of the others proposing a health care policy is that their proposals all too often are just too academic. Books like those of Luft, Porter, Cutler and others, with their academically contrived plans, reflect views from the ivory tower of academe and grossly fail to do what any good business person would do. Namely they fail to look ahead as well as look at reducing costs. They all focus on the issue of how to pay for "it". That approach to me is vacuous.

These changes that we face in the provision of health care are sea changes that exceed those in health care in the past. It is essential I believe that we develop and implement a new health care policy in an orderly and business-like manner and just not rearrange the deck chairs which is a costly and non-productive exercise.


Very truly yours,"