Is Scalability Overrated?


Scalability is the end goal of nearly every tech start-up, systems innovation, and teenager you-tubing their cat – it’s going viral, business-style. And traditionally, it’s been seen as a marker of relevance and success. Growth is good, right?

But in healthcare systems transformation, do we lose something meaningful when we measure the value of our work by its national impact?

Take Iora Health, a new healthcare venture out of Massachusetts that contracts with large companies and insurance plans to provide care for employees or insured patients. Iora clinics have a for-profit model and are seeking to capitalize on saving money. They charge companies and insurance plans monthly fees and in turn endeavor to keep their patients out of hospitals and emergency rooms, the most expensive places to receive care. If they successfully prevent costly services, and save their company or insurance plan money, they take a percentage of those savings as profit.

The Iora model is essentially beefed up the primary care services offered in the comfort of a patient’s community, sometimes even as convenient as a local shopping center. They argue that by providing health coaches, lower doctor-to-patient ratios, around-the-clock availability, excellent customer service, and unlimited visits per patients, they can effectively manage most chronic illness before it progresses and requires hospitalization or emergency services. Now, nothing they are offering is particularly new, as primary care practices across the country are considering or implementing similar strategies. But what is intriguing, is their plan for growth.

As The New York Times recently wrote, Iora’s “ultimate goal is hundreds of practices across the country, a kind of Starbucks for healthcare.” And as their CEO Dr. Rushika Fernandopulle stated, “Building one good practice is mildly interesting, because a few people have done that. But how do you scale that across the country? That’s much harder.”

Hard, yes. But meaningful, I’m not so sure.

See, Iora’s foundation is venture capital and their business model aims to create a revenue stream providing services most clinics cannot afford; because most financial incentives in healthcare favor hospital and emergency visits. On the surface, it’s a win for doctors because many physicians want to provide comprehensive care, and it’s a win for patients, because Iora is paying to provide a care experience consumers want. But what about low-income populations? They lose here.

To maintain the for-profit status that supports their model, Iora Health purposefully doesn’t take patients off the street, the uninsured, or the unemployed for that matter, I guess unless some unemployed individuals are buying insurance with a plan they contract with. And yet, Iora says their model is going to “transform healthcare” and scale across the US.

When 5.5% of the population is unemployed and more than 1 in 7 live below the poverty line, how is this model “transforming” the system for everyone? The truth is, it’s not.

So I return to my initial question, do we lose something meaningful when we measure the value of our work by its national impact?

In Iora’s case, as with many clever and highly specialized health systems innovations, I think we do. Iora’s business model is what drives their innovation, but it is also what makes their services irrelevant in populations that don’t qualify or need their comprehensive care. It doesn’t make what they are doing any less valuable, but it does mean they may not find significance with every population. In addition, since their model excludes populations already under-served by the healthcare system, their national dissemination may actually threaten access to care for low-income families.

Healthcare is a complicated enterprise where the needs of the consumer are variable and evolve overtime. That diversity of need and resource distribution defines the challenge in our current system. And in the end, that variability may be too complex for a one-size-fits-all, Starbucks model.

Perhaps healthcare doesn’t need cookie cutter solutions imposed on populations with distinct assets and needs. Perhaps just like politics, all healthcare transformation is local and finds meaning in its local application, not its national prominence.

We all know ideas with traction and those that find their way to a national stage are exciting. But I think there is something to be said for offering a unique service to a distinct population, and doing that well for the long-term. So instead of looking for the next big thing, the actual big thing is made up of small things that are changing the way each of us experience our healthcare.


Comcast and Your Health Care


Last week cable-mega-provider, Comcast, announced it is merging with Time Warner, the 2nd largest cable company in the US. Together, this deal nets Comcast an estimated 57% of the cable subscriber marketplace and heralds a new oligarchy in US media and entertainment. It’s big news for Comcast, but some people aren’t as excited.


Because both Comcast and Time Warner have been consistently rated the worst providers of customer service in the cable industry. Now as they grow their consumer base and build unprecedented influence in their field, the concerns are mounting. When choices are limited and quality is poor, what recourse do consumers have to demand more of their providers? And, what will drive quality, cost-containment, and new product development in a market-vacuum where the experience of the consumer is at the periphery of the business? The risk is that, with little competition, consumers may be forced to choose between service and no-service and the cost of services and breadth of services provided will be divorced from consumer demand.

No-service isn’t such a problem when you are talking about cable. But, did you know the same thing is happening with your health care?

Since 2009, there has been a surge in the number of hospital mergers and acquisitions. The name of the game is market-share and across the country, hospitals, clinics, and in some cases even insurance plans and pharmacies, are combining forces to form large conglomerates that will control where, how, and at-what-price, you receive your health care. This is being touted as the future of medicine, an organized system where regional populations receive coordinated care. The question is, will the consolidation of health care networks create a vacuum where patients’ choices are constrained within a narrowing marketplace? To answer that question, you need to know a bit of the back story.

Basically, the Affordable Care Act changes how we pay for (read: how profits are made off of) your health care and hospitals are realigning their relationships with each other and their referring clinics, to vie for your health care dollars. Now, instead of receiving care from independent physician practices and hospitals that contract with local doctors, most Americans will be placed into regional systems where the local physician practice not only works with the hospital, but is in many cases, owned by the hospital. Combined, the hospital and clinic will be given a lump sum of money to be accountable for your care (hence the name “Accountable Care Organizations“). This new payment structure incentivizes collaboration between hospitals and clinics, distributes the costs of managing health and preventing disease across the system, and encourages the appropriate and thoughtful use of limited health care resources.

But despite these obvious advantages, there are some important things to consider as we enter this new oligarchical era in medicine:

1. While it may not be a problem if the hospital that owns your local clinic is down the street, what if it is in another town entirely, and like many working class families, you don’t have the resources to get there? Does regionalizing care create geographic barriers to access?

2. What if the hospital that buys your clinic charges higher prices? What recourse will patients have to ensure their care is affordable when clinics choose sides and the local options for providers dwindle? If this happens, will more patients opt for “no-service” because they simply cannot afford the cost of care?

3. What will happen to the county hospital systems that rely on serving insured members of the community to off-set the costs for serving those who do not have the ability to pay? Do large conglomerate hospital systems upset the local order by cherry-picking insured patients out of the community and, in so doing, threaten the viability of public organizations that care for marginalized populations, including undocumented immigrants, children, and the poor?

4. How will quality be maintained across regions to ensure health equity? Will the quality of health care be higher in regions that serve higher income populations? And in areas with only 1 or 2 health care networks to choose from, particularly in rural America, how will patients’ needs impact quality measures and cost-containment standards?

And finally,

5. With such expansive reach into your health care experience, can a one-size-fits-all model really provide patient-centered care to populations with diverse sets of health care needs and priorities? Can health care conglomerates be too big to succeed?

In the end, the economic climate in medicine has changed and traditional independent physician practices are being forced to state their allegiances or risk extinction. It is the birth of big medicine and it is coming to an area near you. In a lot of ways, that’s good news. Integrated health systems promise to decrease the fragmentation in care delivery, provide continuity of services throughout regions, and build payment structures that may contain costs. At the same time, building organizations that are too big to compete with and too expansive to be responsive to the ever-changing needs of the American consumer, risks alienating important populations from our health system, including children and the poor. The goal is to create organized models of care delivery, in which the sum of the whole is greater (read: more cost-effective) than its individual parts. As the business of medicine informs the practice of medicine in important and meaningful ways, the patient experience must remain at the center of the care we provide. Ultimately, it is patients and not profits that must be our impetus for change and our litmus for success.

Update: This post was also published on Kevin.MD. Click here to check it out!