Disease economics: heart disease

I wanted to see what insight I could gain by looking a bit deeper into the economics of specific diseases. I started with heart disease. As in prior posts on disease economics, the data comes from AHRQ (details here and here and at bottom).

Expense color coding

Color code for graphs below

From my post on disease costs, the big heart disease clinical condition codes are Disorders of lipid metabolism, Essential hypertension, Coronary atherosclerosis etc, Acute MI, and CHF. Below are some details of the economics of each of the clinical conditions.

To read what I think it all means, scroll to the bottom of the post.

 
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Disease cost drill down (1)

To be actionable, I felt it more useful to look at healthcare costs by specific clinical condition, rather than by the general disease groupings of my last post. Here is the graphic I came up with (excluding mental disease categories for now).

The 8 red dots represent clinical condition codes with annual expenditures each in excess of $20 Billion. The green dots represent 14 clinical condition codes with costs in excess of $10 Billion (but less than $20B).

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Disease through the eyes of an accountant

There has been a lot written recently about how some diseases cost the healthcare system more than others, and the fact that some patients (the sick ones and the old ones) cost more than others. I wanted to learn more about which clinical conditions are the big contributors to our national healthcare bill. So, for the purposes of this post I pretended I was an accountant, responsible for thinking about where to save money in the USA’s health budget. Here is what I learned.

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My interest in this topic is part of my quest to identify new opportunities that I believe will arise as a result of turmoil and reshaping of the healthcare landscape over the coming decade (more on this topic here). It’s not that I think there is anything especially surprising or worrying about the fact that healthcare expenditures flow more to some diseases and patients than to others. To me that seems only to be expected. However, I do believe there is going to be increasing pressure to reduce costs, and that the logical places to look for new opportunity are where lots of money is presently being spent.  [Read more…]

How Crowdfunding pushes the bounds of what can be funded

954c40800427975e22d301351271d611_largeI just backed a new project on Kickstarter that I consider a fascinating experiment. Who knows how well it will work, but if you are interested in how Crowdfunding is changing the landscape of funding early stage ventures, science projects, and projects at the intersection of art and technology, it is worth checking out the Dragon Empire project on Kickstarter, and the companion Lightning Gun project website. [Read more…]

Pre-existing conditions and the future of US healthcare

“Pre-existing conditions” are (should be?) at the heart of the debate about the two approaches to reforming healthcare financing on display from our Presidential candidates. I found this article by Avik Roy resonated with me. [Read more…]

Emergence of the 401(k) health plan?

401(k) healthcare

401(K) 2012

The idea that health insurance might follow the trajectory of retirement finance, with employer-covered insurance moving toward a defined contribution, 401(k)-style approach, rather than the current, defined benefit, Pension-like approach is one I have written about before.

In today’s news (WSJ) is an article describing how a handful of employers are transforming the way they offer healthcare for their employees. Instead of the employer selecting the insurance plans, and offering them to the employee, these employers are apparently giving their employees a fixed sum of money and letting them select their own choice of insurance plan (from a predefined set of choices). In other words, these employers are moving from a defined benefit approach  to a defined contribution approach, just as pensions moved a few decades ago from defined benefits (pensions) to defined contributions (401(k)’s).
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Petri dish for innovation: Consumer driven health?

Petri dish of innovationI’ve written before about the idea that segments of the healthcare system where patients pay for themselves may be a fertile focus for innovation because of the tight connection between “who pays” and “who benefits”. News today reinforces this hypothesis, suggesting there are actually quite a few of these potential customers. [Read more…]

Who pays for US healthcare?

Funding sources for healthcareIt’s a truism to say that “Patients don’t pay for healthcare” in the USA. And historically, new ventures based on the idea that patients would pay out of their own pockets for healthcare innovations mostly adapted to this reality, or went to the wall.

But as I have been watching various healthcare experiments unfold, and innovations emerge, I keep seeing promising ideas and ventures for which at some limited levels patients do seem to be paying. And for a variety of reasons, about which I will write another time, I am starting to wonder if the most promising changes to our healthcare system are going to emerge outside the traditional ecosystem (as Clayton Christensen suggests they may do), and in particular outside the traditional funding ecosystem. With that in mind, I decided I wanted to get clear in my mind just who pays for US healthcare today. Below are a few of the interesting things I learned, that I think may be relevant in thinking about future opportunities. [Read more…]

Democratization of healthcare innovation: Stethocloud

StethoCloudHere is a summer story that is a counterpoint to the daily gloom and doom in the news. It’s about healthcare innovation, unlocked by some of my favorite trends: democratization of innovation;  low-cost startups; and the “death of geography”. On reflection, I am reminded of just what powerful drivers of better medicine and reduced healthcare costs these trends can be if they are allowed to flourish.

The story starts in mid-July, when I saw these two thought-leader tweets:

Managed care returns?

My last post on healthcare costs looked at how hospital and professional healthcare costs were held flat during the nineties. In todays WSJ, an article asserts this was due largely to managed care, and goes on to describe in some detail how managed care is “returning”, although of course in a much better form.

Here is how things seem to be unfolding to me. [Read more…]

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