HCI3 Update from the Field: Dutch Auctions, Inventory Funding, Public Domain Source Code, Healthcare

Submitted by francois.debrantes@hci3.org on Friday, February 24, 2012 - 01:49

Newtown, CT – February 24, 2012

Dutch auctions, inventory funding, public domain source code, conversational blogs ….healthcare – these aren't words that are usually associated together, and yet they are. A recent GAO report illustrated how even in the controlled pricing domain of Medicare, implantable medical device (IMD) prices were all over the place. Hospitals engaged in bundled payments, like Baptist in San Antonio, have instituted a form of Dutch auction to get IMD vendors to compete on price for business, and cut the prior prices paid by 50%. Some health plans have been working on programs to fund the inventory of IMD for network providers, which would hugely rationalize sourcing, remove the massive conflicts of interest that exist today, and lead to lower overall procedural episode prices. It would also help delivery system entrepreneurs to manage the risk of building a new offering, because they'd have less cash tied up in inventory. For consumers to act on bundled payment prices and generally become better consumers of health care, they need "easy apps". Aetna has agreed to put the source code for a recently acquired HIE platform in the public domain, thus encouraging the creation of mobile apps. This is a huge shift from the "I own all the data and you can't have it" mentality to "let's be infomediaries". This new openness is magnificently displayed by BCBS of North Carolina with the launch of their new site to honestly engage in a community conversation on the cost of health care. There's a special section on their "flat fee" program – bundled payments – in which they use humor and serious facts to simply explain how you can have win-win-win scenarios. Not all plan members are happy and some of the posted comments display skepticism. That's ok, because it's only through openness, public domain freed software, and full price and quality transparency that we can achieve the goal of universally affordable health care coverage.
What this means to you – we've said it before and we'll say it again: those that claim they can't take on a game-changing program are lying. It's not that they can't, it's that they won't. Plain and simple. Employers, plans and providers who are faced with these agents of the status quo must call them on it, give them an ultimatum, and have the guts to walk away. Because there are many others who are displaying the vision, the courage, and the honesty to embrace this changing industry, knowing full well that their current business models are going to be significantly affected. Yet they're willing to take that risk because they all seem to have embraced a single recurring resounding theme – putting the patient-customer first. And that's the key difference. The agents of the status quo are only looking after themselves, not anyone else, and certainly not the patient. The innovators want to do what's right for the patients, and we all must make sure that from now on, doing right for the patient will also mean doing well financially, and that doing wrong for the patient will be severely punished.


Francois de Brantes
Executive Director
Health Care Incentives Improvement Institute, Inc.
w: www.hci3.org