Tag Archives: healthcare

Due diligence in middle market healthcare M&A. The boutique consulting firm advantage

iphoto-png-separated-01

You’re a middle market private equity firm that’s just signed an LOI with a profitable and growing healthcare company. What started as a proprietary deal turned into a competitive process and you had to stretch toward the top end of your valuation range to win. Now you have a few weeks to complete the due diligence process and close the deal. A boutique consulting firm specializing in M&A for healthcare companies may be your best bet to assist.

What help do you need?

When middle market PE firms hire consultants for commercial due diligence of healthcare companies they usually have a few objectives:

  • To generate insights on topics that are critical to the investment thesis. There are often macro questions, such as the fate of healthcare reform after an election or the speed of adoption of a new technology. Then there are questions about the competitive landscape and specific competitors, and about market demand and the needs and satisfaction levels of key customers. Sometimes the potential buyer also needs an assessment of the management team and company processes. A PE firm can do some of this work itself, but often finds it useful to leverage additional resources and skill sets, such as the ability to extract valuable information from players throughout the industry on an unnamed basis.
  • To gain access to an objective third party that can play the role of a constructive skeptic and thought partner, making sure that investors don’t let their desire to close the deal cloud their judgment. The best consultants have the instinct, gravitas and wisdom to challenge consensus thinking and are willing to point out potential pitfalls in a deal and to counsel against proceeding when needed, even if the potential buyer doesn’t seem to appreciate it at the time.
  • To prepare for a fast start after closing by generating and validating compelling strategic initiatives and tactics.
  • To get as much high quality support as possible in a tight timeframe while staying within a reasonable budget.

What firm to hire?

Premier strategy consulting firms such as McKinsey, Boston Consulting Group, and Bain have strong due diligence practices serving PE firms. There are solid reasons for their success. These firms can:

  • Mobilize large teams of highly intelligent consultants around the world to gather and analyze data. They hire the best and brightest from business schools and undergraduate programs.
  • Leverage their knowledge base and industry networks built from hundreds or even thousands of relevant client assignments. Their proposals often reflect the perspectives and data they have assembled over the years.
  • Produce high-grade graphical presentations, with professional staff dedicated to consistent, visually pleasing outputs.
  • Offer their brand name as a seal of approval, which is reassuring to investment committees.

But boutique firms, typically consisting of 3 to 20 professionals, represent a superior due diligence option for middle market private equity firms. Why?

  • Consultants at boutique firms are often former senior professionals from the big, premier firms. The consultants performing the data gathering and analysis are frequently more experienced than the partners from the big firms, who are mainly selling and managing client relationships while fresh graduates staff the cases. A boutique firm’s consultants don’t need time to get up to speed, which is crucial when the project is only a few weeks long.
  • Boutique firm consultants are generally better than their big firm peers at thinking like investors and board members. Many gain this perspective by serving as board members of PE or VC-backed companies and as LPs in PE and VC funds. This profile makes it more likely that the consultant will approach the work with a practical, focused mindset, crisply addressing the questions that really matter. This differs from the classic strategy consulting project that employs elegant but often theoretical approaches. In select cases a consulting team member from a boutique firm is appointed to the board as an independent director post-closing, something that is generally not possible with a big firm.
  • Certain boutique consultants are entrepreneurial and commercially astute. When appropriate, they highlight opportunities for post-closing business development and partnering to help the new owners hit the ground running. Compared with the big firms, there are fewer constraints on introducing clients to one another and aligning with the PE firm for commercial success.
  • Professional fees for the engagement are usually a fraction of what the big firms charge. There are multiple reasons for this. Boutique teams are smaller and flatter because there are no trainees. Consulting veterans don’t need mid-level managers to watch over them. Everyone on the team pulls their weight; no one is there just to boost the billings. There are fewer fixed overheads like HR, administrative staff and downtown offices to cover, and boutiques are not charging a premium for their brand name. All this means that boutique firms can pay staff as well as the premier firms while still offering compelling value to clients.

I co-founded the company that became Health Business Group back in 2001. At that time most of our clients were former colleagues from my days at Boston Consulting Group who had moved into PE firms or senior management roles at companies. After being on the inside they understood our value proposition. Over the next few years we attracted new business from referrals and networking. Recently, we have been pleased to receive a number of qualified inbound inquiries from our website contact page, which represents a change in how clients find consultants. Middle market PE shops are searching the web specifically for boutique healthcare consulting firms to perform due diligence. After interviewing us and checking our references, they often bring us on board and are pleased with the working relationship and results.

By healthcare business consultant David E. Williams, president of Health Business Group.

Fast progress on transgender benefits

Bruce Jenner’s transition to Caitlyn Jenner has brought transgender issues quickly to the fore. What I had not realized is that major employers and the federal government are well on their way toward providing coverage for transition-related health care. I’m not in a position to comment on the adequacy of the coverage, but just want to make the point that it’s advanced faster than I thought.

According to Business Insurance (Transgender benefits gain attention of employers), the Office of Personnel Management recently required Federal Employee Benefit Plan providers to cover transition-related care, citing an emerging consensus that such treatment is medically necessary.

About half of large employers offer transgender-related surgical coverage compared with 5 percent in 2007, according to a National Business Group on Health survey.

Transgender-related benefits are varied, and include “mental health counseling, hormone replacement therapy and gender reassignment surgery. Some employers… include coverage for facial feminization or reducing the Adam’s apple…” Not every employer offers all categories of benefits.

Private employers aren’t required by law to offer such benefits, but they have various motivations. They include:

  • An increasing belief that such coverage is medically necessary, and therefore in keeping with the overall philosophy of health insurance
  • A desire to increase competitive positioning in recruiting –including for employees that do not themselves expect to use such coverage but are looking for employers that are progressive
  • A realization that the overall costs are likely to be small, typically less than 0.5% of total health care costs
  • A defensive view that not offering such benefits could lead to discrimination claims

I don’t typically think about insurance benefits being in the social and cultural vanguard, but at least based on this example that may not be a fair assessment.

By healthcare business consultant David E. Williams, president of Health Business Group.

Governor-elect Charlie Baker on healthcare policy

Charlie Baker (R), Governor-elect of Massachusetts

Charlie Baker (R), Governor-elect of Massachusetts

Early in 2014 I interviewed Massachusetts Governor-elect Charlie Baker (and all the other candidates) about healthcare policy. Now that he’s won the election I have re-posted the interview. I hope to interview him again in the coming months.

Baker has tremendous, relevant experience in healthcare. He was CEO of Harvard Pilgrim Health Care and Secretary of Health and Human Services before that. Healthcare is a huge issue for Massachusetts, so it’s great to have someone at the helm with that background.

Excerpts from the interview are below. The full transcript is available here.

Question 1: Does Chapter 224 represent the right approach to addressing rising health care costs? If not, where does it miss the mark and what would you do differently?

Baker expresses openness to this approach, but only if  the Commission and administrators can address three main issues he sees as “fundamental to dealing with the rising cost of healthcare”:

  1. Lack of transparency regarding price and performance.  Price variations are “known to many people who currently work in the system, but are not known to those actually receiving the service.”
  2. 224 must address the “…roughly 5% of the population who account for 50% of healthcare expenditures.”  These are people managing multiple chronic illnesses, who end up “pinballing all over the healthcare system”.
  3. 224 has the  potential:  “to move us in the opposite direction” due to the “enormous amount of administrivia in healthcare.”  The state should focus on working with the provider community to reduce the amount of “non value-added” paperwork and bureaucracy within the current system. “There’s a lot of money we’re chewing up that isn’t really adding very much to the patient experience.”

Question 2: Certain provider systems in Massachusetts are reimbursed significantly more than others for the same services even though there are virtually no differences in quality. Does the state have a part to play in addressing these disparities?

Baker believes the state already has the power  to “make the system more transparent.”  He thinks the state should be “a lot more aggressive” about making information publicly available.

He says providers that do a good job at offering a reasonable price for services should be “rewarded…and given the public recognition they deserve…”

Baker highlights disparities in reimbursements for the same services between Medicare, Medicaid, and private payers, which are known to those within the health care system, but not the general public.  “The more sunshine the better.  If everybody looks at [this issue] and says we’re fine with it, that’s one thing.  But that ought to be something the people are made aware of.”

Question 3: More than a dozen state agencies have a role in health care. Is there an opportunity to consolidate or rationalize them?

Baker is critical of the state’s approach to addressing healthcare issues, saying: “…when we have a problem, we create a new agency.” He believes this approach has the effect of “fragmenting a lot of the decision-making, a lot of the data collection, and a lot of the regulatory activity across multiple agencies.”

Baker says that this leads to conflicting regulatory directions coming from multiple agencies.

He says “there is a big opportunity, to rationalize the way the state works with, and relates to, all the players in the system.”

Question 4: Government policy has encouraged adoption of electronic medical records. However many providers complain about the systems and the benefits have been slow to materialize. Should state government play a role in helping to realize the promise of health information technology?

Baker says the most important role the government can play in this area is requiring provider organizations to use interoperable technology for electronic medical records.

He says the trend has been to develop closed systems that work within providers, but “don’t connect and communicate with anybody else’s system.”

Baker states:  “Electronic medical records need to be able to share data with other provider organizations”, and he believes that patients should not be “responsible for owning and carrying around their medical records from…provider to provider.”

Question 5: Hepatitis C is 3 or 4 times more common than HIV. New drugs that can cure the infection are coming on the market this year but they are very expensive. What role should the state play in ensuring that residents are tested, linked to care, and have access to these new medications?

Baker says: “it depends on facts that I don’t believe are currently available to us.”  Once more information is collected the state can develop conclusions about best practices using models that have been proven to work in other areas.

He cites his experience in state government, especially the development of strong community-based networks to ensure universal access to vaccines for children.  For Hepatitis C, he would “develop a delivery strategy that builds on some of the successes we’ve had with joint efforts with the provider community and the plans before.”

Question 6:  There are multiple health care related ballot questions. What are your thoughts about them? 

[Note, these ballot questions were withdrawn this summer after the legislature took action.]

Baker says he believes the state “has capacity to create more transparency,” but indicates that he needs to spend more time to get a better understanding on what the state has the ability to accomplish, and whether a ballot question is the best route to address transparency in hospital financial reporting. 

On nurse staffing ratios, Baker says “there’s nobody who likes, admires, and appreciates nurses more than me.”  When he was in state government he pursued a number of initiatives to help nurses “significantly broaden their portfolio with respect to what they were able and capable of doing under existing and proposed state law and regulation.”

He states that before making a decision on the ballot question, he would seek input from the nursing community, so that his actions don’t “freeze in place the notion that we absolutely, positively, know and understand what it is we think nurses should be doing…”

Question 7: How did your experience as CEO of Harvard Pilgrim Health Care prepare you to be Governor?

Baker says his eight years working in state government and his ten years as CEO of Harvard Pilgrim Health Care give him unique qualifications.

He describes two major things he learned from his past work:

“You have to be able to create a culture of accountability.  Set the bar high, hire really good people, and work with the people you have.” But he states that the most important move is to “come up with metrics and ways to monitor performance, and then expect people to perform and achieve to that level.”

The second  thing is to create “a real culture of service.”  This, he says, is why “Harvard Pilgrim went from receivership to number one in the country for member satisfaction when I was there.”  Baker says: “I would like to bring that same maniacal approach to dramatically enhancing and improving the state’s ability to think about service and to deliver service on behalf of the people of the Commonwealth”.

Baker continues: “I would very much like to have the chance to turn Massachusetts into a national model around its ability to deliver a high quality service experience for everybody; people who are looking to get permits, people who are looking to get questions answered, people who are looking for guidance with respect to regulatory policy, and all the rest. “

Question 8:  Much of the emphasis in health care reform is on adult patients. Is there a need for a specific focus on children’s health?

Baker says:  “Massachusetts has done a good job of covering both its adults and its kids, but I worry about the impact these federal reform laws are going to have on the ability to continue the things that have worked here. And I have been disappointed by the inability of the Health Connector to get anything done, and to work for the people who need to rely on the Connector to get their coverage.”

He continues:  “I’m a huge believer in expanding the capacity and support for primary care. That includes pediatrics, which I think is an area that has been neglected by the healthcare system over the course of the past decade or so.”

Question 9: Is there anything you’d like to add?

“I bring a unique blend of public and private sector experience to this job.  I’ve been able to demonstrate my capacity to lead and to succeed as a manager and as a leader in healthcare over the course of the past 20 years. I think that’s a really important area for us as we go forward as a state, not just in terms of quality and cost, but also as a major employer and a major source of innovation and entrepreneurship in Massachusetts.”

”I’m a big believer in discipline and focus. I will bring an aggressive approach to making sure the state’s assets are well-managed, if people choose to give me the opportunity to serve as their Governor in 2015 and beyond.”

By healthcare business consultant David E. Williams, president of Health Business Group.

HealthCare SocialMedia Review #53

All the news that's fit to link

All the news that’s fit to link

Welcome one and all to the 53rd running of the HealthCare SocialMedia Review #HCSM. Social media in healthcare is going more and more mainstream, so there’s plenty of good new stuff to profile.

Bad hair day? Wax Impressions offers advice on how to handle a social media crisis. Hint: Don’t wait around doing nothing!

Type a doctor’s name into Google and chances are you’ll find dozens of links, many for physician ratings sites. What’s a poor practice to do to exert some influence on the message? Joe Chierotti has some practical ideas.

Twitter’s new profile has implications for marketers, including those in healthcare. Marie Ennis-O’Connor explains what’s new and what one should do.

Doctors’ lounges are pretty empty these days, but cloud-based lounge equivalents show some promise for keeping up with the latest medical knowledge (and gossip, too). Practice Fusion’s blog advises docs to get their own e-librarian, be social, and gamify.  Gamify? I thought that was something you did at the gym.

Whether docs are into it or not the drug pushers are trying gamification with consumers. Zyrtec has a Facebook App that lets allergy sufferers walk a fake dog through a fake park, reports Create Conversation. I wonder if we’ll see any of the generic makers of Zyrtec (cetirizine) put out a cut-rate version of the app, perhaps in black and white.

And finally, MD Connect share five ways docs can used LinkedIn to market their practices. Good stuff.

That’s it for today! Sam Welch at brandgagement is up next!

By healthcare business consultant David E. Williams of the Health Business Group

Juliette Kayyem, candidate for Governor of Massachusetts, speaks with the Health Business Blog

Juliette Kayyem (D), candidate for Governor

Juliette Kayyem (D), candidate for Governor

In this podcast interview, Juliette Kayyem, Democratic candidate for Governor of Massachusetts discusses her views on healthcare with healthcare business consultant David E. Williams, president of the Health Business Group. This is the last in a series of nine in-depth interviews with the candidates. For a complete schedule and an explanation of the questions visit the intro post.

Excerpts from the interview are below. The full transcript is available here.

Question 1: Does Chapter 224 represent the right approach to addressing rising health care costs? If not, where does it miss the mark and what would you do differently?

“It’s absolutely the right approach in terms of Massachusetts being the first state to try to crack the nut of rising healthcare costs.”

“While it is a great start, there’s no way we can think that we’re done with the challenge of healthcare, both in terms of the burden that places on our state budget, but also in terms of looking at other ways to relieve a healthcare system that’s under stress.”

Question 2: Certain provider systems in Massachusetts are reimbursed significantly more than others for the same services even though there are virtually no differences in quality. Does the state have a part to play in addressing these disparities?

“There’s more that the state can do. But we need to realize that it’s a competitive field and that there are going to be limitations to what the market can correct. Transparency is good, and litigating or having causes of action against abuses is good. Then let the market begin to drive some better behavior, which I do believe it will.”

Question 3: More than a dozen state agencies have a role in health care. Is there an opportunity to consolidate or rationalize them?

“There is no question that rationalizing and consolidating them is important.”

“We need to work through all those different layers to ensure that agencies are working together. What we need to do, what the new Governor needs to do is to ask, can the delivery of service become more efficient?”

Question 4: Government policy has encouraged adoption of electronic medical records. However many providers complain about the systems and the benefits have been slow to materialize. Should state government play a role in helping to realize the promise of health information technology?

“Medical data is the most private and therefore must be the most secure. It’s understandable that medical records have taken some time to catch up. The state can do a lot to encourage hospitals to adopt and invent new storage protocols and transfer protocols while protecting privacy.”

“This is eminently doable with state government, both providing the best practices, the R&D, and the support for private and public hospitals to do this. In the next couple of years this will begin to come to fruition.”

Question 5: Hepatitis C is 3 or 4 times more common than HIV. New drugs that can cure the infection are coming on the market this year but they are very expensive. What role should the state play in ensuring that residents are tested, linked to care, and have access to these new medications?

“We can make things, we can buy them in bulk, we can get them down to the right hospitals or community health centers, but can we actually get them to individuals? I’m committed to finding ways in which we can do what we call that ‘last mile,’ which is most important.”

“Most importantly, we need to look at prevention of Hepatitis C. That’s only going to occur with strong public health education programs, and strong commitment to community health centers and other public education providers that are out in communities helping people live healthier lives.”

Question 6:  There are multiple health care related ballot questions. What are your thoughts about them? 

“I prefer ballot initiatives going through the legislature. Ballot initiatives don’t allow for the kind of negotiations that are often required for proper implementation.”

“I would support both the fixed nurse-patient staffing ratio and the hospital financial question. If the citizens of the state passed them, I’m not going to oppose them. On the other hand, I would also like to work with the nurses’ union, with hospitals and others to get the legislation that is necessary to ensure that nurses have adequate staffing levels, and whatever other legislation might be appropriate for this space.”

Question 7In your campaign platform, you talked about reducing health disparities in the Baystate’s underprivileged communities. Are there specific steps you have in mind to achieve this? 

“I want to do more in terms of supporting our community health centers, not just empowering them, but actually helping to grow the partnerships between them and hospitals. This will allow hospitals to adapt policies to properly accommodate changing populations in the state, such as the impoverished.”

“I want an ecosystem of the delivery of services that go from the most elite hospitals in the state, which we are incredibly grateful for having, to the community health centers, which are really at the forefront of the delivery of services to our underprovided communities.”

Question 8:  Much of the emphasis in health care reform is on adult patients. Is there a need for a specific focus on children’s health?

“It’s about public education. People have to understand that the health and livelihood of our children is dependent on responsible behavior of other parents about their children.”

“If you think of the burden on our healthcare system, a lot of that can be relieved by focusing on our children, and then being healthier in the future.”

“I am into risk reduction. That is what Homeland Security is about. One of the risks that I see coming down our way is the challenge of climate change and how that’s going to impact our children’s health.”

Question 9: Is there anything you’d like to add?

“Campaigns have a tendency to make us have a healthcare policy, and an education policy, and then an employment and a criminal justice policy. Part of what I bring to this race, in conflicts and crisis management in both state and federal government, is a capacity to think about solving the problems of our time in a way that is very holistic.”

“We should begin to view healthcare not as a separate issue reserved for the professionals in the health businesses and the healthcare providers, but one that is intimately tied to educating our children, the delivery of health services through our infrastructure, and that is tied to our economy and economic growth.”

—-

By health care business consultant David E. Williams, president of the Health Business Group.

Transcript of podcast interview with Juliette Kayyem, candidate for Governor of Massachusetts

This is the transcript of my recent podcast interview with Juliette Kayyem, Democratic candidate for Governor of Massachusetts. Visit the original post to listen to the podcast and read a summary. This is part of a series of interviews with all nine candidates for Governor. The full schedule is available here.

David E. Williams: This is David Williams from the Health Business Blog. I’m speaking today with Juliettte Kayyem, candidate for Governor of Massachusetts.

Juliette, thanks for your time today.

Juliette Kayyem: Thanks for having me, David.

Williams: Juliette, does Chapter 224 represent the right approach to addressing rising healthcare costs? And if not, where does it miss the mark and what would you do differently?

Kayyem: It’s absolutely the right approach in terms of Massachusetts being the first state to try to crack the nut of rising healthcare costs. It’s a great start.

People who see me on the trail know we’re never done. There’s no finish line, we just keep pushing. The legislation is a start to continue and strengthen our efforts: whether it’s through transparency; whether it’s through causes of action against healthcare industries; whether it’s through capping healthcare cost. While it is a great start, there’s no way we can think that we’re done with the challenge of healthcare, both in terms of the burden that it places on our state budget, but also in terms of looking at other ways to relieve a healthcare system that’s under stress.

I am on the trail a lot. Part of my campaign – and maybe also as a mother – is to really focus on public health issues. If you think about the biggest costs of the healthcare system, it’s individuals with chronic and yet preventable illnesses, whether it’s diabetes, or obesity, or congestive heart failure. There are things that we can do on the front end to relieve the burdens that we’re addressing in Chapter 224.

Williams: Juliette, there are certain provider systems in Massachusetts that are reimbursed significantly more than others for the same services, even though there are virtually no differences in quality. Do you think the state has a part to play in addressing these disparities?

Kayyem: I do. I think that part of what the state is doing in terms of transparency is a start. Anyone who is in the system, and certainly has children or family members in the system, knows that those bills you get that actually say “this is not a bill” in the mail are, completely incomprehensible to the average person, even someone running for Governor.

There’s more that the state can do. But we need to, realize that it’s a competitive field and that there are going to be limitations to what the market can correct. Transparency is good, and litigating or having causes of action against abuses is good. Then let the market begin to drive some better behavior.

Williams: There are more than a dozen state agencies that have a role in healthcare. Is there an opportunity to consolidate or rationalize them?

Kayyem: Yes. I have been in state government and executive roles, and I have been in federal government. I’m actually the only candidate who’s been in both. There is no question that rationalizing and consolidating them is important. I have done that in the past in state government, whether it was in my space, which is Homeland Security, which had a lot to do with healthcare preparedness and public health preparedness. We were looking at SARS at that time and H1N1.

We are a home-rule state with 351 cities and towns and each of them has healthcare leaders. Each of them has NGOs working in the space, private facilities, and a lot of players. We need to work through all those different layers to ensure that agencies are working together. What we need to do, what the new Governor needs to do is to ask, can the delivery of service become more efficient?

That doesn’t necessarily mean a czar in the governor’s office. Are we, the state government, more transparent for patients and for other government entities who are clearly much more intimate in the space?

Williams: You mentioned working both in the federal and the state government. Well, both federal and state government policies have encouraged adoption of electronic medical records. However, there are many providers that complain about the systems and some of the benefits have been slow to materialize. Do you think that state government should play a role in helping to realize the promise of health information technology?

Kayyem: Absolutely. Look, nothing happens in a day. I’m pretty honest about that on the campaign, and I’ll be honest about that in government. Just think about the anniversary we just celebrated at Facebook. Ten years ago it was founded, and in that decade the way we manage data has fundamentally changed. Dropbox and Facebook have shown that cloud-based data storage is really a viable option for both public and private data, with all sorts of complications. I’m not washing over it, but with all sorts of complications.

Medical data is the most private and therefore must be the most secure. It’s understandable that medical records have taken some time to catch up. The state can do a lot to encourage hospitals to adopt and invent these new storage protocols and transfer protocols while protecting privacy. This is eminently doable with state government, both providing the best practices, the R&D, and the support for private and public hospitals to do this. In the next couple of years this will begin to come to fruition.

Williams: Hepatitis C is three or four times more common than HIV. There are new drugs that can cure the infection that are coming on the market this year, but they’re very expensive. What role should the state play in ensuring that residents are tested, linked to care and have access to these new medications?

Kayyem: That question is about different pieces of the trajectory of Hepatitis C. My experience is not as a doctor in this space or in the healthcare space. When I was in the federal government, we responded to what was then the H1N1 outbreak, and realized the challenges of drug distribution – in that case a vaccine – and the challenges of getting it to the most people, what we call the “last mile”. We can make things, we can buy them in bulk, we can get them down to the right hospitals or community health centers, but can we actually get them to individuals? I’m committed to finding ways in which we can do what we call that “last mile”, which is most important.

As a state, we have been at the forefront of advocating and pushing for access to affordable healthcare, and Hepatitis is no different. We need to look at whether the 97% that are covered can access these very expensive drugs. Most importantly, we need to look at prevention of Hepatitis C. That’s only going to occur with strong public health education programs, and strong commitment to community health centers, and other public education providers that are out in communities helping people live healthier lives.

Williams: Juliette, there are multiple healthcare-related ballot questions. What are your thoughts about them?

Kayyem: As a general rule – and people know this about me and I think probably maybe most politicians are this way – I prefer ballot initiatives  going through the legislature. Ballot initiatives don’t allow for the kind of negotiations that are often required for proper implementation.

That being said, I would support both the fixed nurse-patient staffing ratio and the hospital financial question. If the citizens of the state pass them, I’m not going to oppose them. On the other hand, I would also like to work with the nurses’ union, with hospitals and others to get the legislation that is necessary to ensure that nurses have adequate staffing levels, and whatever other legislation might be appropriate for this space.

Williams: In your campaign platform, you talked about reducing health disparities in the Baystate’s underprivileged communities. Are there specific steps you have in mind to achieve this?

Kayyem: Homeland Security –which we think of in terms of safety and security and terrorism and hurricane–,is really about buttressing preparedness through our various systems that protect people. That includes public health and citizen’s health. As I’ve mentioned before, they’re not in the spaces of threats that come from viruses that we don’t have vaccine for – for example, H1N1. When you think about any crisis or any disaster that hits a community, the burden on public health and the health community are equally felt. It’s not just the police issue or fire issue. We can think of any disaster with Mother Nature.

I am committed to buttressing public health preparedness. Not only is that good for all communities, but also in underprivileged communities. It is, going back to these words, the community health centers that are really the most intimate in the relationship between the patient and the community to health and healthy living.

I want to do more in terms of supporting our community health centers, not just empowering them, but actually helping to grow the partnerships between them and hospitals. This, will allow hospitals to adapt policies to properly accommodate changing populations in the state, such as the impoverished. I want an ecosystem of the delivery of services that go from the most elite hospitals in the state, which we are incredibly grateful for having, to the community health centers, which are really at the forefront of the delivery services to our underprovided communities.

Williams: Much of the emphasis in healthcare reform is on adult patients. Do you think there is a need for a specific focus on children’s health?

Kayyem: Absolutely. I have three kids, 12, 10 and 8. A couple of things, one is vaccinations, flu vaccines, educating parents of the necessity of doing this. It’s about public education. People have to understand that the health and livelihood of our children is dependent on responsible behavior of other parents about their children. As a mother, you keep them home, you make sure that they’re vaccinated against harm, you teach them healthy living about drugs and alcohol. As a parent, and if I were to be Governor, I can speak honestly about the challenges that we need to address in our child population. It runs the gamut depending on what population you’re talking about.

In addition, you’re looking at a system that is a huge burden on the state, and we’ve got to begin to relieve that burden. Healthy living for our children; the numbers I’ve seen – a million teenagers enter emergency rooms a year, nationally, for just drug and alcohol abuse – if you think of the burden on our healthcare system, a lot of that can be relieved by focusing on our children, and then being healthier in the future. Healthier now so that they are healthier adults.

Finally, and I’ll just say this because this is a big issue for me, I am into risk reduction. That is what Homeland Security is about. One of the risks that I see coming our way is the challenge of climate change and how that’s going to impact our children’s health. We have to begin to really focus on climate change adaptation because our kids are outside and have increased asthma. Access to healthy food becomes harder if the weather’s changing too much. Just think about all the parts of healthy living that would be impacted by climate change. Climate change is a public health issue and that’s why we need to begin to adapt to it as well for our children.

Williams: Juliette, you’ve been very patient in answering my specific questions that I have on healthcare. I’d like to give you an opportunity if there’s anything that you’d like to add that we haven’t covered so far.

Kayyem: I really appreciate this time. Campaigns have a tendency to make us have a healthcare policy, and an education policy, and then an employment and a criminal justice policy. Part of what I bring to this race, in conflicts and crisis management in both state and federal government, is a capacity to think about solving the problems of our time in a way that is very holistic. We should begin to view healthcare not as a separate issue reserved for the professionals in the health businesses and the healthcare providers, but one that is intimately tied to educating our children, the delivery of health services through our infrastructure, and that is tied to our economy and economic growth.  If we are healthy, businesses will want to come here.

While I appreciate all these questions and the opportunity to answer them, part of what we need to do through the campaign, as well as a Governor, is to help people understand how all these things are related, in order to build a stronger, more prepared and more resilient Massachusetts. That’s what I’m in the race for. So I appreciate the time.

Williams: Juliette Kayyem, candidate for governor. Thank you very much.

Kayyem: Thank you.

Steve Grossman, candidate for Governor of Massachusetts, speaks with the Health Business Blog

Steve Grossman (D), State Treasurer and candidate for Governor

Steve Grossman (D), State Treasurer and candidate for Governor

In this podcast interview, Steve Grossman, State Treasurer and Democratic candidate for Governor of Massachusetts discusses his views on healthcare with healthcare business consultant David E. Williams, president of the Health Business Group. This is the eighth in a series of nine in-depth interviews with the candidates. For a complete schedule and an explanation of the questions visit the intro post.

Excerpts from the interview are below. The full transcript is available here.

Question 1: Does Chapter 224 represent the right approach to addressing rising health care costs? If not, where does it miss the mark and what would you do differently?

“It’s a solid approach to curb the rising cost of healthcare. By limiting the growth of healthcare cost to the growth of the state economy, it gives a very achievable target”

“It’s going to take several years to really assess how effective it is, and how effective the various ingredients contained in it are at achieving the desired for results.”

“I would like some thought given to how we can reduce the cost of prescription drugs. As I look at the community health centers and see the pharmacies contained in the community health centers, it’s clear that they have been successful at using the authority they have legally to reduce the cost of prescription drugs.”

“One of the weaknesses of the Affordable Care Act is the failure to include the multiplicity rating factors that Massachusetts was using to help reduce the cost of healthcare for small businesses.”

“I have made it clear that single payer should be on the table and should be examined very, very carefully”

Question 2: Certain provider systems in Massachusetts are reimbursed significantly more than others for the same services even though there are virtually no differences in quality. Does the state have a part to play in addressing these disparities?

“It has a role to play. One of the roles is to drive transparency as a very, very important ingredient, to the extent that the consumer, the customer, knows of the differences in reimbursement rates for various and sundry procedures.”

“The state has a responsibility to make sure that people are aware of the differences in cost. By trying to balance quality and cost, you can demonstrate to the consumer that they are just as well-off, if not better, going to a local medical institution for care they may have sought from a higher-cost provider over a period of time.”

“As a fundamental principle we need to consistently articulate that equity and fairness in payments that protect both teaching hospitals and community hospitals, is something we care about.”

Question 3: More than a dozen state agencies have a role in health care. Is there an opportunity to consolidate or rationalize them?

“The answer, in principle, is unquestionably yes. In other parts of state government I’ve seen a number of issues that are being dealt with by a multiplicity of state agencies. Oftentimes, we are harmed by a silo approach to problem-solving: different agencies maintaining their role, holding on to their role fiercely when more collegiality and collaboration would be an entirely appropriate approach.”

“If you want to utilize taxpayers’ funds wisely, you’ve got to think about how we can be fast, flexible and entrepreneurial in terms of the way we solve problems.”

Question 4: Government policy has encouraged adoption of electronic medical records. However many providers complain about the systems and the benefits have been slow to materialize. Should state government play a role in helping to realize the promise of health information technology?

“Unquestionably, yes. State government should play a role and is playing a role.”

“Presumably, a portion of the investment that we’re making with struggling community hospitals will give those community hospitals the tools they need to be 21st century institutions dealing with health information technology.”

“The fact is that the cost of implementing health information technology can drive smaller medical institutions into the arms of the larger ones. They simply can’t afford the health information technology that they must purchase or acquire in order to be competitive.”

Question 5: Hepatitis C is 3 or 4 times more common than HIV. New drugs that can cure the infection are coming on the market this year but they are very expensive. What role should the state play in ensuring that residents are tested, linked to care, and have access to these new medications?

“I don’t think a caring society can afford in any way, shape, or form not to play a significant role.”

“State budgets have been cut in almost every area over the past five years. State funding for HIV/AIDS, and viral hepatitis have been cut dramatically, by nearly 40% over the past 10 to 15 years. It’s hurting us. We have to find a way to make additional investments in the health of our citizens, because we will get a return on investment in the long term, and because it’s the right thing to do.”

Question 6:  There are multiple health care related ballot questions. What are your thoughts about them? 

On compensation for hospital executives:

“I’m an opponent of extravagant compensation. I would join most citizens of Massachusetts in opposing that.”

“Institutions that deliver healthcare are using taxpayer dollars in a very significant way, whether it’s state dollars or federal dollars, so it is a valid initiative.”

“By requiring hospitals to be far more transparent, it will require them to limit compensation and claw back excess profits, to make sure that taxpayer dollars are used to provide safe patient care and necessary services.”

“That’s a ballot question that I have no doubt will pass and represents good common sense.”

On nurse staffing ratios:

“We’ve got to carefully consider whether rigid ratios are practical at a time when we’re in a period of great transition.”

“Knowing that roughly one in every six jobs in Massachusetts is directly or indirectly related to healthcare, the question is whether we can afford tight and rigid ratios at a time when these institutions need to maintain their financial balance and economic health and well-being.”

Question 7: What have you learned in your business and government career that will be useful as Governor?

“To the best of my knowledge, I’m the only Democrat running for Governor who has spent a lifetime creating jobs in the private sector. I have a track record, a long track record of 35 years. I took that successful track record into the Treasurer’s Office.”

“I understood that small businesses, which are the backbone of our economy, needed help. Help meant access to capital, and access to capital meant a small business banking partnership that’s poured over $350 million into business loans all over the state.”

“What I have learned in business and in my government career as State Treasurer is that job creation, while complicated, is about investing wisely and about creating incentives that will make it easier for businesses – including businesses that are owned by women, people of color, immigrants and veterans – to flourish.”

“People who believe that you are willing to invest in them are going to invest in you. It’s a win-win partnership that I’ve created in my own business, that I’ve created at Treasury, and that will be useful as Governor.”

Question 8:  Much of the emphasis in health care reform is on adult patients. Is there a need for a specific focus on children’s health?

“Let me focus on the issue of emotional health and well-being of our kids. Massachusetts is a national leader in screening children for behavioral health issues. Now, whether the children are getting the care they need once they’ve been screened, that’s another question, and it’s worthy of a lot of time, effort, and attention.”

“Without diagnosis, you don’t get treatment. Making sure that we actually deliver the treatment is a critical ingredient here. That is one of the things that we should focus on. If they don’t catch issues early, they become crises. They become more difficult to manage. They result in more heavy-duty medications that children may not really need. Once the federal judge mandated that we had failed to provide early diagnosis and treatment for poor children of mental illness, our aggressiveness [in Massachusetts] moved us significantly forward.”

“I take a holistic approach to children’s health. It’s about their physical health, their mental health, and it’s about their education. I’m a big believer in universal pre-K, and all four year-olds having an opportunity to learn to read by the time they are in the third grade.”

“The instability of the family unit – substance abuse being a factor in so many families – hurts the health of children.”

“As more resources are invested in research, and more resources are spent –not just financial resources but human resources– in understanding how to deal with children on the autism spectrum, we will have a really positive impact on those children who are on that spectrum.”

Question 9: Is there anything you’d like to add?

“Rather than only focusing on income and economic disparity, we should talk in the same conversation about healthcare disparities.”

“We’ve done an extraordinary job at covering a vast majority of people in Massachusetts, particularly children. As we grapple with wrapping our arms around healthcare cost and cost containment, we need to make sure that those communities and those citizens who live in older industrial cities – neighborhoods in Boston even and also rural areas – have a level playing field. Leveling the playing field and leaving no one behind in terms of healthcare access and quality is a hugely important issue.”

—-

By health care business consultant David E. Williams, president of the Health Business Group.