Nonlinear Healthcare Models

A unit economic model is a business term for looking at a business in its most basic unit of revenue and costs. For a sandwich store, the unit economic model would be the revenue and cost of making a sandwich per customer. For most businesses, the unit economic model is relatively straightforward.

In healthcare, not so much.

If you try to create a unit economic model for an emergency room, then you would start by taking the population of the city or town in which that emergency room cares for patients, and calculate the projected number of patients by dividing the total population with the number of emergency rooms already in the city or town.

Just like calculating the number of customers visiting a sandwich store.

But patients are not customers, and the series of decisions and behaviors that prompt someone to visit the emergency room are vastly different than those that prompt someone to visit a sandwich store. People visit a sandwich store for one reason – to eat a sandwich. People visit the emergency room for a number of medical conditions – which is obvious enough – but what is not obvious is that the context of presenting medical condition defines the type of visit, which is difficult to accurately represent in a unit economic model.

A patient who presents with a dislocated finger is significantly different than a patient who presents with chest pain due to a heart attack (myocardial infarction). The treatment protocols, and the cost and time of care are all fundamentally different.

This may appear intuitive, and a more accurate unit economic model would differentiate among the different presenting symptoms and project different revenues and costs.

In this way, there may be ten to fifteen common presenting conditions which warrant their own unique unit economic model, and the overall model would be a probability adjusted average of all the segmented cases. For example, a model may state that 10% of all emergency visits are heart attacks, and calculate the specific unit economics for that segment of the patient population.

While this may seem correct, it underestimates true patient behavior in an emergency setting.

Patients behavior irrationally in highly emotional times – and there is nothing more emotional than a health emergency. People default to certain tendencies or patterns of thought in these moments, which largely determine the course of action that takes place.

If an elderly patient who is cared for by his daughter presents with a fall, then the daughter will decide where the patient should go for emergency care. She will rely on her previous experiences with her physicians and healthcare facilities. She will call friends she trusts in the healthcare field for advice. And she will make her decision based on what she feels is right in the moment.

There is nothing rational about those moments or about the decision-making process in general. She will take her father to the emergency room that feels right, that somehow has earned her trust. Based upon the series of snapshot judgments she makes in the moments between her father’s fall and her drive to the emergency room.

We have seen this behavior play out on a massive scale during the pandemic. Patients’ perceptions of healthcare influence behavior more than any clinical guideline or data point ever could. That is why people have developed wildly different opinions of masks, regardless of what the data shows.

It is time we formally incorporate these patterns of thought to more accurately represent unit economic models in healthcare.

A post-pandemic unit economic model in healthcare studies patient perceptions and the role it plays in healthcare decision-making. That is the most basic element in any healthcare model, the true unit economics of healthcare.

People do not visit the emergency room. Patients with specific medical conditions visit certain emergency rooms based upon a specific set of beliefs.

While each person is a unique composite of multiple perceptions, there are certain perceptions that impact patient decision-making more than others. These include hospital reputation, physician quality of care, and prior experiences, among others. They have varying degrees of influence at different points in time and for different conditions – becoming more or less impactful depending on the circumstances.

Therefore, to create a unit economic model for an emergency room, we should develop a framework of perceptions that represents the most common reasons why patients with specific clinical presentations someone may come to the emergency room. This includes a set of perceptions for patients who present with finger dislocations and a different set of perceptions for patients who present with chest pain.

For patients presenting with a finger dislocation, they may be more likely to visit the closest emergency room facility knowing their condition is not life threatening and can be fixed relatively easily. For patients presenting with chest pain, they may consider a location where their existing physicians see patients or a hospital known for the quality of care provided.

And to model realistic patient behavior, we should look at it like a ratio consisting of a subset of behaviors in reference to a perception.

Now, instead of modeling the most common presenting symptoms, we would model the most common presenting symptoms relative to the perceptions they most commonly engender. The Centers for Medicare and Medicaid services list data on the number of presenting symptoms and the cost of care. But to capture perceptions, we would conduct a series of surveys repeated over time to gauge how patients think in the moment when healthcare decisions are made, reflecting the predominant emotions expressed.

When the unit economic model is no longer a patient, but a ratio of patient symptom to perception, something unique happens to the model. It no longer becomes linear. Patient growth and hospital utilization, measured both in terms of clinical outcome and costs, do not increase at the same rate.

It becomes more complex. The rate of revenue growth can be faster or slower than the rate of cost growth. More patients do not necessarily translate to more profits. And the most profitable patients may no longer be as profitable if the volume increases or decreases.

If patients with chest pain net more profit to the hospital than patients with finger dislocations, then it would make sense to try to get more patients with chest pain. But at some point, the number of patients with chest pain exceeds the emergency room’s capacity to treat those patients at the same high standard of care.

When the quality of care drops, the perception of care drops as well – and the ratio of symptom to perception would changes. Much like the cost of care per medical condition changes over time, the perception of care also changes. And the relationship between how the two changes varies non-linearly. And the unit economic model becomes non-linear.

The whole system of patient care in acute settings is really an interdependent network of behaviors and interactions, defined by the interactions of decisions and perceptions.

The more accurately we model healthcare, the more complex the models become.

The more complex the models, the greater the role patient perceptions play in representing patient behavior.

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Vaccine Passports: what we need to know

The COVID-19 pandemic has killed more than half a million people in the US and has seriously impacted our daily lives. The granting of Emergency Use Authorizations for COVID-19 vaccines has been a game changer in helping to reverse the pandemic onslaught. Demand for the vaccines currently far exceeds supply nationwide. They have become the golden ticket that can transport us back to a time when routine activities, such as attending school or taking vacations, didn’t seem fraught with danger. What’s the best way to go about re-establishing these activities? One idea that’s getting discussed seriously is giving those who have been immunized a vaccination passport (VP).

What is a vaccination passport?

Let’s start by clarifying some terminology. VPs are documents that show that someone has been given a vaccine(s) and is therefore presumed to be immune from getting and sharing that disease. These are distinct from diagnostic tests to determine if a person is or is not infected with a particular virus (PCR and viral antigen tests) or has been exposed to a virus (antibody tests). VPs are the modern day equivalents of the “letters of transit” that played a key role in the film Casablanca. They’ll enable you to travel freely.

Why give vaccine passports?

Vaccinated people are unlikely to transmit the virus that causes COVID-19 with others, though this has yet to be definitely proven. So, what’s the primary rationale for giving vaccination passports? It seems the goal is to incentivize people to get vaccinated. Folks might be more likely to seek out the vaccine if it bestows upon them certain privileges, such as being able to travel freely. While the idea might sound appealing at one level, the road to vaccine passports is pockmarked with political potholes and littered with logistical land mines.

Administrative issues

There are a lot of important questions that need to be answered before VPs can become widespread; it’s unlikely there will be a “one size fits all” solution. What might VPs look like? Pieces of paper (that could easily be lost or counterfeited), or a digital key or document you store on your smartphone (that many older folks still don’t have)? If you lost one, how would you get it replaced? Would your vaccination records be tied to your other medical records, and if so, what kind of privacy and security protections would be needed to safeguard your data? How would the passport administrator verify that you got vaccinated in the first place? Who is responsible for correcting any errors that crop up? Given how much we’ve struggled as a nation to simply solve the scheduling of vaccinations, VPs might be significantly more difficult to manage.

Who’s going to run the program?

A coalition of health tech leaders (including Epic, the Mayo Clinic, Microsoft and Salesforce) has started the Vaccination Credential Initiative to create an internationally accepted digital health card. Its vision – as stated on its website – is “to empower individuals to obtain an encrypted digital copy of their immunization credentials to store in a digital wallet of their choice. Those without smartphones could receive paper printed with QR codes containing World Wide Web Consortium (W3C) verifiable credentials.” Some European countries (e.g. Denmark) are working on developing their own immunization passports, and the President of the European Union Commission has voiced support for them.

We already have a hodgepodge system designed to keep folks with COVID-19 from traveling. Many airlines are requiring proof of non-infectivity to board a plane – these are distinct from VPs. The methods adopted vary from airline to airline: United uses Travel Ready Center, American uses VeriFly while others use Common Pass. Saga cruises are the first in the UK to demand proof of vaccination, but not everyone is on board with the concept. The World Travel and Tourism Council stated its opposition to allowing travel only by those who have been vaccinated, on the grounds that it is discriminatory.

Discrimination concerns

The concept of gaining advantage from one’s immunological status is not a new one. In New Orleans in the mid 19th century, great economic value was attached to those who survived the onslaught of epidemic waves of yellow fever. A mix of structural racism and a system valuing “immunocapital” ranked men and women highly if they were yellow fever survivors. Those that had not had the disease yet found it difficult to obtain work or obtain credit and women could not marry. Slaves were similarly revalued, with larger assessments attached to survivors. This legacy of viral discrimination casts a long shadow over current discussions surrounding vaccination passports.

Also problematic is the fact that not everyone will be eligible for VPs. Some people can’t be vaccinated for medical reasons but would still like to participate in whatever activities the passports enable (such as travel opportunities). These individuals will likely file complaints if they are denied VPs, arguing that they’re discriminatory in nature. Vaccine opponents will no doubt also file lawsuits seeking to block the use of VPs, claiming they represent an attack on their freedoms and personal choice.

Others may be shut out of VP programs because they don’t have the computer skills to register online, a problem that’s turned out to be widespread with the vaccinations. Don’t have any ID? In some places this prevents the most vulnerable from getting the COVID-19 vaccine, and therefore VPs as well. Many Black and marginalized communities are already deeply suspicious of the medical establishment, and wary of receiving a COVID-19 vaccine. Restrictions that prevent these groups from participating in various societal activities because they don’t have VPs will echo the Jim Crow days of poll taxes and literacy tests that were required to vote.

Enforcement issues

VPs bring up a similar issue as mask mandates: who is going to enforce them? It is one thing for a cruise line to do so, since reservations are required and extensive paperwork needs to be filled out in advance. Who is going to keep non-vaccinated people out of restaurants or concerts that require proof of vaccination? We’ve already seen anti-maskers storm department stores, ignore requirements to wear masks on planes and even kill a security guard who confronted them.

Black market for vaccine passports

Many airlines are now requiring proof of a negative COVID-19 test before they will let their customers fly. This has led to a black market for fake negative COVID-19 test results for those who are looking to game the system. Similarly, bogus cards claiming that the cardholder was exempt– for medical reasons – from having to wear a mask, have been manufactured and distributed. It’s not hard to imagine that a similar market will emerge for VPs.

Overcoming vaccine hesitancy

Given the multitude of issues and concerns listed above, moving forward with issuing vaccination passports seems highly problematic. If the primary purpose of having VPs is to drive up immunization rates, that can be better accomplished by running public service announcements and ads illustrating how liberating it is to start doing normal activities once vaccinated. A nationwide campaign to do just that is already in the works. I personally can think of a better use for the time and money that will be spent on establishing VPs: use them to focus efforts on overcoming vaccine hesitancy in concert with combatting the high tide of online vaccine misinformation and disinformation.

Source: Technology Networks

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