Doctor Jordan Shlain on The Healthcare Hairball: Part II


This is Part II of my conversation with Dr. Jordan Shlain. For Part I, click here.

It strikes me that many of those lessons that you were beginning to learn in the late 90s laid the foundation for the company that you started about five years ago, HealthLoop.

Yes. We spend less than 1 percent of our life in the doctor’s office and greater than 99 percent of our life elsewhere. But your health travels with you one 100 percent of the time. How do you connect that less than 1 percent with that 99 percent in some type of continuity, put it in a narrative?

That’s the story of HealthLoop. It started when I was taking care of a patient who had pneumonia, she was about 73 years old — cough, fever, shortness of breath. So I said here’s a prescription for antibiotics, and here is my cell phone number. Something like 98 percent of people with community-acquired pneumonia will do fine with these antibiotics, and be back to normal in seven days. But the percentage that don’t can die.

I told her that it’s important she call me if she’s not doing better. I sent her home and seven days later the phone rang, and it was the emergency room. She was in respiratory distress, was sent to the ICU, put on a ventilator and she almost died.

As a doctor you take care of a lot of people who do die, and you live at the front lines of death and dying. My first response was why didn’t she call me? I gave her my number! Then my second gut instinct was shame on me, why didn’t I check in on her? I’ve got the time to do that, why didn’t I?

From that moment I started scouring all these startups. This was in 2007 when Google was taking off and LinkedIn, and all these others. Where is the CRM technology that I can use to check in with my patients after they’ve left my office with something simple? And there was nothing.

So I basically cracked open an Excel spreadsheet and created three categories: “I’m really concerned about you, I’m kind of concerned about you, and I’m not really that concerned about you.”

Back in the broken health care system we were just talking about, doctors get paid by entering in two codes. One is a procedure code — how long did I spend, how complex a patient were you. The second is a diagnosis code. I have to put those two codes into the electronic medical record machine, pull the lever, and then see what money comes back. It’s a crapshoot every time because you never know what you’re going to get paid.

The whole architecture of health care has been designed around putting those two coins in the slot machine hoping to see what you get back. I decided I was going to damn the torpedoes, I’m going to come up with three codes.

The third, new code was an “empathy code.” “I’m concerned, I’m kind of concerned, I’m not that concerned.” If I’m really concerned about you, I would call you every day and ask you, are you the same, are you better or are you worse than yesterday? If you said I’m better, I would move you to I’m less concerned and then I’d call you every other day.

I had the spreadsheet, and I was moving people off of it, but if you were moving the wrong way, if you said “I’m worse” or “I’m the same” for three days, I would want to bring you back in and maybe do a course correction, because you’re not trending to the recovery arc that I would want to see.

This system begs for automation, it strikes me.

Yes. I developed a prototype where a patient would get an email from me every day. The subject line says, “Dr Shlain wants to check in with you today.” Nobody at that time — even today — gets an email from their doctor looking like they care about something that’s relevant and contextual.

In the body of the email it says, “Please tell me how you’re doing today,” and there was a link that said, “same,” a link that said, “better,” and a link that said, “worse.” When you clicked on the link, encoded in that link was you, and the problem I was checking in about, and the algorithm. I would then get a report every day of how everybody was doing. The epiphenomena of this observation was is, if you didn’t check in…

… that’s also data.

… that’s also data. The concept of no news is good news in health care is always been, “Well, if you don’t hear from the patient, no news is good news.” No news is really no news. It’s like saying, “No data is good data.” It doesn’t make sense.

HealthLoop was born out of this frustration I had by not having a clinical CRM, or some way to stay in touch with patients — which is what I consider innovation by irritation. It was an experiment. It wasn’t intended to be a company, it was intended to solve a practical problem for me and my patients.

I presented it at a conference in Washington, DC. Someone said, “Wow, you should turn that into a company. Let me write you a check, and I’ll help you raise money and build a team.” I said, “OK, but I really prefer to be a doctor.” Fast-forward to today, now HealthLoop is funded, it has modules for orthopedic surgery, and cancer, and gynecology, ENT, and more.

I imagine the questions it asks are more complicated as well…

It’s no longer just “same, better, worse.” We know if you’re going to have a procedure, and that you are going to be anxious about it. How do we organize everything to mitigate the anxiety? The physiological operating system adheres to pretty predictable models, the cognitive operating system of anxiety has a greater variability. We all have the same concerns over time, pretty much, and there’s not a lot of variation.

I coined this term, “digital empathy,” which is, if you believe that somebody cares about you, and you believe that somebody can anticipate anxiety and mitigate it using technology, you can sense that, and that makes you feel good. You will trust and value that thing. Even though patients know they’re getting these messages, it’s really coming from their medical team. It’s a digital connective tissue. It’s not trying to replace the doctor. It’s trying to augment them.

It seems that it actually amplifies the doctor — when you interact with it, you feel like you’re interacting with the doctor a lot more than just going in for that 5-minute visit.

It gives doctors a super power. You’re connected with them throughout their entire journey until they are better. Imagine, as a doctor if you could ask all your patients, every day how they are doing given a specific medical problem.

HealthLoop seems to be pretty well positioned, given the shift to an outcome-based approach that has been driven by Obamacare.

One of the more prevailing markers in health care is called the “30-day readmission rate.” It’s a very crude marker, and maybe the wrong marker, but it’s the one we use. It measures how many patients are readmitted to the hospital after they’ve been discharged.

For hospitals, it used to be they wanted to keep you in longer, because they got paid $5,000 each day longer you stayed in. When the insurance companies came to capitate all this, they said “OK Hospital, here’s $5,000 for the entire hospitalization.” And that’s it.

So now hospitals want to get you out as soon as they can. They were kicking people out too soon, and then they’d have to be readmitted. The cost of that readmission is usually 2x the original charge. The hospital actually makes more money on the readmission. If you get readmitted a third time, it’s like 3x.

Is that because the patient gets worse every time?

Yeah! It’s because you’re rolling down the hill. When you think about how perverse all these incentives are, it’s crazy. I believe if you ask a patient, a person, who’s just diagnosed with something or has to go to the hospital, “Would you like the best outcome with the least probability of an adverse reaction or complication?” I’m guessing 100 percent of people say, “Yeah.”

If you ask the doctor, “Hey, would you like your patient to get the best outcome, with the least probability of a side-effect and the fastest?” Yeah! We went into medicine because it’s a calling. There aren’t really entrepreneurs in medicine. There are some, but mostly it’s a profession of service and caring.

Now let’s talk about all the other actors that don’t have those incentives. They actually control all the levers.

The insurance companies?

Yes. And the costs have been spiraling out of control. We’ll bankrupt the whole economy soon — it’s unsustainable. We all know it.

The U.S. Government is the largest payer of healthcare in the world. Medicare or Medicaid covers 50 percent of all the Americans. The government is now saying “Look, we’re going to come up with a model where we’re going to pay you for outcomes. Here’s a patient with — pick the disease — here’s the good outcome, here’s a pile of money. Get that outcome. And if you don’t get that outcome, it’s on you.”

You don’t get the money if you don’t get the outcome?

You get the money, but if the patient comes back, you’re going to have to do work, but you’re not getting any more money. That’s all you get.

Now, all of a sudden, they have to re-engineer everything. In order to get that good outcome, you need huge change management. There’s, like, 99 software systems managing a typical healthcare system. It’s a hairball. All these technology companies are trying to comb the hairball. You can’t do it. You have multiple, non-interoperable systems, different organizations, complex regulations…it’s nuts.

HealthLoop comes along with very simple solutions. “Connect doctors and patients between visits around an outcome.” We’ve kind of become the outcomes tool. If you want to get a good outcome, well, you can’t manage what you can’t measure. The fundamental unit of humanity is a conversation. The function unit of medicine is a doctor, a patient and information. This is not rocket science. In fact, it’s so simple, that people can’t grok it. I like to say that when all other forms of communication fail, try words.

Isn’t that what “Electronic Medical Records” are supposed to do? And why can’t I ever see mine?

That’s a two-part question. Let me answer the first one first. EMRs — Electronic Medical Records — were built to be a cash register and database. The database existed, not to store your files for your care, but for the insurance companies, who wanted to make sure that the doctors were doing what they said they were doing so they could get paid.

In other words, it was really built between the doctor and the insurance companies?

Yes. It had nothing to do with patients. When they were built, they asked a bunch of doctors in the 1970’s, “What would you like these medical record systems to do?” They’re like, “We don’t know.” That’s what they built.

They took a paper process and made it a digital process. It’s literally a digital file cabinet. There was no design thinking, no architectural underpinning that honored the nuance between doctors, patients and the evolving information about the patient.

Lots of large technology companies have tried to fix this, no? Google, Microsoft, and now Apple. If anyone can fix this, shouldn’t it be the big tech giants who are going to somehow magically wave their wand and make it work?

Yeah, so the problem with that statement, you can’t sprinkle technology on a broken system and magically expect it to start working. This system is highly labor-intensive, where each person has a role and that role is connected to another role, which is connected to another role.

I think that the technology companies have all failed because they don’t understand how complex and nuanced this is. I do think they have a role to play. I think that in order for the tech giants to figure this out, they need to spend a lot of time with physicians, with patients, and all the clinical people in between. There’s home-health care people, there’s nurses, there’s dialysis centers…There’s a gigantic ecosystem, and if you want to stitch them together in a coherent, meaningful way, it will take a long time to do. There’s no magic technology.

Why wouldn’t you start with the patient? Isn’t the patient ultimately the node, the end point of the network, the independent actor who has rights to data? Isn’t that the point of Apple’s Healthkit ?

Yes, but when you’re really sick, if you’re in the ICU…really? You’re not on your iPhone kicking data up to the cloud and getting processed. You know what I mean? Could the ICU kick that up to the cloud on your behalf, with your permissions? You get into a lot of data privacy issues…

You need all the different actors to align. Is that ever going to happen?

In our lifetime, probably.

You have written in the past about how a patient should not be conflated with a consumer in health care. Can you tell me about that?

There’s a big movement to empower the consumer everywhere, but there are no “consumers” in the intensive care unit. There are no consumers in the hospital. Now, what is a consumer? What is a patient? What is a person?

A consumer has in their pocket a resource called money. This is exciting! They can trade it, and they’ve got all the choices in the world with which to trade it. They can go shopping. They’ve got free will to spend their money with virtually unlimited choices to get something that once they’ve purchased it, adds to their life, something they did not have before. I call it the “Excitement model.” They’re excited!

Patients, on the other hand, live in a world of anxiety. Something’s not normal. They don’t have unlimited choices. They have limited choices, and they don’t have free will. I call it “tethered will.” They have to make a choice. I call this the “Anxiety model.”

A consumer does not think like a patient. The language we use around health care cannot conflate the importance of what it is to be sick, and what it takes to navigate what I call the “freak-o-system” of health care. It’s not easy. There is no front door. There is no docent.

When you’re in the healthcare system, you’re not a consumer.

You’re actually not spending your money. You have given your money to someone else — the insurer, usually. Now if you’re going to go out and buy insurance, well, you’re a consumer for the insurance that you’re buying. You’re a consumer if you buy a Fitbit.

That’s the difference between what I call health and healthcare. Health is like wellness and parlor games, it’s fitness trackers. You’re having fun and getting insights. But health care is, “OK, now you need your pancreas removed.” It’s a different animal that has a different set of issues than just being a consumer.

One of your side projects is the Institute for Responsible Nutrition. Can you tell us what that is and why you started it?

The Institute for Responsible Nutrition’s mission is to eliminate Type 2 diabetes in children. Type 2 diabetes used to be called “adult onset diabetes.” You get it because of things you do to yourself along the way. Type 1 diabetes, just for clarification, is bad luck — it’s a disease you just have.

About 20 years ago, kids started to get Type 2 or adult onset diabetes, and we had to actually change the name of adult onset diabetes to “Type 2,” because we had an epidemic of kids getting this formerly adult disease. This is because the food industry is putting sugar in everything. It’s invisible, and it’s an environmental public hazard, all this sugar. Kids are getting diabetic and some of them get fat, but there are more people that are diabetic that are skinny than are fat.


These people are called TOFIs — thin-on-the-outside-fat-on-the-inside — versus obese. But because our eyes are pretty important to us, we see obese people and go, “You need to lose weight.” But being obese doesn’t cost money. Being diabetic costs money.

I started the institute with Rob Lustig, who’s a pediatric endocrinologist at UCSF. We both agreed that as a society, we’re poisoning our children. If there was some invading army that said, “We’re going to poison your children and make them really sick,” we would martial every force we had to fight those bad guys.

Those bad guys are the largest food companies in the world, and they need to change their model.

What are the things that need to be done to do this? The people at Nestle — I know the people there, they’re good people — don’t believe they are killing the world’s kids. They’re making products based on the inputs they get from government policies — and the government makes it cheap to make food with corn syrup, no?

The World Health Organization just came up with the new guidelines for how much sugar should be in food. If you look at the label of any food, it’s got a percentage of fat, percentage of protein. It doesn’t have a percentage of sugar! There’s a grams there, but there’s no percentage next to it. They’ve kind of like, “Nothing to see here.” They’re going to change that, and so we’ve been active to try to change the labels on foods.

Are you getting pushback from the Pepsis, the Cokes, the Frito-Lays of the world? Or are they, in private conversation, they’re saying, “Yeah, we know this is coming.”

Yes, we’ve talked to a lot of these big companies and they want to be on the right side of history. What they’re deathly afraid of is taxes on their sugar and warning labels on their food like the tobacco. Those are coming.

There’s already warning labels in England. There’s a tax in Berkeley that’s passed. They’re going to have to fight a “death by a thousand cuts”…The thing is that states and local governments have to pay the bill for the people that don’t have insurance or these extra health bills.

To me, and this is somewhat controversial, but if you tax sugar it’s a triple tax. You’re taxing sugar, but by the way, your tax dollars are subsidizing sugar, so you’ve actually been taxed to make it cheap. You’re going to now be taxed to make it expensive, and then you’re going to pay a health care premium tax on all the sick people that are eating it.

We should actually fix the subsidy issue and that would solve all the issues.

Perhaps someday you’ll be testifying on the Farm Bill.

The FDA recently announced that they’re going to redefine what healthy food is, because today a Pop Tart is more healthy than a bag of almonds according to the FDA.

Look, the Millennials are not dumb. We’re not dumb either, but we’re jaded. They want to make change faster than we do and their movement’s coming up. They’re going to force these companies, I think, to change their ways, because they’re not going to tolerate the poisoning of a generation. I just don’t think they’re going to tolerate it.

Another project that you’ve done, and I’ve been somewhat involved in this as an adviser, is a new publication called Tincture. Why did you start it? What’s your goal? What do you hope Tincture will convene a conversation around?

The word tincture itself is a mixture of alcohol and some herb to create a salve, a solution to solve a medical problem. I read the Journal of Medicine, the Lancet, the Wall Street Journal and the New York Times. And there’s all these little vertical publications that are talking about their specific niche in health care. There wasn’t a meta publication that was trying to highlight all these issues in a way that one could translate “Fortress Medicine” into something that’s interesting and makes health care exciting.

We really have a lot of people contributing, a lot of thought leaders, in whether it’s technology or whether it’s food or poverty or policy or wearables or companies that are doing things that are interesting…We’re trying to stitch all this together into a greater common narrative for people to come and read it and start a conversation.

End of Part II. Read Part I here.

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