Dan Munro

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The Fiscal Cliff On Uber’s Road Ahead

April 19, 2017 By Dan Munro

Uber is not doing well. In fact, it’s hemorrhaging cash to the tune of about $2 billion (2016) and possibly as much as $3 billion for 2017. Also, the core service (individual rides) is largely a negative margin business. By some accounts, fares only cover about 40% of the cost of the ride.

Beyond that, the CEO has publicly declared that the whole venture is entirely dependent on driverless cars — at scale. Most scientific opinions I’ve read suggest that fully autonomous cars (at scale), are decades away (if ever).

And that’s just the first obstacle. Beyond the massive societal shift away from car ownership (which is still very popular), are some very real (and sober) technical obstacles.

  1. Like Marc Andreessen — I also believe that “software is eating the world,” but there’s a serious vulnerability with that evolution. Software is inherently insecure — and that represents an incredible risk for cars that rely entirely on software for all major functions. Cars have already been hacked and the result is both crippling and chilling. The selling of that safety and security to consumers should not be underestimated because it will require a long trajectory, federal support and millions of safe actual passenger miles (think air travel).
  2. Software has yet to cross a major ethical dilemma that really only exists in truly driverless cars. Should the software be written to protect passengers over pedestrians — or pedestrians over passengers? This isn’t trivial — and it’s critical — not just technically, but for consumers getting into a car where they are likely to know the logic (as they should).
  3. The financial calculations around the cost of truly driverless cars (with additional hardware/software components) are destined to be an order of magnitude more expensive for the foreseeable future. Think of this as Microsoft Windows but with ten times the complexity/cost/risk.

Those are just some of the big technical hurdles for driverless cars — which Uber itself has openly stated is critical to the success of the company. Then we get to the business challenges which are more specific to Uber individually (and autonomous car sharing more generally).

  1. The negative margin today with a physical driver may not change significantly (or enough) by eliminating the driver.
  2. Dispatch software (part of Uber’s core service) isn’t proprietary or protectable. It’s largely a commodity that other companies can (and have) duplicated easily.
  3. Uber doesn’t manufacture the core component on which its entire service depends — the car.

This last one is equally troubling because of the two core components — dispatch software and automobile manufacturing — one is commodity software (that’s easy to duplicate) and the other requires, well, a whole ton of other stuff.

A more likely scenario for driverless cars — at scale — is that consumers would hail a Toyota, Cadillac, Hyundai or Lexus driverless car based on those brand attributes (and tiered pricing) — not an Uber. It will also be a better experience (for both safety and quality) to build the experience as a single solution rather than as an amalgam from distinctly separate companies. A blended solution between 2 big companies also represents a big legal issue around the assumption of liability. This issue alone may be insurmountable because it would require competing commercial interests to agree (with precision) where the liability lines are — and for how much.

So no, I’m not that bullish on Uber’s future prospects beyond an insatiable appetite to burn risk capital on a Quixotic quest to own a market that may never materialize.

To date, the company has secured over $11 billion in risk capital over fifteen rounds (with more than seventy-five investors). With all this as the backdrop, I see only one remaining question: How much longer will investors keep funding this Ponzi scheme in hopes of at least recouping some of their investment — decades from now? An investment which, by most accounts, appears to be predicated on owning a large part of a market that has yet to materialize — let alone at scale.


A version of this article first appeared in Forbes (April 2017)

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Filed Under: Tech

Why Ireland has a National Patient Identifier (and we don’t)

August 31, 2016 By Dan Munro

On the one-hand, I’m excited by the CHIME-sponsored National Patient ID Challenge. According to the latest release there are “nearly 370 innovators from 40 countries” that have registered for the Final Innovation Round. The challenge itself is crystal clear: “Ensure 100% accuracy of every patient’s health info to reduce preventable medical errors and eliminate unnecessary hospital costs/resources.”

The reward is a cool $1 million and the winner will be announced sometime next year. I’m definitely interested to see the winning entry.

On the other hand, I’m not at all hopeful that the U.S. will benefit from this effort because of the legal blockade imposed by Congress on even studying this issue. In that sense, federal support of a national identifier for anything – even something as critical as healthcare – seems to be further away today than ever before and Congress has a near bulletproof argument against a national patient identifier (NPI) wrapped neatly inside a single word – privacy.

Industry versions of an NPI just won’t get to scale because of competing commercial interests. No real surprise here because car manufacturers were stuck with proprietary Vehicle Identification Numbers (VIN’s) until the National Highway Traffic SAFETY Administration came along and mandated one in 1981.

But NPI’s exist in other parts of the world just fine. The most recent example is Ireland – which announced their NPI as “live” earlier this month. Key milestones on their path included:

  • December, 2013: eHealth Strategy for Ireland
  • July, 2014 – Health Identifiers Act
  • August, 2016 – Individual Health Identifier (IHI) in production

Wow – roughly 32 months from start to implementation. Of course Ireland is small compared to the United States. The population of Ireland (about 4.6 million) is roughly equivalent to the population of Louisiana, but it’s still a major undertaking for technical, legal and societal reasons.

This is probably the single largest patient safety initiative that the Irish healthcare system has deployed to date. I think clinicians are way more bought into this than in the NHS [with the NHS number] 15 years ago. It’s been pushed as a patient safety initiative. This is very much about patient safety and using information to stop mixing people up. Richard Corbridge, CIO of Health Service Executive

Key takeaway – it’s a SAFETY issue. We know that from other statistics (here and here) that we’ve seen through the years from key healthcare organizations like CHIME, HIMSS, and AHIMA.

  • 8-12% of hospitals’ medical records are duplicates
  • On average: 64,000 – 96,000 medical records in an EMR (system) refer to a patient with another existing medical record
  • The average cost associated with repeated medical care – $1,009
  • Kaiser Permanente of Southern California has over 10,000 records of people named Maria Gonzales
  • HIMSS: 8-14% of medical records include erroneous information tied to an incorrect patient identity

Ireland’s accomplishment also tracks to broader objectives. An NPI is both critical and foundational to objectives around patient engagement, population health and safety – including how this will ultimately play into any national electronic health record system. I could reference the critical importance of an NPI for “interoperability” here in the U.S. – but I’ll just bite my tongue.

The Health Identifiers Act (HIA) – which Ireland passed in July, 2014 – also had an interesting intersect with U.S. legislation. The HIA had this language:

PART 2

INDIVIDUAL HEALTH IDENTIFIERS

5. Assignment of individual health identifier

6. Establishment and maintenance of National Register of Individual Health Identifiers

PART 3

HEALTH SERVICES PROVIDER IDENTIFIERS

13. Assignment of health services provider identifier

14. Establishment and maintenance of National Register of Health Services Provider Identifiers

If that sounds remotely familiar – here’s the U.S. version – as incorporated into HIPAA (passed in 1996):

UNIQUE HEALTH IDENTIFIERS.— “(1) IN GENERAL,—The Secretary shall adopt standards providing for a standard unique health identifier for each individual, employer, health plan, and health care provider for use in the health care system.”

The needs are identical – whether you’re a country the size of 320 million – or one the size of Ireland.

Of course, here in the U.S., theoretical concerns around privacy caused such enormous heartburn that Congress simply de-funded the original intent (which is similar to the way they de-funded the “risk corridors” last year) – but I digress. The point here is that unfounded and unrealistic concerns around privacy derailed our effort to implement a national standard recognized as critical (and part of healthcare legislation) more than 20 years ago. Was it truly for privacy issues – or was it intentional for other reasons? We’ll get there.

I say the reasons around privacy were unfounded and unrealistic because what we have today in the way of algorithmic patient matching isn’t just less safe – it’s also less secure. The safety issue is well documented – and that’s the primary basis for the CHIME Challenge.

In an environmental scan in 2014, the Office of the National Coordinator for Health Information Technology found that the best error rate is around 7%.  Worse still, the error rate is usually closer to 10 to 20 percent within a healthcare entity and it rises to 50 to 60 percent when entities exchange with each other.

Wow. That’s painful – how could it possibly get worse? It’s worse because that’s just the safety component. The security component actually compounds the safety risk because any identification number used for patient matching – say a proprietary master patient identifier or Social Security number – is, by definition, less secure because it has less legal protection.

Security and privacy could actually be strengthened with a unique patient identifier. A unique patient identifier, once developed, would immediately become protected health information (PHI) under federal and (applicable) state law. RAND – Identity Crisis? (2008)

The American Health Information Management Association (AHIMA) was the latest U.S. healthcare organization to join our long running battle for an NPI. Unfortunately, the AHIMA petition (launched in March) needed 100,000 signatures and secured less than 9,000. This wasn’t for an actual NPI, mind you, this was simply to remove the federal budget ban to think about a patient safety identifier.

But here’s the thing. I know why we won’t make progress here – today, tomorrow, or even this decade. It’s intentional. In my opinion, it’s also criminal. How do I know this? Because there’s another big regulatory challenge with a very similar profile just one aisle over – and it often gushes blood into our emergency rooms. It’s the gun aisle. How is it remotely similar? Here’s the opening story in a recent article – and the money quote:

Say there’s a murder. Blood everywhere, a dead guy on the floor. The cops come in with their yellow tape, chalk line, the little booties, cameras, swabs, the fingerprint dust. One of them finds a gun on the floor. The gun! He lifts it with his pinkie, examines it, takes note of the serial number. Back at the station, they run a trace on the gun. A name pops up. It’s the wife! Or: It’s the business partner! It’s somebody’s gun, and this is so exciting because now they know who did it.

Except—no. You are watching too much TV. It doesn’t work like that.

“Think,” says Charlie Houser, a federal agent with the ATF.

The cops run a trace on a gun? What does that even mean? A name pops up? From where? There’s some master list somewhere? Like, for all the guns all over the world, there’s a master list that started with the No. 1 (when? World War I? Civil War? Russian Revolution? when?), and in the year 2016 we are now up to No. 14 gazillion whatever, and every single one of those serial numbers has a gun owner’s name attached to it on some giant list somewhere (where?), which, thank God, a big computer is keeping track of?

“People don’t think,” Charlie tells me. “I get e-mails even from police saying, ‘Can you type in the serial number and tell me who the gun is registered to?’ Every week. They think it’s like a VIN number on a car. Even police. Police from everywhere. ‘Hey, can you guys hurry up and type that number in?’ ”

“It’s a shoestring budget. It’s a bunch of friggin’ boxes. All half-ass records.”

So here’s a news flash, from Charlie: “We ain’t got a registration system. Ain’t nobody registering no damn guns.”

Here’s the quote from that same article:

There is no national database of guns. We have no centralized record of who owns all the firearms we so vigorously debate, no hard data regarding how many people own them, how many of them are bought or sold, or how many even exist.

Sound familiar – right? It’s a great article with a great headline: Inside the Federal Bureau of Way Too Many Guns

And that’s why Ireland has a National Patient Identifier and we don’t. We have the technical and economic prowess to trump anything Ireland – or literally any other industrialized country can do. We could implement an NPI – if we wanted to – if there was no artificially induced congressional budget ban. The rationale against one sounds legit – privacy – but it’s a smokescreen.

The reason we don’t have a national gun database and an NPI are the same. I wouldn’t go as far as to say that vested interests are preventing an NPI (although that’s clearly the case with the NRA and a gun database), but let’s just say it’s just not anyone’s legislative priority. There’s no money for it and Congress ain’t gonna ante up voluntarily. That’s not criminal intent – but it does qualify as criminal negligence. There are lots of legal definitions for that phrase, of course, but a good general one is “the indifference or disregard for human life or for the safety of people.”

And make no mistake, that’s exactly what a NPI delivers – better safety and security than the status quo. Maybe CHIME can nudge Congress into action. Clearly the petition path doesn’t work.


[May 2018 Update]

Like many, I was clearly hopeful, but as of November 2017, CHIME has officially suspended the National Patient ID Challenge.

Though we’ve made great progress and moved the industry forward in many ways through the challenge, we ultimately did not achieve the results we sought to this complex problem. We decided the best course of addressing this patient safety hazard is to redirect our attention and resources to another strategy. Russell Branzell – CHIME CEO

Filed Under: Interoperability

Digital Health Lessons From BART

April 26, 2016 By Dan Munro

Then President Nixon (with wife Pat) at BART Station in 1972

If you don’t know history, then you don’t know anything. You are a leaf that doesn’t know it is part of a tree. Michael Crichton

In most of Europe, mass transit is so affordable and ubiquitous it’s largely assumed. Clearly the economics play an important role because gas is comparatively expensive. Most of Europe is over $5 a gallon today – and Italy and the Netherlands are both over $6. As of April 11, Norway is $6.78 and Hong Kong is $6.85.

The economics to public transportation here in the U.S. tilts heavily toward an entire economy (social and financial) built around vehicle ownership. Comparatively low fuel prices help, but the furor over the lack of European style affordable (and cohesive) mass transit usually starts when gas prices spike over an arbitrary but noticeable index. $5 could well be that index.

It’s easy to understand the original logic of American suburbia because oceans of land were cheaper outside of the city, less congested, and more amenable to raising families, back-yard activities, parks, and shopping malls. As concentric circles, suburbia grew further and further away from city centers, requiring longer distances and commutes using personal transportation.

The historic result of this is that many metropolitan cities in the U.S. continue to struggle with affordable mass transit at scale. Just this year both Washington, D.C. and San Francisco hit major roadblocks with key elements of their metro transit systems.

All of which brings us to one system in particular known as (San Francisco) Bay Area Rapid Transit – or just BART. Like the headline quote by author Michael Crichton, the history to BART has lessons that go well beyond mass transit – and run headlong into a new generation of designers and engineers – including those in software and healthcare IT.

But first a little of that history.

The “Pacific Railroad Acts” were a series of Congressional acts that actively promoted the construction of a transcontinental railroad (the “Pacific Railroad”) in the United States. This was largely accomplished through the issuance of government bonds and large land grants to the big railroad companies of that time.

The first “act” was the Pacific Railroad Act of 1862 – which had an incredibly long name:

An Act to aid in the Construction of a Railroad and Telegraph Line from the Missouri River to the Pacific Ocean, and to secure to the Government the Use of the same for Postal, Military and Other Purposes.

Buried in the actual legislation – from an era when there was a fully functional government – is this gold nugget.

The track upon the entire line of railroad and branches shall be of uniform width, to be determined by the President of the United States, so that, when completed, cars can be run from the Missouri River to the Pacific Coast. 37th Congress – 2nd Session – Section 12 – 2nd Sentence (page 495)

Even then, it didn’t take engineering arguments to understand the value and benefit of a standard – and mandated – track gauge. With some minor exceptions (like rapid transit systems and streetcars) the majority of railroad gauges in the U.S. (and North America) remain at 4 feet, 8.5 inches wide to this day.

Wikipedia summarized both the obvious and extended benefits of this reasonably well.

As well as the usual reasons for having one gauge (i.e. being able to operate through trains without transfer arrangements), the North American continent-wide system of freight car interchange with rolling stock having the same standard gauge, couplings, and air brakes meant that individual companies could minimize their rolling stock requirements by borrowing from other companies.

It’s not just passenger convenience – it’s the sizable economics of freight transit by rail.

But San Francisco has always been a tad different – and that included the heady engineering climate during which BART was originally designed and built. Leading the race to the moon, NASA was the engineering envy of the world and large new projects – like BART – were specifically intended to be both “space-aged” and “state-of-the-art.” Like a line out of the movie Jurassic Park (novel and screenplay by Michael Crichton) they “spared no expense” when it came to design thinking.

Back when BART was created, (the designers) were absolutely determined to establish a new product, and they intended to export it around the world. They may have gotten a little ahead of themselves using new technology. Although it worked, it was extremely complex for the time period, and they never did export the equipment because it was so difficult for other countries to install and maintain. —Rod Diridon, Emeritus Executive Director of the Mineta Transportation Institute in San Jose (as quoted in the San Jose Mercury News – March 25, 2016).

Almost everything about BART was new – and different – starting with a critical and foundational component; a unique track gauge of 5 feet 6 inches. Since BART was designed to be standalone (not connected to other rail systems), the unique track gauge was considered a bold and compelling design feature at the time, but like all things engineering, that fateful decision led to a cascading string of other requirements – including custom-made wheel sets, brake assemblies and track repair vehicles – all to match the unique track gauge.

Yet another design “innovation” was a flat-edge rail that requires more maintenance and is actually noisier. Custom aluminum wheels (to reduce weight) with stainless steel “tires” (to reduce noise) were added with no real thought as to long-term maintenance, repair, or replacement.

The 1,000-volt traction power system was also cutting-edge – and unique. Even some of the small electrical components (which are breaking now with some frequency) are expensive and can “usually take 22 weeks to order.” Earlier this year (after a significant service interruption) BART announced the need to buy 100 “thyristors” at a cost of $1,000 each.

Thyristors are the small group of white rings just above and to the right-of-center in this picture

At the very heart of this modern marvel was a computer system that was “state-of-the-art” when it first opened to public travel – in 1972. Today, even relatively minor updates to the software can cause system wide crashes for entirely unknown reasons. Some of BART’s maintenance software still runs on Windows 3.1 (presumably on a secure network). When a system wide software crash does happen, it is literally back to manual switching along the 104-mile system.

Without computers controlling the system’s 400 track switches on the main line, operators had to get out and physically change those switches to ensure that their trains remained on the proper tracks, with each change taking from five to 10 minutes. At some of the more complicated switch points, special crews were sent out to work them. It was all hands on deck. If you were trained and authorized to crank a switch, you were out there. Alicia Trost – BART Spokeswoman (SFGate 11/2013)

At the time of its launch, BART was engineered to accommodate what was considered (at the time) to be a large number of passengers – 100,000 each week. Today it handles over 400,000 – per day – and is the fifth-busiest rapid transit system in the U.S. The enormous stress on the system through the years has caused some to suggest that BART is effectively past “end-of-life” (in the mechanical engineering sense) and on “life support.”

Whether BART is truly on “life support” or not is almost immaterial because there’s a November ballot initiative to raise about $4 billion – just to keep BART running mechanically. It will remain a constant engineering battle – and enormous cost – for as long as the track is stuck at its proprietary 5-foot 6-inch width.

What does any of this have to do with healthcare? When you consider that industry standards around digital data are the modern equivalent to railroad track gauges – it has everything to do with software engineering for healthcare.

Considered enterprise software, large EHR systems in hospitals tend to drive the market and fortunately, over 90% of the inpatient EHR market is divided among 10 sizable vendors.


But unlike the lone BART, there are about 5,600 hospitals in the U.S. In the analog paper world – each hospital was logically an island. All of which is an enormous financial benefit to the software vendors because all the proprietary and unique software requires constant patching, maintenance, and updating.Unfortunately, this gang of 10 is in the business of selling heavily customized software – to accommodate the “unique” and “proprietary” needs of each and every hospital they sell to. Everything from initial design to implementation, training, and maintenance is effectively custom built to each hospital installation. Each hospital installation is effectively a BART, and like BART – standalone. The lack of a data standard for communicating between hospitals is exactly like having a unique track gauge – for each and every hospital.

In hindsight, it’s hard to understand this engineering hubris – for both BART and non-standard EHR software – except that they share roots in the same commercial logic of revenue and profits. Remember, BART was going to build and sell mass-transit systems to other municipalities and countries.

This profit-centric logic has spawned an entire healthcare IT industry that continues to enjoy a healthy and lucrative future – and one that we’re all paying for in a myriad of ways that are both economic and safety related. What we don’t have (lacking a functioning government) are the data standards for patient safety and quality. In effect, our entire healthcare system (including healthcare IT) has been optimized for revenue and profits.

Just this week, ECRI issued their list of Top Ten Patient Safety Concerns for Healthcare Organizations.

Since 2009, when ECRI Institute PSO began collecting patient safety events, we and our partner PSOs have received more than 1.2 million event reports. That means that the 10 patient safety concerns on this list are very real. They are causing harm—often serious harm—to real people.

My only real surprise is that on their top 10 list, patient identification didn’t make #1 – it came in at #2.

During routine reviews of reported events, ECRI Institute analysts discovered that patient identification issues were frequent. And serious consequences were evident.

Is there a solution? Sure, in much the same way that as a country, we determined that if you want to ride a train from Missouri to the Pacific Coast, everyone benefits by having a standard track gauge. Competing commercial interests have no incentive to voluntarily create – let alone agree to one for data in healthcare – and especially one that puts their revenue at risk. Put bluntly, the gang of 10 all risk losing big chunks of revenue if health data is standardized like a track gauge.

Absent a mandated data standard everything done today is just like keeping BART afloat – at huge expense. It will always be the most expensive kind of engineering work because it’s all made-to-order, custom-built and supported – and switching costs are astronomical. BART officially opened in 1972, but the foundational thinking – how to maximize revenue and profits – is very much alive and well in healthcare IT to this day.

History often repeats itself – at sparing no expense.


This article first appeared in Health Standards (April 2016)

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Filed Under: Interoperability

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Dan Munro is an author and Forbes Contributor who lives outside of Phoenix, Arizona. He has written for a variety of national publications at the intersection of healthcare policy and technology.

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