Tuesday, February 09, 2016

Ask, instead, why they would want to leave

It isn't often that I am surprised in a negative way by something relating to an Ohio pediatric hospital.  Indeed, the hospitals in that state have been at the forefront of working together to enhance quality and safety for their patients.

But this recent story in the Columbus Dispatch caught my eye. An excerpt:

Non-compete agreements built into contracts help ensure that doctors can’t join a hospital’s crosstown rival or enter private practice across the street — at least for a while.

The choice to relocate elsewhere to practice medicine is especially limited for pediatric specialists employed by Nationwide Children’s Hospital.

The Dispatch reviewed a non-compete agreement that shows that Nationwide Children’s pediatric specialists risk being sued if they take a job within 100 miles of the hospital within two years of leaving it.

It turns out that other Ohio hospitals have similar, if slightly less restrictive clauses.  The rationale:

Recruiting and hiring require a significant upfront investment, Thornhill said. “It’s a classic business practice of protecting the investment.”

Well, maybe it is--although courts have sometimes tossed out such agreements if they are too wide in scope,.  As noted here:

In states where noncompetition clauses for physicians are enforceable, the provision must: 1) protect the employer’s legitimate business interest, 2) be specific in geographical scope, and 3) have a narrowly tailored durational scope. If the language in the clause is vague or does not clearly describe the exact terms of the restrictions on practice, the clause might be unenforceable or open to greater interpretation than either party anticipated.

But I have a different concern, especially for places like Nationwide, Cincinatti Children's and others that put great stock in engaging their staff in ongoing process improvement.  From the point of view of those leading a learning organization--one focused on constant improvement from within--it is far better to figure out why someone would want to leave you than to inhibit them from doing so.

Monday, February 08, 2016

In memoriam: The Boston Courant

In the end, The Boston Courant did not shut down because of the oft-discussed pressures on the print media.  No, it was because of legal fees and a judgment made against the newspaper from a former employee's lawsuit.

David Jacobs and Gen Tracy and their loyal crew worked hard to provide neighborhoods of Boston with relevant, current news--well written and clearly presented.  Advertisers rewarded the paper with their business because it was widely and consistently read.

The owners and staff deserve to feel proud about their contribution to the City, which will be diminished by the absence of their newpaper.

Cruelty and enlightenment

I don’t know if the following observations are profound or trite or somewhere in between. They are prompted by a recent visit to the Cascades Female Factory in Hobart, Tasmania.

Every country, it seems, has something to be ashamed of in its history. Certainly, among other things, the US bears blame for its treatment of native Americans, slaves imported from Africa, and forced detention of Japanese descendants during World War II.

And yet, those same countries have often made contributions to political systems that are truly noteworthy in the advancement of human society.  Think of the principles espoused in the Mayflower Compact, the Declaration of Independence, the Constitution, and in the practice of civil disobedience against injustice, a philosophy that stemmed from the writings of Thoreau and others. 

These contradictions between eras of cruelty and shame and periods of enlightenment may be irreconcilable. Or perhaps there is some underlying theory of the advancement of the human condition that posits that the bad must occur to bring about the good.  Political philosophers of greater wisdom than I have surely offered their hypotheses.

I think, though, that part of the process of societal development depends strongly on exposing the bad times with stories about normal human beings who were caught up in the antisocial maelstroms of their time.  We seem to be emotionally insulated from general histories about thousands or millions of people who were harmed during the cruel eras.  It is hard to pursue political action based on such broad-based summaries.  But when we hear the stories of individuals who were treated badly, we are able to identify with them and then perhaps step back and build a political coalition for change.

It was in that light that a recent visit to the Female Factory was so powerful.  This facility was opened, ostensibly, to punish and help redeem women who had committed crimes in Great Britain. The crimes could be as simple as stealing a handkerchief or food for a starving family.  Poverty was viewed as a sin, caused by the ethical character of the poor person, not by the society in which they lived. 

“Transportation” was the name for forced passage across several oceans in cramped and unhealthy ships to Tasmania, where women were locked up to serve their time. 


The prison bureaucrats were careful to record the arrival of each woman, assigning her such descriptors as they felt were appropriate.  A sample is shown above, an indication of the dehumanization already being experienced by these women.

But the system was actually designed to provide women to help serve and populate the British colony.  While in the factory, the women would do manual labor in support of the community of Hobart.  Laundry was handled here.  Women were also tasked with “making oakum,” disentangling the caustic, tar-laden strands of ship rope into fiber that was used as caulking to fill the cracks between boards for ships.


Babies were forced to be weaned from their mothers at 6 months, then to have a diet of bread and water from the polluted rivulet next to the factory.  Many died from dysentery.  At 3, the children who survived were taken to live in their own orphanage-prison, perhaps to be reunited several years later when their mothers’ terms of servitude were completed.

Later, “transportation” was transformed to “probation.” Upon landing, women would be sent out to work and live on farms throughout the island in slave-like conditions until they could earn their freedom.  If they failed to do their work well or became pregnant, they would be returned to the factory.


At the museum, there is this simple exhibit on which women’s names are listed.  They remind us that each one had her story of loss and suffering. With luck there could be survival and freedom.  Indeed, there was a lovely photographic exhibition of modern day descendants of some of these women, who live proud lives notwithstanding their “convict” ancestors.

(By the way, there were other types of awful treatment awaiting the male convicts in Van Diemen’s Land—many of whom, too, committed minor crimes and were sent as a work force by the British Empire to squeeze out possible colonization by other European powers.)

I was reminded as I watched the movie Suffragette that Australia was the second country in the modern era (after New Zealand) to grant women the right to vote—well before Great Britain.  Was there something about the earlier history of cruelty and oppression that led to a greater sense of egalitarianism in Oz?  Is it possible that the treatment of men and women convicts created a communitarian culture that led to this and other social advances?  A number of my friends and colleagues here have made this connection.  How ironic it would be if one era of such cruelty helped herald another period of political enlightenment. If so, the women at the factory would have left a legacy for their adopted country that they never could have imagined.

Sunday, February 07, 2016

There is no Holy Grail, just small chalices

Given the stakes to society and the persistent growth in health care delivery costs throughout the developed nations, there is an understandable desire to achieve the “breakthrough” technological solutions that will result in a substantial disruption in diagnostic and treatment practices and patterns that have evolved over the decades.  Well intentioned and intelligent people with thoughtful ideas are focused on ways to achieve these solutions.  Investors, seeing the large (and growing) percentage of each nation’s GDP that is devoted to health care, likewise hunger for the opportunity to grab even a small portion of that wealth.

As I noted in a blog post last year, an area that consumes tremendous energy is the search for the Holy Grail of decision support products that would mine health care “big data.” People are looking for the algorithms that could help doctors—in real time—analyze the condition of patients and put in place more efficient and efficacious diagnostic regimes and treatment modalities. I explained in that blog post why these efforts will fail. Let me summarize:

1 -- The data that is collected is not reliable enough to draw connections between patient characteristics, clinical decisions and outcomes.  It is not reliable for two reasons.  First, it is simply not reliable.  Much data that is collected and/or coded in hospitals and physician practices is done so poorly, or in a format that is not clinically accurate.  Second, it is likely to be characterized by such wide standard deviations as to make it unsuitable for predictive purposes.

2 -- It is unlikely that the algorithms that are designed to produce work rules will be trusted by doctors. In part, this is due to the standard deviation problem noted above. That is, the models will not be sufficiently rigorous in their predictive capacity. Maybe more important, there is a general lack of trust on the part of doctors with regard to using formulaic approaches in their practices. While doctors are the victims of many kinds of cognitive errors—diagnostic anchoring, confirmation bias, and the like--they are often not trained to reflect on and catch these biases. They are trained instead to trust their own judgment and take personal responsibility for their patients. It would be but a small minority of doctors who would be able to overcome those biases and that training to use big-data-driven decision support tools—even if such tools were able to overcome the statistical difficulties mentioned above.

3 – The process for selling such systems into the hospital market is complex and almost infinitely slow. The sales cycle will kill off all but the most highly capitalized firms. Even excellent products will often wither and die on the vine.

Does this suggest that there is no potential for disruptive technologies that can improve health care delivery at a reduced cost? No, but it suggests that there is not a Holy Grail, but rather a group of smaller, potentially jewel-encrusted, chalices. Targeted innovation is the way to go. Think small, think focused, and think about how to achieve quick results that benefit the doctor, the patient, and the hospital.

Wait, did I just put the doctor first on that list? The Ptolemeic health care system has the doctor at the center of the solar system, and it will be that way for a long time to come. Unless your product helps the doctor feel that they are doing a better job and can fit into their work flow, it’s not worth pursuing.

I’ll provide an example that originated in Melbourne, produced by a firm called Global Kinetics. The approach is described in this article. A Parkinson’s patient wears a simple device on their wrist for a week or two. The accelerometer contained in the device correlates the extent of the patient’s movement disorder with the drug dosages they have taken. (The “watch” also, by the way, provides the patient with a reminder to take the drug at the specified times, leading to a higher level of adherence and providing a higher level of precision to the experiment.) The report is transmitted to a standard hand-held device, using a patient code that is fully privacy protected.

The technology and the reports produced by this approach do not substitute for the judgment of the neurologist. Rather that judgment—previously based on trial and error--is enhanced by a real-time, patient specific experiment. The process can be repeated as often as the doctor deems necessary--more often for a patient suffering a rapid deterioration from the disease, and less often for a more stable patient.

The device is not bought by the hospital, and so it bypasses the highly competitive capital budgeting process. Rather, the product is provided as part of a service offering, the test result that is provided to the doctor. The fee for each report is well within the normal operating budget of the neurology department, requiring no special allocation of funds. In short, acceptance simply requires a decision by the doctors themselves.

I offer this as a perfect example of a jeweled chalice. Simple hardware and software technologies; easily incorporated into the doctors' workflow; enhancing their ability to exercise professional judgment; and offered in a sales process that does not create competition among hospital factions and is consistent with normal budget processes. It is by this path that technology can disrupt health care—one carefully designed step at a time.

Thursday, February 04, 2016

There is no billing code for compassion


I am borrowing a line from Dr. Amy Ship, the 2009 recipient of the Campassionate Caregiver Award from the Schwartz Center, to remind folks that nominations are now open for this coming year's award. The award recognizes health care professionals who display extraordinary devotion and compassion in caring for patients and families.  It is open to health care professionals who work in any U.S. health care setting. The nomination deadline is March 31, 2016. Here's the link.

There's no better way to express your appreciation to a friend, colleague, or caregiver than to nominate them for this honor.

Wednesday, February 03, 2016

Plus ça change


I mean no disrespect to my Australian hosts when I say that I've seen this all before.  The details differ, but the same underlying themes emerge. And when stories are placed side by side, it can be confusing to the public.

In Australia, the government strongly encourages private health insurance coverage for a portion of the population, a policy that was designed to reduce overcrowding in the public hospitals.  There are a whole series of regulations that influence both corporate and individual behavior in this arena.  These rules have essentially created the private health insurance market in the country.

As noted just a few days ago, the private hospitals in the country want to assure their investors that the demand for health care services will not diminish over the next several years.  They cite underlying demographic factors:

In a strident statement Ramsay's Mr Rex said the report failed to consider further utilisation growth linked to the ageing population. "Macquarie's report incorrectly concludes that the modest impact of ageing in the past means that the impact will be minimal in the future," he said. "But it is the future impact of ageing – the baby boomers moving into the 60-70 year bracket - that needs to be considered... We have not yet felt the ageing impact – it is yet to come."

Those who provide private health insurance to cover patients for these services have understandably been increasing premiums to cover the costs.  Look at this chart below:


Private health care costs are rising at about 8%, mostly due to higher utilization of the health care system (both number of visits and procedures per visit) and a bit (about equal to the consumer price index) due to hospital and doctor pricing changes.  So the insurers have actually been able to hold premiums increases to something a bit less than the total cost increase. 

But that doesn't keep government officials from taking a strong stand against the current premium rate filings, saying they demand further review.

The insurers then respond by pointing out that part of the problem stems from the government's own policies. For example, the cost of prosthetic devices in Australia's private health care sector is dramatically above that found in other countries.  Why?  Because the government has made a pricing deal with equipment suppliers to keep the cost of such devices low to the public hospitals, subsidizing those facilities with higher prices to the private hospitals.

Health insurers . . . estimate that up to $800 million could be saved on prosthetics, such as hip and knee replacements, if a reference pricing system with Australian and international benchmarks was introduced.

But let's get past this local detail. Even if it is true--and worthy of attention--it can distract from our overview.  There is an old joke about gravity:  "It's not just a good idea.  It's the law."  So, too, for anti-gravity in the health care world in developed countries.  Those countries face common factors that are driving up costs.  I summarized these back in 2009.  Number 8 doesn't apply here in Australia, but the others do to a greater or lesser extent:

1) Demographics. The huge cohort of baby boomers have now entered the age at which they are seeking hospital care. Meanwhile, their parents are living longer than ever and are coming to the hospital for both acute and chronic care.

2) Entitlement. The first cohort named above expects and demands everything for themselves, and of the insurance products they expect their employer to purchase. For their parents, they often expect extraordinary end-of-life care interventions, paid for by Medicare.

3) New stuff. See #2 above. A knee that previously would have remained sore in the past or be treated by physical therapy becomes a target for arthroscopic surgery.

4) The medical arms race. Physicians and hospitals feel compelled to buy the latest technology, even without proof of enhanced clinical efficacy.


5) Defensive medicine. Yes, the threat of malpractice law suits leads to over-testing and other extra costs.

6) Regional medical mythology. Thanks to Brent James for this insight. Local practice patterns often are just that, with no evidentiary basis.

7) Preventable harm in clinical settings leading to extended hospitalization and bodily injuries.

8) Lack of access itself. If people don't have health insurance and can't get proper early diagnostic and preventative care, they are a more expensive burden on society when they get sick.

9) The cottage industry problem. The medical profession, both in physician practices and hospitals, has failed to adopt process improvement approaches that are common in other industries, that result in redesign of work flow and systems to derive efficiency, quality, and standardization.

10) A sedentary and malnourished lifestyle for all age groups, leading to obesity and other associated physiological problems that are the precursors to major health issues.
 

... We can fix some of our inadequacies through legislation, but many components of our problems lie deeper in society.

P.S. While there are pro's and con's of each country's health care systems, similar cost pressures have become evident in much of the rest of the world. Perhaps this suggests that a common organism underlies our problems, homo sapiens and its curious ability to live longer and expect more.


Putting aside the political trading that will inevitably take place, from what I've seen so far, Australia could do a lot by investing in changes to numbers 6, 7, and 9, above--and likely number 10.  Places around the world that have done so have been able to counteract at least part of the anti-gravity tendency of societally driven health care cost increases.

Sunday, January 31, 2016

Mind the step!

One of my "thinker in residence" sponsors here in Australia is VMIA, the Victoria state government insurance agency.  I had just finished having a lovely cup of coffee and conversation with one of the agency's executives, where our topic had been risk assessment and mitigation.

As I started to leave the coffee shop (not a state agency facility!), I stumbled and looked back to see a drop in the floor levels between two parts of the restaurant.  While I can be clumsy (just ask my soccer buddies!), usually I'm pretty adept at walking out of restaurants without suffering harm.  So, I looked back to reconstruct the situation.


Here's the broad scene.  The waiter above has just stepped down into the lower portion of the shop.  And indeed, there is a large sign up and to the right warning patrons of the drop in floor height.


The problem is a that there is a very eye-catching sign to the left, designed to draw your attention as you pass through this area.


So, I didn't notice the warning sign to my right.  Also, the floor area is not well lit, and there is little color difference between the step and the floor below.

Ok, that's the human factors set of circumstances. These are accidents waiting to happen.

Now, let's turn to the people side.  As I stumbled, a clerk behind the counter noticed and smiled knowingly, as if to suggest that I was not the first to have this experience.  I went back to talk with another clerk and point out the problem.  She was very apologetic and asked if I was hurt.  I said I was fine but just wanted to point out the safety hazard.  When she saw me taking pictures, she said, "You're not going to sue us, are you?"  I said no, but I thought the shop might want to devise a better warning system.  She acknowledged that the current arrangement was designed to warn people headed towards the right, i.e., going to the toilet, but not those who might be going to the left.

I left confident that the problem would not be addressed in the future.  Some day, someone will fall and be badly hurt, and the shop may, indeed, be sued.

Think through similar circumstances in health care facilities and other service establishments, as well as industrial settings.  Such patterns are highly prevalent--both in terms of the human factors issues and also in terms of the lack of empowerment felt by the front line staff.

Wednesday, January 27, 2016

A canary in the coal mine?

How should we think about medical malpractice claims against doctors?  Are they indicative of something about those doctors who've been sued? Are they a symptom of underlying quality and safety issues in a hospital, a kind of canary in the coal mine that suggests there might be deeper problems?  These are long-standing questions.

Perhaps part of the answer is provided in a new article in the New England Journal of Medicine, "Prevalence and Characteristics of Physicians Prone to Malpractice Claims," by David Studdert and colleagues.  (The article has a theme that is somewhat consistent to one I discussed a few days ago, which reported that a small group of doctors in Australia accounted for many patient complaints.)

The authors conducted an extensive review of US National Practitioner Data Bank information, analyzing 66,426 claims paid against 54,099 physicians from 2005 through 2014. They found that, over this 10-year period, "a small number of physicians with distinctive characteristics accounted for a disproportionately large number of paid malpractice claims."

Approximately 1% of all physicians accounted for 32% of paid claims. Among physicians with paid claims, 84% incurred only one during the study period (accounting for 68% of all paid claims), 16% had at least two paid claims (accounting for 32% of the claims), and 4% had at least three paid claims (accounting for 12% of the claims). In adjusted analyses, the risk of recurrence increased with the number of previous paid claims. For example, as compared with physicians who had one previous paid claim, the 2160 physicians who had three paid claims had three times the risk of incurring another.

Risks also varied widely according to specialty. As compared with the risk of recurrence among internal medicine physicians, the risk of recurrence was approximately double among neurosurgeons, orthopedic surgeons, general surgeons, plastic surgeons, and obstetrician–gynecologists. The lowest risks of recurrence were seen among psychiatrists and pediatricians.

Male physicians had a 38% higher risk of recurrence than female physicians. The risk of recurrence among physicians younger than 35 years of age was approximately one third the risk among their older colleagues. Residents had a lower risk of recurrence than nonresidents, and M.D.s had a lower risk than D.O.s. 

We could stop right there and conclude that the problem lies solely with the high-risk doctors.  But, as the authors point out, these doctors practice in health systems, and those systems have the potential to intervene.

All institutions that handle large numbers of patient complaints and claims should understand the distribution of these events within their own “at risk” populations. In our experience, few do. With notable exceptions, fewer still systematically identify and intervene with practitioners who are at high risk for future claims. Rather, the risk-mitigation initiatives that are in place — such as the educational and premium-discount programs that some malpractice-insurance companies offer — are generally offered en masse. Otherwise, insurers tackle the problem of claim-prone physicians primarily by raising premiums or terminating coverage. These strategies do not directly address the underlying problems that lead to many claims.

In an environment in which a small minority of physicians with multiple claims accounts for a substantial share of all claims, an ability to reliably predict who is at high risk for further claims could be very useful. . . . If reliable prediction proves to be feasible, our hope is that liability insurers and health care organizations would use the information constructively, by collaborating on interventions to address risks posed by claim-prone physicians (e.g., peer counseling, training, and supervision). It could present an exciting opportunity for the liability and risk-management enterprises to join the mainstream of efforts to improve quality.

Tuesday, January 26, 2016

Fostering a non-negotiable safety mindset

Apparently, my recent blog post about preventable medical errors at a Victoria community hospital was widely circulated among the local health care community.  Maybe it's helpful to have an outside observer say things about such a circumstance, but there are also local observers who fully understand the underlying issues and have been working on them for some time.

One is Cathy Balding, who wrote this article on the same situation back in November.  Here are some excerpts that go to the heart of the matter, not just in Djerriwarrh, but more generally through the state of Victoria:

Creating and maintaining consistently safe, high quality care requires an understanding of complexity, and the mix of interconnected organisational factors required: great people supported by great systems, led from the top, based on a relentless pursuit of excellence. But--we haven't yet achieved universal acceptance that this is what it takes. The belief that point of care is fundamentally clinicians' business is buried in our healthcare DNA; an unconscious attitude that drives a hands off approach to clinical governance in still too many health, community and aged care services.

So--There's a step before all the action. And that's the step that many health services miss: fostering a non-negotiable safety mindset that addresses this deeply held belief head on. I see ‘excellence’ everywhere in mission statements and strategic plans. But it doesn't take much to scratch the surface and realise that in too many cases, these words are about image, not substance. The way we'd like to be perceived, rather than the way we really are. As if saying it will somehow make it a reality. But saying it is just the beginning. 

I've addressed a common pyschological reaction of clinicians: everybody likes to think they are doing better than others.  It turns out that boards also fall into this trap.

Marie Bismark summarized this phenomenon in a paper delivered in May 2014: "Almost every respondent believed the overall quality of care their service delivered was as good as, or better than, the typical Victorian health service."  Here's the pertinent graphic from her talk:


I addressed this issue once with regard to US hospitals, noting:

We know that most medical harm does not derive from the individual actions of doctors. It derives from the work patterns and systems that are in place in hospitals. These are not organizational aspects in which most doctors and nurses have been trained. They are trainable with some time, effort, and resources—but those in a position of authority must encourage and demand that it happen. The “those” in this case must be the boards of trustees, the governing bodies of the hospitals. 

But it is in this arena that we have a public policy lacuna. While trustees often have a statutory responsibility for the quality of care given in their hospitals, they are never held accountable for that care. The history of involvement by lay governing bodies is heavily centered on the social and community aspects of governance. Clinical decisions are left to the clinical staff, as they should be, but oversight of clinical activities by the governing body is often rudimentary at best.

In another article, I offered a suggestion as to how transparency of clinical outcomes could help a board do its job better.

I think the issue is not the unavailability of reliable information on peer performance.  I think the issue is a failure, in the first instance, to even measure one's own performance and to share that with one's own team. After all, the issue is not so much benchmarking.  That only goes so far.  As I've often said, there is no virture in benchmarking to a substandard norm. 

So, the first step is to accurately collect one's own data and make it transparent to your own team. It is that transparency--more than benchmarking--that will establish the creative tension in an organization that will drive people to meet their own stated standard of clinical excellence.  A smart board does not have to apply pressure on its staff by drawing comparisons with others. Rather, they take governance steps to demand transparency, so that the deep sense of purpose that is inherent in the clinical staff is employed to stimulate the team to do better on their own.

In short, the conclusions reached by Dr. Balding, Dr. Bismark, and many other observers must be revisited by the broader community. Victoria, in contrast to, say, New South Wales, has determined that a highly devolved structure of health services best suits it population. That may indeed be the case for a number of reasons, but a necessary condition for such a devolved structure is that the CEOs of local hospitals are given the clear mandate from their boards that quality and safety are the first and highest measures in their performance reviews--and that the boards are given the identical clear mandate from Government.  Yes, access and cost are important factors as well, but if the underlying care delivered by health services is not safe and effective, the public service mission of these organizations has not been achieved.

Monday, January 25, 2016

Nominative determinism


Upon seeing this photo from the town of Koo Wee Rup, Victoria, that I posted on Facebook, our friend Geoffrey Irvin posited that it appeared to be a clear case of nominative determinism, which Wikipedia defines as "the hypothesis that a person's name can have a significant role in determining key aspects of job, profession or even character."  The article notes:

The term nominative determinism had its origin in the 'Feedback' column of the British popular science magazine New Scientist in 1994:

"We recently came across a new book, Pole Positions — The Polar Regions and the Future of the Planet, by Daniel Snowman. Then, a couple of weeks later, we received a copy of London Under London — A Subterranean Guide, one of the authors of which is Richard Trench. So it was interesting to see Jen Hunt of the University of Manchester stating in the October issue of The Psychologist: 

"Authors gravitate to the area of research which fits their surname." Hunt's example is an article on incontinence in the British Journal of Urology by A. J. Splatt and D. Weedon. We feel it's time to open up this whole issue to rigorous scrutiny. You are invited to send in examples of the phenomenon in the fields of science and technology (with references that check out, please) together with any hypotheses you may have on how it comes about. No prizes, other than seeing your name in print and knowing you have contributed to the advance of human knowledge."

What do you say?  Shall we see if our readers here can continue to advance human knowledge and offer other examples, either that support the hypothesis or cast doubt upon it?  Please submit your entries as comments.  Thanks!

Sunday, January 24, 2016

One person's costs is another person's income

What a relief!

According to Jessica Gardner in the Sydney Morning Herald, a recent report suggesting that the growth in utilization of the Australia private health care system might slow down is off base.

Two rival private hospital leaders, Healthscope's Robert Cooke and Ramsay Health Care's Chris Rex, say a research report from Macquarie that warned of a hit to the companies' growth is premature and ignores important trends.

Macquarie's health analyst published a note on Monday warning that a federal government review of the Medicare Benefits Schedule would hit 'utilisation' of services, which is the largest driver of revenue growth for the companies.

Investors were unnerved by the analysis. On Monday Healthscope shares fell 4.8 per cent to $2.36, while Ramsay shares lost 3.2 per cent to $60.65.


In a strident statement Ramsay's Mr Rex said the report failed to consider further utilisation growth linked to the ageing population. "Macquarie's report incorrectly concludes that the modest impact of ageing in the past means that the impact will be minimal in the future," he said. "But it is the future impact of ageing – the baby boomers moving into the 60-70 year bracket - that needs to be considered... We have not yet felt the ageing impact – it is yet to come."

Whew!