8 Things CFOs Must Know About Health Reform

Whether a Chief Financial Officer is running the fiscal operations of a hospital system, an insurance company or a company that simply employs individuals with health coverage, the decision-making process for sustainability is changing at a rapid pace. However, after years of hearing about reformation in the health system, broad, sweeping and revolutionary changes are finally happening. Major shifts are also occurring in the population, as well as technological advances that will disrupt the entire premise of a four-walled institution for care and the very model we use for health delivery.

Health care in the US is a business – a multi-billion dollar business – and understanding the financial implications of health reform will make or break every CFO. Knowing that health access, demand, quality and payment changes are inevitable there is an immediate need for CFOs across the ecosystems to embrace and plan for transformation.

1. You have too many beds.
   While many hospital leaders won’t accept this at face value due to lengthy wait times, surgical demands and desire to shift beds, the truth is there are too many beds in a lot of hospitals. Between transferals to the outpatient setting and telemedicine, the need for expensive inpatient beds is declining. Additionally, hospital leadership are increasingly finding that they face problems with state authorities when they apply to move beds. Most recently at the University of Chicago, where 338 beds were being used for a 304-person utilization pattern, the state rejected a University application to move surgical beds.
2. Food, housing and transportation of patients is your problem.
   As Americans begin to define and attempt to tackle community and population-based care, the access individuals have to quality food, affordable housing and efficient transit matter.  No one living in a food desert will have the same health outcomes as someone living next door to a Whole Foods, just as an individual with a new car will always be more consistent in making appointments and picking up prescriptions than someone who has to access three public transit buses for the same activities. Real patient engagement and activation begins with understanding the environment of each patient.
3. Your patient demographics are shifting, and so too should your leaderships. As the US continues to brown, hospital leadership must be representative of the population to understand and meet need. At a recent Modern Healthcare Top 25 Minority Executives session, an awardee remarked that the United States is now a country of minorities, and “our leadership as minorities is our future for health outcomes.” With this in mind, it is inevitable and paramount to success that the leadership of any organization resembles and represents those it serves, so it makes the financial investments and decisions that influence the community.
4. More bodies in beds will never work again.
   Value-based purchasing means that a warm body in a bed not only drives costs higher for the payer, but that the longer a patient remains in the hospital – or the more often they return – the more penalties that accrue. Therefore, the goal should not be for more bodies, but for cost-effective bodies. Depending on the community serviced, this can mean desire for more Masters Athletes, specialized services or elective services. Additionally, as we shift to a world where technology enables more clinical procedures and recovery to be done in the outpatient setting, or at home, and expensive inpatient procedures decrease in volume and reimbursements, hoping to fill beds is futile.
5. Alignment with physicians is nonnegotiable.
   No leader can effectively attain a goal without buy in from those who carry out the work.  However, it is important to be aware that “physician alignment” is a term that causes almost all physicians to turn and walk the other direction out of fear that this indicates buying their autonomy and dictating their day-to-day, moment-to-moment ability to practice. According to Healthcare Financial News the implications of physician behavior are so important in 2014 that more revenue than ever will be spent recruiting physicians who see the world the same way you do, which is not very different from how corporation CFOs think about their employee hires.
6. As consumers take on more and more pay responsibility, unexpected payment shifts will keep occurring.
   Many experts estimate that defined contribution, health insurance exchanges and the growing individual health insurance market means that patients will become more informed about spending their health care dollars, and therefore, more unwilling to spend. The future of reimbursements and pricing strategies is presently a puzzle wrapped in an enigma because of extreme uncertainty. However, it is general knowledge that Medicare and Medicaid reimbursements are going to continue decreasing, with the American Hospital Association and Moody’s already estimating an, “unequivocally negative” outlook for hospitals on the reimbursement fronts.
7. Technology and data utilization can save you money.
   While the learning curve with new technology can be excruciating and the meaningful utilization of collected information seems daunting, everything from workflow to health activities and employee/patient engagement can be monitored – and altered in real time – using new technology. Moreover, the more information that is known today, the better predictive analytics and behavioral change that can be made tomorrow. However, as the amount of technology available to leadership continues to grow exponentially, the purchasing of new tech will be a balancing act between what is a passing fad versus what is sustainable and transferable.
8. Your EHR is going to cost you. Big time.
   Now this seems obvious to most hospital CFOs, as they have already seen the initial price tags that come with implementing a “holistic” electronic system. However, the most costly elements may not yet be realized. As mergers and acquisitions continue, technology advances and EHR capabilities increase, the need to refresh systems will continue.  At present there is not one system that meets end-to-end patient or provider needs, leaving the ecosystem open for further disruption, which inherently includes more interoperability, more upgrades, more plugins and more costs.

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The Most Interesting Man Revolutionizing The Health World

He wrote his first world-renowned book at the age of 26. On weekends he recites love poems (ghazals) on Voice of America. He casually – and humbly – references his more than 70 patents that range from aging wine to chewing gum to bioreactors to air scrubbing systems at his infamous Chicago wine parties. And his mustache rules his twitter feed. In 2013 he was awarded the Star of Distinction, the highest civil award by the Government of Pakistan, for his inventions that are making significant impact in developing countries. He has written over 50 books, well over 100 research papers, and hundreds more articles in the field of science, philosophy, rhetoric, poetry and religion, drawing thousands of hits per day on his blog. Dr. Sarfaraz Niazi might just be the most interesting man in the world, but he is certainly the most interesting man pursuing biosimilars in the United States.

Throughout his career his driving principle has been to make things simpler. He did this while at Abbott Labs, as a former tenured professor at the University of Illinois at Chicago (UIC), in developing countries, and presently in his independent career at Therapeutic Proteins International, LLC (TPI) where he is working on biosimilars – or “copies” of current biologic pharmaceuticals that are about to lose their patents. Although only 17 biosimilars have been approved to date worldwide, though none in US, Dr. Niazi and TPI have nine in the pipeline to transform the entire market.   According to photographer Steve Huff, Dr. Niazi is, “An amazing man, in fact the most interesting man in the world!”

Flexibility Is Key To Innovation

When asked his advice to other inventors in a recent interview, Dr. Niazi explained his philosophy that, “You should never get enamored by your thoughts. If the idea does not solve a problem or move the quality of life farther, there are many more things to be invented.” With that mentality, he is filing two products this year alone, similar to Amgen Inc.’s $6 billion molecule white blood count product, due to its expiring patent in the cancer market. Next year, the two molecules he plans to take to market are similar to AbbVie’s expiring $12 billion product Humira.

With movement like that, it’s no wonder Dr. Niazi claims that the U.S. Food and Drug Administration (FDA) is his “friend.”Nevertheless, he notes extreme complications with the rolling submission model, which can cost up to $4 million per submission in fees alone. Additionally, the four levels of the FDA’s “analytical similarity” benchmarking can be troublesome if one has a new biologic entity. This benchmarking, however, allows scientists and the FDA to work together in a predictable, step-wise fashion to move products to market quickly that have fingerprint-like similarity to existing US-licensed biologic products.

Dr. Niazi’s strategy is to create an analytical and clinical equivalent to biologics with expiring patents, which is preferred even over a Phase 3 clinical trial. By doing this, the cost of production is reduced drastically and the speed of development increases by 2-3 times. Dr. Niazi estimates an overall reduction in production costs for his biosimilars of up to 50% or higher compared to market competitors.

By being flexible, his products are proving to be bio-revolutionary.

Can The United States Catch Up?

Additionally, thanks to the Affordable Care Act (ACA), a shorter licensing path for lower-cost versions of cell-derived drugs is now possible, giving inventors like Dr. Niazi another pathway for approval and distribution.

While he claims that the ACA will not reduce health costs, he does believe that independent shocks to the health market will. By this, he believes that making biosimilars easier, faster, cheaper and better translates directly into his mission of making all things simpler. Further, cost-effectiveness in the US and European Union (EU) can directly convert into worldwide distribution and scalability that is safe.

Although a friend of the FDA, Dr. Niazi is not hesitant to note the tough decisions US-based companies face to stay in the states. Having FDA approval carries weight around the world, but the financial and regulatory burden can be great for inventors and business owners. In contrast, he asserts that the EU has moved ahead of the rest of the world, with the most established and advanced regulatory framework for the authorization and marketing of biosimilars, which has since been adopted by the World Health Organization (WHO).

Additionally, Dr. Niazi says that it is difficult to raise money in the US. Venture capitalists and corporate investors are less likely to take risk and have notoriously poor track records with the health sector

Investing In The Windy City

In 2003, the TPI founder committed that his work and company would stay in Chicago.  He believed that from creation to manufacturing and testing to going to market, that TPI would excel in the Midwest due to Chicago’s health care ecosystem, experts and manufacturers.

Through a focus on creating “generic equivalents,” Dr. Niazi is proving that TPI can be wildly successful in the Midwest, and further, that in the same way generics revolutionized how people access pharmaceuticals, biosimilars can revolutionize the way those around the world access lifesaving treatments.

As his biosimilars enter the market with FDA approval, the ability of Dr. Niazi to impact the entire health sector grows because his biosimilars can be substituted for its reference product without provider or patient intervention. However, the FDA has not yet finalized these guidelines, and only 17 biosimilars have been approved internationally to date, of which none are by the FDA.

Ultimately, with numerous billion-dollar biologics coming off patent over the next six years, and the exorbitant cost for specialty drugs, the nine biosimilars TPI has in the pipeline stand to make a huge impact in the health sector. While Dr. Niazi could be doing many interesting things these days as an international man of mystery, he has devoted his research, time and energy to bringing high quality, cost-effective treatments to the US, and beyond. So long as he maintains his wine parties and poetry readings, its certain no one will complain.

 

Can She Make a Cherry Pie, Billy Boy?

My parents have always made their own bread, a skill I have never been able to master.  The other day my dad was showing off this beautiful loaf of bread he had made, and I asked him how he did it.  He said “I don’t know.  I followed the recipe and then added more flour until it looked right.”  Huh.  So the recipe was wrong?  “Well, not really.  It just needed more flour.”

As I was reading our dear leader Brad Wright’s policy wonk piece from March 12 I clicked on John Goodman’s piece on personalized medicine and it occurred to me that my father’s approach to bread baking is a good analogy for how doctors confront protocols and guidelines.  Goodman has a great blog, by the way, over at the National Center for Policy Analysis.

Let’s start with the recipe itself.  You think you want to make, say, a pie.  You don’t know what kind of pie, just “pie”.  But you’re an experienced baker, you’ve been baking for 20 years.  You look in the index and find the directions for “pie”.  You follow the directions exactly.  You end up with something that looks like pie.  But it’s not quite right, it doesn’t fit exactly.  There’s no filling.  You haven’t decided how to personalize the pie, make it yours.  According to our analogy, the baker is the doctor.  He’s very experienced, and has been practicing medicine for a long time.  He sees a patient whom he decides has, say, diabetes.  He looks in the index of his protocol manual, as he has been told to do by the administrators of his EMR, and follows the directions for “diabetes” exactly.  But the patient doesn’t get better.  The doctor hasn’t found out what kind of person his patient with diabetes is, so he can tailor the recommendations to the patient, that is, he can personalize it.

To extend the analogy, say this baker makes his pie according to the directions but because of his experience, knows a few ingredients are missing, so he adds them.  Like my dad, an experienced bread-maker, adding flour.  The results are much better, and he is able to charge more for his superior bread.  But the doctor does this for his diabetes patient, and the patient’s insurance company calls him saying it won’t pay for the added items.  They aren’t in the recipe.

Now someone comes to the baker and says: “Baker I ate your pie and I got sick.  What did you put in it?”  The baker replies that he followed the recipe, but when pressed admits he added a few things, but nothing that could make the pie-eater sick.  The pie-eater doesn’t believe him but the worst that he does is no longer buy pie from the baker.  The patient comes to the doctor and says: “Doctor I did what you said but I got sick.  What did you do?”  The doctor says he followed protocol, but when pressed admits he added a few things, but only things that would improve the patient’s care.  Doctor is sued for 10 million dollars.  Conversely, a person buys a pie and says to the baker: “This pie tastes terrible.  What happened?”  And the baker answers that someone got sick from a pie he made with additions, even though it wasn’t his fault, so now he just follows the recipe.  The patient says to the doctor:  “This treatment isn’t working for me, what happened?”  And the doctor says:  “I got sued for personalizing care, so now I just follow protocol.”

Tired of this analogy?  Me too.  Here is the problem with cook-book medicine.  You’ll come out with something that looks like quality care, but doesn’t really satisfy anyone.  It’s nice to have guidelines, so you know in general how things are done by other doctors and experts in the field, but if you don’t have the freedom to use judgement gained by experience to adjust care to the patient at hand, the end product doesn’t work.  I guess my point in all this is that quality care cannot be legislated and measured with strict guidelines.  Quality health care is like good pie; you know it when you see it, and you leave it to the professionals.

 

American Heart Association Launches Accelerator To Find Internal Game Changers

Accelerator programs and incubators are growing rapidly in number within the health care industry, with most replicating standard tech incubator models. But one organization has worked to redefine what an accelerator program can look like in the health space by joining one of the country’s largest and most influential associations in its landmark effort to court healthcare innovation. Dr. Ross Tonkens, a cardiologist and Chief Medical Officer in Cary, North Carolina has directed the creation of the Science and Technology Accelerator Program inside the American Heart Association (AHA), that targets and supports ground-breaking ideas from residents to senior clinicians.

Breaking The Mold

Although the AHA is most well known for its Heart Walks, Heart Ball and various awareness efforts such as the Go Red campaign, with a growing accelerator program, the Association could soon be known for changing how health associations and organizations think about growing overall impact. Not only do new ideas, technologies, and products improve the branding and public relations of an association, but it also leads to innovation that improves cost-effective practices, patient experience and standards of care.

According to Dr. Donald Lloyd-Jones, Senior Associate Dean for Clinical and Translational Research at Northwestern University, “When the prevalence of atrial fibrillation is presently estimated between 2.5-6 million Americans, but also estimated to be 6-16 million by the end of 2015, we know invention and innovation are needed.”

The AHA’s 2020 Impact Goals are to reduce deaths from cardiovascular disease and stroke by 20% as well as improve cardiovascular health of all American’s by 20%. Lloyd-Jones said the kind of disruption and change necessary to make these goals achievable will have to come from newer and more effective ideas and products through the Accelerator program in addition to continued research funding.

Dr. Lloyd-Jones set the tone of the AHA’s “Get Pumped” efforts by highlighting that, “continuing to fund research efforts will ensure tomorrow’s health and science discoveries make it from bench to bedside.”

Dr. Tonkens adds that investments through the Accelerator program can encourage industry and venture capital interests to “pick up the baton and carry it to the finish line after we fund proof of concept clinical research.”

Funding

Presently, the AHA is the second largest funder of cardiovascular research after the federal government. AHA has spent over $3.5 billion in supporting basic science research, and continues to do so. The Accelerator on the other hand is focused on identifying the game changers that can be propelled to market as quickly as possible, and helping the industry and investors feel confident in having a lower amount of risk on innovative products.

While AHA gave an estimated  $134 million last fiscal year in research, the AHA Science and Technology Accelerator Program is independent. To date it has not collected money directly from AHA, but instead, relies solely on donations directed to the Accelerator through awareness and fundraising efforts.

While this can make funding difficult, it also means any return on investment by the Accelerator is used to drive game changers into the market faster; the gift that keeps on giving.

Challenging The Status Quo

The Accelerator program not only invests money, but also expertise in areas such as scientific research, regulatory issues, intellectual property and commercialization strategies. This is done to ensure that all ideas are solicited, vetted and implemented to the best of their abilities, even those from younger individuals in the AHA that may not have yet been granted government funding or published in journals.

At the Heart Innovation Forum in Chicago last October, Jill Seidman of Healthbox agreed. During a panel discussion on accelerating discovery to patient experience she examined to audience that it was ideal for Chicago to host the AHA Forum because it was on the forefront of young innovation. She explained that, “bridging academic medical centers (AMCs) with community centers and clinics is imperative to improving outcomes, and Chicago has more AMC and medical schools than any other region in the United States.”

Dr. Tonkens message was clear at that same Forum. He said that like Healthbox, the Science and Technology Accelerator within AHA could fund – and has – great ideas. As he put it, “small amounts of money can dramatically improve life expectancy and decrease death from heart attack and stroke when leveraged by the global expertise in science, medicine, IP, regulatory and commercialization strategies which AHA is uniquely capable of bringing to bear.

American Heart Month And Beyond

As February closes out National Heart Month it is important for American’s to think about the implications of the country’s most detrimental health condition, heart disease. As a nation we have a long way to go to improve overall outcomes as they pertain to cardiovascular health, and especially those of our minority populations.

Through initiatives that range from the new Get Pumped phone app to high-end fundraisers to advocacy campaigns, the AHA is working hard on its outreach, educational, and public policy efforts. “Funding research and encouraging technological innovation is critically important,” said AHA Illinois Government Relations Director Alex Meixner, “but we also work with stakeholders ranging from hospitals to local, state, and federal governments to ensure that today’s scientific breakthroughs become tomorrow’s universal standards of care.”

Further, the status quo must be disrupted, and must be met with acceptance by veteran clinicians. Although current best practices exist for a reason, there cannot be progress using older methods to care for our aging and changing population.

 

An Engineering Feat Gives Hearts Extra Life

With the release of their new HeartAssist5 heart pump, ReliantHeart is making real-time, personalized feedback possible for the millions of Americans suffering from heart failure. The new technology allows for real-time, remote monitoring of implantable devices, years of added life for patients, and flexibility to travel without a physician nearby. With a staggering projected 46% growth in heart failure by 2030, advances in heart failure innovation are on the forefront of changing medical treatment, policy, device research and physician reimbursements. Further, with heart failure and disease disproportionately affecting minorities in the US, advances in length and quality of life could be huge strides for medical equality.

Heart Failure In America

Approximately 7.5 million people in the United States currently suffer from heart failure, a figure that is increasing over time as more people survive heart attacks and various other heart conditions. According to the Heart Failure Society of America, an estimated 400,000 to 700,000 new cases of heart failure are diagnosed each year, with deaths averaging 250,000 annually, more than double since 1979. Even worse, an estimated one half of heart failure patients die within five years of diagnosis and 20% within the first year.

With a waiting list for heart transplants at an overwhelming 3,736 at publication, and less than 2,500 hearts donated annually, the need for a bridge between heart failure and transplant is literally life and death.

LVADs

Left ventricular assist devices (LVAD) are implantable heart pumps that were created to temporarily support patients with advanced heart failure as the bridge between diagnoses and transplant. However, with new scientific advancements, LVADs are becoming a long-term tool for improving heart function without transplant.

The right ventricle pumps blood to the lungs, but the left ventricle is responsible for pumping blood to the rest of the entire body, making it much more susceptible to failure. Therefore, LVADs have been the focus of most modern research to prolong and improve life saving implants.

Patient-Centered Care

Reliant’s system acts like your car’s dashboard. “If a patient’s pump has any sign of a challenge, like dehydration or low flow, the remote monitoring system signals the change to a data-collection center that notifies the transplant center as well as the individual,” ReliantHeart CEO Rodger Ford says. This is what makes the HeartAssist5 unique; at the first sign of a problem the right people are notified immediately.

Essentially, if the engine light goes on, the heart center and patient are notified to get the engine checked.

He also notes that the patients can set monitors to send text message notifications, thus making changes in blood flow, speed and power truly personalized. Individual blood flow is collected and transmitted every 5 minutes, making one’s own body the standard comparator.

The greatest importance to Founder and CTO Bryan Lynch is his ability to use his background as an engineer to, “Get involved in a project where you can actually see how you saved a life. While the docs and nurses are the real lifesavers, we give them the tool to make it possible.” He continues that it is vitally important for engineers and innovators to gain a patient-centered approach to get a real reduction in cost burden and improve quality of life.

Sailesh Saxena, CFO, continues highlighting the patient focus of the company by telling about the origination of the design of the VAD pack. “Bryan and I used to go to Schlotsky’s Deli ($BUNZ) for lunch,” he said, “and we used to see this man wearing a coat although it wasn’t cold out. Bryan noticed immediately that he was attempting to hide an LVAD controller and batteries. Well, this happened more than once, and we recognized that he was always concealing the VAD controller. So we decided that we needed to create a unique insert so that our LVAD control system could slip right into a Louis Vuitton ($LVMH) or Gucci ($GUC) bag unnoticed. It’s the small things that make the patient feel like we understand what they really want.”

Expanding The Geography Of Care

Remote monitoring, like other methods of telemedicine, is a key to expanding the geography of health care. “As technology matures, with the help of remote monitoring, the cardiologist and patient will feel safer with greater distances between them,” says Saxena.

This growth in telemedicine as a whole, and specifically in heart care, has major implications for the Centers for Medicare & Medicaid Services (CMS) as well as health care policy and reform. Because CMS is beginning to assign reimbursements and penalties based on patient outcomes instead of traditional fee-for-service metrics, it will become more and more important to have reimbursements reflect remote monitoring and its likely benefits.

Reimbursement codes also need to be reworked to genuinely target geographic discrepancies in care, which are fundamentally important for transplant centers. However, at present, CMS is slowly beginning to take growth rates of heart implants seriously based on the agency’s continued increases in payments, including their slight variations in geographic differences.

An Engineering Feat

In a recent study, researchers found that platelets flowing through the HeartAssist5 are exposed to significantly lower cumulative shear stress levels than in competitive devices tested. Ultimately, this means that the ReliantHeart product allows for what the CTO calls “a more physiologically normal cardiac output, including the pulse.”

What Bryan means is that people with failing hearts have low blood flow throughout the body, which is why they are so sick. When an LVAD is implanted, patients return to a more normal flow, but they also need blood flow that is as natural as possible. With the HeartAssist5, blood is not damaged and any pulse that the recovering heart produces is naturally transmitted to the body.

The LVAD and heart now work together to help the patient recover.

Although there are two other continuous flow LVADs on the market (THOR and HTRW), the ReliantHeart team claims their careful design capitalizes on working with the natural ventricle to the benefit of the patient, almost like a gym trainer for your heart.

Their “implantable flow probe” is also a revolutionary aspect of the HeartAssist5. This ultrasonic probe measures the blood flow from the LVAD in real-time providing critical feedback that is a one-of-a-kind technology providing data that makes the aforementioned remote monitoring so valuable. Ford says this ability to see patient-specific trends remotely in real time not only helps all patients improve quality of life, but the longevity of the HeartAssist5 creates a life support system, far beyond the “bridge” that the LVAD was originally created to be.

So this month, for American Heart Month, think about what innovation really is. It might be the ability to prolong and add quality of life for individuals and families across the nation, to share more time with loved ones.

 

Global Study Finds Majority Believe Traditional Hospitals Will Be Obsolete In The Near Future

A global study was released at the new year by the Intel Corporation indicating that around the world people’s health care wants and needs are principally focused on technology and personalization. The “Intel Health Innovation Barometer” found a consistent theme: customized care. At the intersection of health, care and technology, communities around the world consistently said they wanted to see their biological makeup and individual behaviors used to make receiving care more effective and efficient. This unsurprisingly was described by people through means such as telehealth, mobile health and the sharing of health information in real time. However, surprising methods of care were also common themes throughout the world such as ingestible monitoring systems and care that involves no utilization of hospitals.

Eric Dishman, Intel Fellow and Global General Manager of Health & Life Sciences at the company says the findings indicate that, “workflow, policy and culturally focused care are the most important ways we can improve health care.” Making care convenient, universally available and efficient through technological innovation is seen as more promising around the world than increasing the number of physicians or funding more academic research.

According to Senator Ron Wyden (D-Oregon), “People always talk about disruptors in terms of various kinds of practices in the American economy,” but “there’s nobody who’s done more disruption for the right reason than Eric Dishman.” With that kind of support to understand and advance the health care system, the Intel Health Innovation Barometer was conducted online by Penn Schoen Berland in Brazil, China, France, India, Indonesia, Italy, Japan and the United States. It was conducted among a representative sample of 12,000 adults aged 18 and older with a margin of error of +/- 0.89 percentage points.

Surprising Findings:

–       Traditional hospitals, according to 57% of people, will be obsolete in the future

–       Majority of people (84%) would be willing to share their personal health information to advance and lower costs in the health care system

–       More than 70% of people are receptive to using toilet sensors, prescription bottle sensors and swallowed health monitors

–       72% of those surveyed would be willing to see a doctor via video conference for non-urgent appointments

–       66% of people say they would prefer a care regimen that is designed specifically for them based on their genetic profile or biology

–       More than half of people (53%) would trust a test they personally administered as much or more than if that same test was performed by a doctor

–       About 30% of people would trust themselves to perform their own ultrasound

While wearable monitoring devices are commonly accepted in the US, global readiness for ingestible and sensory systems far exceeds that of Americans.  Acceptance of non-hospital care is also more appealing to those living outside the US. In remote areas of India, for example, extremely high percentages of people said that there is no need for traditional hospitalization.

Although in the US, a growing desire to care for the elderly at home gives hope to Eric Dishman that there could soon come a day that hospitals are obsolete. He cites changes in care seeking behaviors, policy and payment reform as incentives to move away from traditional hospitalization care. “The moment you signal pay for performance, people start thinking about how we misuse hospitals every single day,” says Dishman. That misuse of hospitalizations, and lack of formal hospitals in other countries, contributes greatly to the number of individuals worldwide who think the archaic system is not sustainable in the future.

Emerging Technologies For Innovation

Intel has been doing qualitative and quantitative research around the health care industry for many years. To date, the Intel Barometer is the most extensive survey it has conducted, and did reveal shifts in people’s increased desire to have access to emerging personal technology tools to become more active members of their care team.

Specifically, the Intel R&D teams are using ideology like Dishman’s to seek clarity and recognition of health advancements that unburden people from having to travel to a health care provider. “Care must occur at the home as the default model,” says Dishman. “It was also interesting,” he says of the survey, “to see people in emerging markets such as Brazil, China and India trusted themselves to use health monitoring technologies more than those in more technologically advanced economies like Japan and the United States.

Intel’s team of ethnographers used research in more than 1,000 homes and more than 250 hospitals across 20 countries to better understand the everyday lives of people, including those receiving and giving care.

The technologies that Intel’s survey received novel feedback on include items such as wearable and ingestible monitoring systems. While these hi-tech possibilities are new to all markets, the potential benefits could be felt across the entire health care arena as more thorough and patient-centered data is collected, driven by patient approval and demand.

Eric Dishman’s Personal Mission

In his pursuit of better health care technologies and home health care, Eric Dishman has been driven primarily from his in depth involvement with the health care system. As a student at the University of North Carolina, Dishman was told that he had months to live due to a rare kidney disease. Over twenty years later he has received a new kidney from a colleague at Intel thanks to sequencing his genes and finding that his diagnosis had been wrong his entire life.

Further, his grandmother’s progression of Alzheimer’s Disease drove his pursuit of innovation to keep her safe in her own home.  He found that keeping her health and dignity was a group effort. According to him, “Improving health care is a team effort, including patients and their families. Intel’s research shows that when people see benefits for them and their wider community, they are open to sharing sensitive information in an anonymous way.”

His approach seems to be gaining support based on the Health Innovation Barometer, which found that a higher percentage of people (47%) were willing to share their personal health records than their phone records (38%) or banking records (30%) to aid innovation.

If Dishman and Intel have their way, the new survey will move them to the head of the class by proving to health care leaders around the globe that massive disruption to the health care system is possible and supported by the large community. Smart devices that can connect patients and care givers in their home can lead to all kinds of health and policy change. Payment reform, independence and equal access might all be possible in the near future if individuals around the world are willing to use their own bodies and surroundings to educate and innovate the larger system.

 

NFL Players Host Concussion Summit Week Before Super Bowl, Despite Ongoing Litigation

Real innovation is often driven by those who think outside the box; those who take the obvious and make it an actionable reality. The week leading up to Super Bowl XLVIII, a group of entrepreneurs created a unique and transformative meeting of the minds. At the Coalition for Concussion Summit (#C4CT), Brewer Sports International and Amarantus BioScience Holdings, Inc. joined forces at the United Nations’ (UN) New York headquarters to bring scientists, biotech companies and professional athletes together, with the goal of building awareness and advancing scientific and medical opportunities for traumatic brain injury (TBI), chronic traumatic encephalopathy (CTE) and concussions. Add in the weight of immediate policy implications of the National Football League facing litigation for not properly informing or protecting players and Northwestern University’s football team attempting to unionize in hopes of improving athlete’s rights, and a perfect storm is created to demand change. Collectively, the week of the Super Bowl developed into an ideal time, location and platform for changing standards of health care and promoting developments in mental medical care that are patient-centric.

NFL Litigation

In the months preceding the 2014 Super Bowl, the NFL and the NFL Players Association (NFLPA) found themselves in a heated battle over the allegations that the NFL withheld information from the players about the depth and breadth of research indicating that concussions, memory loss and memory deterioration are linked. The NFL has since agreed to a $765 million settlement, which was recently denied by Judge Anita Brody who claims that the in the suit, “not all retired NFL football players who ultimately receive a qualifying diagnosis, or their related claimants, will be paid.”

While that decision is pending, more lawsuits are beginning to surface from individual players. Last Tuesday, former Detroit Lions running back Jahvid Best sued the NFL and helmet maker Riddell, claiming that concussion problems contributed to ending his career early

However, according to Robert Griffith, a 13-year veteran of the league, it doesn’t take a career-ending hit to significantly impact long-term functioning. “Guys suffer the same symptoms even after a few years in the league, including, sleep deprivation, depression, mood swings, addictions and self worth problems.”

The same week of the Super Bowl, the Northwestern University football team also dropped a bomb on the sports world, despite efforts from the National Collegiate Athletic Association (NCAA) to curb player concussions. The team wants to change the way university’s view, treat and educate student athletes, claiming more players’ rights are needed. This comes in tandem with a more than two-year long effort by several college players to sue the NCAA for failing to protect student athletes from concussions. An irony, pointed out by Chris Nowinski, author and former professional wrestler with World Wrestling Entertainment (WWE), who noted that “We have pitch counts for shoulders, even in high school, but we don’t have hit counts.”

Health Policy at the Forefront

When the NFL, the United States’ most powerful sports league, is on the hot seat for neglecting players’ mental and physical health, it is only a matter of time before public outrage requires policy change. Not only does the NFL itself have the ability to change health policy for the better, but the trickle down impact could save many young athletes around the country the trauma that current and past players have suffered.

Ultimately, a new standard of care is possible in the near future. Because, as Jermichael Finley told me, “100% or 50%, it doesn’t matter how one steps on the field. It isn’t if you get hurt, it’s when you’ll get hurt.” Further, as one conference goer attested, “We are speaking on the floor of the United Nations about brain trauma. This has never before been possible.”

With that in mind, researchers and clinicians such as Andrew Maas, MD, PhD, Robert Stern, PhD, Kim Heidenreich, PhD and Jay Clugston, MD came together with patients and biotech companies to discuss the current state of trauma, neuroscience, degenerative diseases, sports medicine and public policy.

Meeting Of The Minds

Despite the exorbitant power of the NFL, surprisingly little has been done to advance the conversation between athletes and the scientists who work diligently to understand and protect our brains. Until now.

As the nation’s best football players ascended upon New York and New Jersey, Brewer Sports International and Amarantus BioScience Holdings, Inc. gathered a room full of athletes and scientists to educate one another and discuss the real world of traumatic brain injury, concussions and memory loss.

“As a former NFL player, I am passionate about making strides to improve the health and safety of my fellow professional athletes, both former and current,” said Jack Brewer, CEO of Brewer Sports International. “Instead of pointing fingers, we have put together a world class panel of researchers to discuss TBI-induced neurodegeneration and CTE with those directly affected by and equally passionate about the cause as we strive to enhance awareness and work to find viable treatments.”

Gerald Commissiong, President and CEO of Amarantus reinforced the originality of the idea saying that, “The true innovation in #C4CT lies in bringing all of the stakeholders on the concussion issue into one forum. Conferences that are medical in nature almost always overlook key groups such as patients, caregivers and advocates. By allowing patients to be part of the process, we are creating a paradigm shift that we hope will galvanise the broader community into action.”

Brain Function

Despite Super Bowl caliber athletes having athletic abilities that are superior to most, the brains and vulnerabilities of these athletes are comparable to all others. The impact of one hard hit or one concussion can disrupt brain function forever. A point that resonates with Mixed Martial Arts (MMA) fighters as well. Just yesterday, boxing rivals met on Capitol Hill with Senators to support efforts of the Cleveland Clinic in studying brain health. They were backed by more than 400 of their peers who wanted to maintain their profession, but ensure that the future is brighter for other athletes.

Even veteran players such as Clinton Portis assert that he does not have regrets about his career but that he, “will not let my sons play contact football until at least high school,” due to the limited research that exists on TBI and concussions.

Those downstream effects, many at the summit contend, are highly linked to neurodegeneration, memory loss and long-term functioning. However, this is exceptionally hard to prove given how hard apples-to-apples comparisons are of brain damage and functioning. This association is further limited by the ability to compare impact enumeration and force due to the small sample size that are athletes.

Events such as the Coalition for Concussions Summit are becoming imperative to change health policy. When organizations, individuals, researchers and policymakers cannot fight the battle alone, it takes a meeting of the minds to advance a message. Hopefully, assembling key stakeholders to address health care problems will become a norm to improve health and care in the US.

 

Massachusetts Wins the Prize for Most Expensive Healthcare

It has recently been brought to the attention of the good citizens of Massachusetts that we spend more than anybody else on healthcare.  According to the Massachusetts Health Policy Commission report published recently, Massachusetts spends 16.6% of it’s economy on healthcare, as opposed to the national average of 15%.  The expense is in both higher utilization and higher prices.  It is across all payer types.  The most cost is associated with hospital care and long-term care/home health care.  The report goes on for many pages with reference to lots of charts and graphs.  I cannot pretend to understand all of it, and I defer to Dr. Paul Levy, who knows a lot more about this sort of thing than I do, in a post he recently wrote for The Health Care Blog (http://thehealthcareblog.com/blog/2014/01/09/the-data-are-wrong-our-patients-are-sicker/).  The best I might be able to do is to de-code some of the language in the Executive Summary.  To wit:

1. “Significant trends are occurring in the provider and payer market. For providers, the delivery system is growing increasingly concentrated in several large systems, with a larger proportion of discharges occurring from major teaching hospitals and hospitals in their system.”

Partners and Caregroup, along with a couple of for-profits, have eaten up pretty much all the formerly-independent hospital systems and physician practices.  While this means they can negotiate more effectively with vendors, it does not mean that potential cost savings gets passed on to anybody below the CEOs.

2. “…many provider organizations seek to re-orient care delivery around patient-centered, accountable care models, though significant challenges such as misaligned payment incentives, persistent barriers to behavioral health integration, and limited data and resources remain.”

This is nice-speak for “A lot of groups are moving toward accountable care organizations, without any real evidence that care in this model is better or that it’s any cheaper.”

3. “In addition, public and commercial payers are increasingly developing alternative payment methods that aim to alter supply-side incentives. However, there are significant challenges in implementation, including wide variation in these types of contracts covering Massachusetts providers, both within and across payers, as budget levels, risk adjustments, and other terms are negotiated.”

Everybody has a different deal.  Everything can be negotiated.

4. “The operating expenses that hospitals incur for inpatient care differ by thousands of dollars per discharge, even after adjusting for regional wages and the complexity of care provided. Some hospitals deliver high-quality care with lower operating expenses, while many higher-expense hospitals achieve lower quality performance.  Operating expenses are driven in part by market dynamics. Hospitals that are able to negotiate high commercial rates have high operating expenses and cover losses they may experience on public payer business with income from their higher commercial revenue, while hospitals with more limited revenue must maintain lower expenses.”

Operating expenses make no sense.  There is no consistency.  Going to a big fancy hospital with a big fancy name does not mean the care you get will be better, but it will likely be more expensive because the fancy hospital also has things that make a lot of money, like imaging machines and advanced non-invasive procedures.

5. “An estimated 21 to 39 percent ($14.7 to $26.9 billion in 2012) of health care expenditures in Massachusetts could be considered wasteful.”

No translation needed.  I could give you a hundred examples of waste right now, but anecdotal evidence is not data.  Massachusetts HPC has the data.

6. “Persistently high-cost patients – those who remain high-cost over multiple years – are easier to identify for care improvement and better health outcomes. These patients represent 29 percent of high-cost patients and make up 15 to 20 percent of Medicare and commercial spending in Massachusetts. Interventions that have been shown to improve the efficiency of care for high-cost patients include: prevention of conditions that often lead to expensive health crises; process and operational improvements that reduce the cost of episodes that are common among high-cost patients; and care management resources to support patients to manage their care more effectively and better coordinate care for patients across multiple provider settings.”

We know who the highest cost patients are and if we had better ways of encouraging prevention, managing diseases so they don’t get out of hand, and helping people take care of themselves in the community, we’d spend less.  Maybe.

So there you go!  Maybe these things can be addressed, maybe they can’t.  In the meantime, save your pennies, Massachusetts residents.  You’re gonna need them.

 

Doctors: Beware The Doc Fix

Let’s talk about the Doc Fix.  No it doesn’t mean that surgeons will get any less cranky or that your urologist will improve his bedside manner.  What I am talking about in this case is the Sustainable Growth Rate formula. You see, the Center for Medicaid and Medicare Services, or CMS, has to figure out every year how much it’s going to pay for things. The SGR is supposed to ensure that as fees for everything in healthcare go up, the rate of increase does not outpace the growth of GDP. In a complicated middle-man maneuver, CMS sends a report to the Medicare Payment Advisory Commission, which in turn advises Congress on how much medicare spent last year and how much it’s targeted to spend next year.  There is a conversion factor that adjust payments based on how much over or under the target cost was the previous year.  The SGR is that conversion factor, and believe me unless you have the beautiful mind of John Nash you don’t want to know how it’s calculated.  The SGR was formulated in 1997 and, put simply, is a way to control costs.

So the SGR is a formula to control medicare costs.  OK.  So what’s the problem?  The problem is that as healthcare spending has outpaced GDP, every year since 2002 physician reimbursement has gone down.  The SGR demands it, because every year cost is over the target.  And every year Congress, under the heavy lobbying of the AMA, passes short-term overrides to prevent these cuts.  And why is THIS a problem, since everything Congress does these days is emergency short-term fixes?  Money. The gap between what the SGR says we should pay for medicare and what it actually costs is about $300 billion.  The gap will get bigger and bigger.  But what’s the alternative?  Here’s what the Society for Hospital Medicine blog says:

“To earn greater or equal revenue, we will need to achieve prespecified process of care and health outcome targets (VBP or value-based payment) on top of the old reimbursement chassis.  Additionally, participating in alternate payment models (APM’s), e.g., patient-centered medical homes, will garner increased rewards.  A caveat, APM’s work for ambulists, but not for hospitalists—and SHM has responded to CMS with proposals.  The same goes for VBP mismatches.”

What?  I have no idea what most of that means but, as a physician, the phrase “we will need to achieve pre- specified process of care and health outcome targets” strikes fear into my heart and puts ice into my veins.  You see, what Congress is suggesting is that instead of tying medicare payments to GDP, they should link the payments to quality measures or performance-based incentive programs.  That would be great if there were anything like actual meaningful quality measurement metrics.  Quality measurements have to be things that are easily understood numerically.  Number of people counseled on smoking.  Number of flu vaccines.  Number of people getting pre-operative antibiotics.  Number of time-outs before surgery.  Number of people tested for prostate cancer.  These are NOT measure of quality.  They are measures of compliance by physicians who must blindly check boxes in order to ensure that their “quality” matches what a panel of experts say is quality. Not only do quality measures not measure quality, they impose the increasingly onerous documentation requirements physicians face every day.

According to Forbes(http://www.forbes.com/sites/brucejapsen/2013/12/13/in-rare-bipartisan-moves-congress-may-remedy-medicare-doc-fix-in-2014/) the AMA thinks this is a great idea:

“(Thursday’s) strong, bipartisan votes by the Senate Finance and House Ways and Means committees, following similar action last October by the House Energy and Commerce Committee, shows that there is overwhelming, bipartisan support for ending the SGR in a fiscally responsible manner and closing the book on the annual cycle of draconian Medicare physician payment cuts and short-term patches,” said Dr. Ardis Hoven, president of the American Medical Association. “This long-overdue policy change provides the stability that physicians need to pursue delivery innovations that help improve patient care and reduce costs for American taxpayers.”

I suspect Dr. Hoven hasn’t practiced medicine in quite some time.

 

Health IT Thrives With New Startup Companies

As the health insurance exchanges opened for enrollment just days ago, the federal government, including the President and the Department of Health and Human Services (HHS), had to acknowledge that it was not technologically ready. The IT infrastructures by which individuals tried to sign up for health insurance crashed and were unavailable throughout the first day and the weeks after. Those same sights were supposed to track enrollment, but proved to not be as well tested and far more expensive than originally anticipated. However, despite the shortages and disappointments with government IT readiness for exchange websites, there was a surge in US-based startup companies that demonstrated just how innovative and forward thinking technology can be in the health care arena. Nine new companies, all curated through BluePrint Health were introduced at that same time three weeks ago on “Demo Day,” and were ready to show the new frontier of health care, and how to transform care delivery through technology.

Health IT Incubators Driving Innovation

Blueprint Health is an accelerator program geared towards health care companies that want an intensive three-month mentorship to help find customers and capital, and learn from leading industry experts. The companies that are selected for the program range from individuals with a clever value proposition to well-established organization leaders that have existing customers, investors and are generating significant revenue, but with new ideas. According to Doug Hayes, a Principal at BluePrint Health, “We are seeing an acute need for innovation at the seed stage of the health care ecosystem. With top-down changes in regulations and quickly shifting incentive structures, the most successful companies will be those who can nimbly adapt.”

He asserts that what makes BluePrint successful is that it is, “uniquely positioned to attract, identify, and support the entrepreneurs that fill the gaps of service left in the wake of massive industry changes.” The accelerator program promotes the mindset that new businesses should not have to focus exclusively on fundraising. Hayes says, “Building a company is extremely difficult, and a founders’ time is best spent on customer and product development, not fundraising.” With that mentality, BluePrint does not use many pre-established filters when evaluating the near 1,000 applications it receives each year, but instead concentrates on business models.

The nine particular startup companies that were cultivated during the summer of 2013 range from Healthify, which focuses on creating platforms that connect and standardize medical homes to treat social needs to Board Vitals, an organization that improves the testing system of our nation’s providers. Each of these new businesses gives hope to innovators and entrepreneurs.

The Companies

Artemis

Artemis is a health care analytics firm specializing in benefit claims. With employers spending billions of dollars on health care, benefits managers need more information than the historical, once a year paper reports of the past. With the Artemis platform, benefit managers have graphical, real-time updates for claims and assessments. The creators claim that that deploying its tactics not only saves money for organizations, but also heads off future costs through prevention and determination of key cost drivers.

Board Vitals

Board Vitals brings together publishers, universities, and top physicians into a single digital platform for medical specialty education, with pass rates that are 10% higher than the national average. According to co-founder, Dan Lambert, “Content is continually voted up and down, meaning that the very best material comes to the top and outdated or incorrect content is voted out.” His partner, Andrea Paul added that their aggressive, but attainable, goal is to have materials for 20 of the 35 specialties in 2014.

CredSimple

The founders of CredSimple created a system to make the mandatory credentialing of physicians cheaper and more efficient. According to co-founder Garry Choy, at present, credentialing takes two to three months per physician and hospitals spend millions a year on the routine, but inefficient process. CredSimple uses an impressive 214 data sources to verify credentials, saving all provider parties time and resources, with downstream positive implications for entire hospital systems.

Genterpret

Pharmaceutical companies strive to gain pricing power and market share using genetic information about how patients respond to drugs. Genterpret, started by two system biology PhDs, links genetics to drug responses in one-third of the time (six months) of previous genetic testers. The faster turn-around time and vast outreach program created by the founders suggests that the Genterpret technology can soon be applied to thousands of diseases, improving health outcomes and saving money.

Healthify

After years of working in Baltimore health clinics, the creators of Healthify joined forces to start a company that addresses social needs such as food insecurities to improve health in communities. Medicaid spending on medical homes averages about $15 billion, much of which is spent on social needs. The data collected by Healthify will become vital as medical homes and accountable care organizations begin to address social needs as integral to overall health and well being.

ReferBright

ReferBright helps health practitioners with digital marketing in a world full of medical advertisements. The goal, according to the founders, is to improve outreach and referral rates for various kinds of professionals. Additionally, the automated system makes updating personal information easy for practitioners and makes vetting of practitioners easy for hospitals, knowing the information on ReferBright has been inspected and verified.

SpotMe Fit

According to co-founder, Jarrod Wolf, SpotMe, “allows employers to reward their employees for attending any fitness facility, running in races, or for using fitness apps and devices. When the barrier to incentives are removed–like eliminating paperwork and providing immediate rewards–and employees are given the flexibility to choose how they engage in fitness, then program participation rates skyrocket.” This focus on wellness and fitness programs is to improve health outcomes and lower health costs through incentives, monetary and physical.

Staff Insight

The premise of Staff Insight is to increase workforce productivity, specifically through hospital leadership being able to understand and staff facilities to the optimal levels. The company aims to use real-time dashboard to identify staffing levels in units, test baseline productivity, set new benchmarks for productivity and ultimately save revenue for facilities by optimizing productivity. The founders claim that early adopters have already seen a two to four percent increase in productivity.

WellTrackOne

WellTrackOne conducts a Medicare-approved personal assessment that hospitals can use to track patient data and identify potential risk factors. To lessen the administrative burden and disruption to the workflow, WellTrackOne claims that it can integrate all electronic health records, from multiple systems to improve data and health outcomes.

The Future Of Health Technology

Despite the federal governments success in getting support from professional athletic organizations and celebrities like Jennifer Hudson, the technological infrastructure just wasn’t ready for consumer usage. In contrast, Doug Hayes says that a key reason BluePrint startups were ready on Demo Day is due to the mentor community and outreach.

He claims that a by-product of their focus on business models and portfolio is that it, “includes many enterprise solutions. The long sales cycle and disparate channels within health care makes enterprise sales an especially tough nut to crack. However, our experience within enterprise and our mentor community, 150 strong, makes us especially well positioned to help founders sell into large payers, provider networks, pharma, and other enterprise customers.