Today, Medicare is releasing data on in-patient hospital costs across the country to provide consumers/patients with cost comparison information. Unsurprisingly, the data are interesting and price discrepancies staggering, but the release of the data itself is also fascinating as yet another example of big government opening its vaults, so to speak, as well as adding more momentum to the power shift in healthcare from physicians/providers toward consumers/patients.
This move clearly speaks to the idea that access to information can drive behavior/decision making and that access to cost information can harness the power of the medical consumer to drive costs down.
The team at Popper and Company has focused, since the firm’s inception ten years ago, on technologies and services that improve quality and decrease cost in healthcare. We believe that three big trends at play today clearly support this:
- “Consumerification” – the rise of the power of the consumer;
- Access to information, and
- The convergence of technology from other industry segments (e.g., Telecom)
As I asked in an earlier post, is the U.S. consumer ready for so much service choice (or, in this case, so much information)? Where does the responsibility for consumer education fall? To stay on top of healthcare trends, particularly those related to the rising power of the medical consumer and the convergence of technologies, subscribe to our newsletter and follow us on Twitter. I’d also love to hear from you directly.
Tags: healthcare costs, medical consumer, medical technology, Medicare
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I’m pleased to announce that Stephanie Kreml, M.D. has returned to Popper and Company, joining our core team of life science advisors as Principal.
Like all of our team members, Stephanie is committed to delivering perspective, value, and high-quality, hands-on service to clients across the life sciences spectrum. As a practicing physician with an engineering background, Stephanie brings a unique multi-disciplinary perspective to helping life sciences companies address diverse healthcare issues. She is an excellent addition to our existing team of experts whose operational backgrounds span clinical, technology, marketing and finance in a variety of capacities in the diagnostics, medical device, pharmaceuticals and digital health industries.
You can read Stephanie’s full bio here. Please join me in welcoming her, and please do not hesitate to reach us if you have questions that Stephanie can help address, including those focused on business strategy, commercialization, diligence, and product development. We’re excited to have Stephanie back on board, and to put our entire team of experienced industry experts to work addressing your life science company’s complex challenges.
Tags: clinical research, medical technologies, Popper & Company, Popper and Co, Popper and company, Stephanie Kreml
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Scientists have puzzled over cognitive differences between men and women for at least 100 years. And the results of their work support the reality that should be on the minds of everyone working in healthcare; one size doesn’t fit all.
Researchers in Madrid and at UCLA recently tested men and women on cognitive tasks, including spatial reasoning, inductive reasoning, keeping track of tasks, and attention to numbers. Women, although they have smaller brains – and most importantly because of its role in memory, emotion and reason – a smaller hippocampus than men, were nonetheless better able to handle most of these tasks (except spatial), while showing less brain activity on an MRI. Thus, women require less neural material (and energy) to perform cognitive tasks on an equal level with men.
If this study holds up (other studies also point to significant cognitive differences between the sexes), its results may and should have an impact on healthcare innovation and service delivery. For example:
- At our firm we are very aware of the increased importance of the consumer in healthcare decision making. The way health information is processed by that consumer is very important. This has implications for both the device and the service interface. A consumer-focused device may be intuitive to one person, but baffling to another.
- One particularly strong area for women was in ranking and numerical tasks. New diagnostic tests often produce information that isn’t binary, but probabilistic. In this case, women might have an easier time knowing how to evaluate this information and make choices.
- On the other hand, men appeared to be much better at processing spatial information. This could play into the design of three-dimensional imaging technology, or even smartphone apps and videos.
A big question remains from studies like these; are these traits genetically wired, or more consistent with the way men and women have been trained to think? Perhaps, as Shakespeare showed us 500 years ago, things are more complicated; when Cleopatra’s complexity contrasts to Mark Antony’s hard reason, was that genetic or just the English writer’s perception of life in ancient Rome and Egypt? If it’s nature, then innovation needs to address these differences. If it’s nurture, then a wide range of other cultural differences need to be recognized.
At Popper and Company, we know that incorporating the role of the consumer is critical to successful innovation and strategy in healthcare. We can help you create new strategies, ideas, and inventions to address true unmet needs (and gender differences), and give your company (and its products) a sustainable market advantage. To learn more, please subscribe to our newsletter, follow us on Twitter, or send me an email.
Tags: cognitive testing, genetic traits, healthcare, healthcare innovation, healthcare strategy
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As I watch the power in healthcare shift away from physicians/providers toward consumers/patients (enabled by the wide access to information and driven in part by higher co-pays), I can’t help but to observe the affects of the Affordable Care Act on both this new power and the bedrock concept of healthcare delivery—“standards of care”.
Rob Lamberts, a physician who switched his practice from fee-for-service to “direct care” (in which patients buy in as a member instead of paying for each procedure and visit, and receive a basic set of services), has compared the changes in healthcare delivery to the upheaval caused by digital cameras. Just as the move from film to digital imagery brought photography closer to the consumer, mobile apps and web-accessible information will move healthcare delivery closer to customers (a.k.a., patients). Film companies like Kodak failed to recognize the disruptive innovations wrought by digital photography; could consumer power provide the same disruptive innovation to healthcare? As healthcare industry expenses approach 18% of GDP, the unsustainable weight of healthcare costs practically beg for such a disruption.
The Affordable Care Act (ACA), as well as other regulations and pending legislation, is addressing healthcare delivery standards and relating those standards to costs. The ACA will require health plans to be delivered at four levels of coverage: bronze, silver, gold and platinum. Bronze plans will require the highest copayments, and platinum the lowest. All, however, will have to cover basic benefits such as ambulatory services, emergency care, hospitalization, maternity/newborn care, mental health, prescription drugs, rehabilitation, laboratory services, prevention and wellness, and chronic disease management. At the same time, high-end concierge services—the so called “Cadillac health insurance”—will be subject to a 40% tax.
The sheer size of the plans under the ACA will require more standardization of insurance coverage, and new and potentially different concepts of “standards of care.” I believe we will see the basic package become the core “standard” with more costly but more generous premium services layered on top. And we will see a rapid shift from fee-for-service to global payments for various levels of service intensity.
But can you also have too much health care? Standards of care, developed by professional organizations, have traditionally answered this question. With these new levels of care, standards are no longer decided exclusively by physicians and specialists’ organizations; they’re increasingly influenced by patient choices. So the concept of guideline-driven medicine may no longer be in the eye of the physician but in the eye of the policy-holder.
Is the U.S. consumer ready for so much service choice? Where does the responsibility for consumer education fall? What mechanisms should we put in place to measure quality and reward efficient providers? Let us know what you think.
Tags: ACA, Affordable Care Act, guideline-driven medicine, healthcare, healthcare delivery, standard of care
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In its quest to find ways to reduce healthcare costs but boost healthcare quality, the U.S. Department of Health and Human Services (HHS) launched its first fellowship program in September. For the next year, I’ll be a technical advisor on the part of this program that focuses on quickly developing ways to measure clinical quality under the new healthcare act.
I’ll be working on a team with Mindy Hangsleben, an innovator in Lean technology at Intel in Portland, Oregon. We’ll be examining the challenge presented by the Affordable Care Act, which aims to move reimbursements from “fee for services” to” fees for performance.” Our questions are: “how do you measure performance? How do you pay for it?” Some aspects of health care delivery are easier to measure; e.g., what percentage of the relevant population gets a mammogram. But basing performance upon a more holistic measure of patient outcomes is tricky because all patients are not equal, and a comparison and ranking of outcomes is not easy. In addition, we’ll be looking at ways to determine the role played by various electronic health records (EHRs) in the capture of these performance parameters, as required under the new Health Information Technology for Economic and Clinical Health (HITECH) Act.
The other HHS Innovation Fellowship projects include:
- Finding ways to quickly determine Medicaid or CHIP eligibility for people. This is going to be very important under the new healthcare law because a significant percentage of the 30 million new health-insurance eligible people will be covered under Medicaid. It will take a sophisticated infrastructure to make sure people know about the coverage they are eligible for and are getting the care they need, at the right time. Could a combination of the fulfillment ability of Zappos with the innovation of Apple show the way to some solutions?
- Optimizing services in the event of disaster. Preparing for disasters is problematic because disasters are rather rare—but as “Superstorm”/Hurricane Sandy showed, the need for care is acute when these types of natural disasters occur. This team is looking at ways to optimize devices and services for rare disasters and that may have collateral benefits for routine events. While only an advertising line, Motel 6’s “We’ll leave the light on for you” hints at ways to provide a constant state of comfort, if not readiness.
- Developing electronic tracking and efficient transport for the nation’s organ transplant system. Could the logistics expertise of United Parcel Service (UPS) provide new avenues, for example?
The fellowship program was spawned when HHS met with other federal agencies to determine issues that might require some outside help (very much like the Defense Advanced Projects Research Agency). For the first round of the program, the teams assembled make for an extremely varied group, which should foster fresh ideas and perspectives, some of which are readily borrowed or repurposed from other industries.
What do you see as some of the biggest challenges facing healthcare with the ACA in place? Are the ones outlined above “it” or are there others that HHS might consider next? How would you develop a fee-for-performance system, perhaps borrowing ideas from other industry segments? Are there specific ideas you’d like to share with me as an advisor in this effort? Let me know your thoughts.
Tags: Affordable Care Act, healthcare act, HHS fellowship, HHS innovation fellowship, U.S. Department of Health and Human Services
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The flight had leveled out when the cabin announcement called for a doctor. A passenger was in distress, feeling chest pains. Cardiologist Eric Topol, author of the Creative Destruction of Medicine, answered. He pulled out his smartphone, which had an electrocardiogram attached, and placed it on the suffering passenger’s chest. He quickly was able to assess the patient’s condition: a heart attack.
This is not the future of digital health. It’s happening now, as we learn in this radio interview on iHealthbeat (the California Healthcare Foundation’s radio show) with Dr. Topol; Chuck Parker, executive director of Continua Health Alliance; and Paul Sonnier, our head of digital health strategy.
Here are a few excerpts:
Parker: “Individuals recover better, and it’s less costly, to manage them at home, rather than inside of hospitals or long-term care facilities.”
Topol: [Health apps will cover] “everything from quantifying depression, quantifying your eye pressure for people with glaucoma, brain waves to prevent seizures, asthma detection to prevent an attack. So it’s just going to basically get into virtually every area of medicine.”
Sonnier: “There’s a lot of change happening in our health care systems. There’s a lot of opportunity for consumers to be aware and have very powerful and engaging tools that are sticky. And you have that confluence of factors.”
What happened to the patient on the airplane? What else do these experts have to say about digital health? You can find out by listening to the broadcast here.
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Healthcare, even for the insured, can wreak extremely high financial costs for patients, e.g., with hundreds of thousands of dollars for cancer treatments and new drugs that can run up to $10,000 a dose. While it’s morally impossible to determine the exact value of a human life, a group at the Fred Hutchinson Cancer Center is starting to ask a related question—how cost-effective are cancer treatments?
A recent article in Xconomy by Luke Timmerman that highlighted the Fred Hutchinson Cancer Center study also pointed out that inefficiencies arise because many patients who could benefit from treatment never receive the drug. That puts the ultimate value of a drug that may cost hundreds of millions of dollars to develop at zero. In addition, many people who have insurance can’t get reimbursed for certain treatments, and therefore still face financial hardships:
“Ramsey has already dug up some disturbing findings about how much money is spent, and how little value is gained. One study showed that among patients who have insurance, almost 40 percent suffered from ‘severe financial strain’ which was defined as re-mortgaging one’s home to afford medication, borrowing money from friends, or using up their life’s savings. Another study found that Genentech’s hit antibody drug, bevacizumab (Avastin), had almost a zero percent chance of being cost-effective for lung cancer patients (actually, it was a 0.2 percent probability). That hasn’t stopped the growth of cancer drug spending.”
Digital healthcare pioneer Eric Topol suggests that this costly scenario may be temporary. As healthcare becomes more targeted and consumer-oriented (as opposed to disease and subject-oriented), driven in large measure by increases in our understanding of the biology of diseases, the costs of developing treatments that can directly benefit an individual will go down. Ultimately prices will follow costs down, but until that happens, we still face a hefty cost-effectiveness question.
As a health economist, I believe that cost-effectiveness is not something you add after a product launch. Instead, the team creating any new device, diagnostic or treatment must incorporate cost-effectiveness at the beginning. This extends beyond reimbursement issues into whether the innovation will result in improved patient outcomes at a reasonable price. This is not as extreme as a purely financial ratio to determine value. It is, rather, a holistic view of how well a patient comes out from these treatments, both healthily and financially.
Do you think cost-effectiveness can be accurately measured in today’s environment? Will future, genetic-based treatments increase value? How would you incorporate cost-effectiveness into an innovative treatment or device? Would love to know your thoughts.
Tags: cancer treatment, cost-effectiveness of cancer treatment, health economist, healthcare innovation, innovative treatment, targeted healthcare
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There’s a joke that’s often shared by medical students: “What’s the difference between God and a doctor? God doesn’t think he’s a doctor.” Regardless of your spiritual orientation, the line illustrates the lofty perch (and decision-making power) occupied by physicians in today’s healthcare settings. But, as we at Popper and Co. have discussed, a new wave of consumer power may eventually topple this perch.
A recent story in the Wall Street Journal by author Doc Searls, “The Customer as a God,” focused on the growing power of customers using electronic devices for daily communication, shopping and other activities. Most current product development, the article points out, focuses on improving the supply of products to the customer, not involving the customer in making those products. This however, is changing. The story projected a future in which people use their devices to pick out clothes, replace parts for appliances, and shop for products—all unencumbered by invasive marketing tracking methods, corporate service plans, and other systems that, as Searls says, “tend to herd customers as if they were cattle.”
I saw a number of parallels between this view of today’s and tomorrow’s consumer electronics world and the healthcare industry. In the consumer electronics world, internet/wireless service providers determine how the consumer will use devices and control the internet that connects them. Meanwhile, in healthcare, physicians and hospitals “provide” the care that patients are told to accept. Fast forward about 10 years, and the providers are no longer in charge—the consumers are.
Just as in the consumer electronics world, healthcare is not yet completely in the hands of consumers. As digital health pioneer Eric Topol said, the medical establishment is replete with entrenched institutions and individuals resistant to this type of change.
“We are moving away from information asymmetry, ‘Doctor Knows Best,’ to a true democratization of medicine,” he said. “Like in the 1400s with the Gutenberg printing press, people learned to read—that is coming with each individual’s key medical data, like blood pressure, glucose, heart rhythm, displayed on their smartphones.”
While many refer to “personalized medicine” as the treatments and diagnostics that arise from our advancing knowledge of biology to an individual level, the term is starting to mean something else; the consumer demand for treatments that are tailored to their personal needs and aspirations (as well as a tailored treatment for disease).
The “inflection point” of medicine—where portable devices, low-cost genetic screening, and a wealth of accurate online health information all merge to allow a consumer to call the shots—isn’t here yet, but it’s close. Perhaps the ancient Greek writer Homer had it right in The Iliad, where men (and a woman or two) fought alongside the gods.
Do you see the same future of healthcare? How close are we to medicine’s inflection point? What would it take to create a new consumer power? Please share your views with us.
Tags: consumer power, digital health, electronic devices, Eric Topol, future of healthcare, medical devices, mHealth, mobile health
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After attending the 2012 AusMedTech (Australia Medical Technology) national conference in Sydney, I decided to visit China to observe for myself how healthcare is practiced—and changing—in that country.
At first glance, Shanghai looks much like a bustling, Westernized city. As the world’s largest metropolis, it is more than twice the size of London or New York—and is a hugely crowded urban area where 18 million people live vertically in forests of high-rise residences. And these tight living quarters helped provide a glimpse of how China’s residents are managing their healthcare, with a mix of traditional and “Western” medical methods.
Parks are a large part of Chinese urban life. They are manicured and well used. At Fuxing Park, in Shanghai’s French Concession section, I found the grounds—at mid-morning—filled with locals, practicing in a number of routine wellness activities: Tai Chi, badminton and karaoke. Each activity was practiced as a group, with participants orchestrating their movements. Karaoke may not strike one as a wellness activity, but the breathing, singing and positive thinking (it was conducted under a large banner that said “Happy Everyday”) are all possible elements of achieving wellness.
China’s health services merge Western, “scientific” medicine with traditional Eastern healing methods; the government runs most hospitals and medical research facilities, while trying to integrate and train medical doctors on both types of medicine. The efforts do appear to result in a more holistic outlook on healthcare; focusing on wellness, community influence on disease management and healthcare delivery, and being connected to a social group. I saw some of these techniques merging in Fuxing Park. Karaoke and Tai Chi were practiced next to stands where individuals could get their blood pressure taken, for example. I also noticed that many people getting their blood pressure monitored were quite heavy, part of a growing problem in China where obesity, heart disease, and other so-called “industrial” diseases are increasing.
While in the Western world, there is much talk (including at Popper and Company) about the promise of the consumer power arising from mobile devices and access to information and healthcare providers, consumer power in China comes from the power of the community and people’s ability to take wellness activities into their own hands. It struck me that this is a unique consumer power: to reach a state of mind, a state of social connectedness, to create a state of wellness.
Could this kind of collective consumerism or community-consumer system work in the United States or Europe alongside the emerging individual consumer? Could the power of the collective provide valuable approaches to widespread healthcare problems, like heart disease or diabetes? I’d love to hear your thoughts.
Tags: china health, china health services, china healthcare, collective consumerism, community-consumer system, shanghai health
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In a previous blog post reporting in after the 2012 AusMedTech (Australia Medical Technology) conference, we discussed the need for healthcare technology companies to quickly demonstrate how their innovations add value.
My presentation at AusMedTech stressed four important elements that are driving the industry now, and that will continue to do so over the next decade. We believe that addressing each of these areas – as outlined below by me and my colleague Ken Walz – will be vitally important as healthcare innovators seek to demonstrate the value of their technologies.
Imperative of operational efficiency
Caroline: Cost constraints in both developed and developing countries are making efficient operations a requirement. Emerging markets and non-healthcare industries like manufacturing or hospitality are more quickly embracing methods that enhance efficiency; we could learn much from them.
Ken: There’s been a greater scrutiny of inefficiencies in healthcare in the past few years. This has led equally intense efforts to develop disruptive innovations in healthcare (for example, smartphone monitoring, or a consumer healthcare ranking system). What’s encouraging is that more life science and healthcare organizations are working to develop and incorporate these disruptive innovations into their operations.
Importance of the consumer
Caroline: Consumer power is only going to grow, fueled by smartphones and more widespread internet access. Consumers are demanding more transparency and they are comparison shopping. This will encourage more consumer-oriented companies to enter the healthcare market; new methods of reaching, educating, and retaining consumers will be crucial to success.
Ken: We have focused on the issue of growing consumer power in previous posts, such as a recent entry by Caroline chronicling the demystification and democratization of healthcare. Consumers will be less willing to accept inefficient healthcare delivery, especially as their other consumer experiences become more efficient and convenient.
New biological insights
Caroline: Genomic sequencing and other new tools have helped us understand biology like never before. Genomics, in particular, opened the door to personalized treatments. Understanding proteins and cellular functions is also providing critical insights. The lightning-fast pace of discovery in this area is showing no signs of slowing down; hence our significant focus on and interest in this area.
Technology
Caroline: Information technology makes healthcare information delivery possible—it also enhances services and is the bedrock of the consumer power revolutionizing healthcare. Technology that was developed for other industries has become incorporated into healthcare. This is what led us to add Paul Sonnier to our team as head of Popper and Company digital health strategy.
Ken: This application of technologies from other industries goes hand in hand with business models, also borrowed from other industries, which are now applied to healthcare. Leveraging these ideas and technologies can maximize return on investment, which goes back to improving operational efficiency.
Do you think these four points are the key healthcare technology drivers today? Are there others? How willing is the industry to accept “outside” technologies and ideas? Share your thoughts with us.
Tags: ausmedtech, biological insights, health innovation, health innovation drivers, health technology, healthcare innovation, importance of the consumer, operational efficiency
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