Author Archives

John Irvine

A Whiff of Market-Based Health Care Change

Tuesday’s announcement about Amazon, Berkshire Hathaway and JPMorgan (A/BH/JPM) was short on details. The three mega-firms will form an independent company that develops solutions, first, for their own companies’ health plans and then, almost certainly, for the larger health care marketplace. But the news reverberated throughout the health care industry as thoroughly as any in recent memory.

Health care organizations were shaken. Bloomberg Markets reported that:

Pharmacy-benefit manager Express Scripts Holding Co. fell as much as 11 percent, the most intraday since April, at the open of U.S. trading Tuesday, while rival CVS Health Corp. dropped as much as 6.4 percent. Health insurers also fell, with Anthem Inc. losing as much as 6.5 percent and Aetna, which is being bought by CVS, sliding as much as 4.3 percent.

As expected, these firms’ stock prices rebounded the next day. But you could interpret the drops as reflections of the perceived fragility of health care companies’ dominance, and traders’ confidence in the potential power of Amazon’s newly announced entity. Legacy health care firms, with their well-earned reputations for relentlessly opaque arrangements and egregious pricing, are vulnerable, especially to proven disruptors who believe that taming health care’s excesses is achievable. Meanwhile, many Americans have come to believe in Amazon’s ability to deliver.

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What Kmart’s Settlement Says About Health Care Fraud

David A. Hyman
Charles Silver

Perhaps because its size was so small—“only” $59 million—the press paid little attention to Kmart’s recent settlement of False Claims Act (FCA) litigation in which it was accused of overcharging Medicare, Medicaid, Tricare, and private insurers for generic drugs.

But it is worth discussing both the conduct that got Kmart in trouble and the way that conduct came to light.  The former shows how dysfunctional the market for pharmaceuticals is and the latter nicely demonstrates the severe limits on the government’s ability to police fraud and abuse.

The nub of Kmart’s scheme was that it sold generic drugs to cash-paying customers at very low prices while charging governmental payers vastly more.  For example, Kmart sold a 30-day supply of a generic version of a prescription drug for $5 to cash customers, but then billed Medicare $152 for that same drug.  Because pharmacies can only bill the government for their “usual and customary charges,” Kmart was pocketing millions of dollars that it was not entitled to.

When it announced the settlement, the DOJ said, as it always does, that “[t]he government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud.”  In truth, both the success of Kmart’s scheme and the settlement show exactly the opposite: The government can neither prevent nor police even the most obvious forms of health care fraud.  We make this point at length in our forthcoming book, Overcharged: Why Americans Pay Too Much For Health Care.

Consider a few facts.  While public payers were happily paying Kmart’s inflated bills, they were also receiving bills from Walmart that accurately stated the far lower market price for the very same drugs.  When James Garbe, the pharmacist who discovered what Kmart was doing, had a prescription for 90 days of blood pressure medication (Lisinopril/HCTZ) filled at Walmart, it billed the government $2—the difference between his copay ($10) and Walmart’s cash price ($12).  When he had the exact same prescription filled at Kmart, it billed the government $50.84, even though the charge should only have been $5 because Kmart’s cash price was $15.  No one in the government (or at the private carrier that administered the part D program for Medicare) wondered why Kmart’s charge was 25 times as much as Walmart’s, even though the two stores compete directly with one another.

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Ambergan = Amazon + Berkshire Hathaway + JPMorgan

Dear primary care doctor, Jeff Bezos is about to devour your lunch.

All of it. And then he’ll eat the table, the plates, the napkins and the utensils too, so you’ll never have lunch ever again. Oh yeah, and they’ll also finally disrupt and fix health care once and for all, because enough is enough already. Mr. Bezos, it seems, got together with two of his innovator buddies, Warren Buffet from Berkshire Hathaway and Jamie Dimon from J.P. Morgan, and they are fixing up to serve us some freshly yummy and healthy concoction.

Let’s call it Ambergan for now.

This is big. This is huge. It comes from outside the sclerotic “industry”.

And it’s all about technology. The founders are no doubt well versed in the latest disruption theories and Ambergan will be a classic Christensen stealth destroyer of existing markets. When the greatest investor that ever-lived combines forces with the greatest banker in recent memory and the premier markets slayer of all times, who happens to be the richest man on earth, all to bring good things to life (sorry GE), nothing but goodness will certainly ensue.

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What Is a “Co-Presidency”? Would It Work? Biden-Obama 2020

Why would the last certifiably sane occupant of the White House consider a run for the Vice-Presidency, an office that Vice-President John Nance Garner derided as “not worth a pitcher of warm spit” and John Adams scorned as “the most insignificant office that the invention of man contrived or his imagination conceived?” In a word, Trump. The former President told voters in 2016 that his legacy and life’s work would be threatened by a Trump presidency. That would be doubly true of a second Trump term.

Federal law poses no obstacle to the Democrats’ dream ticket. The 22nd amendment, ratified in the wake of FDR’s four electoral victories, prohibits the election of a president to more than two terms. No provision prevents a former president from assuming the office through succession nor from running for the vice-presidency. Securing Obama’s assent for the race would likely require Biden to offer him a virtual “co-presidency.” The notion has been raised before. In 1980, Ronald Reagan, also facing a challenging run against an incumbent president, briefly considered former President Gerald Ford for his running mate and “co-president.” Ultimately, Reagan lacked sufficient comfort with his former opponent to test such uncharted political waters.

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Bigger is Not Always Better: How Consolidation in Health Care Hurts Patients

The recent news that U.S. retail giant CVS Health will purchase insurance giant Aetna, in part to gain millions of new customers for its prescription drug and primary care businesses, is another ominous sign for patients.  Patients should worry about all the continued consolidation in the health care industry, whether it is Walgreens buying Rite-Aid to increase their pharmacy clout; Anthem’s ill-fated attempt to purchase Cigna to become an insurance monopoly; or hospital systems like Partners Healthcare in Boston trying to buy the hospitals and physician networks in and around its service area to control patient flow and increase market share.  Consolidation often limits competition, and when that happens in market-based systems especially the result, says good research, is often that the cost of health care goes up.  This does not benefit patients, who increasingly are paying more out of pocket for their insurance and for the services they receive from doctors, hospitals, labs, and drug companies.

The Affordable Care Act did little to encourage greater competition in the health care marketplace.  That was probably by design, since those creating the legislation held an implicit assumption that the bigger players in each of the different industry areas like insurance, pharmacy, and hospital care could deliver given the size of the insurance expansion the ACA would promote.  As we see from the existing premium inflation on the exchanges across the country and with prescription drugs, and the continued long delays in people’s ability to access care, this assumption was not accurate.  To the contrary, the ACA’s focus on new and unproven structures like accountable care organizations; new payment models that reward scale and resource investment in things like information technology; and rewarding those organizations that have the most comprehensive performance measurement infrastructures has encouraged the kind of profit-oriented consolidation in the industry that does less to improve the overall system.  Also, given the increased squeeze by payers like Medicare on payments to hospitals, for example, mergers and acquisitions are a natural yet dysfunctional corporate response to higher levels of uncertainty in the external health care environment.

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MedPAC’s Repeal And Replace MIPs Campaign Will Not End Well

“[T]his is tough. I don’t know how to proceed…. Lord help the staff who must bring all this together.”

That was how Dr. Francis Crosson, chairman of the Medicare Payment Advisory Commission (MedPAC), reacted to the commission’s baffling discussion at its January 11 meeting moments before it voted 14-2 to replace the Merit-based Incentive Payment System (MIPS) with something called the “voluntary value program” (VVP) (pp. 167-169 of the transcript ). MedPAC’s staff must now summarize the January 11 discussion and prepare a report for inclusion in MedPAC’s March 2018 report to Congress.

MIPS is a pay-for-performance (P4P) scheme imposed on the traditional fee-for-service Medicare program by an act of Congress known as MACRA. MIPS requires that CMS measure performance on cost and quality at the level of the individual doctor, something MedPAC recently acknowledged can’t be done after spending 13 years claiming it could be done.

The portion of the commission’s January 11 discussion that focused on the repeal of MIPS was not hard to understand. The commissioners agreed that MIPS cannot work for multiple reasons, the most important being that the pools of patients treated by individual doctors are too small to permit accurate measurement of cost and quality. “MIPS will not succeed in helping beneficiaries choose clinicians, helping clinicians … improve value, or helping the Medicare program to reward clinicians based on value,” explained MedPAC staffer Kate Bloniarz. (pp. 116-117) Only one of the 16 commissioners present (Dr. Alice Coombs) disagreed with that statement.

Zen and the art of summarizing doubt

It was the commissioners’ discussion about what to replace MIPS with that will be very difficult to summarize. That’s because the discussion consisted largely of expressions of doubt about the VVP, which is essentially a proposal that all doctors who treat Medicare patients either join a “group” (aka ACO) or lose 2 percent of their Medicare payments. The discussion, which followed a vague opening presentation by two MedPAC staff members, consisted of numerous questions posed to the staff that neither the staff nor Dr. Crosson could answer. Because so many issues remained unresolved, ten of the 16 commissioners (one was absent) expressed reservations about voting for the VVP. How does the staff or anyone else summarize a discussion like that? How does the staff explain why the commission voted to recommend the VVP to Congress when a majority of commissioners have multiple concerns about it?Continue reading…

AbStats, VR & the Future of Digital Health : A Conversation with Brennan Spiegel

In my new capacity as the Law and Technology Editor for The Health Care Blog, I had the opportunity to interview Dr. Brennan Spiegel, the Director of Cedars-Sinai Health Services Research, about his new digital health innovations as well as his views on the medtech and data privacy landscapes.

Dr. Spiegel leads an interdisciplinary team which investigates how digital health technologies such as wearable sensors, smartphone applications and virtual reality can strengthen trust among patients and doctors, improve outcomes and cut costs.

Below is a transcript of selected moments of our conversation. For further thoughts, I encourage you to attend the upcoming conference entitled “Virtual Medicine” at Cedars-Sinai on March 28-29th, 2018 where Dr. Spiegel and other digital health leaders will gather to discuss the medical VR revolution.

Dr. Spiegel on AbStats, a new medtech device developed by his team to track the gastrointestinal rate – a new vital sign:

JC: Congratulations on AbStats. How would you quickly describe AbStats and what it’s meant to do to revolutionize care?

BS: Yeah, sure. So AbStats is one of the few things we have going on now at Cedars-Sinai and it’s exciting. AbStats is the first FDA cleared wearable for the gastrointestinal tract. It’s a digestion monitor that measures how quickly the GI system is moving.

It is essentially a new vital sign. We call it the intestinal rate. Just like the heart rate or respiratory rate, intestinal contractions have their own natural rhythm to them just like other parts of the body and AbStats has a small microphone in it and it listens to the sounds and vibrations of digestion. It can count the number of intestinal contractions per minute so the rate can be used for lots of different purposes.

We initially tested it and published two papers validating it in post-operative management after surgeries.

After an operation, one of the most common problems is that the bowel shuts down and it’s hard for people to eat and people can get sick and nauseous but at the same time hospitals want to get people out the door as fast as possible. So they try to advance their diet as quickly as possible but there’s really never been guidance on how to do that so we developed AbStats initially to help surgeons,patients and nurses decide how quickly to advance diet after an operation. We demonstrated that the sensor can accurately predict who is getting into trouble and who is not in terms of their stomach function. So that was the first opportunity.

We then wanted to expand beyond that to start thinking about AbStats for calorie management in general. The idea here is that people eat food not necessarily because they’re hungry, or because the natural rhythms of digestion call for it, but rather because there’s food available or there’s a social environment that is supportive of eating. They may also be stressed or depressed. The cognitive component of eating drives a lot of our behaviors and ultimately can lead to obesity and other problems of digestion and ingestion. The idea behind AbStats here is it could provide some objective feedback to tell the user where their body is at any moment in time. What we’re developing is a stoplight so I could tell you if you’re in the red zone, the yellow zone or the green zone for eating okay.

If you’re still digesting your last meal and you see the bunch of food on the table at six it will tell you that it’s too early to eat because you’re still digesting now. You still might eat anyway, but you will at least still have feedback.

Similarly, if you’re trying to lose weight you might want to lose weight by eating less, run after and set a goal and track your digestion throughout the day so you can tell if you’re on track or if you’re overshooting your projections for the day. That’s something we’re working on right now – the technology and the apps to support calorie management.

JC: That’s fascinating.So you view AbStats as both a diagnostic tool and as a commercial product. In that case, do you view it primarily as something that you can leverage as a commercial product much like a Fitbit or something that we’re packaging along with a Fitbit?

BS: Yeah, so it actually has a diagnostic application. It can also be used as an outcome measure to see if treatments are actually working or not.

So, I happen to be a gastroenterologist and we treat a lot of people with medicines that impact their intestinal function so this is also a way to monitor the effect of treatments but also consumer facing products like the “Fitbit for the stomach”…

It’s like with Fitbit, you know you want to get 10,000 steps per day? It’s sort of a traditional goal and, like that, we can use AbStats to calibrate their digestion rate and make sure they don’t overshoot their eating targets, so yeah in that sense, it’s like a Fitbit for the stomach.

JC: That leads me to the next question which is what is your goal with this technology? Is it to get purchased by Fitbit and create a personal diagnostic machine or are you waiting and seeing and have you not thought that far ahead?

BS: I’ve definitely thought a lot about it and, you know, what’s important point for me is I’m a researcher and to me it’s vital to have scientific data and research, peer reviewed research, to support our claims. This is an FDA cleared device – we had it cleared in 2015 but we’re still working on it.

It’s actually relatively easy to get FDA clearance. The hard part is doing all the science and understanding that it’s not just the technical performance but the behavioral component – how do you actually get people to change their behaviors, how do you integrate this within care flow for doctors and patients and nurses.

That’s the stuff we’ve been working on the last few years.

JC: Absolutely. The next thing I wanted to ask you about is the FDA process. I can understand the attorney’s point of view but what sort of other impediments did you face? What was the process like when innovating this product? I know that you have GI Logic and institutional collaborators – what does it actually look like to get this kind of medtech innovation out there?

BS: Sure, I mean it’s been a protracted process. It’s interesting because there’s so many different stakeholders involved that it’s important to keep the scientific goal in mind from the beginning. What I mean by that is, you know, it’s very convenient to develop a medtech device, make some claims about it and go out and sell it without ever having really tested it in the clinical trenches or with the end users’ understanding their preferences, attitude, knowledge, beliefs, and so on. And I say all that because that’s my orientation. So from the beginning, as business partners have gotten involved I’ve always emphasized that until we have the scientific data we need I’m not going to support scaling this thing out in the community.

JC: That’s not what everyone wants to hear.

BS: Right, absolutely but I’m not going to stand by it until I feel comfortable that it does what it says it’s going to do even if it’s FDA cleared. We have to take the time to do it right because this is not a game – we’re talking about healthcare that enables life and quality of life.

JC: And how has that process been for you? Obviously there’s a lot of med tech things out there with all kinds of claims coming from Silicon Valley. How has it been with your partners putting science first and has it been a challenge getting that mentality out there?

BS: There have been challenges but we’ve also found it’s actually worked out. You know, we have found an investor and a company that it has a strategic alignment and at the same time recognizes the value of science and is willing to support that science and be patient with us because these things take time. It’s actually been really gratifying to find people who see the long term play. There’s a risk involved in that because maybe it does what we think it’s going to do and maybe it doesn’t.

JC: I can imagine it’s also a high-risk high-reward sort of thing because once you’ve done all this legwork it’s much easier to market after the fact as well. It’s a lot easier to make claims on a legal basis without having to constantly worry whether somebody’s going to try to poke holes in it or sue you.

BS: You’re right it is high-risk, high-reward. I think about how we’ve gone about this and it seems like it’s the exact opposite of much of what I’m seeing out there. What I mean by that is what I often see is a device or product is developed and then it goes looking for an application and they try to figure out where is this product going to work, who is it going to serve, what problem will it solve and then they sort of slot it in and hope it works without ever thinking about , in many cases, achieving FDA clearance, or the science or end-users.

We’ve gone about it the opposite way. The first thing we did is we identified an unmet need. As a gastroenterologist, I saw we didn’t have any way to non-invasively monitor human digestion, which is a huge unmet need for us, so what about developing this thing? When I was at UCLA with our engineers it became an academic project and we developed the technology quite quickly and it was relatively trivial to create the sensor. The hard part was then doing the work of testing it out with patients at different hospitals and we got FDA clearance.

I mean I don’t know if there’s another product I can think of that gets FDA cleared and still two plus years later is not being sold. Look around and it’s only if something looks successful maybe we’ll get it cleared and then expand into other markets.

JC: Because the FDA clearance process is relatively trivial do you think there’s a problem in the regulatory landscape? Do you do you think it’s the government’s role to examine the utility of the tech before it hits the shelves or do you think that’s a private market matter?

BS: Right. You know, that’s as much a political question as it is sort of a scientific question and I think that it’s probably beyond what the government needs to regulate. The government, the FDA in particular, wants to know if there’s a new device how it compares to a predicate device. In our case, all we’ve said is that we’re simulating an electronic stethoscope essentially.

The hard part with medtech is generally not the technical and safety issues, although it can be, but the government’s job should be to figure out that we’re not going to hurt people and that the device is going to do what it says it’s going to do.

But just think about something like a blood pressure cuff. What I mean is that a blood pressure cuff is safe and it does what it’s supposed to do – it measures your blood pressure in millimeters of mercury and the number comes off of it. Well, the number unto itself doesn’t mean anything unless and until it’s been validated. Like, what does that mean you have 122 millimeters of mercury of pressure in your arteries. Unto itself that means absolutely nothing as the data point. There’s a difference between data and information – a difference between information and knowledge – and a difference between knowledge and wisdom – and the hard part, which is not the FDA’s chore, is to figure out how do you go from data to information to knowledge to wisdom and my point is that’s up to the investigators and ultimately up to the market to determine.

But, from a scientific standpoint we have to figure out how to provide value. We know we can measure, we can do it safely and accurately but for me to say your intestinal rate is 6mm what does that mean? So, educating the marketplace as well is a huge part of the endeavor.

On VR and the potential to revolutionize patient recovery:

JC: That brings me to the next part of what I wanted to talk to you about. I did a little bit of due diligence and read up on what you’ve been doing as a leader in the VR space. So what about that technology excites you?

BS: Oh yeah, we’ve been very excited. So, when I first used virtual reality it was a mind-blowing experience and it was clear to me it can nudge the brain, even hijack the brain – a more negative connotation – and it was powerful so I thought there’s got to be a way we can use this for positive things so that we can transport patients from jail cells or a hospital room to a beach or you know to swim in the ocean or whatever.

So, we’ve tried that and it’s clearly worked and the key is we’ve done clinical trials. We’ve published a number of trials now and we’ve just completed our largest trials to date which is a randomized controlled trial of 120 patients in the hospital and seen over a 50 percent reduction in pain with VR compared to about 10 to 15 percent with a control condition.

What we’re now doing is try and understand can we reduce opioid prescribing in particular and are starting a new study with Traveler’s Insurance because they’re at the tip of the spear of the opioid epidemic and can we reduce opioid exposure amongst worker’s comp patients.

So these are examples but it all requires science and hard-fought research to figure out if this works or not. It’s wonderful but what’s exciting to me is this is an innovative technology that clearly affects the mind and meaningful ways that are measurable and it’s drug-free so there’s a lot of advantages and a lot of the things that you can see using like calm spaces and you in the VR environment, those are specifically tailored as a medical device.

JC: Do you think that VR needs to go through that sort of clinical testing? Obviously, you’re doing the clinical testing but do you think it needs to be regulated in any way or can you just get by using off-the-shelf tools to help people?

BS: It’s, yeah, a little bit of both. So, okay off-the-shelf is fine and we use off-the-shelf experiences and visualizations right now and that’s fine. But with pharmacotherapy if a developer or company wants to make a health claim like, “I’m going to reduce blood pressure with this intervention” or “I’m going to reduce anxiety”, yeah, it could be subject to the same rigorous evaluation as pharmacotherapy.

In fact, we’ve just completed and will soon announce the results of an international working group of VR experts who are putting together a regulatory framework for how to evaluate and test new VR treatments.

What we will propose in this document, which is going being submitted for publication now, is three phases of clinical trials just like Phase One, Two and Three for pharma companies – we’re calling them VR1, VR2 and VR3 trials – and VR1 is really all about human centered design principles. This means working with the end-users, the patient’s themselves and finding out what their preferences are and using best practices and human centered design to create the right experiences. VR2 is exposing them to patients in a clinical environment in an uncontrolled small pilot test and VR3 is a properly powered randomized control trial in a clinical environment.

So that’s what we think is required for VR treatments to be at least scientifically valid.

JC: If this isn’t made mandatory by regulation or by regulatory agencies, how do you get the money for that, to conduct the testing, if off-the-shelf can work? Should pressure to be follow VR principles come from funders, should it come from government, is it private industry’s responsibility – where do you think the money should come from for testing?

BS: Yeah, the money for testing… Well, it just depends. I mean that’s a business decision so if a company wants to make an FDA claim or sell an approved project and product they have to pay for it just like a drug company does. But that may not be necessary right, they might just not make the claims but that means they have to be careful how they market and talk about their treatment.

You know, to make a claim that something is going to have a health effect, you’ve got to show it. That’s the problem. People do it all the time but you know if we’re talking to doctors and nurses and patients and providers we’re going to ask questions.

I guess that’s part of it in the sense that people make claims all the time and I get that enforcement has been lacking.

There’s all sorts of medicines we use that are not FDA approved. We use them all the time but we don’t need to go to the effort of getting it FDA approved because no one’s trying to convince doctors at this point that something like aspirin is good for you. (Editor’s Note: Aspirin was grandfathered in as an existing drug by the 1938 Food, Drug, and Cosmetic Act). That may end up being the case for a lot of VR treatments.

But from a business development standpoint, it’s tough to make a living in VR. There’s all this free stuff that might work just as well as your product. Unless you think your product’s better but then prove it.

JC: So, do you wish that there was better enforcement by, say, the FTC about claims that are made about products, particularly claims of health benefits? Because there’s a lot of claims that are out there.

People sometimes say all kinds of things to sell their product with very dubious backing and no trial… Do you think there should be a policeman for that kind of thing?

BS: Right, so I don’t have an opinion about whether it should be more rigorous enforcement. Just consumers, and certainly health care professionals need to be smart about the claims made when hearing about any health technology – VR or otherwise.

On the Importance of Distinguishing Health and Fitness Devices from Clinical Devices and Dealing with Data Privacy Concerns:

JC: Last couple of things. I’ve read that you’ve been using and bundling Fitbits in order to track activity among patients during recovery while reading through your PLOS One abstracts.

My work shows that people are kind of weary about giving out their personal fitness tracker information.

One of the ways I’m acquainted with The Health Care Blog is through my work speaking to Health and Human Services about the regulatory regime around personal fitness trackers and biometric data and how it’s not really well regulated in the United States.

I was just wondering how you found in your usage if people’s attitudes have evolved regarding data privacy and how you use Fitbits on a day to day basis.

BS: General consumers and patients won’t generally use the Fitbits unless it’s clear to them why they’re using it and how their data is being employed to make decisions or their well-being in addition to privacy concerns.

However, when we use it in the context of defined protocols we’re seeing excellent adherence. We have a study right now where we’re working with cardiac patients to see if we can predict who’s going to have a heart attack before it happens. To achieve that requires pretty intense monitoring of a lot of different parameters, biomarker parameters, physiologic parameters, quality of life parameters and in that study we’re using Fitbits.

We have 86 percent compliance among our clients now and the difference there is that patient clearly understands why they’re using the Fitbit, how the data is being collected and used so we’re seeing excellent adherence. The other important thing is we have staff who talks with the patients and troubleshoots the device. They really put in the time and energy to explain why we’re doing this and that’s what works.

JC: Is the data self-reported or do you have access to their to their online profiles? How do you get this information?

BS: in that case we’re using a company called Fitabase, they have an API and they just serve up the data directly so we have direct access 24/7 into all those patients’ activity data. It’s through HIPAA compliant channels, IRB approved and so on and it’s been very successful.

JC: How often does it data security actually come up when talking to people?

BS: Not that often. I’m going to guess about fifteen percent of the time they bring it up actively though they may think about it but not express it. But I haven’t formally audited that figure and it’s a tricky question.

People may be uneasy about data privacy but they do it anyway because it brings benefits like doctors understanding exactly what’s going on with your recovery.

JC: This brings me to my final couple questions. As an attorney and I’m curious to hear your thoughts on how you feel about that the need for more data from a medical professional point of view with how individuals value their data privacy.

You mentioned that 15 percent actively ask about their data so what are your frustrations with the narrative that’s out there about big companies collecting your data and monetizing it? What can we do better in terms of medtech and the data that’s collected to reassure people that it’s not being used for nefarious purposes?

BS: Yes, I’ve got a few thoughts about that. The first thing is I would distinguish health and fitness data from actual clinical data. The latter is data being used for clinical decision-making in a healthcare system and there’s still not a whole lot of it.

There’s an awful lot of consumer facing products like Fitbit and Apple watches and so on that aren’t necessarily FDA cleared and are widely used to measure features of health but they’re not necessarily being evaluated or analyzed by credentialed clinicians and in that world.

Patients or users know that the companies have access to the data in different ways and to me that’s a different environment than the environment where I operate. I’m operating within the context of a healthcare system. We have a panel of patients we’re trying to take care and do it as effectively as possible with the least amount of cost as possible and provide value.

And in that environment the narrative is very different so I don’t know that I’m answering your question other than know you I am splitting it into two different situations.

JC: No, that’s great because the next thing that I can ask about is any frustrations you may have about medtech. Do you feel that some of medtech is or the language behind it is being hijacked by health and fitness data that’s out there?

People that aren’t FDA cleared are dominating a lot of the news cycles right now.

BS: I think so. I don’t know that I’d go so far as to say hijacked or that I feel that strongly about it. Until health care systems and investigators/researchers can demonstrate the value – and I truly mean value from a health economic standpoint of these programs – we can’t really complain about messages being hijacked or misconstrued through these sort of health and wellness app platforms.

In fact, we have a paper that will be published in the next couple of weeks in the very first seminal edition of Eric Topol’s new journal, Digital Medicine, and in this new journal we have a meta-analysis where we are going to publish of all of the randomized control trials to date of using wearables versus a control condition in healthcare and the upshot is there’s no statistically significant benefit so far not using wearables to take care of people in terms of improving their health outcomes.

To me, we need to focus on figuring out whether when and how to use this technology rather than marketing messages or shaping public perception. The public will perceive it how they like once we figure out how to access technology.

We’ve definitely over-promised and under-delivered in my opinion on the claims for digital health broadly but I’m still a technophile. I can also just be techno-skeptical as well.

Jason Chung is the Law & Technology Editor at The Health Care Blog. He also writes on the intersection of health, technology and sports as the senior researcher and attorney at NYU Sports and Society, a think tank dedicated to the study of sports and social issues. He tweets @ChungSports.

Pharma’s (Big) Data Problem

C.P. Snow, author of “The Two Cultures”

Despite (some might say, because of) a raft of new biological methods, pharma R&D has struggled with its EROOM problem, the fact that the cost of successfully developing a new drug, including the cost of failures, has been relentlessly increasing, rather than decreasing, over time (EROOM is Moore spelled backwards, as in Moore’s Law, describing the rapid pace of technology improvement over time).

Given the impact of technology in so many other areas, the question many are now asking is whether technology could do its thing in pharma, and make drug development faster, cheaper, and better.

Many major pharmas believe the answer has to be yes, and have invested in some version of a by-now familiar data initiative aimed at aggregating and organizing internal data, supplementing this with available public data, and overlaying this with a set of analytical tools that will help the many data scientists these pharmas are urgently hiring to extract insights and accelerate research.

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Mayo Clinic: Transparency, Deception, and Ice Cream

The Mayo Clinic in Minneapolis has held the top spot on the U.S. News and World Report hospital rankings for the past two years. That’s an impressive accomplishment. But one despite the closure of community hospitals that negatively impact rural Minnesota towns.

Citing staff shortages, reduced inpatient censuses and ongoing financial challenges, Mayo decided to move all inpatient services from the hospital in Albert Lea, Minnesota, including labor and delivery, to a town more than 20 miles away. In response to pleas for reconsideration, Mayo Clinic Vice President Bobby Gastout callously remarked that 23 miles is not ideal — but “people are driving 23 miles to get their favorite ice cream.”

A grassroots group, Save Our Hospital, galvanized the community by answering “we like our ice cream and inpatient care in Albert Lea.”

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The UPMC-Highmark Brawl Spills Into Philadelphia’s Backyard

The UPMC/Highmark rivalry continues to open new fronts in Pennsylvania. Highmark’s response to UPMC is differentiated in two ways: first, Highmark is using a coalition-building strategy and, second, it is controlling its exposure to big in-patient assets; in contrast, UPMC is building an integrated, single-brand system and happily taking over hospitals (and building more) along the way. When UPMC and Highmark make major investments in a region, local systems will be caught in the capex arms and feel the pressure to affiliate. Credibly threatening to respond in kind may defuse the arms race. But unaffiliated systems may struggle to find partners willing to bankroll a battle with both Highmark and UPMC, leaving no option for unaligned systems than to pick sides. Philadelphia systems – so far largely neutral to Highmark vs. UPMC – should be able to stay neutral as the fight develops in their western backyard. If the battle moves into northeastern Pennsylvania or jumps into south Jersey, however, the Philadelphia systems will have to develop a response.

The competitive rivalry between Highmark and UPMC is truly epic. Long ago – when Highmark largely focused on insurance and UPMC largely focused on care delivery — they were good partners in the Pittsburgh market. But as each has become more vertically integrated – with Highmark acquiring the West Penn Allegheny system and UPMC’s health plan buisness growing – they have since become bitter rivals. The competition has expanded out of Western Pennsylvania and into the rest of the state. 

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