In a recent essay, VIVIO Health’s CEO Pramod John guides us through four sensible drug policy changes and supporting rationales that could make drug pricing much fairer. Reading through it, one is struck by the magnitude of the drug manufacturing industry’s influence over policy, profoundly benefiting that sector at the deep expense of American purchasers. As Mr. John points out, the U.S. has the world’s only unregulated market for drug pricing. We have created a safe harbor provision that allows and protects unnecessary intermediaries like pharmacy benefit managers. We have created mechanisms that use taxpayer dollars to fund drug discovery, but then funnel the financial benefit exclusively to commercial interests. And we have tolerated distorted definitions of value – defined in terms that most benefit the drug manufacturers – that now dominate our pricing discussions.
The power of this maneuvering is clear in statistics on health industry revenues and earnings. An Axios analysis of financial documents from 112 publicly traded health care companies during the 3rd quarter of 2018 showed global profits of $50 billion on revenues of $636 billion. Half of that profit was controlled by 10 companies, 9 of which were pharmaceutical firms. Drug companies collected 23% of the total revenues during that quarter, but retained an astounding 63% of the profits, meaning that the drug sector accounts for nearly two-thirds of the entire health care industry’s profitability. Said another way, the drug industry reaps twice the profits of the rest of the industry combined.
The United States ranks number one in the world for health care spending as a percentage of GDP. That sounds great… but, for instance, Texas ranks only 11th worldwide when it comes to performance. That’s because of access to care.
The country’s health care rankings are likely to get worse as 673 rural hospitals in the U.S. are at risk of closing. Here’s what has happened: the need for care greatly outpaces available funding, especially for public hospitals. Something must be done.
If public funding is no longer available, alternative funding can be secured in numerous ways. The simplest way to access alternative funding is through a public-private partnership (P3) engagement. However, alternative funding for public hospitals, health care clinics and university medical centers can be found from other sources as well. Finding funding is not a problem when private-sector investors, large equity funds, pension programs, asset recycling and EB5 programs all stand ready to invest in public-sector projects.
Moving to a P3 health care model would allow hospitals to secure immediate funding and utilize private-sector expertise and best practices while transferring all risks. The launch of health care P3s would also ensure new construction, new jobs and hundreds of additional health care options for people. Continue reading…
This month, we saw historic turnout at the polls for midterm elections with over 114 million ballots cast. One noteworthy observation regarding voter turnout is record rates of participation by younger voters aged between 18 to 29 years old. Around 31 percent of people aged 18 to 29 voted in the midterms this year, an increase from 21 percent in 2014, according to a day-after exit poll by Tufts University.
Surely their political engagement counters the criticism that millennials are disengaged and disconnected with society and demonstrates that millennials are fully engaged when issues are relevant to them, their friends, and their families. Why, then, do we not see the same level of passion, engagement and commitment when young adults are asked to consider their health and well-being?
I have had the privilege of being a member of the National Heart, Lung and Blood Institute-funded Coronary Artery Risk Development in Young Adults (CARDIA) study research team. In over 5,000 black and white adults who were initially enrolled when they were 18 to 30 years old and have now been followed for nearly 35 years, we have described the decades-long process by which heart disease develops. We were able to do this because, in the 1980s when these studies began, young adults could be reached at their home telephone numbers. When a university researcher called claiming to be funded by the government, there was a greater degree of trust.
Unfortunately, that openness and that trust has eroded, particularly in younger adults and those who may feel marginalized from our society for any number of valid reasons. However, the results—unanswered phone calls from researchers, no-shows at the research clinic and the absence of an entire group of adults today from research studies, looks like disengagement. Disengagement is a very real public health crisis with consequences that are as dire as any political crisis. Continue reading…
Today on Health in 2 Point 00, Jess interviews me all the way from London. In this episode, she asks me about Google, who hired Geisinger CEO David Feinberg to lead its health care initiatives, Driver, a startup which ran out of money just weeks after their launch, and HealthifyMe, which has recently raised $6 million.
Jess also tells me about her recent trip to Berlin for Frontiers Health. Apparently, there’s a lot that the U.S. can learn from European startups, which have mastered regulatory and really understand how to plug what they’ve got right into pharma. Next, we’re headed to Tokyo for Health 2.0 Asia – Japan, so catch us there on December 4-5. ––Matthew Holt
“When doctors today say patients should stay off the Internet, I know they’re wrong.” — ePatient Dave de Bronkart
Dave de Bronkart (aka ePatient Dave) credits online communities of other patients – and access to clinical research he found on his stage 4 cancer diagnosis – to saving his life more than a decade ago. Fast forward, and this patient advocate has taken his mantra, “Let Patients Help,” to the TedTalk stage and beyond.
As health care continues to shift its focus from ‘patients’ to ‘consumers,’ how can we all be better, more empowered participants in this system that, despite its best efforts, remains closed, difficult to understand, and challenging to navigate?
I caught up with Dave to talk about his definition of what it means to be a ‘consumerist patient advocate’ and get his suggestions for how we can all better partner with our doctors and nurses when it comes to improving our health. The magic ingredient is data – namely, access to it in a frictionless and open way – so that we can be fully involved in learning about our health and able to set priorities when it comes to preserving it.
How did access to health data prevent serious health consequences in Dave’s life? He’s got more than one story to prove this point – oh, and a great little rap (yes, that kind of rap) at the end.
Get a glimpse of the future of healthcare by meeting the people who are going to change it. Find more WTF Health interviews here or check out www.wtf.health.
Each year in the United States, half a million Americans will be treated for burns so severe as to require hospitalization. The “survivors”—including more than three hundred children each day and a drastically increasing number of U.S. military members since the turn of the millennium—can be expected to undergo arduous, agonizing surgeries and painful rehabilitation lasting for years.
The emotional and physical trauma of these fellow citizens is not a pretty picture, nor is it an inexpensive one. According to estimates, patients with severe burns with no complications can expect a whopping $1.6 million bill for treatment over the cost of their lifetime. For patients who do go on to develop complications as the result of severe burns, hospital bills can run more than $10 million.
Where is that money coming from? Partly, it comes from you and me in the form of increased healthcare premiums. But oftentimes, it comes from directly people like me, the cofounder of the Moonlight Fund, a Texas-based non-profit organization for burn survivors and their families. We’re often tasked with raising funds to help with the costs of expensive procedures in addition to the emotional support and caregiver assistance our organization was founded for. Many times, I’ve reached into my own pocket—not because I’m a saint, but because I’ve been there. As a childhood burn survivor myself, scalded over 32% of my body, I’m well aware that infections resulting from burns—which occur in one out of three cases—add between $58,000 and $120,000 to treatment costs. Skin breakdown—which happens one out of two times—adds up to $107,000 more. Disfigurement and scarring? Up to $35,000 on top of that. Then, of course, there are the psychological issues associated with severe trauma. 57% of burn victims need help for these, help that costs as much as $75,000 per patient.
But ACOs could pave the way for more significant cost-cutting based on competition.
By KEN TERRY
The Medicare Shared Savings Program (MSSP), it was revealed recently, achieved a net savings of $314 million in 2017. Although laudable, this victory represents a rounding error on what Medicare spent in 2017 and is far less than the growth in Medicare spending for that year. It also follows two years of net losses for the MSSP, so it’s clearly way too soon for anyone to claim that the program is a success.
The same is true of accountable care organizations (ACOs). About a third of the 472 ACOs in the MSSP received a total of $780 million in shared savings from the Centers for Medicare and Medicaid Services (CMS) in 2017 out of the program’s gross savings of nearly $1.1 billion. The other MSSP ACOs received nothing, either because they didn’t save money or because their savings were insufficient to qualify them for bonuses. It is not known how many of the 838 ACOs that contracted with CMS and/or commercial insurers in 2016 cut health spending or by how much. What is known is that organizations that take financial risk have a greater incentive to cut costs than those that don’t. Less than one in five MSSP participants are doing so today, but half of all ACOs have at least one contract that includes downside risk.
As ACOS gain more experience and expand into financial risk, it is possible they will have a bigger impact. In fact, the ACOs that received MSSP bonuses in 2017 tended to be those that had participated in the program longer—an indication that experience does make a difference.
However, ACOs on their own will never be the silver bullet that finally kills out-of-control health spending. To begin with, 58 percent of ACOs are led by or include hospitals, which have no real incentive to cut payers’ costs. Even if some hospitals receive a share of savings from the MSSP and/or private insurers, that’s still a drop in the bucket compared to the amount of revenue they can generate by filling beds instead of emptying them. So it’s not surprising that physician-led ACOs are usually more profitable than those helmed by hospitals.
At long last, we seem to be on the threshold of departing the earliest phases of AI, defined by the always tedious “will AI replace doctors/drug developers/occupation X?” discussion, and are poised to enter the more considered conversation of “Where will AI be useful?” and “What are the key barriers to implementation?”
As I’ve watched this evolution in both drug discovery and medicine, I’ve come to appreciate that in addition to the many technical barriers often considered, there’s a critical conceptual barrier as well – the threat some AI-based approaches can pose to our “explanatory models” (a construct developed by physician-anthropologist Arthur Kleinman, and nicely explained by Dr. Namratha Kandulahere): our need to ground so much of our thinking in models that mechanistically connect tangible observation and outcome. In contrast, AI relates often imperceptible observations to outcome in a fashion that’s unapologetically oblivious to mechanism, which challenges physicians and drug developers by explicitly severing utility from foundational scientific understanding.
Today on Episode 58 of Health in 2 Point 00, Jess and I have more to share from Exponential Medicine, but this time we’re at the Health Innovation Lab checking out all of the startups. In this episode, Jess and I talk to Meghan Conroy from CaptureProof about decoupling medical care from time and location, Care Angel‘s Wolf Shlagman about the world’s first AI and voice powered virtual nursing assistant, and highlight Humm’s brain band which improves working memory, concentration, and visual attention. We leave you with some parting words from Godfrey Nazareth: “Let’s set the world on fire. Let’s change the world, with love.” -Matthew Holt
“I don’t know that what they’re doing is going to be as transformative as maybe the potential of it is – and it’s going to take time. I don’t know that they’re going to ‘all-of-a-sudden’ leap frog over all the things that health plans have been doing for decades. I think they’re going to learn that this is really complicated stuff…”
Health plan innovation got a makeover this year. What used to look like value-based care models and telehealth visits has transformed. Health plan innovation is sexier – with big-dollar M&A deals like CVS-Aetna and Cigna-ExpressScripts looking to flatten the industry. Meanwhile, brand name collaborations like Amazon-Berkshire Hathaway-JP Morgan may prove that payment model innovation is unexpectedly ‘label-conscious.’
So, how are health plans dealing with this startling new look? And what should health tech startups who want their innovation investment dollars do now??