It’s not every day that an analytics firm focusing on improving the efficacy and value of drugs has a big raise in the health tech world–especially one I don’t know much about. This morning Aetion raised $36m to add onto $11m they raised last year. Their new round is led by famed venture firm NEA and includes Amgen Ventures. I spoke to CEO and part-time extreme skier Carolyn Magill to find out what Aetion does and why big pharma and major payers need their help in the brave new world of value-based care.
Intrigued by many things in my first few days in the U.S., what perplexed me the most was that there seemed to be a DaVita Dialysis wherever I went; in malls, in the mainstreet of West Philadelphia, near high rises and near lower rises. I felt that I was being ominously followed by nephrologists. How on earth could providers of renal replacement therapy have a similar spatial distribution as McDonalds?
After reading Friedrich Hayek’s essay, Use of Knowledge in Society, I realized why. In stead of building a multiplex for dialysis, which has shops selling pulmonary edema-inducing fried chicken, DaVita set shop where people lived or hung out. It wasn’t a terribly clever business plan but its genius was its simplicity, its humility. If the mountain will not come to Muhammed, Muhammed must go to the mountain. DaVita went to the masses.
The link between Hayek’s wisdom and DaVita’s business plan may seem tenuous. But Hayek has been misunderstood, particularly in healthcare. Many a times and oft in the policy world Hayek has been rated about money and usances. This is because of a misperception that Hayek was all about profit and loss, which are anathema to healthcare. Hayek’s message was simple: local knowledge can’t be aggregated. From this premise sprouts others – dispersed agents in certain times and places possess fragments of knowledge which don’t come easily to central planners.
For Hayek, socialism and capitalism weren’t moral but epistemic issues. Socialism would fail because of a coordination problem – markets would succeed because they could use price signals to coordinate. Healthcare doesn’t use price signals to coordinate, not explicitly, at least. Nor does it capitalize on dispersed agents – on local knowledge. Hayek, a supporter of universal healthcare, didn’t specifically discuss healthcare in his essays. Nonetheless, it would be a useful intellectual exercise to speculate how Hayek might have applied his wisdom to modern healthcare.
What does local knowledge in healthcare even mean? Stated in a rather unlettered way, it is the provision of healthcare locally. AEDs are no good if they aren’t located where people congregate. The value of local presence of medical facilities, particularly in poor neighborhoods, is hardly rocket science. Just as great cities grew near rivers, great hospitals germinated in poor neighborhoods. But, with growing centralization of healthcare, with hospitals becoming multiplexes, futuristic cities with a distinct architectural phenotype, different from the neighborhoods they serve, the value of decentralization can be missed.
The Future of Value-Based Care Relies Upon Providers: Taking the Reins on Alternative Payment Models
2017 was a pivotal year for the growth of value-based care. For many practices, this meant completing their first performance year as part of the Merit-Based Incentive Payment System (MIPS). A much smaller percentage of practices was able to participate in approved advanced Alternative Payment Models (APMs).
While practices await feedback on their 2017 performance, early lessons have already become evident. Clearly, as practices are assigned greater responsibility and accountability for patient populations, it becomes increasingly important that they effectively navigate the reimbursement models upon which their financial viability depends.
Where should provider practices start? The MIPS model may not be a long-term answer. MedPAC has recently clearly articulated their disfavor with MIPS and desire to replace it. In contrast, advanced APMs provide a much more fertile ground for providers to work collectively. They can contribute their unique clinical expertise to define opportunities to improve quality and cost, focused on areas that have potentially greater beneficial impact on patient care and practice pathways. The Center for Medicare and Medicaid Innovation (CMMI) recently acknowledged as much by unveiling the Bundled Payments for Care Improvements (BPCI) effort that measures performance and sets payment against four broadly defined models of care.
Your address to HIMSS acknowledges many of the problems with Healthcare IT, highlighting lack of interoperability, lack of data exchange, and lack of cybersecurity, and suggesting some regulations that could be eliminated. This is a welcome realization of some of EHR’s more obvious limitations and problems. However, most of your recommendations for improvement of health IT are insufficient, unproven, or have been repeatedly shown to fail.
We applaud your acknowledgement of: 1. The frustration (and often rage) of many clinicians when using the current EHRs’ clunky and inefficient user interfaces; 2. Patients’ frustration and alienation when doctors spend much time entering data into the EHRs rather than listening to them; 3. The need for better cybersecurity; 4. Benefits of increased patient access to their data; and 5.Healthcare systems’ refusal to share patient data with others clinicians (data hoarding).
We are also delighted for your strong support for the Sync for Science program.
However, your solutions to these problems are faulty or have already failed—and thus we are obliged to explain why and how they fail:
- Belief in the magic of value-based care as a cure for excessive spending
- Claim that “open APIs” (defined in next sentence) will solve the problems of lack of interoperability. Here, APIs refer to software programs that try to translate different forms and formats of information into a single commonly understood item.
- Belief that a patient’s personal data store or personal EHR, called “MyHealthEData,” will help solve the problems of patient care.
- Confusing patients with customers. We train doctors to make diagnoses, order and interpret tests, and help patients make profoundly complex decisions. Healthcare decisions are not like buying a toaster.
- Attributing so many of the problems of EHRs to the regulations created in 2009, the “Meaningful Use” rules. In fact, meta-analyses of EHRs—both before the Meaningful Use rules, and after–fail to find they reduce costs, mortality, or morbidity.
HHS Secretary Alex Azar spoke earlier this week at the American Federation of Hospitals, giving a widely reported speech that offered new details on the Trump administration’s plans for Accountable Care Organizations, the CMS quality measurement program, and a new drive for patient access to medical records. The full text of his remarks follows. – The Editors.
It’s a pleasure to be here with all of you today. I want to thank Chip [Kahn] and all of the Federation’s members for inviting me to share our vision for HHS and America’s healthcare system, and how we hope to work with all of you to make it a reality.
One of the key commitments President Trump has made across this administration has been to see the private sector as our partners, not as just entities to be regulated or overseen.
That charge has been taken seriously at HHS from Day One. We at HHS see stakeholders, including our nation’s hospitals, as part of the solution to our country’s many healthcare challenges. We recognize that it’s not just government that wants better healthcare for all Americans. Our partners in the private sector, all of you, want the same.
It’s an exciting time to take over the helm as Secretary of HHS, full of both challenges and opportunities. The same goes for our stakeholders, as advances in science are transforming medicine. It seems like it’s every other week that FDA is approving some novel therapy, or NIH announces a finding that revolutionizes how we think about a key piece of biology.
But innovation in payment and delivery systems is simply not proceeding at the same pace. When I was at HHS in the 2000s, concepts like personalized medicine and cell therapies for cancer were in their infancy. Now, personalized medicine has come to life, and cell therapies are receiving FDA approval.
Meanwhile, on the delivery side, back in the 2000s, shifting to a value-based system was just getting going as well. And yet here we are today — more than a decade later — and value-based payment is still far from reaching its potential.
Following is the full text of CMS administrator Seema Verma’s remarks at HIMSS18 in Las Vegas.
It is a privilege to be with you here today and speak about the amazing advancements happening all across the nation in healthcare. One of the most exciting parts about being the CMS Administrator is the opportunity to see the cutting-edge breakthroughs that are happening every day. As we walk the exhibit hall of this conference, it is easy to be struck by how innovation is accelerating in healthcare.
We have procedures that we couldn’t have imagined a generation ago that are saving thousands of lives.
- Precision medicine has opened the door to a new world of therapies specifically tailored to a patient’s unique genetic code.
- We can now treat retinal disease that causes blindness.
- Robotic technology is making surgeries less invasive, and we are on the verge of having the world’s first artificial pancreas.
- 3D training tools are enabling doctors to learn anatomy without a cadaver.
- Telemedicine is also improving access to care and empowering CMS beneficiaries to lead healthier lives.
And it doesn’t stop with traditional healthcare innovators. The automobile industry is partnering with leading technology companies to perfect driverless cars that may one day give independence to our nation’s elderly and people with disabilities. And through smart phones and wear-able technology, we are compiling health information every second, and Americans are using that information to track activity, calories, and heart rates. Innovators are even developing ways to monitor chronic illness with electronic watches. The list of innovation is endless.
But while all of this technology is changing every area of our lives, we face enormous challenges in healthcare, and the value that we are receiving for the amount of money that is being spent.
Last year CMS released a report showing that the rate of growth in healthcare spending is not slowing down. Despite all of the changes and regulations over the past decade, healthcare continues to grow more quickly than the overall economy. By 2026, we will be spending one in every five dollars on healthcare.
Pay for performance, the catchall term for policies that purport to pay doctors and hospitals based on quality and cost measures, has been taking a bashing.
Last November, University of Pittsburgh and Harvard researchers published a major study in Annals of Internal Medicine showing that a Medicare pay-for-performance program did not improve quality or reduce cost and, to make matters worse, it actually penalized doctors for caring for the poorest and sickest patients because their “quality scores” suffered. In December, Ankur Gupta and colleagues reported that a Medicare program that rewards and punishes hospitals based on arbitrary limits on the number of hospital admissions of heart failure patients may have increased death rates. On New Year’s Day, the New York Times reported that penalties for “inappropriate care” concocted by Veterans Affairs induced an Oregon hospital to deny acute medical care to its sickest patients, including an 81-year-old “malnourished and dehydrated” vet with skin ulcers and broken ribs.
And just three weeks ago, the Medicare Payment Advisory Commission recommended that Congress repeal a Medicare pay-for-performance program, imposed by Congress in 2015, because the program is costly and ineffective.
This bad news comes on top of a decade of less-publicized research indicting policies intended to reward and penalize doctors based on measures — most of them inaccurate — of their cost and quality. That research demonstrates that penalties against doctors:
Encourage doctors and hospitals to avoid or “fire” sicker patients who drag down quality scores due to factors outside physicians’ control
Cause some doctors to stop using lifesaving treatments if they don’t result in bonuses
Create interruptions in needed medical care
Reduce job satisfaction and undermine altruism and professionalism among doctors
Cause doctors to game quality measures. For example, a Medicare program that punished hospitals for hospital-acquired infections actually induced some hospitals to characterize infections acquired after admission as “present upon admission” or to simply not report the infection rather than reduce actual infection rates.
Subjecting doctors and hospitals to carrots and sticks hasn’t worked for several reasons. The most fundamental one: Clinician skill is not the only factor that determines the quality of care. Consider one widely used performance measure: the percent of patients diagnosed with high blood pressure whose blood pressure is brought under control. Doctors who treat older, sicker, and poorer patients with high blood pressure will inevitably score worse on this so-called quality measure than doctors who treat healthier and higher-income patients.
Value-based healthcare is gaining popularity as an approach to increase sustainability in healthcare. It has its critics, possibly because its roots are in a health system where part of the drive for a hospital to improve outcomes is to increase market share by being the best at what you do. This is not really a solution for improving population health and does not translate well to publicly-funded healthcare systems such as the NHS. However, when we put aside dogma about how we would wish to fund healthcare, value-based healthcare provides us with a very useful set of tools with which to tackle some of the fundamental problems of sustainability in delivering high quality care.
What is value?
Defined by Professor Michael Porter at Harvard Business School, value is defined as a function of outcomes and costs. Therefore to achieve high value we must deliver the best possible outcomes in the most efficient way, outcomes which matter from the perspective of the individual receiving healthcare and not provider process measures or targets. Sir Muir Gray expands on the idea of technical value (outcomes/costs) to specifically describe ‘personal value’ and ‘allocative value’, encouraging us to focus also on shared decision making, individual preferences for care and ensuring that resources are allocated for maximum value.
This article seeks to demonstrate that the role of data and informatics in supporting value-based care goes much further than the collection and remote analysis of big datasets – in fact, the true benefit sits much closer to the interaction between clinician and patient.
According to the WHO definition of health, which is “a state of complete physical, mental, and social well-being, and not merely the absence of disease and infirmity,” several million Americans became unhealthy on Tuesday November 8th, 2016 as Florida folded to Trump. As Hillary’s prospects became bleaker many more millions, particularly those on Twitter, lost their health. The WHO sets a high bar for health. It is easier for a camel to pass through the eye of a needle than for a person on social media to be in “complete mental and social well-being.”
Whilst WHO has set a high bar for health, modern medicine casts a wide net for disease, and the duo have led to mass over medicalization, overdiagnosis and overtreatment. Yet despite the wide net, Trump has thus far managed to evade the psychiatrists, medicine’s version of the FBI, who have tried imposing upon him a range of psychiatric disorders including “extreme present hedonism”, which sounds like “hyperbolic discounting,” which basically means someone who doesn’t give a rat’s tail about the future. Base jumpers suffer from this condition. I once suffered a milder version – and then I became a father and grew up.
Trump doesn’t look like a base jumper. And you’re going to need more than hyperbolic discounting to nail him on the 25th Amendment. Some tried diagnosing Trump with “mild cognitive impairment” (MCI) – a condition which heralds the more persuasive cognitive decline of dementia. MCI reminds me of an old medical school friend who went around administering the mini mental test to elderly patients on medical wards. One of the questions was: what are the dates of the 2nd World War (WW2)? No patient got that question right because my friend thought WW2 started in 1940. It started in 1939.
The resurgent debate about President Trump’s mental health prompts me to update a piece I wrote for THCB last June. That piece drew lively comments and debate.
It’s also the one-year mark of the Trump presidency.
As The New York Times editorial page recently asked, bluntly, on Jan. 11: “Is Mr. Trump Nuts?”
Since last summer, that question has gained more traction and spurred more earnest debate. The results from Trump’s medical and “cognitive” exam on Jan 12 are unlikely to quell concern. (More about those results below.)
Nearly every major newspaper and magazine has run stories. Print media columnists and TV commentators dwell on it constantly. It’s catnip for late night comedians. It’s been a trending topic on social media for months. And, of course, it’s a topic of discussion and banter almost everywhere you go.
Lawmakers have finally joined in, too, after reluctance for the better part of 2017. Some even render an opinion publicly.
Articles have begun to pop up in medical journals, too—most recently Dr. Claire Pouncey’s piece in the New England Journal of Medicine (Dec. 27, 2017).
And then there’s the book, which sparked Dr. Pouncey’s piece as well other articles and reviews since it came out last fall. I’m not talking about Fire and Fury: Inside the Trump White House by Michael Wolff—although that book is certainly relevant in this context.
Rather, I’m talking about The Dangerous Case of Donald Trump: 27 Psychiatrists and Mental Health Experts Assess a President, edited by Dr. Bandy X. Lee, a specialist in law and psychiatry at the Yale School of Medicine.