Tag: Innovation

The Affordable Care Act: Like It Or Not, It’s Catalyzing a Golden Age In Health Care Investing

Apr 18, 2013• 4

By Al Waxman

Now that President Obama has been re-elected and the Supreme Court has upheld the Accountable Care Act, healthcare reform is here to stay. So what does reform mean for healthcare investors? I believe it will usher in a new fertile period for innovative,venture‐backed companies that can navigate the brave new world of healthcare delivery and management.

The Accountable Care Act impact on healthcare IT investing is already being felt.Venture investment in 2013 is showing significant growth from last year. In 2012,according to PWC, a global accounting firm,the life sciences sector which includes healthcare IT accounted for 25 percent of all venture capital dollars invested which totaled nearly $1.2 billion in 163 deals,more than double the $480 million in 49 deals in 2011 and almost six‐times the $211 million in 22 deals in 2010.

Now is the time to make order out of chaos and to set the stage for a next‐generation healthcare system that can effectively service our nation. At Psilos Group, we have just released our fifth Healthcare Economics and Innovation Outlook and identified the following four areas as the most promising opportunities for healthcare investors in 2013 and beyond: Private health exchanges, consumer‐focused insurance programs, 21st century healthcare technologies, and innovations that reduce error and waste.

Investing In Exchanges

The healthcare insurance marketplace—and the way insurance is bought and sold—is facing massive change.Healthcare insurance exchanges, both public and private,promise to create a more organized and competitive market for buying healthcare insurance, which could moderate price increases that are currently spiraling out of control.

From our perspective, exchanges are an intelligent place to invest. Software and services will power the exchanges. Psilos envisions massive opportunities for technologies that enable operators of both public and private exchanges to build high functioning platforms, including the shopping software and back‐end administrative technology and service products needed to serve tens of millions of people efficiently.

Doctors: We Can’t Leave It to Business to Educate Us

Apr 5, 2013• 9

By Leslie Kernisan, MD

Recently I came across yet another media article with suggestions as to how digital health products can gain more widespread adoption. The writer notes that “we can learn a lot from the pharma and healthcare industries,” and goes on to discuss the importance of engaging the doctor.

This article, like many I read, doesn’t acknowledge the downsides of using pharma’s tactics.

I have to assume that this is because from a business perspective, there aren’t a lot of downsides to pharma’s tactics. Pharma, along with many other healthcare industry players (hospitals, insurance companies, device manufacturers) has overall been extremely successful from a business standpoint.

So if the intent is to help digital health companies succeed as businesses, then by all means one should encourage them to copy pharma’s tactics.

But as we know, what works for business has often not worked well for serving the needs of individual patients, or to society from a health services and public health perspective.

App Prescribing: The Future of Patient-Centered Care

Mar 28, 2013• 4

By Ben Chodor

Dr. Leslie Kernisan recently wrote a great piece about app prescribing, asking, “Should I be prescribing apps, and if so, which ones?” Since Happtique is all about integrating apps into clinical practice, I jumped at the chance to add to this important discussion.

Dr. Kernisan is right to be concerned and somewhat skeptical about app prescribing. More than 40,000 health apps exist across multiple platforms. And unlike other aspects of the heavily-regulated healthcare marketplace, there is little to no barrier to entry into the health app market—so basically anyone with an idea and some programming skills can build a mobile health app. The easy entry into the app market offers incredible opportunity for healthcare innovation; however, the open market comes with certain serious concerns, namely, “how credible are the apps I am (or my patients are) using?”

The Napsterization of Health Care

Mar 26, 2013• 8

By Lisa Suennen

Two weeks ago I had the good fortune to be invited back to the South by Southwest Conference (SXSW) to participate as a judge of a digital healthcare start-up competition. SXSW, which takes place in Austin, TX, is historically an indie music gathering that has evolved into a massive mainstream music conference as well as a monumentally huge film festival, like Sundance times twenty. There are literally hundreds of bands and films featured around town. There has now evolved alongside this a conference called Interactive that draws more than 25,000 people and focuses on technology, particular mobile, digital, and Internet.

In other words, SXSW has become one of the world’s largest gatherings of hoodie-sporting, gadget-toting nerd geniuses that are way too square to be hip but no one has bothered to tell them. Imagine you are sitting at a Starbucks in Palo Alto, CA among 25,000 people who cannot possibly imagine that the rest of the world still thinks the Internet is that newfangled thing used mainly for email and porn. SXSW is a cacophonous melting pot of brilliance, creativity, futuristic thinking, arrogance, self-importance, ironic retro rock and roll t-shirts and technology worship. One small example: very hard to get your hands on a charger for anything other than an iPhone 5 because, seriously, who would have anything else?

The Health IT Scandal the NY Times Didn’t Cover

Mar 3, 2013• 56

By Michael L. Millenson

In case you missed it, the shocking news was that health IT companies that stood to profit from billions of dollars in federal subsidies to potential customers poured in – well, actually, poured in not that much money at all when you think about it – lobbying for passage of the HITECH Act in 2009. This, putatively, explains why electronic health records (EHRs) have thus far failed to dramatically improve quality and lower cost, with a secondary explanation from athenahealth CEO Jonathan Bush that everything would be much better if the HITECH rules had been written by Jonathan Bush of athenahealth.

Next up: corporate lobbying for passage of the 1862 Pacific Railroad Bill is blamed for Amtrak’s dismal on-time record in 2013.

The actual scandal is more complicated and scary. It has to do with the adamant refusal by hospitals and doctors to adopt electronic records no matter what the evidence. Way back in 1971, for example, when Intel was a mere fledgling and Microsoft and Apple weren’t even gleams in their founders’ eyes, a study in a high-profile medical journal found that doctors missed up to 35 percent of the data in a paper chart. Thirty-seven years later, when Intel, Microsoft and Apple were all corporate giants, a study in the same journal of severely ill coronary syndrome patients found virtually the same problem: “essential” elements to quality care missing in the paper record.

Unleashing the Innovation Monster

Jan 16, 2013• 14

By David Dranove

I have been absent from the blogosphere for about two months. The fact is, there just isn’t all that much new to write about. Healthcare spending growth continues to moderate, but not by enough to stave off forecasts of doom for Medicare and Medicaid. Nor can employers begin to shift money from health benefits back into wages. But wheels are turning. Health networks are expanding as providers prepare to offer ACOs and/or increase their bargaining clout. A handful of states are poised to start up exchanges with the feds ready to take the reins in the laggard states. Aon/Hewitt is about ready to launch a private sector exchange. We will start to learn whether exchanges save or destroy private health insurance.

The Affordable Care Act has had many detractors but at least it has disrupted the status quo. We needed to see fundamental changes in how we pay for and deliver healthcare services and the ACA has delivered. But ACA has brought us a very particular set of changes. Time will tell if we have chosen the right path.

Even as the industry changes the way it does business, one critical aspect of change is missing. The faces are all the same. The same large systems that dominated the fee for service world seem poised to dominate the shared savings world, and the same insurers that dominated the traditional employer-based insurance market stand ready to dominate exchanges. Value might be created when old businesses play by new rules, but even more value is created when new players are free to enter and perhaps even break the rules.

Entry is the engine that drives economic progress. Entrants bring new technologies to manufacturing and new service models to sales. Threatened by entry, incumbents strive to innovate and improve customer service. This is as true in high tech industries as it is in the service economy. Research confirms that entry is ubiquitous – in a typical manufacturing industry, fully one third of established firms are replaced by entrants within five years. Though the data is not as readily available, turnover in the service sector is likely even higher.

The Future of Medical Innovation and Commercialization

Dec 17, 2012• 4

By Chris Coburn

Innovation has been a driving force behind health care from the beginning, yet with the U.S. health care system in the midst of an unprecedented transformation and a focus on lowering costs, many are asking, “What will become of innovation?”

The answer to that question is also a potential solution for hospitals facing financial pressures – a solution that has the power to improve patient care as well.

A growing number of hospitals are looking to develop a new revenue stream through the commercialization of medical innovations. They’re not doing it alone.

Just as Cleveland Clinic collaborates with other health systems on cardiovascular or cancer care, Cleveland Clinic Innovations has formed a national Innovation Alliance network to collaborate on the commercialization of medical innovations.

Cleveland Clinic Innovations, the corporate venturing arm of Cleveland Clinic, has a track record of converting and commercializing medical expertise, creating 55 spin-off companies and more than 300 licensed technologies that began as doctors and researchers’ ideas. Those companies have received nearly $700 million in equity investment.

How Bundled Payments Just Might Save Health Care From Itself

Oct 26, 2012• 5

By Wes Champion

In the 1960s, Texas Instruments developed the first handheld calculator. It could display up to 12 digits while performing addition, subtraction, multiplication and division. And it cost $2,200.

Since then, the calculator has come a long way. Competition forced continuous innovations, and today’s models are more lightweight, have longer battery life, are capable of performing more complex computations –all at a dramatically reduced price point.

That’s the typical cycle in virtually every sector of the American economy. Innovations are introduced, competition forces design improvements and cost reductions and products are continually improved until the next big thing comes along to start the process over again.

But that’s not the way things work in healthcare.

Like the calculator, Medicare was first created in the 1960s.

But even though the practice of medicine has changed dramatically over the last 40 years, the Medicare program has stayed largely the same. And, since most commercial insurers tend to follow the government’s lead in terms of payments and benefit design, even private markets have played a role in limiting innovations in the way we pay for healthcare.

State of Disruption

Oct 5, 2012• 12

By Jonathan Bush

Disruptive leadership. That’s a thing now? I’m told that this is a kind of leadership—I thought it was a market dynamic.

Hmmm…

What does it take to be a “disruptive” leader?

Does it mean talk like a pirate when explaining how the company will be cutting benefits?

Does it mean dress like Ali G and try to imitate him but only muster a WASP accent?

I suppose it does…but that’s the easy part.

Job #1 in leading a true market disruptive: FIND AND FERTILIZE THE HIDDEN RAGE AT THE STATUS QUO THAT LIES WITHIN ALL OF US. Find it in yourself and feed it and then find it in others and attract them to work with you.

I’m constantly looking for change in my personal life. For example, I just bought a Tesla. My other car is a 1983 Land Rover. Why? Because in 1983 you didn’t need to sell cars with a seatbelt dinger and airbags in the front seat andD because Tesla is the first ATTACKER disruptive car maker to make it past the fetal stage in my entire life. I must feed them. I HATE the established car industry! I have been trapped inside a small number of culturally (and occasionally financially) bankrupt brands that have lost any interest in fighting the over-regulated morass that constraints.