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The Future of Medical Innovation and Commercialization

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.

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The Only Way Out of the Health Care Wilderness

The landmark 2001 document from the Institute of Medicine’s (IOM), Crossing the Quality Chasm, should have guided us out of the healthcare cost-quality crisis. It argued that the root cause of our difficulties has been a failure to meet the needs of patients with chronic disease. We have not solved this crisis because we have almost entirely ignored the recommendations for reform found in that document.

The claim that we have the best healthcare in the world is correct only if you have an acute condition. If you are having an event, such as a heart attack, our system can provide an emergency stent — for as much as $50,000 — that will open the blocked artery, immediately relieving the pain and saving your life. We are really good at rescue medicine-crisis medicine.

But acute conditions generate enormous costs only because we have not addressed the chronic condition earlier, interrupting the disease progression that produces the acute events. Since most healthcare cost growth over the past 2 decades has been related to patients with 4 or more chronic conditions, this should be recognized as the foremost issue in healthcare reform.

In fact, the IOM charged that, despite the central role of chronic disease in most pain, disability, death, and cost, care continues to be designed around the needs of providers and institutions, and most patients with chronic conditions do not receive the care they need. A 17-year lag in implementing new scientific findings results in highly variable care.

That cardiologists favor coronary stenting over optimal medical therapy — that is, managing vascular disease using $4 drugs and recommended lifestyle changes — provides a powerful case in point.

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Are In Vitro Fertilization (IVF) Clinics Scamming Customers?

Somewhere near where you live, a couple will discover this week that they are infertile and that if they want biological children of their own, they are going to need in vitro fertilization (or IVF).  According to treatment protocol, the woman will need to take powerful medicines to ramp up her production of fertilizable eggs.  One monthly cycle of this treatment will run around $12,000.  But most couples require more than one cycle to achieve their goal of carrying a child to term.  In other words, this couple could easily be looking at a bill exceeding $30,000 or $40,000.

And did I mention that this money could all come out of their own pockets?

Because not all insurance companies pay for in vitro fertilization.

No worry though.  Their infertility physician informs them about a company he has worked with that specializes in infertility loans.  He even offers to have his office staff help the couple fill out the necessary paperwork.  Thanks to this assistance, the couple secures the loan and, with luck, will soon be rewarded with a healthy baby.

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Ode to Mystery Blob

The bartender was a young guy who wanted to go to law school, so I leaned back in my chair and smugly pontificated about the slings and arrows of practicing the law. I can’t even tell you the dude’s name, but it gave me a superior feeling to give him advice. Having taken on a couple of high-profile cases, I’d been on local TV a bit recently, which really gave me license to lay it on thick. I was the center of my own attention, a big man, a rising star on his way to fame and fortune, the essential ingredients of American success.

As the barman poured me my second beer, though, he did a double take and asked me what happened to my eye.

I went to the bathroom and saw the red swelling above my right eyelid. Immediately I notched it up to some mountain allergy. I downed the rest of my beer and went home. The next morning I woke up and the inflammation was about the same, but had spread to my cheek. I needed to be in court that afternoon, so I borrowed my girlfriend’s base makeup to cover the splotches. Outside of wearing makeup, I felt good and strong: a winner sporting a nice tie and a snazzy pocket square.

That night I went to the gym.

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Will You Receive a Tax Credit to Help You Buy Insurance in 2014? How Much?

Beginning in 2014, millions of Americans will discover that they qualify for subsidies designed to help them purchase their own health insurance. The aid will come in the form of tax credits, and many will be surprised by how generous they are.

Not only low-income, but moderate-income families earning up to 400 percent of the federal poverty level (FPL) – currently $44,680 for a single person and $92,200 for a family of four – will make the cut. Within that group, households bringing in less than 250 percent of the FPL ($27,925 for a single person, $57,625 for a family of four) also will be eligible for help with out-of-pocket costs.

If your boss offers benefits, you won’t qualify, unless …

If your employer offers health insurance you won’t be eligible for a tax credit – though there are two exceptions to this rule:

  • If your share of the premium for your employer’s coverage would exceed 9.5 percent of your income, or
  • If your boss offers a skimpy policy that pays for less than 60 percent of an average worker’s covered benefits, you will qualify for help.

If I qualify, how much will I receive?

The size of the tax credit depends on your income, your age, how many people are in your family, and where you live.

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State-Federal “Partnership” Exchanges: The Rarely Discussed Alternative Option

Beginning in 2013, states will begin rolling out health care insurance exchanges as required by the Affordable Care Act (ACA). To this point most legislators, policymakers and health care experts have discussed the state-based and federal insurance exchange options at length. However, there is another form of insurance exchange that states are beginning to explore: the “partnership”.

In a state-federal partnership, states will divide obligations with the federal government. For this partnership model there is no requirement for a 50-50 split of labor, and the states are actually more of a facade whereby the consumers (individuals and employers) merely interact with the state. The federal government, on the other hand, will essentially perform all functions of the exchange management except customer service and plan management. Moreover, states have the choice to run either one or both of those functions. According to former head of insurance exchange planning at HHS Joel Ario, “States that choose this option are ceding the more technical aspects of exchange activity to the federal government but can retain control
of insurer oversight and consumer assistance.”

In the state-federal partnership model, the federal government will operate everything from consumer eligibility and enrollment to financial management and risk corridors. This essentially means that the federal government will take on most responsibility for the exchange, while granting states many of the perks they would receive if they had created a state-based exchange.

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To DNR or Not to DNR

Here is a little appreciated fact: Patients cannot order medical care; they can only accept or refuse it.

Only a doctor can order medical treatment.  In an extreme medical situation, the doctor can offer CPR, but it is the patient’s job to accept or reject.

Any patient can refuse CPR.  This refusal is known as Do Not Resuscitate or DNR, and for obvious reasons needs to be made ahead of time. The question is, when is making the decision to be DNR appropriate?

A further definition is needed.  DNR (and its colleague, Do Not Intubate, DNI) is not the same as DNT, or Do Not Treat.  A patient, at their discretion, may receive maximal medical care, including drugs, dialysis and surgery, and still be DNR.  The DNR order in that situation is simply a line that the patient will not allow the doctors to cross.  “Do everything you can to help me, but if it fails I do not want to end my life on a machine or with some gorilla pounding on my chest.”

On the other hand, a DNR can be a part of a hospice or palliative care program, so that all care is focused on comfort and not treatment.  It is even possible, in very unusual circumstances, to receive hospice care without being DNR.  A DNR order is like any medical decision, it can be changed if appropriate.  DNR is not the same as “pulling the plug.”

How aggressive to be in receiving medical care is a personal decision.  In order to make certain that our individual desires are followed it is critical that, as much as possible, these decisions be made ahead of time.  This avoids panic, confusion, and guilt.  In that spirit, let us review a few cases.

Ben is a 54-year-old gentleman with lung cancer, which has spread to bones and liver and is growing despite the third chemotherapy.  His doctors inform him that a fourth chemotherapy has a 5% chance of helping him and a 20% chance of killing him.  He wants to try the chemo.  His physician says, “OK Ben, we will order the chemo but if things fall apart and your body starts to fail and we cannot fix it, do you want to be put on a machine?”  Do you think Ben should make himself DNR?

Ben made himself DNR.  He survived the chemo, but the cancer progressed and he died one month later.

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More Signs of Rate Shock and Awe

Last week, I reported on my informal survey of health insurance companies and their estimate for how much rates will rise on account of the Affordable Care Act (“Obamacare”).

Today, there are press reports quoting the CEO of Aetna with their estimate. The Aetna estimate is worse than mine.

From Bloomberg:

Health insurance premiums may as much as double for some small businesses and individual buyers in the U.S. when the Affordable Care Act’s major provisions start in 2014, Aetna Inc. (AET)’s chief executive officer said.

While subsidies in the law will shield some people, other consumers who make too much for assistance are in for “premium rate shock,” Mark Bertolini, who runs the third-biggest U.S. health-insurance company, told analysts yesterday at a conference in New York. The prospect has spurred discussion of having Congress delay or phase in parts of the law, he said.

“We’ve shared it all with the people in Washington and I think it’s a big concern,” the CEO said. “We’re going to see some markets go up as much as as 100 percent.”

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My Grand, Sweeping Cardiovascular Predictions for 2013

Cardiovascular predictions for next year are always fun to contemplate this time of year.  So much is happening to the practice of medicine as we’ve known it that it can be helpful to highlight some of those changes, both good and bad, as our medical world continues to evolve.  While these predictions contain pure guesses, they also contain one doctor’s observations of our new evolving medical world.  Many of these changes will profoundly shape how doctors interact with their patients.

So grab some coffee and strap in.  Here are my 2013 predictions of life as a cardiologist in 2013.  (Please feel free to add your own predictions in the comments section.)

Valvular Heart Disease

  • TAVR for critical aortic stenosis will be applied to progressively younger and healthier patients.
  • As smaller delivery systems for percutaneous heart valves gain widespread acceptance, government payers will look for new and inventive techniques to restrict patient access to these devices.  No heart valve will remain untouched as creative uses of the approved devices are attempted in non-surgical patients.
  • Innovations valve design will improve the safety and effectiveness of this therapy.

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Are We Finally Seeing the Dawn of the Golden Age of Interoperability?

Today I’m speaking at the ONC annual meeting as part of panel discussing interoperability.

For years, patients, providers and payers have complained that EHRs “do not talk to each other.”

By 2014, I expect this issue to disappear.

Why?

Do I expect that every state and territory will have a robust, sustainable healthcare information exchange by 2014?  No

Do I expect that every provider will be connected to a Nationwide Health Information Network by 2014?  No

Do I expect that a single vendor will create a centrally hosted method to share data by 2014 just as Sabre did for the airline industry in the 1960’s?  No

What I expect is that Meaningful Use Stage 2 will provide the technology, policy, and incentives to make interoperability real.

Stage 2 requires that providers demonstrate, in production, the exchange of clinical care summaries for 10% of their patient encounters during the reporting period.   The application and infrastructure investment necessary to support 10% is not much different than 100%.   The 10% requirement will bring most professionals and hospitals to the tipping point where information exchange will be implemented at scale, rapidly accelerating data liquidity.

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