Wednesday
May242017

Rise of the Drones

By Kim Bellard, May 24, 2017

For those of us of a certain age, we expected to be living in a Jetsons-type world, complete with flying cars.  That hasn't happened, but it is starting to appear as though the skies may, indeed, soon be full of flying vehicles.  It's just that they may not have people in them. 

Welcome to the brave new world of drones.

Many people may have viewed drones as a toy akin to radio-controlled airplanes. We're beyond that now.  Last summer PwC asked "Are commercial drones ready for take-off?"  They thought so, estimating the total available market for drone-enabled services at $127b

This is not going to all be about getting your books, or your socks, or even your new HD television faster.  It is going to impact many industries -- including health care.

And that impact has already started to happen.

Zipline International, for example, is already delivering medical supplies by drone in Rwanda.  They deliver directly to isolated clinics despite any intervening "challenging terrain and gaps in infrastructure."  They plan to limit themselves to medical supplies, but not only in developing countries; they see rural areas in the U.S. as potential opportunities as well.  Last fall they raised $25 million in Series B funding.  

Drones are also being considered for medical supply delivery in Guyana, Haiti, and the Philippines.   

And drone delivery is already being tested in more urban areas.  The Verge reported that Swiss Post, its national postal service, is working with two hospitals in Lugano to ferry lab samples between them. 

Similarly, Johns Hopkins has been testing drone transport of blood supplies, concluding that it is "an effective, safe, and timely way to get blood products to remote accident or natural catastrophe sites, or other time-sensitive destinations."

Airbus is developing the A-180 drone specifically to deliver medical supplies, especially for emergencies.  Its cargo capsule is "capable of transporting everything from medicine and antivenin to supplemental blood and even organs." A company called Otherlab is going a different direction.  Wired reports that their drone will deliver its package -- then decompose, making it ideal for deliveries to humanitarian crises (or to battle sites, since Darpa helped fund them).  

Lest we focus too narrowly on the concept of drones delivering medical supplies, argodesign has proposed a flying ambulance, which could be operated as a drone or by a pilot.  If you've ever seen ambulances stuck in traffic and felt sorry for the patients relying on them, such ambulances could be the solution -- arriving faster and to locations regular ambulances could not reach.  

But for real impact, let's go back to Amazon.  CNBC's Christina Farr broke the news last week that Amazon was considering getting into the pharmacy business. Put rapid delivery -- especially with drones -- together with lower and more transparent prices, and it is no wonder that the stocks of CVS and Walgreens took a hit when the news broke about Amazon's new interest.

Health care has been all-too-much a story of waiting.  That's quickly changing, with telemedicine, WebMD, retail clinics, and -- soon -- 3D printing and health care robots.  We can add health care drones to the list, allowing 30-minutes-or-less kinds of promises that we haven't even begun to tease out yet.

Bring on the drones!

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

 

Friday
May192017

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week:

 

House May Need to Vote Again on GOP Obamacare Repeal Bill

House Speaker Paul Ryan hasn’t yet sent the bill to the Senate because there’s a chance that parts of it may need to be redone, depending on how the Congressional Budget Office estimates its effects. House leaders want to make sure the bill conforms with Senate rules for reconciliation, a mechanism that allows Senate Republicans to pass the bill with a simple majority. Bloomberg News Friday, May 19, 2017

 

Price pushes Congress to follow Trump plan for more FDA user fees

HHS Secretary Tom Price pressed Congress to heed President Donald Trump's call to make the FDA rely more on industry fees — and less on taxpayer dollars — for product evaluations, as lawmakers continue work on extending the agency's user fee programs.

Politico. Wednesday, May 17, 2017

 

Hatch Says He’s Open to Keeping Obamacare’s Individual Mandate

Sen. Orrin Hatch (R-Utah) on Wednesday said he wouldn’t be opposed to delaying the repeal of the individual mandate in the Affordable Care Act, making him one of the most senior Republicans to float the idea. Morning Consult. Wednesday, May 17, 2017

 

UnitedHealth Doctored Medicare Records, Overbilled U.S. By $1 Billion, Feds Claim

The Justice Department on Tuesday accused giant insurer UnitedHealth Group of overcharging the federal government by more than $1 billion through its Medicare Advantage plans. Kaiser Health News. Wednesday, May 17, 2017

 

Bipartisan bill will be reintroduced to force pharma to justify price hikes

A bipartisan group of lawmakers will re-introduce a bill on Tuesday that would require drug makers to justify their pricing and provide a breakdown of their expenses before raising prices on some medicines. StatNews. Monday, May 15, 2017

 

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.

 

Thursday
May182017

Investing in an Index Fund tied to the Milliman Medical Index instead of the Dow Jones Industrial Average

By Clive Riddle, May 18, 2017

Milliman has just released their 2017 Milliman Medical Index, which measures the cost of healthcare for a typical American family of four receiving employer PPO coverage. The total family bill is $26,944 compared to $4,518 in 2001. I want to invest in an index fund tied the Milliman Medical Index. The annual rate of return since 2001 would be 11.805%, compared to 3.874% for the Dow Jones Industrial Average during that same time (Dow Jones May 16 2001: 11,215.92; Dow Jones May 16 2017: 20,606.93). Our Milliman Medical Index fund would outperform the Dow index fund by three times.

But since the Milliman index fund only exists in some alternate universe for now, we might as well dive into some of findings Milliman shares in their 12-page report on this year’s index: 


Pharmacy share of costs have increased during this this time (from 13% to 17%) as have Outpatient (from 14% to 19%) while Professional services decreased (from 40% to 30%) and Inpatient remained about the same (from 30% to 31%).

Here verbatim are Milliman’s three key findings:

1. The MMI’s annual rate of increase is 4.3%. This is the lowest rate since we began tracking the MMI in 2001. Yet the total dollar amount is still bracingly high. Of the $26,944 spent by the MMI’s family of four, $11,685 is paid by the employee, through a combination of $7,151 in payroll deductions for premium, and $4,534 in out-of-pocket costs incurred at time of care.

 

2. Prescription drug trends are lower, but still high. For the first time since 2013 and 2014, the family of four’s prescription drug trends have decreased in two consecutive years. Still, the 2017 prescription drug cost increase of 8% is more than double the medical increase of 3.6%.

 

3. Employees pay a bigger piece of the healthcare cost pie. Through their payroll deductions and through out-of-pocket expenses incurred when care is received, employees now pay for about 43% of expenses and employers pay the other 57%. The difference between these two shares has gradually narrowed since 2001, when employees contributed 39% and employers contributed 61%. High growth in per-employee healthcare expenditures have pushed employers to limit their contribution increases to amounts below the rate of healthcare inflation.


Friday
May122017

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

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Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week:

 

Industry Hopeful Senate Health Care Debate Focuses on Policy, Not Politics

The health care industry is hopeful senators will be more receptive to outside groups than their House colleagues were, as the Senate takes the reins on overhauling the Affordable Care Act. Morning Consult. May 11, 2017

 

Senate GOP making tax credits look more like … Obamacare

There’s growing support for making the tax credits more generous for poorer people. Senate Republicans are working on a potential breakthrough that could help push through an Obamacare repeal bill – by making insurance subsidies look a lot like Obamacare.

Politico May 11, 2017

 

CMS Gives States Until 2022 To Meet Medicaid Standards Of Care

The Trump administration has given states three extra years to carry out plans for helping elderly and disabled people receive Medicaid services without being forced to go into nursing homes. Kaiser Health News. May 11, 2017

Wednesday, May 10, 2017

 

Aetna Fully Exits Obamacare Exchanges With Pull-Out in Two States

The New York Times reports: Health insurer Aetna Inc said on Wednesday it will exit the 2018 Obamacare individual insurance market in Delaware and Nebraska - the two remaining states where it offered the plans. NYTimes. May 10, 2017

 

Who will decide what the Senate’s health bill looks like? Follow the Medicaid-state senators.

The Senate has broken into a series of “working groups” to begin writing its own version of legislation to replace the Affordable Care Act. There’s the leadership-driven group, a group of moderates and there was talk about a more conservative group before it was mostly absorbed into the leadership group. The Washington Post. May 9, 2017

 

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.

 
Wednesday
May102017

An Interview With Kaiser’s Robert Pearl, MD on Mistreated Patients and the American Health Care System

By Clive Riddle

By Clive Riddle, May 10, 2017

 

Doctor Robert Pearl, certainly a prominent figure in American healthcare today, agreed to sit down and expand upon his thoughts on the American health care system in 2017 and its impact upon patients. His new book, Mistreated - Why We Think We're Getting Good Health Care and Why We're Usually Wrong has just been released this month by Public Affairs, and we hoped he would elaborate on some of the questions that come to mind from issues raised in Mistreated, and in his public speaking appearances.

 

Robert Pearl, MD, is executive director and CEO of The Permanente Medical Group, responsible for the health care of 3.8 million Kaiser Permanente members, and he is the president and CEO of the Mid-Atlantic Permanente Medical Group. He is on faculty at Stanford and has taught at Duke, UC Berkeley, and Harvard. His column on Forbes.com addresses the business and culture of health care, and he has been featured in national media including Time, ABC News, USA Today, and NPR.

 

So here’s what Doctor Pearl shared with us in response to our half dozen questions:

 

Q. You have been an influential healthcare stakeholder and thought leader for some time. American healthcare has been problematic for even longer. What confluence of events influenced you to write this book at this juncture?

 

Doctor Pearl: The American health care system is walking towards a cliff, and if nothing is done to change course, we will step over the edge and crash to the ground below. We spend almost 50% more than any other country in the world and our outcomes are in the lower half of industrialized nations. Hundreds of thousands of people die each year from failures in prevention and medical error, including my dad. Our system most closely resembles a 19th century cottage industry. It is fragmented, with doctors scattered across the community and hospitals in every town, piece meal, what we call fee-for-service and using information technology from the last century. The cost is rising faster than our ability to pay. The government is spending 40% of tax revenues on health care today, and with 10,000 people becoming eligible for Medicare every day, that will rise rapidly in the future. And businesses are implementing high deductible insurance products, with patients increasingly unable to pay the out of pocket expense. In other words, the "patient" is becoming critical. I wrote Mistreated for two reasons. The first was my career long desire to make American health care better. And the second to prevent other people from losing their parent prematurely. For both reasons, all profits from the book will be given to charity to provide care to patients unable to access it today.

 

Q. You have written about how healthcare organizations should be less, and not more, regulated in some respects - for example reducing regulation in order to facilitate workflows that would allow hospital patients to get more uninterrupted sleep during the night. You also have written that a single payer system is not the answer for American healthcare. What legislative changes do you advocate in your book?

 

Doctor Pearl: I believe that change can best happen through transparent and fair competition. Making it possible for insurance companies, ACOs and large, multi-specialty medical groups to offer products that patients can understand, compare and choose among would be valuable. I have confidence in the wisdom of people and businesses to make the best selection, once they have broad choice and sufficient information.

 

I also believe that the government needs to address the egregious pricing by many drug companies. The patent laws were written for the greater good of all. They were designed to encourage R&D and focus drug companies on solving the most important clinical problems that exist. They never were designed to allow manufacturers to buy the rights to long standing, inexpensive drugs and raise their prices 500% - 5000 %.

 

Q. You cite three technologies as being key to transforming American health care: Video and digital photography; Data analytics; and EHR. These are not exotic items. So what are some primary factors in 2017 that are still holding us back from deploying these three items at optimal levels?

 

Doctor Pearl: There are three reasons I believe these technologies are not more broadly used. The first is that to use them effectively requires an integrated delivery system that is prepaid with effective physician leadership. Without all three pillars, the information in the EHR will be incomplete, the data analytics difficult to apply, and applications like video economically problematic.  The second reason is physician inertia. According to the Rand Corporation, it takes 17 years for a great idea to become common practice. Finally, when it comes to video and digital, the problem with these technologies is that they are inexpensive. As such, there is no manufacturer or device company that wants to invest the dollars needed to encourage and train physicians to embrace these patient conveniences. And without this level of support change is slow to happen.

 

Q. Speaking of exotic technologies, you are not necessarily the biggest fan of focusing on all things new and shiny, and have cited the challenges in overcoming behavioral biases in that direction. What are some significant examples of technologies that have at this point benefited from undeserved demand from consumers or providers?

 

Doctor Pearl: As you note, as a nation we are attracted to the new and the hyped. A variety of expensive medications fit this description. Often they have minimal improvements over what was previously available, or extend life by a few weeks for most patients.  Another example is Artificial Intelligence. It sounds great, but most of the systems are really just fancy computers with physician developed algorithms, not real self-learning applications. Similarly, expensive fitness trackers are minimally better than the free application on your smart phone. And medical wearable devices can transmit hundreds of heart rhythm tracings, but doctors don't want them cluttering up their EHRs, and rarely do they add value for someone without a known cardiac arrhythmia.

 

Q. You are a strong advocate for clinical integration. What in 2017 are the biggest impediments in urban markets that lack adequate clinical integration? And how do we bring greater clinical integration to rural America?

 

Doctor Pearl: In urban areas, the limitations are the associated changes that need to happen. For integration to add value, you need to create a structure with the right number of physicians from each specialty. Often there are too many or too few in a typical community. For the new structure to add major value, reimbursement needs to change, rewarding prevention and avoidance of medical error as highly as intervention. And altering how doctors are paid is always contentious. The computer systems need to connect, and that is difficult to accomplish today. Finally, physician leadership is essential, and that requires investments in training and a willingness of all to relinquish autonomy.

 

In some ways the rural areas could be easier. In this case I believe the structure can be virtual, with specialists in more urban areas linked to primary care in the rural location. We are already using this type of approach in our on-site clinics located in large businesses. Here specialists whose offices may be in a hospital miles away can consult on a employee needing specialty expertise without having to ask the patient to drive to the physicians' location and miss a day of work. Over half of the time, this solves the patient's problem.

 

Q. In what ways do you hope consumers will change their actions or thought processes as a result of reading your book? And in what ways do you hope other healthcare stakeholders will be influenced?

 

Doctor Pearl: I wrote Mistreated for the patient in all of us. My father was a professional with well trained doctors, and yet, he experienced a medical error from the lack of a comprehensive electronic health record and inability of his doctors to communicate effectively.  The first step to transforming American health care is to help people see what they are missing and why. Having done so, I would hope they would begin to make different choices in the health plan and delivery system they select. Information can be difficult to obtain, but increasingly it is available. Choose a five star program in Medicare or on the health care exchanges. Check to see if there is reported data on outcomes for various procedures like heart surgery, and go to the programs with the best results. Ask physicians before you have a procedure how many of these they did last year, and choose ones with the highest volume. And when you are in a hospital or doctor's office, and anyone fails to wash their hands before examining you, speak up.

 

Specific to the medical profession, my hope is that change will happen soon, rather than waiting for the predictible crisis. The current system isn't working for clinicians any more than patients. The fragmentation that exists today leads to isolation. Fee-for-service makes doctors feel like they are having to run faster and faster, and convince patients they need things done that often add little value. The lack of technology and medical information leads to errors. And the lack of leadership reduces coordination of care and produces growing frustrations in the practice of medicine.  Change always is difficult and scary, but it can happen. And when it does, I believe both patients and physicians will benefit immensely.

 

The current system is broken. I am optimistic that when large numbers of people from diverse backgrounds come together to talk about their experiences and recommendations, that we can improve health care delivery in the future. That is my hope in writing the book. The path I describe is the one I believe best for the nation, but I look forward to learning from others. If Mistreated stimulates discussion, debate and improvement, and as a result tens of thousands of lives are saved each year, then my father's death will have served a purpose.