Health Business Blog

A reader sent along a tip about an excellent presentation given at Harvard Medical School by Zen Chu, a venture capitalist and medical device entrepreneur. You can download the presentation from the Center for Integration of Medicine & Innovative Technology (CIMIT) blog. It’s well worth having a look.

Here are some tidbits I picked up from the document:

• Innovation without impact is worthless: Unmet clinical needs is a cliche, translational medicine must strive to become Standard of Care
• A very high share of med-tech innovations originate with physicians, and those inventions have a higher impact on average
• MDs look at value creation differently from investors, who attach more value to later stages of development than do the inventors. “Innovation is spark, development drives value.”
• Incremental innovations are very useful, but creating a whole company based on one may doom the product
• “Time is Life” –and there are a variety of accelerants and deccelerants to be aware of

Some techniques to identify opportunities include:

• “Productize” a procedure: turn a service into a repeatable product, e.g., from stomach stapling to lap-band
• Remove treatment ambiguity to anticipate or create the standard of care
• Eliminate a provider or facility to reduce costs and provide an opportunity for profit
• Import solutions from other countries

The presentation ends with a call for a Commercialization Grand Rounds.

I’m sorry I missed the live presentation, but glad to have at least had a look at the document.

This is a transcript of my recent podcast interview with David Hom, Chairman of the Center for Health Value Innovation.

David Williams: This is David Williams, Co founder of MedPharma Partners and author of the Health Business blog. I am at Consumer Health World in Las Vegas where I spoke today with David Hom, Chairman of the Board of the Center for Health Value Innovation.

David and I spoke about value based insurance design and health care consumerism. Hom would like to see consumers become CEOs of their own care, and he believes we are at the cusp of using information technology effectively to enable consumers to adhere to therapies. The Center’s approach represents a clear departure from business as usual, but the concepts are strongly rooted in improving the existing employer based model rather than overthrowing it.

David, thanks for joining me today.

David Hom: You’re welcome, David.

Williams: What is the Center for Health Value Innovation, and who is involved in it?

Hom: The Center was established to share best practices with employers, both large and small, both state and private. We have at the table all the key players in the health system, from health plans to insurance brokers to health systems, physician groups, employers, business coalitions and unions.

Williams: What was the impetus to get all of those groups together?

Hom: The impetus was really simple. It’s how do we create a safe environment for these organizations to share best practices, to innovate in health care in order to reduce the rate of health care inflation primarily through improving patient adherence to treatments for chronic conditions?

Williams: Who has an interest in doing that? Often, you hear about adherence as being something that’s pushed by the pharmaceutical companies as another form of marketing, but this sounds like something.

Hom: Absolutely. The ones that have been most upset about this are the health plans, physician groups and hospital systems. What this will do is it will reduce the level of intensity for ambulatory services. At the same time, it will reduce ED visits and hospitalization costs for payers.

Williams: You have the word “value” in the name of your organization. Value is a term that is being thrown around a lot in health care these days, starting with the Secretary of Health and Human Services. Can you tell me what you think about when you use the term value?

Hom: We define value from a payer perspective, which is how do we measure the dollars spent in health care? What does it do to employee productivity? How does it drive higher employee engagement and thus reduce disability days for organizations?

Williams: Is that a concept that people can agree on, or do people come at it from different angles?

Hom: I think, most people understand the concept of ‘an ounce of prevention is worth a pound of health care.’ They get through the solution multiple ways, but by and large people focus on this concept around data, aggregating data and then understanding what are the patterns within the data. What are the barrier issues for access to care? How do you remove the barriers –whether admin barriers or financial barriers? Then, how do you track the ROI? How do you measure the return on investment of those dollars?

Williams: How good are the data today that are being used? I’ve heard about value based insurance design, which seems to be mainly about reducing co pays in certain situations. Is that done in broad strokes? Will happen on an individual person basis or a dynamic basis over time?

Hom: We see this concept happening at the population base level, looking at what the patterns are, what the barrier issues are, and how to manage those issues. However, when you set your designs up, it drives individual consumer behaviors. That’s the most powerful thing.

When someone is highly compliant with their regimens –taking their annual physicals, doing their pap smears, doing their colorectal exams– they tend to be CEOs of their own health, which is what you want them to do.

Williams: What are you finding in terms of the evolution of consumerism in health care? How much credit do you give consumerism, and how much potential is there for consumerism to resolve some of the cost and quality issues that exist today?

Hom: In terms of consumerism, we are at the cusp. We are at the cusp of using emerging technologies to provide information on a chronic to the patient and guiding them through the health care system in an effective way.

The example I use is that when you go to the doctor, the doctor spends six minutes with you. You get a set of directions. You walk out saying, ‘What am I doing? How do I do it and when do I do it?’ And you get confused. We want to use technology as an enabler to train patients one at a time to adhere to what the physician recommends.

Williams: What sort of evolution is required of the typical physician, and does the Center play a role in that?

Hom: We work with a number of physician groups. The concept is to align pay for performance –which is how you assess physician practice patterns– to this concept of benefit design. If you are going to lower the barriers to access care, then how do you hold physicians accountable for the management of their diabetic patients, for example? And then, how do you steer patients to those physicians, and how do you modify the reimbursement rates to those physicians to pay for the appropriate care?

Williams: It sounds like what you are doing is mainly within the construct of the current system, the current private payment system whereas a lot of what’s being discussed on the campaign trail sounds pretty radical. Even the Republican, John McCain talks about blowing up insurance coverage from employers. How does that fit in with what you are doing, and do you think there is an opportunity to preserve the private system?

Hom: Absolutely. People often talk about health care from 30,000 feet. What we’ve learned is that not only is health care delivered locally, but health care decisions are made locally, too. You have to create successful case studies within geographic areas, test the hypotheses, roll out the interventions, measure them and then scale them to other organizations.

Williams: We’re here in Las Vegas at the Venetian Hotel at Consumer Health World 2008. I believe you are running a workshop this afternoon as part of the National Conference on Health Care Consumerism. Can you tell me about that? Who is participating? What are you hoping to get out of it?

Hom: We have a great panel today. We’ve got 10 folks representing insurance brokers, health plans, physician groups, hospital systems, PBMs, employers, business coalitions, really talking about health care innovation from a pay perspective. We’ll discuss what they have done to a) identify the problem; b) solve the problem; and then c) measure the results.

It is very action oriented. It includes case studies, and it will create tangible results for people to walk away with versus talking heads.

Williams: I have been speaking today with David Hom, Chairman of the Board of the Center for Health Value Innovation. David, thanks for speaking with me today.

Hom: Thank you, David. I appreciate it very much.

Check out the latest edition of the Health Wonk Review at Healthcare Economist.

As part of the preparation for Grand Rounds (hosted here yesterday), Nicholas Genes profiled me on Medscape. This year’s writeup focuses on some of my more strident positions: in favor of immigration and in defense of commercial health plans. Last year’s piece emphasized my work in medical tourism and the year before’s was a general introduction.

Welcome to the latest edition of Grand Rounds at the Health Business Blog. This is my fourth time hosting (fifth if you include the April Fool’s edition).

We’ll start things out with a little fun before getting serious

Who says radiologists don’t have a sense of humor? Not Totally Rad’s iPhluoroscope is the latest antidote to the cocktail party consult syndrome.

Clinical Cases and Images advises that starting to drink in middle age may reduce cardiovascular events as much as statins do. If the effect is synergistic, expect to see combination products enter clinical trials soon. Liquitor anyone?

And if you want to play games while drinking, Vitum Medicinus likes to pour hot water in one ear and cold in the other to make your eyes quiver.

Medical manners, miscues and menschen

I was struck by the number and depth of posts discussing the complexity of relationships among doctors, administrators, patients, nurses, and chaplains.

Other Things Amanzi offers a story from his surgical training. A senior physician had essentially left a patient to die –pronouncing his diagnosis of a fatal condition by phone and refusing to come in to help out– but our blogger and a colleague saved that patient’s life. The next day another senior doc took the two trainees to task (in public) for not performing the surgery exactly the way he would have, while the doc who’d given up on the patient and abandoned the trainees sat by silently.

Dr. Anonymous interviewed Beth Israel Deaconess president Paul Levy. The Blog That Ate Manhattan was eating it up at least for a while. Here’s an administrator who gets it, who’s empathetic toward docs and generally a good guy. But then she reacts (or possibly overreacts, as she admits) to a comment Levy made about dealing with a difficult doc in a negotiation. In the comments section Levy explains himself further: Doctors should be expected to communicate and negotiate well as part of their jobs, and not just in dealing with administrators. Meanwhile GruntDoc was listening to the podcast, too. He didn’t take umbrage at Levy’s comment. In fact he’s a bit embarrassed that doctors display such “horrible” negotiation skills.

In case you think you can’t teach an old doc new tricks, The Entrepreneurial MD presents Secrets of developing new habits. Physicians fall into certain patterns of thinking, but they can become creative and innovative again by pushing themselves out of their comfort zone (and perhaps learning to negotiate and communicate). For the RoboDocs who aren’t quite ready to leave their comfort zone, the NEJM ran an article entitled Etiquette Based Medicine. In Sickness and In Health is saddened by NEJM’s cookie cutter approach to etiquette in the doctor/patient relationship, e.g., “Sit down. Smile if appropriate.” She considers it a poor substitute for real empathy and connection.

I’m more sanguine on the concept –courtesy and manners can go a long way for patients, even when it’s not heartfelt. Over time, following such mechanical steps may actually lead to a change of heart. But if your doctor isn’t the compassionate (or polite) type, you could do a lot worse than to receive a visit from Rickety Contrivances of Doing Good, a volunteer chaplain. What she calls Two Moments of Grace I would call, A Touch of Class. Her offer to get a glass of water for a fatigued family is greatly appreciated, and her “few trite, awkward sentences” for another patient help that person turn the corner.

Medical Pastiche offers up commentary on 7 famous medical TV shows. Some are more realistic portrayals than others, but as a whole they offer insights into doctoring and the nature of medical relationships. In any event they do have an impact on real-life patients and medical professionals –current and potential. Meanwhile, Mind, Soul, and Body was introspective and insightful in his choice of pediatrics over adult medicine. My favorite reason: “Kids don’t have that unmistakable adult hospital smell.”

Own Your Health provides advice on creating a “meaningful, healing partnership with a physician.” Old fashioned talking plays a big role.

Emergiblog offers words of wisdom to graduating nurses. Among them: “Please, please remember that you practice nursing and not medicine… Act like the consummate professional, and you will find that the doctors will treat you accordingly. Those who don’t have a problem. You do not.”

Suture for a Living offers aspirational words for physicians to live by, circa 1871 but still relevant today.

Patient tales

HealthBlawg went to Israel and had a pretty good experience at the emergency room. For one thing, no one asked about payment. Delayed arrival at Shakespeare’s Falafel Stand was the only real downside.

Chris is going to be quite a good husband if Six Until Me’s story of nighttime low blood sugar woes is any indication. At a minimum he’ll get used to hearing the term “honey” thrown around.

Decreased amniotic fluid? Not good, says Fruit of the Womb, and here’s why.

Well, Well, Wellness

The biggest change since I last hosted GR is the plethora of submissions on wellness.

The Fitness Fixer shows us how to stretch mindfully so we don’t just cause new problems. Wellness tips advises: “pretend that your pelvis is a bucket,” to avoid hip pain.

SharpBrains (surprise!) is into brain fitness.

Teen Health 411 recommends healthy eating for teens. The Diet Dish lets us on to the fact that a dietitian is a professional while a nutritionist is a nobody. Dr. Penna reminds us that breast is best.

Medicine for the Outdoors suggests avoiding ground-level ozone.

In case you’re still having trouble sleeping after all that wholesome advice, How to Cope with Pain has tips on getting better sleep and so does Highlight Health. How to Cope recommends using the bed only for sleep and sex. Apparently insomniacs had been giving the kitchen a bad name.

Health Wonk Review it ain’t, but we’ve got a few policy posts

Dr. Rich of The Covert Rationing Blog establishes that he is no friend of lawyers but then explains that medical malpractice insurance reform is a bad idea for everyone, at least at this stage.

FDA is dissing insulin pumps. If they’d read Diabetes Mine they’d know better than to say such things.

Are doctors overmedicating kids? Dr. Anonymous raises the issue but keeps his own verdict close to the vest.

Freedom from Smoking worries that tobacco control money is being cut in tough economic times. He may not realize that we need smokers to pay cigarette taxes for all the new domestic initiatives –like universal health insurance.

Taking Accutane for acne? You might be blackballed when you try to get insurance, says InsureBlog.

Technology’s turn

From Healthline Connects: Cochlear implants may be the number one medical advance of this century, but adjunctive therapy is a must.

ASTHMA IQ helps physicians implement clinical guidelines, says Allergy Notes.

Wait Time & Delayed Care applies the Boston Consulting Group’s richness vs. reach framework to explain the tradeoff between quality service and wait times in health care. (I wish he’d continued in the same vein as the BCG authors, who used the construct to explain how the Internet breaks the compromise between richness and reach. Workflow innovations and health care IT display some of the same potential in health care.)

Efficient MD is launching a new wiki for health care professionals. “Clinical pearls” and “life hacks” are among the rewards to be found there, we are told. Perhaps they can resolve Wait Time’s issues.

Thanks for reading Grand Rounds. You can read my previous Grand Rounds editions here, here, here and here.

Next week’s host is Musings of a Dinosaur.

You can read a good take on placebo surgery at Science Channel.

This leads me to an extremely bizarre — but nevertheless intriguing — thought: If fake surgery actually helps study subjects, what about using it to treat ordinary patients, particularly ones for whom no other effective treatment seems to be available?

Several years ago, while seeking to establish the ROI for RelayHealth, we found that users of RelayHealth had lower spending for emergency department visits than the control group. The explanation was reasonably straightforward: better, more timely access to physicians obviated the need to show up at the emergency room with its attendant costs, inconvenience and dangers.

Now a study from the University of Rochester has shown something similar. More than 25 percent of pediatric ED visits could be avoided through telemedicine. Researchers found that many ED visits were for non-emergency issues like sore throats and ear infections. That’s no particular surprise to anyone, I don’t think.

The group in the study with access to telemedicine did access care 23 percent more than the control group, but overall costs were much lower because ED visits were 24 percent less frequent. Cost savings translate into about $14 per year, enough to buy a pretty decent dinner in Rochester.

As technology improves –with better communications and remote monitoring technology– I expect such benefits to grow.

I’m reprinting this message I received from FDA:

Please help FDA spread the word about recalls of injectable heparin products and heparin flush solutions that may be contaminated with oversulfated chondroitin sulfate (OSCS). Affected heparin products have been found in medical care facilities in one state since the recall announcement. Although product recall instructions were widely distributed, they may not have been fully acted upon at all sites where heparin is used. There have been many reports of deaths associated with allergic or hypotensive symptoms after heparin administration (see FDA link at http://www.fda.gov/cder/drug/infopage/heparin/adverse_events.htm ).

We ask that health professionals and facilities please review and examine all drug/device storage areas, including emergency kits, dialysis units and automated drug storage cabinets to ensure that all of the recalled heparin products have been removed and are no longer available for patient use. In addition, FDA would like to inform health professionals about other types of medical devices that contain, or are coated with, heparin. To read this update, and to learn how to report these problems to FDA, please go to: http://www.fda.gov/cdrh/safety/heparin-healthcare-update.html.

Please report to FDA adverse reactions associated with these devices, as well as any reactions associated with heparin or heparin flush solutions. If you have questions or would like more information about this request, please contact the Division of Drug Information at 301-796-3400.

This is a transcript of my recent podcast interview with Richard Noffsinger, CEO of SafeMed.

David Williams: This is David Williams, co founder of MedPharma Partners and author of the Health Business Blog.

I spoke today with Rich Noffsinger, CEO of SafeMed, a clinical decision support company based in San Diego. I first met SafeMed’s founder, Dr. Ahmed Ghouri, a couple of years ago when the company was starting a pilot at Beth Israel Deaconess Medical Center in Boston. I liked the demo I saw then and I have been following the company ever since.

In our interview today, Noffsinger brought me up to speed on SafeMed’s collaboration with Google, its progress in radiology and the impact the company hopes to have on cost, quality and patient safety.

David: Richard, it’s a pleasure to speak with you today.

Richard Noffsinger: It’s great to be with you David. I appreciate the opportunity.

David: Richard, tell me first of all, what is SafeMed and how does it work?

Rich: SafeMed is an exciting new technology in the clinical decision support arena. We’ve set a new bar in clinical decision support that personalizes and identifies and prioritizes treatment options for both doctors at the point of care, as well as patients in a PHR, or doing it on a mass population basis. It then specifies best treatment options based on that information and is specific to the patient, their conditions, issues and their demographics and profile.

David: Richard, what kind of information does SafeMed rely on? It sounds like if you have more information, it will lead to better decisions.

Rich: David, you are exactly right. The more information that SafeMed has, the deeper and more specific the recommendations or information and clinical decision support we can provide.

At the point of care, if there is an EMR we are going to have much better information, much better results, than if we just have a few pieces of information. We pull personal information: age, weight, sex, that type of thing, and also what drugs are they taking. We also take business rules into consideration: what formularies they’re on, what their insurance covers and we also analyze and compute on lab results.

We consider not just that they had a lab test but what the lab results are. The more information we have, the better we can provide the depth and context of the information in providing the safest, most effective and affordable treatment options.

One of the areas that we have done this in is radiology, where we take into consideration all the data points for imaging. When a doctor is ordering an image, we can look at the different options and point out the highest efficacy based on the profile of the patient and what they are trying to determine for that patient and what makes the most sense from an imaging test. We are doing that at Beth Israel in Boston, for example.

David: Richard, you mentioned radiology and I know that has been a focus for the company. In fact, I saw that radiology model at BI a couple of years ago when it was first being tried out.

Why do you have such a focus on radiology and how does what you are doing in radiology relate to, for example, National Imaging Associates or a cost containment organization that an insurance company might hire or own?

Rich: The imaging market is a very rapidly growing market and it is very expensive, north of $100 billion a year, and there are companies out there that are trying to contain those costs through call centers and requiring authorization and that type of thing. What we have done is automate that at the point of care, so there is not a 24, 48, 72 hour turnaround.

It provides and empowers the physician at the point of care and where appropriate to direct them to possibly a more appropriate test for the patient given that profile. We’ve automated a lot of that call center type of functionality. Because our engine is so powerful it can do it literally in subsecond time right there in the exam room, if necessary.

Now your question is why so much focus on that. It’s one of the capabilities of the engine but the search engine is so powerful that we can purpose it in different areas, whether it is drug contraindications or lab tests or whatever. We are using the same core engine and we are just extending the rules, if you will, to that engine and to that specific specialty or requirement. It is very compelling for a lot of institutions so they are not trying to maintain multiple decision support engines.

David: There are a lot products out there and services that would call themselves clinical decision support. Do you have a market map of how you would position SafeMed relative to some other players that the listeners may have heard of? Or can you lay out where you stand relative to some other companies?

Rich: Our capability, our technology, is unique in that it can truly serve multiple constituents. We can provide the clinical decision support in a very profound way at the point of care in an EMR or CPOE system. Because of its speed, there are very few systems that have the depth and breath of capabilities that we do at the point of care.

We have built a methodology or business model where we’re an engine, and in that instance we want to integrate into the existing work flow. But that same engine can then be used as a clinical decision support in a PHR for a consumer. So as Google and other PHRs become available to the general population, we can help take that functionality to a whole new level by empowering the patient with actionable information.

It becomes much more than just a filing cabinet. It is specific to their situation, the prescription drugs that they are on or the drugs that they are on and their profiled information. It becomes very empowering to the patient. That is on an individual consumer basis.

So Google Health announced that they are in a pilot and going to be launching a PHR soon. We have been working with them for over a year to help deliver drug contraindications in their health portal, their PHR. It is very powerful to the consumer.

We leverage the same engine for the payer market. There are many players out there that are engaged in analyzing the claims data. While we do this very well also, that is not the only place we do it, as we just talked about.

So we give you one engine, purposing that in three different environments. At the point of care, for the consumer in a PHR, and analyzing a population, or a payer base of patients from a payer’s prospective.

David: Richard, you mentioned payers as one of the constituencies, and I know that, for example, Aetna acquired ActiveHealth a while back and WellPoint just announced the purchase of Resolution Health. Do you fit at all in that space or have you had enquires from payers? Do you see that becoming a possibility further down the line?

Rich: We do fit in that space and we do have a good deal of interest from payers because we not only provide the analysis, but we provide direction on where they can provide better care. Our engine not only can analyze, but can provide input on more economical directions and also on the safest direction to help a payer’s population.

We are working with other payers and disease management companies in looking at how to leverage our engine. We think that the Resolution Health acquisition by WellPoint validates and increases the interest in this market and validates the value of what we are doing and what other companies are doing in this marketplace.

David: You mentioned earlier on that you were doing some radiology physician support at Beth Israel in Boston and I said I had seen it there. Can you tell me a little bit about how that relationship has evolved? I noticed that John Halamka who is the CIO there at BID and also of Harvard Medical School has joined the SafeMed board.

Rich: We are absolutely thrilled to have John on the board. His expertise, his intellect, his knowledge and his experience in the health care IT market is really exceptional. We are exceedingly fortunate to have somebody as smart and experienced as John on our board.

Our relationship with Beth Israel is very strong. We have been working with them for a couple of years and we continue to expand the capabilities in working with them. This includes an IRB test with what we are doing in radiology and imaging and expanding the capabilities of the product. They have been a wonderful business partner through this process.

David: Explain for me your vision of where clinical decision support can have an impact on cost, quality, and patient safety. How broad can SafeMed’s impact be? Is SafeMed the silver bullet for health care cost and quality?

Rich: Well, as much as I would love to say that SafeMed is the silver bullet, I am not sure that there is one silver bullet. I can say that we think that we have developed something pretty special and that we feel that there is a strong place for SafeMed’s technology in the health care ecosystem.

There is so much information out there and there is so much new information coming all the time that a doctor can’t possibly be expected, given the pressure to see more patients in the same amount of time or less time, the new information that is coming to the forefront all the time, the regulations and guidelines. It is just virtually impossible for someone to keep it all straight.

We think a tool like SafeMed is incredibly empowering and helpful, both in the quality of care that is ultimately delivered, but also in the cost of care. There is a lot of defensive medicine going on out there. We think that we have the most powerful engine out there. We think it is foundational and transformative to health care as a whole.

We think it can have a profound effect on what is going on in health care today. Health care is just too complex, too big, too many options, too many things to consider to expect one person to keep it all straight in their mind. We think a tool like SafeMed is profound in what it can do.

David: Richard, what you mentioned there about defensive medicine reminded me of a piece that my fellow blogger Kevin Pho, who writes as Kevin M.D., had published in the USA Today. He talked about wasted medical spending, and about unneeded CT and MRI scanning in particular. It sounds like SafeMed may actually be able to address this.

Rich: David that is an excellent example. That is right in the sweet spot of where we are going and where we see incredible opportunity.

David: I have been speaking today with Richard Noffsinger, Chief Executive Officer of SafeMed, a clinical physician support company located in San Diego, California.

Richard thanks very much for your time today.

Rich: Thank you very much. I appreciated the opportunity David.

I’m hosting the upcoming Grand Rounds. Please submit your favorite post to me via email. The deadline is Sunday at midnight EDT. There is no theme.