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At HLTH, a Candid Discussion of What the Federal Government Can and Should Do to Promote Healthcare Innovation

May 11, 2018
by Mark Hagland
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At HLTH, UPMC’s Rasu Shrestha spoke with HHS CTO Bruce Greenstein and former U.S. CTO Aneesh Chopra to talk about innovation

At the HLTH Conference held this week at the Aria Resort in Las Vegas, the session entitled “U.S. Government Investing in Health Innovations” stimulated candid, oftentimes-spirited discussion of the role of the federal government in promoting technological and service innovation in the U.S. healthcare system.

The session held on Tuesday, May 8, and led by Rasu Shrestha, M.D., the chief innovation officer at the 30-plus-hospital, Pittsburgh-based UPMC health system, and executive vice president of UPMC Enterprises, its technology test-bed division, included two other panelists: Bruce D. Greenstein, Chief Technology Officer in the U.S. Department of Health and Human Services, and Aneesh Chopra, former CTO of the United States, and now president of CareJourney, an Arlington, Va.-based consulting firm and solutions provider founded in 2014 to help patient care organizations transition to value-based payment models.

Dr. Shrestha and Messrs. Greenstein and Chopra discussed a wide range of topics, around how, to what extent, in which contexts the federal government can or might act as a facilitator and catalyst for technology and other progress in U.S. healthcare; as well as payment- and data security-related considerations around innovation.  As Shrestha said at the outset of the session, “We all know about the Washington in the headlines,” the Washington of political conflict and division. But beyond that Washington, he said, “There’s a quiet Washington that continues to do a lot of work.”

Rasu Shresta, M.D., Bruce Greenstein, and Aneesh Chopra on May 8 at HLTH

In that context, Shrestha asked Bruce Greenstein to describe the KidneyX Project, which is described on HHS's website thus: “Each year approximately 4000 organs recovered from deceased donors (nearly 3000 kidneys) were not used for transplant and instead were discarded. This project proposes to analyze the underlying causes of the high rate of kidney discards and identify tools to provide transplant physicians and patients with better information on kidney quality and expected outcomes to inform decision-making and reduce the risk of discard. Based on input from multiple end-users and stakeholders these may include improved information-sharing, data analysis tools, and proposed changes to organ transplant systems and policies. The goal” of the initiative,” the HHS website says, “is to increase the number of successful kidney transplants and reduce kidney transplant waiting times.”

Speaking of the initiative, Greenstein explained to Shrestha that “It’s not regular government innovation, or the kind where you have a little festival for a day and say you’re so innovative. My mom died in 2008 of kidney disease, at 59 years old, after 15 years with kidney disease. I remember taking her to the dialysis center, where the machines, the care, everything, was set up in the exact same way as 15 years before. In fact, for 60 years, there’s been no innovation in the end-stage renal disease care in 60 years. And there’s massive market failure. We spend more on kidney dialysis than the entire Department of Commerce, NASA, and you can throw in the FTC and FEC as well—so our idea was to change the market. We went out and asked investors and innovators why there hasn’t been change. They said, well, you guys seem to like it as it is. So we’re using the federal government’s X Prize funds to encourage invention and innovation, so we can pay differently for this. This is one example of an area where the government can address market concerns and innovations.”

“Is this perhaps a clever way also for the government to cleverly start working with the private sector?” Shrestha asked. “You’re very clever!” Greenstein replied. “Yes, this is a perfect way to start. And we also want to try to start to fix one piece after another, to use the power of investors, VC [venture capitalists], and material scientists and engineers, people from outside the industry, to address our issues.”

Turning to Aneesh Chopa, Shrestha said, “During your time as CTO, you saw a radical shift around data. Pace of innovation hasn’t caught up. What’s your perspective on this?” he asked, cited the potential for public-private collaboration around data analytics, information technology, and other forms of technology development.

“Bruce and I will do our best to demystify the avoiders,” Chopra said. “So here’s what I’m going to context: the government historically has been a participant in the innovation economy mostly by investments in infrastructure, setting rules of the road broadly, or setting a target like going to the moon. In 2008 when President Obama was running for president, he said he wanted us to close the innovation gap between the pace of change in the private sector and that of the government. So we had a theory of how we would make this shift, and that theory involves a new form of government investment that I want to make sure to communicate here.”

Per that, Chopra said, “The first thing we decided to do was to change the default setting from closed to open on the data held by the government. Now on the healthcare side, the most difficult set for the private sector to use had been the Medicare file. Why? It was seen as a privacy violation for physicians, because someone could determine through the claims database how much physicians were paid, and one could extrapolate how much physicians were paid overall. But now, that Medicare database is open for business. There are public use files where that data set can be used as a fuel for innovation. So that default changed. The second thing the government did is that we got much more active in the standards debate. There had historically been a notion that the private sector should develop standards, and that the government should stand back—you don’t want the government weigh in on Betamax versus VHS. But in the absence of government involvement, we had this decade of gobbledygook in medical records, where it was difficult to express things like your problem list, medication list, allergies list, etc.”

“But wouldn’t the government’s role around standards had been better had the government enforced national standards around EHRs [electronic health records]?” Shrestha asked.

“Phenomenally good question,” Chopra said. “Now, in 2009, there were a few legends in HIT—Rasu, and John Glasser [the former CIO of Partners Healthcare in Boston, and later, CEO of Siemens], for example. And John said, we’ve got electronic records, but if you ask me to produce a list of patients who smoke, I can’t do it, I can’t do that query; there’s no standard format for that question. Now, if a core data set had already been standardized at the time we launched the HITECH Act, we would have gone for it. Meanwhile, another investment area for the government is, we’d fund the R&D for standards development. Now, per this Apple Health thing, if you sourced the original technologies that Apple relies on that are standards-based, they have their origins in an R&D project we helped fund around how a consumer can access their right to data, along with FHIR. So the government invested in opening up the data, engaging in standards, and then allow the government to create prizes that Bruce just mentioned.” In other words, that foundation that the federal government laid around standards, has helped to fuel the Apple innovation around patients’ direct access to their patient records on their iPhones.

“Here’s an audience question,” Shrestha said. “Will we see a greater role by NIST in terms of enabling innovation?” he asked, referring to the standards developed by the National Institute of Standards and Technology (NIST).

“Great question!” Chopra said. “NIST is a division of the Commerce Department that is the opposite of top-down: it’s bottom-up, it’s industry collaboration, a convening authority. So what’s powerful about NIST is when we have a market failure and can’t reach consensus, NIST can corral troops. NIST was explicitly empowered in the energy sector to do so. We put $10 billion into smart meters at the same time we put $40 billion into EHRs. NIST was actually an active player there, and worked on an explicit roadmap to make sure that the data and smart meter were available to consumers. That had been the policy going back to 2012. It wasn’t until 2015 that we finalized the rule to allow consumers to connect their electronic health data to apps. That’s the spirit of NIST, of government convening. And the fact that Apple deliberately chose an open stack was due to the NIST model, which was a convening model. Goldilocks—not too top-down, not too chaotic, but convening.”

A downside risk policy question enters the discussion

“Bruce, we talked about payment reform, a lot of things that happened in the prior administration around ACOs. So, pun intended, looks like the ACO program is at risk now, per this press release from NAACOS,” he said, referencing both comments that Seema Verma, Administrator of the Centers for Medicare and Medicaid Services (CMS) had made this week, and the results of a survey by the National Association of Accountable Care Organizations (NAACOS) that found that 71 percent of its member leaders who responded to the survey said that they would likely leave the Medicare Shared Savings Program for ACOs if they were forced to assume downside risk.

In his May 9 report on all of this, Healthcare Informatics Managing Editor Rajiv Leventhal noted that, “Earlier this week, CMS (the Centers for Medicare & Medicaid Services) Administrator Seema Verma remarked that ‘upside-only’ ACOs (accountable care organizations) that do not take on downside risk have not generated enough results to date. Now, Healthcare Informatics has learned that a CMS rule is forthcoming that could shorten the duration ACOs can stay in one-sided risk models. Verma’s remarks, made at the American Hospital Association (AHA) annual membership meeting in Washington, D.C. on May 7, aligned with what HHS (the Department of Health & Human Services) Secretary Alex Azar said at AHIP's (America’s Health Insurance Plans) National Health Policy Conference in March where he stated, ‘[Federal ACO] programs were intended to give providers three years to learn how to accept risk and share savings, but the results have been lackluster,’” Leventhal’s report noted.

Further, Leventhal wrote, “Verma went into more detail this week, noting that downside-risk ACOs have achieved significant savings to Medicare, ‘while upside-only ACOs are increasing Medicare spending, and the presence of these upside-only tracks may be encouraging consolidation in the market place, reducing competition and choice for our beneficiaries.  While we understand that systems need time to adjust, our system cannot afford to continue with models that are not producing results,’ she said.”

Responding to Shrestha’s question, Greenstein said, “The government is making the market more fertile, to enhance value. Medicare Advantage plans, second area. Every year, we’re increasing the number of people in MA plans. Large plans, some national, some local, are investing in that area. Large plans buying vertically integrated provider organizations, making investments in the social determinants of health. We’ll continue to see innovation on the payment side and on the delivery side, we don’t’ tell them what to do. And we’re continuing to use our authority at CMMI [the Center for Medicare and Medicaid Innovation] to do innovative delivery models. It’s really about value. In this case, value does not have to equal risk. What do we think about as value? Quality, affordability, and consumer-centricity.”

That means, Greenstein continued, that the federal government is trying to improve choice and quality in healthcare. “So with this, we have the ACO model,” he said. “You just referenced a press release where 71 percent of the ACOs said if there’s downside risk, they’re likely to leave this program. Well, maybe this program is not for you. Because if you only want a little bit of extra money but don’t want to take risk, maybe this isn’t the program for you. There’s no ‘A’ for effort here; you have to produce results.”

“It’s time to deliver?” Shrestha asked. “Yes, it’s time to deliver,” Greenstein responded.

What about data security?

Shrestha went on to broach the topic of data and information security at a time when leaders are trying to push forward into innovation in U.S. healthcare. “Given the recent Cambridge Analytica scandal, does the government need to change its approach to privacy?” he asked his panel.

“Yes,” Chopra replied. “Here’s the challenge: as we speak, we’ve now put in place the technical ability for the consumer to connect to their health records. That is a data liberation model. But,” he went on to say, “when you move the data from a HIPAA-covered entity to a consumer app, there is no protection. It’s the equivalent of Facebook. The worst we can do is if you lie to a customer, we can bring you up on charges of deception. In my opinion, that is insufficient; and this has been the case in the Internet economy from the very beginning. My team led the charge to create a Consumer Privacy Bill of Rights under the Obama administration. And one of the core principles included that one was, I should have the right to control the sharing of my data. Second, I should be able to consent on collection, meaning, I would like permission to access X Y and Z data from you on the front end. And lastly, I want to be able to manage its use. And by constraining the context under which the consumer is permissioning the use of the data, you allow for some rational thinking. If I wanted to play a game using my psychometric profile, I wouldn’t have anticipated that that data would be sold.”

In any case, Chopra said, “We submitted this Bill of Rights to Congress, but it didn’t go anywhere. My hope would be that Congress would take a second look at this. And we have a hook for this. While Google or Facebook may not feel they need to worry about this, I believe that for apps touching sensitive HC information, we could create something equivalent to a digital Hippocratic oath—industry-led—that would protect consumers’ data. If we could do that, create an industry-led digital Hippocratic oath, that would be very big.”

“Can we revisit HIPAA? Can we talk about it?” Shrestha asked, citing an audience member-supplied question.

“Whoever asked the question, they’re onto something,” Greenstein said. “This is an active question under discussion at HHS. HIPAA is mostly about insurance, not information. And a lot of information is not covered by HIPAA. But it’s often used as a cultural shield to avoid doing something. So we started asking the question of lawyers around the department. And it turns out, it’s not that hard; you start writing regs. So does HIPAA need to be modernized to keep up with today’s level and desire for sharing, for modern technology capabilities, and for the marts we might use, around formats or standards? That’s the question. Or do we need a much better marketing program, because HIPAA is so grossly misunderstood? We’re interested in doing either, but something needs to happen. And maybe every single person in this room has had some negative brush with it. And if the government created this problem, we can fix it.”

Per that, Chopra said, “We made the requirement that patients need to be able to get their data within 3 days of discharge, and 90 percent of hospitals said they could do this, and everybody was high-fiving, but what was the denominator in the rule? 53 percent of the hospitals in the US publicly reported last year that not a single patient had requested an electronic copy of their discharge summary, by their own admission. There’s no way those patients were told that they were allowed to take an electronic copy. So let’s understand the right of my access. If I invoke my right and you refuse, the government can fine you. We created a penalty under the Obama administration. Let’s start understanding that authority, and I can say as an outsider now, that’s our opportunity. The consumer has the right, we’ve got to start building the DNA in the healthcare system, to honor that right.”

Innovation: which way forward?

“Let’s talk about the specifics around innovation at HHS. There’s almost a bit of a perception that at the federal level, there’s not as much of a sense of urgency in pushing this forward, and that seems wrong in what you’ve said,” Shrestha said. “I just came back from Sacramento where they had their innovation conference, I gave a keynote there, and there’s a remarkable sense of energy and activity at the state level. What are you doing” at HHS? He asked.

“We believe we need to franchise our model, to not exhaust our resources,” Greenstein said. “They’ve created an excellent model in California. We are trying to be the front door to HHS, the big glass front door for innovators, start-ups, entrepreneurs. To some extent, we compete for the same innovators to focus on our projects, as others do. We want them to work on our problems right away. So we try to defeat these four myths: that the sales cycle is too long, the priorities are ambiguous, the process is byzantine, and they don’t know who to call, in the government. And if you’ve ever tried to sell into a Blue Cross or Blue Shield plan, our sales cycles are a lot shorter. So we’re working with the FDA [Food and Drug Administration], the NIH [National Institutes of Health], and other agencies, to move forward.”


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Take the Lead to Deploy Emerging Technologies for Improved Outcomes

December 14, 2018
by Brad Wilson, Industry Voice, former CEO of Blue Cross and Blue Shield of North Carolina
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It is a thrilling time to work in healthcare. As the former CEO of Blue Cross and Blue Shield of North Carolina (Blue Cross N.C.), I have had the opportunity to be at the forefront of using new technologies to improve outcomes for our members. Now as a member of the CitiusTech advisory board, I continue that focus on emerging technologies, such as artificial intelligence (AI), and the potential to accelerate the shift to value-based care and improve the healthcare system in material ways.

AI is starting to make a distinct impact in helping providers deliver more effective care, lower costs and create a more consumer-friendly healthcare system. Blue Cross NC recently piloted the use machine learning, a type of AI, to identify spikes in prescriptions for a costly medication. The company reached out to doctors who had been prescribing the medicine in significant numbers. Alerting just one particular physician practice to a generic equivalent brought estimated annual savings of $750,000 for Blue Cross NC customers. The potential of AI is not measured only in dollars, but cost savings are an important consideration.

Machine learning works by applying sophisticated algorithms to rich datasets from electronic medical records (EMRs), patient-reported data, claims and a host of other sources. To be successful, this requires both access to data and significant investment to support the depth and breadth of data analytics capacity and capability.

Yet, historically, one of the biggest barriers to value-based models has been providers’ and payers’ possessiveness of their own data. There is a good business reason for that possessiveness: competitive advantage. The different parts of the healthcare system do not want competitors to use shared data to steal business. But the guarding of data drives healthcare costs higher and, more importantly, makes delivering better, more personalized healthcare more difficult. In the past, power came from hoarding information; today, there is power in serving as an information hub.  Healthcare providers and payers are starting to understand this and there is more willingness to work together in sharing what has traditionally been closely held information.

As consumers’ voices gain in numbers and decibels, it’s clear that analytics technologies that can lead to better care at lower cost are desperately needed, particularly for payers. But the entire healthcare industry needs to move more rapidly. Health plans need to enrich, deepen and widen their analytics capabilities as quickly as possible. If they don’t, we will continue to see disruptors like Google, Apple, and Amazon enter the healthcare market—companies that have a demonstrated ability to be nimble and maximize the impact of their data.

For both providers and payers, forward-thinking organizations recognize that building their own data analytics solutions is not always the answer. Often there is not enough time, resources or enough of the right talent to deliver the capacity and capability required. Fortunately, robust turnkey solutions coupled with deployment expertise are available to efficiently and cost-effectively integrate data and analytics within an organization’s clinical, financial and administrative processes.

As health plan executives map out their strategic plans, look to these emerging technologies as accelerators for leveraging data to manage risk, optimize performance, engage consumers, enhance population care, and improve clinical outcomes to reduce readmissions and further drive evidence-based medicine. The opportunity is here to transform healthcare delivery in significant ways. Success will go to those organizations that understand the potential of these new technologies and take the lead to deploy them effectively—today. 

Brad Wilson is former CEO at Blue Cross and Blue Shield of North Carolina and as a member of the new CitiusTech Advisory Board. Mr. Wilson joined Blue Cross NC in 1995 as General Counsel and held a variety of senior-level positions before being named CEO in 2010. Under his leadership, Blue Cross NC grew to a $9 billion company serving over 3.8 million customers. Mr. Wilson has also served as Director of the BCBS Association, AHIP and numerous other national and state healthcare organizations.


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Investors Have Strong Interest in HIT Sector, Despite Valuation Concerns

December 13, 2018
by Heather Landi, Associate Editor
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Healthcare IT remains a hot investment sector despite concerns about these companies being overvalued, according to KPMG-Leavitt Partners 2019 Investment Outlook, a survey of health care investment professionals.

Looking ahead to 2019, more than a third of respondents (34 percent) said they were most interested in investing in health care IT, followed by care management (31 percent), home health (23 percent), retail-centric medical groups (22 percent) and primary care practices (21 percent).

New York City-based KPMG and Leavitt Partners, based in Salt Lake City, surveyed 175 respondents online from corporations, health systems, investment banks, venture capital and private equity firms between September 17, 2018 and October 21, 2018. Of those surveyed 32 percent were C-suite executives; 29 percent were principal, partner or managing director; 32 percent were vice president or director; 6 percent were analysts/associates and 2 percent held other titles.

“We are not surprised by the great deal of interest in health care IT and care delivery outside the hospital,” Governor Mike Leavitt, founder of Salt Lake City-based Leavitt Partners and former Utah Governor and U.S. Health & Human Services Secretary said in a statement. “As health care continues to march toward value, the emphasis on moving care to lower cost sites and enhanced coordination will continue, and those who can increase quality and lower cost will win.”

According to an October report from Rock Health, 2018 is already the most-funded year ever for digital health startups. Digital health funding in this past third quarter soared to $3.3 billion across 93 deals, pushing 2018 funding to $6.8 billion, already exceeding last year’s annual funding total, which was $5.7 billion, by more than a billion dollars.

Drilling down into respondents’ predictions for investment activity in 2019, in the health care and life sciences market, 96 percent of respondents see either a lot or a moderate amount of investment in health IT and data next year, while a similar percentage (90 percent) see significant or moderate investment in outpatient services. Forty-four percent forecast a lot of investment in post-acute care services, 39 percent predict significant investment in provider services and about a quarter of respondents believe there will be a lot of investment in managed public programs, payer service providers and pharmaceutical and biotech manufacturers. Eighteen percent believe there will be significant investment in medical device and diagnostics and medical equipment.

The survey results indicate there is concern that health IT is overvalued, yet investors believe there is some room to climb.

The majority of investment professionals see health care IT investments as an overvalued sector (64 percent), yet 40 percent expect the valuations to increase in 2019 while 51 percent see them staying the same. About two-thirds of respondents (62 percent) think the health IT sector will grow faster than the market in 2019, and three quarters of investment professionals see increasing competition in the health IT market. Investors also estimate that the average purchase price multiple, in terms of EBITDA, will be 12.5 for the health IT sector in 2019. Survey respondents expect ongoing demand for tools to help with consumerism will impact investment and deal making in the sector, according to the survey.

About four in ten respondents believe the healthcare market is experiencing a “moderate bubble,” while 9 percent believe the bubble will likely burst.

Care management solutions for risk-bearing providers, a highly competitive sector which helps coordinate care of the chronically ill or seriously injured, are expected to be the second highest sector for investment behind health care IT, similarly driven by trends of consumerism and increased focus on early care interventions.

Looking at potential drivers of M&A activity in the health care and life sciences sector in the coming year, 64 percent of respondents cited cost consolidation and economies of scale, while 45 percent cited accretive acquisition strategies. Forty percent of respondents see changing payment models as a driver of M&A activity, and 38 percent cited pressure from competition. Other drivers cited by respondents include expansion/divestiture of service areas (25 percent), geographic expansion/contraction (24 percent), revenue synergies (22 percent), need to deploy cash on balance sheet (17 percent), and regulations and legislation (13 percent).

“Deals are largely being driven by the need for savings, economies of scale, and improving cash flow or accretive earnings per share,” Carole Streicher, Deal Advisory leader for healthcare & life sciences at New York City-based KPMG, said in a statement. “Secondarily, there is a bit of a defensive posture motivating investments as health care organizations contend with competition and reimbursement models connected to quality and efficiency, as well as the entrance of tech firms investing in the sector.”


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Report: Massachusetts General Hospital Targeting Various Blockchain Use Cases

December 7, 2018
by Rajiv Leventhal, Managing Editor
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Massachusetts General Hospital (MGH) researchers are partnering with MediBloc, a Korean healthcare blockchain company, with the aim to improve patient data sharing and storing, according to an article in CoinDesk.

Per the article, the Laboratory of Medical Imaging and Computation by MGH and Harvard Medical School will be escalating research in a variety of broad areas “from medical image analysis to health information exchange by leveraging our cutting-edge technologies such as blockchain, artificial intelligence and machine learning,” according to Synho Do who is the laboratory’s director.

Do specifically told CoinDesk, “In collaboration with MediBloc, we aim to explore potentials of blockchain technology to provide secure solutions for health information exchange, integrate healthcare AI applications into the day-to-day clinical workflow, and support [a] data sharing and labeling platform for machine learning model development.”

Interestingly, MGH won’t be using any real patient data for its research, but rather simulated data, according to officials, since the various institutions that have the real patient data keep it in a way “that can’t be shared securely and often is in various incompatible formats.”

MediBloc’s CEO noted that the company is not only developing a distributed ledger for storing and sharing medical data, but also working on a tool that would convert data now held by hospitals from existing formats to a universal one, per the article.

For this initiative, MediBloc has already gotten partners across Asia, including eight healthcare organizations and 14 technology companies, officials said.

Earlier this year, a testing environment version of the blockchain was launched, and the network is expected to go live before the end of the year before becoming fully functional in the second quarter of 2019. Furthermore, there are also apps in the works that are planning to go live next year, with one of them, currently in a beta testing phase, “designed for patients to sell the information about their symptoms and the prescriptions they get to MediBloc. After that MediBloc will analyze that data and sell the analysis to pharmaceutical and insurance companies,” according to the story.

In the end, the main goal of the blockchain project will be to let patients independently decide what to do with their information.

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