By Siddharth (Sid) Shah, Industry Analyst, Visionary Healthcare Program, Frost & Sullivan
The 23rd Annual Medical Technologies: A Frost & Sullivan Executive MindXchange was held at the Hilton San Diego Resort and Spa on March 4-6, 2018. We brought together several thought leaders in the healthcare industry to discuss this year’s theme –Navigating Healthcare Transformation: Value Based Care, the Patient and Technology. This popular, three-day event, known for its interactive format, featured keynote sessions, individual meetings, breakout theme-based workshop zones, recognition of disruptive innovators and of course, plenty of networking and discussions over breaks and lunch. Here, we present the top takeaways from the entire event.
The Hospital: The Last Resort!
In the thought-provoking opening keynote, acclaimed author and futurist, Dr. Josh Luke presented his views in a session titled, Discharge with Dignity. In Luke’s opinion, today’s hospitals operate on a revenue model, as profit centers. The number one rule for them seems to be, ‘get more heads in beds.’ The second rule, ‘once we get them in, get them out.’
Our current transition to value-based care is somewhat incomplete and inefficient in this regard – does our federal healthcare system know if a patient was discharged from a different hospital five days prior? In Luke’s opinion, hospitals are not yet incentivized correctly to prevent readmissions. Conversely, the emerging value-based model is about membership to drive revenue, not about having heads in beds. In the future era of value-based care, hospitals are not profit centers, but the largest expense item in the new business model. Similarly, value-based care models will avoid unnecessary therapy and expenses by imposing penalties and avoiding incentivizing physicians to refer patients to unnecessary therapy. Ultimately, the future is a model based on patient-centered medical centers where patients in the emergency room can then be referred to long term acute care, acute rehab, skilled nursing, assisted living, home health, home care, hospice or palliative care… anything, but the hospital itself!
The ‘Patient’ is Out: The ‘Person’ is in!
Several presentations by industry experts and discussions by thought leaders echoed this recurring theme – the healthcare industry’s vocabulary must consider the term ‘patient’ obsolete, and recognize that it is all about the person. For example, Merck’s efforts are now being designed to keep the person at the center of all their healthcare products’ and services’ design. They believe in starting with humans – their hopes, fears and needs, to uncover the most desirable needs, and then filter them out according to what is viable for the business and feasible from a technology perspective.
Instead of focusing on peer competition to motivate people to be more active, uncovering and leveraging what really motivates them to make them more active and therefore healthier, is a better approach. Johnson & Johnson is attempting to define wellbeing, what it truly means for a person, and apply those insights to holistic approaches to chronic disease management. As one participant concluded – ‘tie prevention (more?) closely to health than disease.’ In essence, broaden the focus on health to include wellbeing, and on the patient to include their needs as a person.
Defining Value in Value-Based Care
According to Mahek Shah, Senior Research Director at Harvard Business School, the value is defined as:
Value = (Health Outcomes / Cost of Delivering Outcomes)
To be able to measure the health outcomes, patients’ health needs should be tracked for as long as possible. Martini Klinik in Germany has some prostate surgery patients being tracked for over 20 years now! With our current setup and limitations, highly-trained doctors and surgeons are required to perform an additional task of data collection post-surgery.
In a video presented by Mahek, Martini Klinik says, ‘I’m a trained surgeon and I love to operate.’Enabling doctors to operate in a value-based care framework without burdening them with data collection necessities is therefore a challenge, one that could be solved by technology or even an army of scribes, the former possibly being the ideal choice. In fact, the ideal way to create a value-based healthcare system has four essential steps:
1. Organize a multi-disciplinary team around a patient’s medical condition
2. Measure and communicate the full set of patient health outcomes by medical condition,
3. Measure and reduce the total costs of resources used to care for a patient’s medical condition over the complete care cycle, and finally
4. Develop bundled payments to compensate providers for treating the medical condition effectively and efficiently
Leveraging AI and Other New Technologies
In a panel discussion on Leveraging AI, VR and Digital Assistance to Enhance Value, panelists examined what new technologies like these mean in a value-based care environment. Under the prevalent fee for service system, adopting new technology may be challenging because the value did not go to the users, and hospitals under that model were not focused on innovation. Within a value based system, the benefit is that all stakeholders are equally involved, so the value, or innovation, of a product or service can no longer be segmented to one group. Similarly, some technological challenges exist as well, to enable such technologies to operate in a value-based environment.
For example, artificial intelligence works only with the data fed to it, whereas a human (doctor) can take into account contextual data around a person (not just the patient) – the challenge then is to make this contextual information available to the AI system to provide more meaningful results. Naturally, AI is necessary in a value-based environment as it helps re-balance the work flow in terms of data, so that providers, payers and patients alike are not swamped in data, and they can focus on what needs their attention at any given moment – AI can sift through the volumes of data and provide the appropriate insight at the right time.
Challenges for Healthcare Digital Solutions
The primary challenge with most hospitals is the lack of a clear digital decision maker. Some hospitals such as The Mayo Clinic, Johns Hopkins Medical Center and Kaiser Permanente, do have this clearly defined. Even then, there is a lack in continuity in digital health solutions across the continuum of care. Even in designing digital solutions, experience has taught some stakeholders that doctors don’t really know what they want as a solution. An iterative process to digital solution design is therefore important. However, now another dimension to the challenge is that of the amount of healthcare data blowing up, making it necessary to employ machine learning based technologies.
Data Ownership and Security
A growing concern in healthcare, especially with the proliferation of devices that generate volumes of health data, is that of data ownership. Some business models allow patients to monetize their own health data. Others leverage anonymized patient data to perform clinical studies and sell results. The current regulatory framework has actually made it difficult for patients to control their data, while making it a burden for healthcare providers to maintain it. While the debate on who actually owns the data has not yet been settled, hospitals as the custodians of the healthcare data generated within their premises are tasked with protecting it, or face heavy penalties. In the age of cyberattacks, hospitals must share and adopt best practices for solutions and resolutions post data breach events.
Regulations for Digital Health
Given the very nature of digital health solutions, the U.S. Food and Drug Administration is actively seeking industry support in framing appropriate regulations, per the Associate Center Director for Digital Health, Bakul Patel. In his presentation titled, Developing the Software Precertification Program, he outlined the FDA’s views: software iterations are a must for public health, and companies must focus on excellence and not just compliance to regulations. As the FDA views it, with excellence, compliance will automatically follow. The five excellence principles that the FDA expects stakeholders to focus on are:
1. People or consumer safety
2. Product quality
3. Clinical responsibility
4. Cybersecurity responsibility
5. A proactive culture
All are good guidelines for any payers, providers or designers in the healthcare ecosystem who want to improve their products and services.
Siddharth Shah possesses extensive experience in end-to-end execution of market research and consulting projects and a deep understanding of medical sciences with a foundation in biotechnology. Siddharth has several years of healthcare industry expertise spanning the areas of market research, custom consulting and biological stem cells (wet lab) research.
Prior to becoming an Industry Analyst at Frost & Sullivan, Siddharth was a Research Analyst in the Visionary Innovation, Transformational Health group at Frost & Sullivan. Previously he was a Business Analyst, Life Sciences Consulting at Tata Consultancy Services and a Research Technologist at Johns Hopkins University, Institute for Cell Engineering.