About Us Contact Us Join Us

Play
Prev
Next

Stop Making $50,000 Hiring Mistakes

 

Stop Making $50,000 Hiring Mistakes
 
Wanted to pass on this blog post from Debbie Fledderjohann a partner of ours.

Mis-hires are expensive and disruptive. Contracting is a great alternative to relieve near-term pressure so you can as Jack Welch says "Hire slow and fire fast"

-Phil

Enjoy…
 
By Debbie Fledderjohann, Top Echelon 
 
Everyone makes mistakes, but when it comes to hiring, those mistakes can be quite expensive.
 
Citing a CareerBuilder survey, J.J. Keller reported that 69% of businesses experienced a bad hire in 2012. Forty-one percent estimated the cost of that bad hire to be at least $25,000 while 24% stated that it cost them more than $50,000.
 
It's more than just recruiting and training costs employers need to think about when considering what a bad hire costs their company.  According to the survey, some of the biggest costs come in the form of lost productivity and the negative impact bad hires have on other employees and clients.
 
So why do so many companies make this costly mistake? The survey found that the biggest reason, given by 43% of the respondents, is the need to fill a position quickly.  
 
http://www.topecheloncontracting.com/blog/bid/56864/stop-clients-from-making-a-50000-hiring-mistake?source=Blog_Email_[Stop%20Clients%20from%20Ma]

Early Implications of Healthcare Reform for Key Players in the Healthcare Value Chain: Challenges and Opportunities

Doctor with HIT

It is probably not an exaggeration to state that the recent passage of the healthcare reform bill and the Patient Protection and Affordable Care Act (PPACA) by the current administration will have profound and far reaching changes on the US healthcare system – more than we have seen in the last 30-50 years.
Besides ensuring subsidized health insurance coverage for the currently 32 million uninsured Americans, those with pre-existing conditions (banning discrimination in coverage), assuring coverage to young people thru the plans of their parents until the age of 26, and better prescription drug coverage for Medicare seniors, the stated objectives of healthcare reform are to drive unprecedented transparency, higher quality of outcomes at a lower cost, often thru innovative leverage of healthcare IT and relevant technologies (thru the ARRA stimulus bill and HITECH Act passed earlier).

The incremental costs of healthcare reform has been estimated to be $940 billion over 10 years, according to the Congressional Budget Office, but is widely anticipated to exceed $ 1 trillion. While almost everyone agrees that the current increase in annual healthcare costs as a percentage of the US GDP is just not sustainable, there is wide spread disagreement and controversy on how to implement healthcare reform and ensure higher quality healthcare at a lower total cost of delivery.

While the impact of the healthcare reform will be felt over the next 5-10 years for most patients, there are current challenges that will be posed to the US healthcare ecosystem and all of its stakeholders. These challenges also bring in their wake new opportunities for collaboration, business model and IT innovation and patient and physician empowerment that I will discuss on this blog post. This presents a high level business summary of my key takeaways (eschewing the technicalities involved) and forward looking implications and analysis, as well as prognosis for some of the opportunities presented and solutions thereof, from a business and IT perspective, from a number of seminars and webinars on Healthcare reform that I have had the opportunity of attending, in the recent past.

Patients:
Challenges and Implications:

  • Given the advent of 32 million new patients in the current healthcare system, most patients will be challenged to secure appointments with their primary care physicians as easily and promptly as they may have in the past. This is anticipated to significantly burden the current system and demand additional hospital infrastructure as well as a shortage of primary care physicians and nurses in the short to medium term.
  • Given the expected rise in health insurance costs, and higher co-pays, it is anticipated that patients will also be constrained to seek alternatives at a lower cost.

Opportunities and Solutions enabled by Business and IT Innovation:

  • Substitution of less experienced primary care physicians and nurse practitioners as well as immigration of doctors and nurses from other countries to deal with the shortage in the near to medium term, is a distinct possibility.
  • Retail healthcare clinics such as those being opened at Wal-Mart (see my earlier blogpost – Wal-Mart’s retail and healthcare IT play- Implications for Patients, Providers, Physicians and the rest of us) and other retail chains as a lower cost alternative may become viable and real, especially for the lower middle class.
  • The ubiquity of electronic health records (EHRs) and physician-patient interaction via portals, video conferencing, telemedicine, wellness and disease management programs, mobile and wireless devices etc. would also enable physicians to manage interactions with a larger number of patients thru exception and ‘severity of condition” based management, subject to appropriate reimbursements models being put in place.
  • The evolution of mobile/wireless healthcare, business models and reimbursement and monetization thereof, while still ahead of the curve, is a significant opportunity, going forward. Envisioning the ability for patients to access and monitor their personal health records and/or personal health dashboards (like the one below) on their iPhones, Blackberrys and iPads, interacting with their nurse practitioners and physicians thru video conferencing enabled on these devices and accessing health related information, scheduling visits and interacting with their health centric social networks (like Patients Like Me , CareFlash or private groups on Facebook, for instance) are significant and viable market opportunities that organizations like the West Wireless Health Institute and many innovative solution providers are seeking to realize and enable, going forward.
John Doe_Personal Healthcare Dashboard_2009

Healthcare Providers and Physicians:
Challenges and Implications:

  • Medicare reimbursement reductions as currently stipulated (many doubt whether these will actually come to pass) is a significant challenge that will constrain profit margins for providers and potentially incomes for physicians. It is also anticipated the reimbursement models from payers may evolve to “pay for episode of care” (treatment of a fracture from cradle to grave across the primary care physician, specialist, and chiropractor or physiotherapist is treated and reimbursed as a “single episode of care”) vs. pay for interaction/procedure currently prevalent that will demand higher operating efficiencies and productivity. As well, this will demand that hospital providers find and create new and alternative sources of revenue to compensate for the anticipated reduction in reimbursement, going forward.
  • The quality and performance reporting stipulations of the hi-tech act, pay for performance models, comparative effectiveness and evidence based medicine will further demand delivery of the best possible, sustainable patient outcomes at a lower cost, while ensuring a move from the current paper based processes to automated Electronic Health records (EHRs), Health Information Exchanges (HIEs) and interoperable IT systems to assure transparency and higher levels of accuracy and efficiency.

Opportunities and Solutions enabled by Business and IT Innovation:

  • Hospital providers and small physicians’ offices will need to implement and adopt Electronic Health records (EHRs) and Health Information Exchanges (HIEs) with demonstrable “meaningful usage” by 2013 or face penalties by way of reduced Medicare reimbursements. While many providers will perceive this as a significant and onerous burden, the visionaries will actually leverage their early adoption and performance reporting as a competitive differentiator to secure patient mindshare and loyalty.
  • Visionary CIOs in industry leading providers are currently testing pay-for-performance models enabled by analytics and performance management software that enables CXOs to monitor, measure, analyze and improve performance based on outcomes rather than procedures, for the very first time. Analysis of variances in outcomes across physicians for the same therapeutic area and treatment and causal analysis there of, can be anticipated to drive us towards a true comparative effectiveness and evidence based model, going forward. This initially will meet significant resistance and will demand appropriate change management to institutionalize these. As well, leveraging similar sophisticated analytics and process improvement paradigms like Lean and Six-Sigma can enable CXOs and hospital administrators to improve performance per function and department while potentially driving up productivity and margins while ensuring superior therapeutic outcomes at a lower total cost of delivery (TCD). As well, the advent of “pay-for-performance” and evidence based outcomes may actually accelerate the drive towards targeted treatment and personalized medicine (see my earlier blogpost – ‘Personalized Medicine: The Time is Now – Are we there yet?’) vs. the one size fits all paradigm currently prevalent.
  • The advent of wellness and disease management programs and IT enablement will also enable providers to extend the “continuum of care” from the context of the four walls of the hospital to the patient’s home, and potentially provide additional and highly lucrative revenue streams and also assure reinforcement of the relationship with patients. This also holds significant promise in terms of assuring higher quality of care and diagnosis delivered within the context of “the medical home”, especially for seniors and multi-morbid patients thru leverage of video conferencing, remote monitoring, telemedicine, medical devices etc.

Employers:
Challenges and Implications:

  • Employers (who currently pay for almost 40% of all insurance coverage in the US) will potentially face higher increases in insurance coverage for employees for the next 2-3 years given the additional insurance coverage of the currently uninsured. Passing on some of the costs to employees has been the norm for many employers, and is anticipated to continue.
  • Businesses are not required to offer coverage. Instead, employers are hit with a fee if the government subsidizes their workers’ coverage. The $2,000-per-employee fee would be assessed on the company’s entire work force, minus an allowance. Companies with 50 or fewer workers are exempt from the requirement. Part-time workers are included in the calculations, counting two part-timers as one full-time worker. it is anticipated that smaller employers especially in low margin industries may explore the tradeoffs of paying penalties for non-coverage of their employees against the higher costs of insuring them especially if this is perceived to be economically unviable and unsustainable.

Opportunities and Solutions enabled by Business and IT Innovation:

  • It is anticipated that larger employers especially in high margin industries may start to leverage “health and wellness” as a tangible reward, thru the award of screening (like the Copper Clinic) wellness and disease management programs in collaboration with their health plans, to drive down their total cost of health insurance. Many companies have already instituted similar plans leveraging personal health records (PHRs) like Microsoft’s, Google’s and Dossia’s platforms coupled with wellness and care management programs leveraging tools like Keas, for education and improved employee health and maintenance thereof.

Health Insurance Payers:
Challenges and Implications:

  • Almost everyone will need to have health insurance or pay a fine, per the stipulation of the Patient Protection and Affordable Care Act (PPACA) of 2010. Expands the federal-state Medicaid insurance program for the poor to cover people with incomes up to 133 percent of the federal poverty level, $29,327 a year for a family of four. Childless adults would be covered for the first time, starting in 2014. The federal government would pay 100 percent of the tab for covering newly eligible individuals through 2016.
  • Health Insurance Payers will experience the higher cost of insuring the currently un-insured population though a large percentage of that population is anticipated to be covered thru the state run American Health Benefit Exchanges for individuals and small group of upto 100 employees (thought groups over 100 can join these exchanges starting in 2017). As well, the additional cost of insuring children and youth up to 26 within their parents’ health plans, inability to exclude children or adults based on pre-existing conditions, lowered MLRs (medical loss ratio – the ratio of premiums paid in to what is paid out for medical care and wellness) et al. It is logically anticipated that they will respond by raising premiums on their health plans for employers who may pass on a part of that additional burden to their employees. It is also anticipated that providers may respond by crafting reimbursement models for “episodes of care” versus pay-for-procedures that will add complexity and demand business rules based automation and decision support.
  • As well, health insurance payers have to simplify and standardize their plans and transactions, enable standard electronic enrollment forms, and report on their plans, enrollment and MLRs, going forward.

Opportunities and Solutions enabled by Business and IT Innovation:

  • Given the current preponderance of paper based process for claims submission, rejection and adjudication, there are significant efficiencies and productivity gains to be had (to the tune of $ BNs), by automating these thru the use of IT.
  • The evolution of “pay-for-performance” and evidence based medicine models may also see a significant support for targeted treatment and “personalized medicine” (see my earlier blogpost – ‘Personalized Medicine: The Time is Now – Are we there yet?’) to drive superior therapeutic outcomes on a per patient basis while lowering the cost for the “episode of care”.

Life Sciences Companies – Pharma, Medical Devices and Bio-Tech manufacturers:
Challenges and Implications:

  • The move to a “pay-for-performance” model will further challenge Life Sciences companies especially pharma and diagnostic manufacturers to further accelerate the development of companion diagnostics and bio-markers for ‘Personalized Medicine’ to ensure superior therapeutic outcomes for patients vs. the approximately 60% efficacy for most of the drugs in the market place today. Pharma manufacturers are also anticipated to experience cost pressures that will demand a significant reduction in the $ 800 MM to $ 2 Bn spend in bringing a new molecule to market, including the huge spend in sales and marketing.
  • The potential imposition of additional sales taxes on medical devices will also impose cost and margin pressures on medical device manufacturers and will demand innovation at a lower cost of product development, sales and marketing.
  • The need to constrain overall costs of healthcare delivery thru pay-for-performance models may potentially constrain the number of defensive CAT and MRI scans currently being prescribed by physicians today, that can potentially impact business and pricing models of medical equipment manufacturers.

Opportunities and Solutions enabled by Business and IT Innovation:

  • Pharma manufacturers can be anticipated to leverage IT extensively for managing their clinical operations, as well as enable their pharmacovigilance, product and patient safety and exception reporting business processes. The use of more sophisticated drug discovery and development tools, data mining and search capabilities to uncover new indications of existing or previously unsuccessful molecules, or for the development of companion diagnostics and bio-markers can be anticipated. As well, leveraging IT for manufacturing, supply chain planning and execution for higher efficiencies, compliance as well as serialization, tracking and tracing and authentication from the plant to the patient bedside to assure higher patient safety and medication compliance is anticipated to scale significantly, going forward.
  • Medical devices manufacturers have significant opportunities to further improve the efficiencies of their supply chain, inventory management and manufacturing processes, thru lean and six-sigma for instance, enabled by sophisticated analytics and performance management tools. Proactively monitoring patients following the implant of their devices (like pacemakers, implantable defibrillators etc.) for exceptions and events before they happen (with often life impacting implications) to monetize additional and highly profitable service revenue streams is a distinct possibility, going forward.

Unprecedented opportunity for IT, Technology and Services Vendors:

All of the challenges, their business implications and their mapping business and IT opportunities, enumerated above (and many more) present significant opportunities for innovation, for IT and technology vendors, going forward.

It would perhaps not be inappropriate to postulate that Healthcare, especially in the US, is undergoing a “renaissance” and presents unprecedented opportunities for technology and IT innovation to enable each and every node in the Healthcare Value Chain. The measurable impact, if executed and realized, would improve transparency and quality of care delivery, while reducing redundancies, waste and cut costs – this is my ‘raison d’etre’ and my purpose in life that fuels my passion and my aspirations!

The contents of this blog are the express personal opinions of Andy De only, and do not reflect those of his current or previous employers

Personalized Medicine: The Time is Now – are we there yet?

This author would like to express his gratitude to the Partners Healthcare Center for Personalized Genetic Medicine and the Harvard Medical School for their invitation to author this perspective on the 2009 Personalized Medicine Conference at the Harvard Medical School, Boston, MA, on the 18th and 19th of November, 2009.

An abridged version of this blogpost has been published within Helix - the official newsletter of the Harvard Medical School – Partners Healthcare Center for Personalized Genetic Medicine in February, 2010.

Share

Doctors Patient and Xray

The fall of 2009 presented an interesting milestone for Personalized Medicine given the focus on healthcare reform, not only in the USA but across the world at large. Perhaps never before have we seen such a sustained impetus on measurably improving quality of treatment for patients, and ensuring superior therapeutic outcomes, while driving down the total cost of treatment. Against this backdrop of often contentious and partisan debates, landmark reforms with potentially far reaching impact looming large and the unquestionable need to improve the quality of healthcare while lowering costs, the relevance and the reality of Personalized Medicine received close scrutiny, seminal discussion and multi-disciplinary focus at the 2009 Personalized Medicine Conference, held at the Harvard Medical School in Boston, on the 18th and 19th of November, 2009.

Dr. Raju Kucherlapati, the founder of the conference and the Paul Cabot professor of genetics at the Harvard Medical School set the tone for the conference with his opening remarks. Given that the sequencing of the human genome was completed in 2003, he pointed out that attendance at the P/M conference has increased from 237 attendees in 2002 to 601 in 2009, a 3X increase over 7 years, as a key lagging indicator of success. Given the need to deliver better healthcare for the entire population at a lower cost of healthcare delivery, P/M is a key enabler and is happening now – hence the theme of the 2010 conference.

Dr. Kucherlapati alluded to the support for P/M from key constituents like President Obama, the late Senator Ted Kennedy, Secretary Kathleen Sibellius and the Genetic Non-Discrimination Act currently in place, as a key enabler of P/M. According to him, there was significant regulatory pressure to ensure that patients that will respond to drugs and treatment be proactively identified, using tools like bio-markers or companion diagnostics, to ensure the highest efficacy of treatment delivered. These diagnostics are playing a significant role as well as the data re: the sequencing of the Human Genome. He suggested that the $ 1000 genome sequencing price point may actually be around the corner to render this affordable and accessible to almost everyone. Key questions and concerns he enumerated as basis for discussion included reimbursement models that would be critical to success for the early innovators, as well as sustained availability of risk capital, and a robust IT infrastructure to accelerate P/M innovation.

Setting the stage: What is Personalized Medicine (P/M)? Why is it significant for Patients today?

In his introduction of the now re-named Partners Center for Personalized Genetic Medicine (PCPGM), formerly the Harvard Medical School –Partners Healthcare Center for Genetics and Genomics, Dr. Scott T. Weiss, Interim Scientific Director, PCPGM and Professor of Medicine, Harvard Medical School, Brigham and Women’s Hospital defined P/M in the current context as, “Personalized medicine (P/M) is the application of genomic or molecular data to better target health care delivery.” [Click here for Dr. Weiss' presentation]

Dr. Gary Gottlieb, President, Brigham and Women’s Hospital, President and Chief Executive Officer-Designate, Partners HealthCare System in his opening remarks further qualified P/M as “a tool to move from a system of fragmentation of data and healthcare delivery to a fabric that runs across the country and delivers healthcare that is specific to the needs of patients i.e. a plan for each person that is individualized for him/her”. This implies delivering treatment to patients that is proactive, predictive, personalized and participatory unlike the status quo today.

The core objective of P/M is to ensure the best, exact treatment possible for the patient specific to his or her needs, with minimal errors.

The Promise of P/M – The Real World Impact of Personalized Medicine in Enhancing Quality of Life in Patients


Aligned with the theme of this year’s P/M conference, the Panel Discussion that followed the keynote, articulated some of the most promising success stories delivering real value to patients today:

  • Xdx (Expression Diagnostics) developed a non-invasive diagnostic test for heart transplant patients for “acute cellular rejection,” with sufficient clinical data and validity to enable confidence in its adoption and assure “event free survival” and better quality of life. Having appropriate reimbursement for the companion diagnostic, with clear basic guidelines, would go a long way to assure its continued success.
  • El Camino Hospital in California, with self-employed physicians who are not part of an integrated or academic medical center, has seen early success with web-based clinical support for physicians, genetic counseling for patients, and fully imbedded IT that includes computerized physician order entry and electronic medical records.
  • GlaxoSmithKline developed a companion diagnostic product to predict patient’s risk vs. benefit with the underlying drug product for HIV treatment resulting in a 60% decrease in adverse reactions to the drug based on the results of the diagnostic.
  • CVS Caremark announced a relationship with Generation Health, a young genetics benefits management company, through which they will make a large number of genetic tests, that are appropriate for CVS’ tens of millions customers, available and accessible. They plan to launch their combined operation in the Spring of 2010.
  • Medco Health Solutions undertook a series of trials to assess the value of genetic/genomic tests that could ensure its patient customers receive effective treatments with minimal adverse effects. They reported that thousands of its clients have benefitted from such tests.
  • DNA Direct and Humana have partnered to develop a program that will help physicians understand how genetic counseling can help Humana’s patient customers experience better treatment outcomes at potentially lesser cost than they might otherwise experience.
  • bioMérieux announced an agreement with GlaxoSmithKline to develop a predictive test, based on emerging biomarkers, to help clinicians select the most appropriate treatment for different sectors of breast cancer patients.

The discussion identified uncertainty of third party reimbursement as the biggest barrier to adoption of P/M. As well, the investment in the diagnostic tests upfront vs. the total cost of treatment and clear demonstration of superior therapeutic outcome is still a barrier in most cases. There is a need for compelling return-on-investment (ROI) to be unequivocally demonstrated. El Camino Hospital and similar success stories are clearly precedent setting for further innovation and scale up with P/M.

Further reinforcing the promise of P/M in his keynote address while receiving the Personalized Medicine Coalition’s Fifth Annual Award for Leadership in P/M, Brooke Byers, Partner, Kleiner Perkins Caufield and Byers, and a leader in driving innovation in this arena, spoke about “visualizing Personalized Medicine” and its real-world impact on improving the quality of life and/or therapeutic outcomes for patients.
He articulated these three exemplars of success which were vividly etched in his mind:

  • A lady patient diagnosed with breast cancer using the results of a diagnostic test with her physician to make the determination of whether she should undergo chemotherapy or not, given the extremely low (less than 5%) efficacy of chemotherapy in the treatment of breast cancer.
  • A general practitioner with 1,000 patients using a diagnostic test to determine which 50 (5%) of those patients are likely to convert to type 2 diabetes, and then prescribing appropriate treatment and medication to prevent the onset of the disease.
  • Female patients using cost-effective, and relatively risk-free diagnostic tests to determine the onset or extent of coronary artery disease (CAD) vs. having to undergo risky and expensive angiograms to arrive at similar conclusions.

A visionary and a pioneer in fostering innovation in this arena, Brooke expressed hope and optimism that the early successes with P/M can be scaled up despite the barriers and the roadblocks, and urged collaborative efforts across all the key stakeholder communities to accelerate the current pace and momentum.

State of the Union – Where are we Today with P/M?

The sessions analyzing and articulating the current state, reality and challenges of P/M presented three unique yet complementary points of view: a microeconomic snapshot, a policy and political viewpoint and the Innovator’s (the Pharma and Diagnostic industry) perspective as summarized below:

I. Microeconomic Perspective:

According to McKinsey and Company:

  • Adverse drug events for patients drive $45-135 billion in incremental costs each year in the US of which, approximately 25% is avoidable, through appropriate use of diagnostics and bio-markers.
  • $292 billion was spent on drugs in 2008 of which approx. 50% was ineffective.

This raises the questions:

  • Why aren’t pharmaceutical companies more aggressively pursuing companion diagnostics?
  • Why aren’t payers actively driving the adoption of personalized medicine?
  • Why has physician adoption of some clinically validated tests been slow (and required a large sales force)?

McKinsey and Company cited the results of its survey of almost 100 stakeholders across pharma manufacturers, payers, regulators, providers, diagnostics manufacturers, analysts and venture capitalists:

  • Payers were generally skeptical and did not perceive personalized medicine as a priority at this time. They are challenged by the lack of information on cost efficacy as well as longitudinal accounting visibility and patient movement (patients only average 3-4 years on one payer plan).
  • Providers showed variable interest since reimbursement is activity/procedure based and billing is not standardized and scalable at this time.
  • Pharmaceutical manufacturers are seeing a steady increase in use of personalized medicine (companion diagnostics and bio-markers) with pockets of opportunity and variable investment levels. Cost savings in development are unlikely. Market share is the largest swing factor, as well as pricing upside potential.
  • Diagnostics manufacturers are excited about molecular diagnostics, with significant investments in targeted areas and focusing on capturing elusive “full value”. They are constrained by the tradeoffs between the companion diagnostic model that captures a lower relative value at a lower risk vs. the ‘stand-alone’ model that while potentially assuring higher value capture, comes with significantly higher risks as well as high upfront investments, uncertain approval regimes and uncertain payer adoption.

II. Political and Policy Perspective:
 
Healthcare is a high stakes issue for President Obama given the unsustainable cost curve but the reform process is still highly contentious and partisan. Regulation has come a long way over the last three years and will move forward independent of the current healthcare reform.

Reimbursement for personalized medicine is another issue to be addressed through regulation. Universal health insurance coverage and eliminating exclusion of pre-existing conditions are key enablers to funding companion diagnostics and genetic testing. Demonstrating clear value in terms of higher quality, lower costs, higher patient safety and lower total cost of treatment is critical to enabling reimbursements and driving large scale adoption of personalized medicine.

III. Innovators’ Perspective:

Development of bio-markers and companion diagnostics is very expensive. Identification of the best targets and the best bio-marker before Phase 3 need to be addressed, as do complexities of clinical trial design. A path for simultaneous approval of drugs and diagnostics would be a significant step forward. Getting sufficient tissue samples from patients for the genetic testing is a significant constraint.

What are the most significant Challenges to large scale adoption of P/M? How can these challenges be addressed?

Given the current landscape for P/M, what are the most significant challenges and how can these be addressed to pave the way for patient and physician adoption, scale up and ubiquity i.e. a not-so-distant scenario where indeed, medicine becomes “personalized medicine”?

A. Reimbursements and Payments

 
The discussion identified uncertainty of third party reimbursement as a serious barrier to adoption of personalized medicine. Similarly, the upfront investment in the diagnostic tests vs. the total cost of treatment and clear demonstration of superior therapeutic outcome is still a barrier in most cases. There is a need to see clear linkage between genetic testing and clinical outcomes as well as a search for clearly demonstrated and compelling return-on-investment to be unequivocally demonstrated. Can personalized medicine prove that it will lower the cost of healthcare or demonstrate comparable healthcare value? Can comparative effectiveness data show what is the most effective and the most economic treatment to assure the best therapeutic outcome for patients?

B. Lack of integration of Electronic Health Records and Healthcare IT

In a keynote address Dr. John Glaser, Vice President and Chief Information Officer, Partners HealthCare System, and Senior Advisor to the Office of the National Coordinator for Health Information Technology at HHS, noted the very low adoption rates of Electronic Medical Records and Electronic Health Records (EHRs) (only 13% for large hospitals and 3-5% of small physician’s offices). To address this, substantial stimulus funding has been earmarked for the National Healthcare Information Network and for Medicare and Medicaid incentives for meaningful usage of certified, interoperable EHRs by hospitals and physicians offices.

Dr. Glaser further emphasized that the “meaningful usage” of EHRs has the stated objective of better quality outcomes at a lower cost. A key enabler to scale adoption is workforce development – an estimated 50,000 HIT knowledge workers are needed to meet demand. Interoperability standards establishment and adoption by healthcare IT vendors and the providers is essential and should take place over the foreseeable future. [Click for Dr. Glaser's Presentation]

Panelists noted significant IT challenges that impact personalized medicine:

  • The national healthcare IT infrastructure is not yet ready to support the molecular diagnostics data existing today and that will certainly increase. Reducing the costs of the testing, sequencing, storing, archiving, accessing (by clinicians), analyzing and reporting the data, and the concomitant clinical decision support, requires a more sophisticated and robust IT infrastructure than is currently available.
  • There must be enhanced capability to capture clinical outcomes data and to develop usage of the clinical data in meaningful ways.
  • There is an imperative to strike a balance between security, privacy and access. Technological lock-ins into proprietary systems is a significant challenge.
  • Cataloging companion diagnostic tests (with necessary details and insights) and making this available online in an intuitive manner is key to mainstream adoption of personalized medicine by payers, providers, physicians and patients. Providing access to physicians and training them on this catalog will be critical to educating them.

C. Business Models and Implications
 
Are pharma and diagnostics companies aligned? Is a new regulatory framework needed? What business models have the best chance of effecting personalized medicine?

An innovative aspect of this year’s conference was an audience participation exercise, orchestrated by Richard Hamermesh, DBA, professor of management practice, Harvard Business School, and Mara Aspinall, president and CEO, On-Q-ity, Inc. Two Harvard Business School-style case studies, specially prepared for the conference, were presented.

One discussed the considerations for labeling and marketing the colorectal cancer drugs Erbitux and Vectibix based on testing patients’ tumors for their KRAS gene. The other dealt with the opportunities and challenges presented by the explosion of genetic testing. The audience responded with rich, highly interactive and engaging discussion with often diverse perspectives articulated.

Discussion of the case regarding Erbitux and Vectibix focused attention on the economic (and philosophical) considerations for when pharma companies might or should include an expectation of genetic testing in their seeking approval from the FDA, or the European Medicines Agency (EMEA), for how the drugs should be administered. Erbitux and Vectibix were approved in the United States and Vectibix was approved by EMEA only for patients whose tumors do not have a mutation in the KRAS gene. Based upon this approval and other scientific evidence the FDA changed the label for both drugs and indicated that only patients who do not have mutations in the the KRAS gene are likely to benefit from these drugs.

Among the questions that stimulated very active conversation were: How did the economics of how Erbitux was approved for use play into subsequent purchase of ImClone by Eli Lilly? Did the pharma companies know about the genetic basis for differential response rates? What are the implications for other “smart” drugs under development, based on how these two drugs were handled?


The discussion of the second case highlighted the changing landscape for gaining widespread acceptance of genetic testing for its implications in disease diagnosis, prediction of occurrence, and drug choices and dosage. The growth rate of available tests is impressive, and the understanding of their usage will expand dramatically the portion of the population who can benefit from them.

The audience was challenged to suggest, in the context of Professor Clayton Christensen’s notion of “disruptive innovation,” what changes in current regulations, business models and thinking would be necessary to make the use of genetic testing more widespread and economically feasible. Are small labs, those currently delivering diagnostic tests with a small sales force, a sustainable model? Is there a possibility of scaling to broader distribution channels and getting diagnostics included in catalogs integrated into the doctor’s desktop for easy ordering of the test on demand? What roles might large pharma and biotech companies play?

A common perspective in the discussion of both cases was that genetic testing is critical enabler of personalized medicine and that substantial changes on many fronts are necessary to yield promised and promising results.

Scaling Personalized Medicine beyond the borders of the US: the P/M Experience in Mexico and the United Kingdom (UK)

Dr. Gerardo Jimenez-Sanchez, Director General, National Institute of Genomic Medicine (INMEGEN), Mexico, pointed out that currently most of the personalized medicine research and development is concentrated in the US, home to only 4.52% of the world’s population. This, he suggested, is not sustainable economically and politically. He articulated the need to create a more international market for personalized medicine, to address the complex and demanding issues in a global healthcare context. [Click for Dr. Jimenez-Sanchez's presentation]

To that end, Dr. Sanchez shared his experience with orchestrating personalized medicine in Mexico, which has the 11th largest population in the world and the largest of all Spanish speaking countries. With a very diverse population comprising 65 indigenous groups, Mexico identified personalized medicine as an opportunity to improve healthcare, advance research and development, and a move toward a knowledge-based economy. The Mexican Congress has created a National Institute of Health (NIH) for Genomic Medicine in 2004, with an initial regulatory framework. An ambitious Mexican Genome Diversity Project, a Human Bio-banks and Genomic Research Project, and several personalized medicine focused research projects at INMEGEN have been launched with the stated objective of making “individualized medicine” a reality by 2015.

Sir Michael Rawlins, Chairman, National Institute for Health and Clinical Excellence, UK, provided an overview on the state of personalized medicine innovation and adoption in the United Kingdom. The key objective was to secure and deliver the highest quality of healthcare UK can afford. Personalized medicine is an additional avenue for doing that.

Dr. Rawlins noted that the UK is challenged by expectations for significantly higher standards for genetic testing as well as higher levels of quality control which present significant but potentially avoidable economic costs. Another challenge he cited is that there are now 25 million individual health records in the UK, complete with their personal details. While health data embedded in electronic medical records should be accessible on demand, they also raise privacy and security concerns.

Dr. Rawlins observed that the global system of healthcare is constrained by finite resources. The amount countries such as Mexico, the UK and the U.S. spend on healthcare is closely correlated to each country’s gross domestic product. This will inevitably affect the scale with which personalized medicine is adopted. He concluded that the promise of personalized medicine is immense and its utility has been unequivocally demonstrated, but expects that each country would embark on a calibrated adoption path that is appropriate within its own healthcare context.

Who will be the Biggest Beneficiaries of large scale adoption of P/M?

Given the current momentum and perspectives on accelerating P/M going forward, the concluding panel discussion focused on the beneficiaries of P/M for the foreseeable future.

There was consensus that pinpointing diagnosis for a high cost disease like cancer thru genetic testing is compelling, especially if it has a positive impact on the total cost of treatment. Cancer patients particularly, are well positioned to benefit, as are the oncologists who administer them. The patient benefits from the more precise diagnosis and therapy tailored for them, especially avoiding medicine/drugs that could have toxic effects on them, and /or do not impact treatment outcome, despite the higher costs.

Genetic testing can often serve to complement the lack of a robust family history. It was pointed out that Plavix is a poster child of success with different impact in patients based on their genetic variance. 25-30% of patients (who have had stents installed) with certain genetic make ups show a 3 fold risk of stent thrombosis with Plavix, relative to other patients.

What is the implication of this genetic roadblock for patients with stents taking Plavix? Genotype testing at around $ 600 per test per patient reveals this early on and qualifies patients at risk of stent thrombosis. This presents significant potential to draft a tailored treatment life-cycle (statins, stents, bypass surgery etc.) for each patient subject to his/her genetic profile and lowering risks of adverse events.
The huge levels of non-compliance especially in chronic disease management, provides a basis for leveraging genetic testing and diagnosis to change and modify patient behavior.Genetic testing and information thereof, is a way to drive compliance in patients, and potentially change patient behavior. At this time there is a huge societal and patient interest in genetic testing as predictor of certain conditions and diseases.
However, education, evidence of success and experience from a patient’s perspective are challenges that need to be addressed. Physicians and genetic counselors are needed to guide and educate the patient to maximize the quality of treatment, and assure the best therapeutic outcomes at the lowest total cost. As well, better education of the clinicians is needed since they see an overload of often contrasting and conflicting information.
Besides the patients and the providers, it is anticipated that some of the obvious beneficiaries of large scale adoption of P/M will be the V/Cs and investors, the diagnostics and pharma companies and the payers, as discussed earlier.

Key Takeaways from the 2010 Personalized Medicine Conference

In conclusion, Dr. Raju Kucherlapati provided these salient points to ponder for contemplation, and to drive the P/M momentum forward: Given the momentum around Healthcare reform, there was significant regulatory pressure to ensure that patients that will respond to drugs and treatment be proactively identified using tools like bio-markers or companion diagnostics, to ensure the highest efficacy of treatment delivered. The $ 1000 genome sequencing price point may actually be around the corner to render this affordable and accessible to almost everyone.

  • Significant early successes provide incontrovertible evidence of the promise of P/M in delivering targeted treatment for each patient based on his/her genetic profile, assuring the best possible therapeutic outcome but much remains to be done.
  • Current payment systems are fundamentally flawed – payments for volumes and not value. The current healthcare reform assuring coverage for every American would be a big step forward and a significant enabler of P/M.
  • Lack of standards and best practices in gathering and storing genetic information into Electronic Health Records (EHRs) is a serious impediment, as is the extremely low adoption of both EMRs and EHRs by hospitals and physicians offices. The incentives provided by the ARRA stimulus to drive “meaningful EHRs usage” is encouraging and a key enabler of providing the information infrastructure needed to drive and sustain P/M from a HIT perspective.
  • It was extremely encouraging that P/M has now transitioned across the borders of the US, as evidenced by success in Mexico and the United Kingdom (UK) – this is key to scaling targeted treatment for people across the world and drive down total costs of healthcare.
  • The Future of Personalized Medicine (P/M) is now and needs to be collaboratively driven by all stakeholders: academia, government, payers, producers, providers and physicians to scale and enable large scale adoption of P/M and deliver value to patients.
The contents of this blog are the express personal opinions of Andy De only, and do not reflect those of his current or previous employers

Wal-Mart’s Healthcare Retail and IT Play: Implications for Patients, Physicians, Providers and the rest of us…

Retail Healthcare Shelf 1

Wal-Mart, the largest retailer in history, is betting big on Healthcare and why not!

Given the escalating costs of healthcare in a recession impacted economy with well over 47 million Americans bereft of any kind of insurance coverage, the notion of low cost retail clinics at your friendly neighborhood retail store, is an idea whose timing is night! After all, can you and should you pay for a “Mercedes Benz” like treatment at your physician’s clinic that will cost an arm and a leg for a common cold or strep throat, when a walk-in clinic at your nearest mega-retail store can offer “Toyota quality” treatment from a qualified and experienced nurse practitioner for perhaps as little as $30-60 per patient?

Wal-Mart’s Retail Healthcare Strategy

Wal-Mart currently has over 40 clinics operating in its stores and plans to partner with healthcare providers and healthcare entrepreneurs to open 600+ clinics in the next couple of years, with a potential for more than 2,000 clinics in its stores in the foreseeable future [Ref 1].

What is this significant for mainstream Americans? Given the ever escalating costs of healthcare, this is a move towards delivering right quality, right priced healthcare with price transparency accessible to millions who otherwise cannot afford treatment today, but have a reasonable expectation for “value for their healthcare dollars” similar to their spend in other areas.

The retail clinics are anticipated to be operated by third party physicians and nurse practitioners with practice management (patient registration, billing, e-prescribing) and electronic medical records (EMR) software provided by eClinical Works, a healthcare IT company located in Westborough, MA [Ref 2].

The promise in addition, to the quality of treatment delivered is the use of electronic health records (EHRs) to ensure transparency, accuracy and portability to assure a better customer experience. This would be well aligned with the Obama administration’s mandate and initiatives to drive electronic health record adoption across the country, to drive higher transparency, accuracy and quality at a lower total cost of treatment. Also implicit is the promise that medications if prescribed will be instantly transmitted to the in-store pharmacy for pickup before the patient leaves the store – “one stop shop” now acquires new meaning for many of us!

Driving Healthcare IT (HIT) adoption – Electronic Medical Records (EMRs) and Physician Practice Management

Wal-Mart’s move in healthcare does not stop at merely installing walk-in clinics at its retail stores. Given the Healthcare IT stimulus provided by the current administration that offers physicians over $ 40,000 per year in subsidies to install and embrace “meaningful usage of EHRs” to enable “evidence based medicine” i.e. treatment that can be meaningfully monitored, measured and analyzed to ensure superior patient outcomes, and also compared against peers to potentially enable “pay-for-performance” models currently unknown in healthcare, this presents a significant market opportunity for Wal-Mart.

Given the miniscule 17% or so penetration of EHRs at small physician offices unlike large hospitals (according to a recent government sponsored survey in the New England Journal of Medicine), the incentives outlined above, as well as the penalties for lack of “meaningful adoption” of EHRs, it can be reasonably anticipated that the next 5 years will see significant adoption of these technologies to move us into the 21st century. After all, isn’t it a travesty that in today’s technology enabled era, our medical records continue to languish in paper format within manila folders in doctors offices?!

Analysis of Wal-Mart's B2B2C Healthcare Strategy by Andy De (www.andyde.com)
Figure. Andy De’s Analysis of Wal-Mart’s Retail Healthcare (Business-to-Consumer (B2C)) and Healthcare IT for Small Physicians Practices (Business-to-Business (B2B)) Strategy

Wal-Mart’s strategy (please see the service-market opportunity matrix above) for creating and penetrating this market is the stuff that business case studies from Harvard Business School articulate, to train their next cohort of consultants and managers (there is a current HBS case study on eClinical Works referred below)! Given that Wal-Mart’s Sam’s Club subsidiary has over 200,000 healthcare providers and physicians, it will offer the e-Clinical Works EMR and/or practice management software offering loaded ion Dell’s servers, for approximately around $ 25,000 for the first physicians’ practice and about $ 10,000 for each additional doctor within the same practice [Ref 1]. Following the installation and training, estimated annual maintenance and support costs are anticipated to be in the $ 4,000 -6,500 on an annual basis. Dell will provide the installation of the hardware with eClinical Works delivering the software installation, training and maintenance. As well, physicians can anticipate a hosted option – currently offered by eClinical Works, priced at around $400/month for EMR+ Practice Management or $ 250/month for EMR alone [Ref 3].

Can Wal-Mart’s Personal Health Record (PHR) be far behind?

Given this ambitious strategy to address the needs of both physicians and patients, Wal-Mart also has a significant opportunity to drive adoption of Personal Health Records (PHRs) with a competitive offering similar to those offered by Microsoft Health Vault and Google Health.

Wal-Mart is part of a consortium called Dossia – formed by a group of companies including AT&T, Pitney Bowes, Applied Materials, BP, Cardinal Health, Sanofi-Aventis. Dossia’s goal is providing employees, their dependents, retirees and others in their communities with an independent, lifelong health record, one that is personally-controlled, private, portable and secure [Ref 4].

Dossia’s Founders are funding Dossia and its platform called Indivo, an independent secure, non-profit infrastructure for gathering and securely storing information for lifelong health records. At the request of employees and other eligible individuals, Dossia gathers health data from multiple sources. Employee participation as a Dossia user is completely voluntary and individuals have complete control over who sees their information.

Dossia’s PHR platform called Indivo, provides a secure data infrastructure that aggregates and stores health information for individuals to create a lifelong personal health record with medical information from multiple sources. Once gathered and securely stored in a decentralized database, the health information is continually updated and is available to individuals for life even if they change employers, insurers, or doctors.

Although access to Dossia’s PHR platform and database has been initially limited to the employees of founding companies including Wal-Mart, it is perhaps not inconceivable that this could be scaled to meet the needs of consumers of these companies as well in the foreseeable future. It is also not inconceivable that Wal-Mart could potentially offer this free to patients (consumers) of its in-store Health clinics as a loyalty building mechanism (similar to frequent flyer advantages offered by airlines) to build “stickiness” for both the clinics and its pharmacies. For instance, having your personal health records as well as all of your current medications on a secure server that only you can access anywhere, anytime, to retrieve your medication information for the pharmacy, or provide your physician in the event of an accident while on vacation, is compelling especially for the elderly or the technologically challenged, and could offer “barriers to switching” for Wal-Mart, going forward.

As well, bundling Dossia’s PHR platform and services along with the eClinical Works physician practice management and EMR offering (after rending eClinical Works interoperable with Dossia) would also make this even more compelling for physicians who can now not only digitize their medical records, but also potentially offer interested patients a digital and secure copy of their personal health records (PHRs) gratis, or as a fee based service. While this is perhaps easier said and done, given the lack of universally accepted Healthcare Interoperability standards, this could be a significant step in the right direction, especially given the incentives for adoption provided by the ARRA (American Recovery and Reinvestment Act of 2009) stimulus from the Obama administration, referred to above.

While this is currently strategic prognosis on the part of this author at this time, monitoring Wal-Mart’s moves in PHRs will be interesting indeed, going forward.

Hey Doc, Wal-Mart is your IT Provider and you better believe it!

While the notion of purchasing your IT software, hardware and services from your retailer may pose questions for many physicians, Wal-Mart has adroitly mitigated this risk thru its partnerships with a well known brand like Dell and a well known small practice software offering from eClinical Works (currently used by over 25,000 physicians) [Ref 1,2]. Proof of this concept will be provided to prospective physicians thru the usage of this software and hardware within the retail clinics currently in place within the Wal-Mart retail stores.

Given the high cost of sales and marketing involved with selling healthcare IT to small physicians offices, the adoption, scalability and success of Wal-Mart’s “aggregator model” could potentially be a game changer in Healthcare IT. At the same time, the provision of quality, transparent healthcare at a low cost within its walk-in clinics, if successfully embraced, may well be the panacea for millions of Americans without insurance – the next 3-5 of years will be interesting indeed, as we monitor and perceive the progress of Wal-Mart’s Healthcare strategy and execution.

REFERENCES:
1. Wal-Mart plans to market Digital Health Records System, Steve Lohr, The New York Times, March 11, 2009.
2. eClincal Works: The Paths to Growth, Harvard Business School case study # 9-807-025 by Robert F. Higgins and Mark Rennella, February, 2007, Harvard Business School Publishing, Boston, MA.
3. www.eclinicalworks.com, eClinical Works company website.
4. www.dossia.org, Official Dossia web-site

The contents of this blog are the express personal opinions of Andy De only, and do not reflect those of his current or previous employers