Tag Archives: Healthcare

How do we prevent denial of available and deserved therapeutic options to patients?

I read this excellent post The Irrational Rationing of Health Care on LinkedIn by David Katz, that documents a case of denial of a treatment option to a patient because the payer considers that ‘not established as standard therapy for that cancer’ – as documented in their business criteria. As you would have guessed that the treatment option is a reasonably expensive one. This is an excellent article and an exemplary case for what I elaborate in previous blogs http://bit.ly/ACOSteadyState and http://bit.ly/sustainablehealthcare .

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Yes, the advances in available treatment options puts heavy burden on payers – and most of the time payers are ruthless and act against the purpose of their existence. This puts anguish and many times irreparable damage to patients and heavy burden on sympathetic physicians. We, and they (payers), have to accelerate the newer options that are available for them (as never before in the existence of that industry) to recover costs in other ways available to improving efficiency and margins. My guess is the motivation for such actions are a combination of: (i) payers are behind in effective adoption of options in other fronts for cost control with new advances – so they see newer treatment options only as a cost burden, (ii) those cost containment options take time to pay back, and treatment options are evolving faster and (iii) payers are greedy to reap the benefits by trying to maximize as much margin till an effective law or regulation is imposed on them to stop this business practice. Let us hope they do not make it a practice to be fair only when regulated strongly – which is not good for them. Often payers end up spending more money cumulatively by trying to deny something that seems to be expensive care option at the current point in time, or sadly let the patient die.

As a society, the onus is on us to both help the payers as well as regulate them, but keeping their capitalistic needs in perspective. The recent and rapid developments in healthcare market have left too many loopholes that payers as well as many care practices (physician offices, hospitals, etc.) exploit to squeeze out more from the system.

As I wrote in an earlier blog http://bit.ly/ACOSteadyState, “To avoid such a scenario, the system: patients, physicians (and other care providers), payers and regulators have to simultaneously achieve their goals of patient care and cost control while balancing everyone’s financial incentives – without burden on one of the players in the equation.” Who is going to take up this responsibility? Only a healthy dialog and thought leadership involving all players will reveal the answer for that – we need to get there rapidly to avoid heavy burden of course correction.

Finally, this also reminds me to reach out to an experienced and knowledgeable physician who said in a recent meeting, that ‘when treatment options are available, the single determining factor if the patient has access to it is if they have access to physicians‘. Will update when I get a chance to discuss, or even ask if he is willing to write a post on that.

So, how do we get care to ‘medically deserving’ (definition needed) patients to whom therapeutic options are available even if they are classified exploratory/experimental by payers – under current rules or loopholes – with the evolving healthcare market?  Share what you think using the comment option.

Picture based on a reflection captured from subway window in Zurich. It is modified and used to show four major facets in healthcare: Patients, Providers (of healthcare), Payers and Regulators.

Just in time (JIT) vaccines and cures for Ebola and other sporadically emerging (and devastating) global infectious diseases

Do you know one of the advantages of being an engineer turned biotechnologist turned entrepreneur/capitalist? You can write a blog like the one below.

A few months ago, I was in an event that discussed approaches and challenges in tackling Ebola, organized by the MIT Enterprise Forum of Cambridge.

Image for JIT infectious Disease blog

Many such sporadically emerging diseases of global consequence needing rapid efforts to containment (like Ebola, Anthrax, Bubonic Plague) share the same trait, that their occurrence happens unexpectedly, the effect is deadly and spread is rapid, and it does not always attract enough funds to do lot of research or stockpile vaccines/cures, like two classes discussed below.

The discussion in the above event boiled down to three technical topics, and need for lots and lots of money (double digit billions of US dollars) to stockpile the vaccines. (when vaccine(s) is used alone in this blog – please read as vaccines/cures)

  1. Design of better suits and other tools to protect care givers.
  2. Immune based vaccines (antigen-antibody approach).
  3. Nucleic acid based vaccines (like antisense and RNAi).

Improving protective gears:

The first topic centered on using engineering, advances in material science and user interaction sensitive design. Among other topics, involving places like MIT towards this problem was discussed. I think we can also tap talent using hackathons, like Hacking Pediatrics or MIT Hacking Medicine. I am using these two because I happened to be there as mentor in recent hackathons.

Immune based vaccines:

Immune based vaccines for non-biologists, is to identify ways to elicit natural/artificial immune response (antigens/antibodies) through rigorous research from infected individuals that show resistance or from appropriate model systems. Certainly it takes effort, expense and time to identify them. So it makes sense to invest in research to test out effective vaccines continuously and keep the best one as the first line of defense.

Nucleic acid based approaches:

An example of Antisense technology is (e.g., identify potent nucleic acids that will bind to DNA/RNA viruses and inactivate their capability to replicate) and was represented by the company Sarepta Therapeutics in that event.

RNAi (RNA interference) is a mechanism to degrade the viruses, may even be possible to use strategically against bacterial pathogen infections – the discussion of that is beyond the scope of this blog. An example company, that was also represented in that event, is Alnylam Pharmaceuticals. My interests and success in predicting things of very high consequence with RNAi are highlighted towards the end in this other blog.

A third class that was not discussed is the emerging approach to deliver RNA molecules into appropriate cells and express proteins, and an example of such company is Moderna Therapeutics.

Here, again, it makes sense to invest in research to test out effective vaccines continuously and keep the best one as the first line of defense.

Much of the discussion, except for what I brought up as a question in between, discussed using lot of money to stockpile these vaccine candidates.

My question which is also my suggestion in this blog relates to research and improving existing capabilities for Just In Time (JIT) manufacturing for these vaccines, rather than building a stockpile with huge expense – some other disadvantages are highlighted below. This term JIT has been very popular in engineering manufacturing industries, initially became popular in automobile industry when Japan took a significant lead over American automobile manufacturers – and is one of the focus of many Operations Management or Operations Research (OR) studies – so as to reduce having inventory which increases the cost of the whole process and the end product (e.g., a car).

The advantage of a person like me who is an engineer turned biologist turned entrepreneur/capitalist who has been trained and been in many fields with deep experience in life sciences – including infectious diseases click here to see a futuristic framework – come in the above statement. Borrowing the idea from engineering, we should simply invest in improving manufacturing systems and identify locations/companies to manufacture antibodies, antigens or nucleic acid (which is relatively simple – except there is currently no major need to manufacture them at such large scale, yet).

Our funding agencies like NIH, NSF, CDC and other foundations (e.g., the Bill and Melinda Gates Foundation) and health and welfare organizations like WHO, UNICEF etc. should focus and incentivize research groups, pharma and biotechs or even other enterprises outside healthcare sector to contribute to improving rapid production techniques – be it using recombinant cell lines, other isolated cell lines like hybridoma, or approaches taken by companies like Genocea, or even from microbes (bacteria, yeast, fungi) and bioprocess equipment like fermenters/bioreactors for large scale or continuous cultivation and downstream processing – and manufacture enough when need arises.

Thus we do not stockpile vaccines/cures for these sporadic diseases (that we do not know when or if it is going to arise again) and also avoid the risk of stockpiling older generation vaccine/cure in large quantities for unknown amount of need. That way (i) we can scale up latest available vaccines/therapeutics when need arises and very rapidly, and (ii) manufacture the latest generation vaccine/cure when such sporadic and catastrophic diseases strike.

Another concept that is popular in operations management and supply chain management is “buffer or suffer”. Simplistically, in order for a process outcome to be effective we identify bottlenecks and initial needs to store just enough quantity of the materials or the end products to suit the need, rather than optimizing only resource utilization. Naturally, this concept applies here as well. We should stockpile just the buffer amount of vaccine/cure that is the best proven solution at any point in time.

To summarize the solution proposed in this blog in a simplistic sense of the concept:

  1. We invest in research just to identify and improve vaccines/cures for such diseases, but not to stockpile huge quantities.
  2. Invest/incentivize other enterprises to improve JIT production of the vaccines/cures – which infrastructure can usually be used for lot of other purposes, so the infrastructure won’t be sitting idly.

Implementing this takes getting people from all sectors to work together and as separate subcommittees and formulate the plan. Biologists, healthcare, epidemiologists, user experience specialists in these arenas, engineers for design of equipment as well as protective gear, operations management specialists, people with ground experience in delivering this in all kinds of societies and policy makers together with people who are responsible for funding will all be involved in this process.

Share your thoughts in the comment section below, or if you are not a person who likes to share your thoughts use these suggestions as well as come up with your own to ‘Build an efficient and healthy world’.

*Picture from Nature magazine, with permission.

 

Leading Healthcare to a Better and Sustainable Future

This post is a complement and response to the post by Michael Greeley entitledBet the Jockey…Bet the Horse…and Bet the Track’ (hyperlinked).

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Michael Greeley is one of the nicest people I have met in the investment sector. The above well-written blog post is a ‘must read’. Michael periodically writes these nice blogs with well compiled information and passion. This particular post talks about changes in healthcare and how he and his firm have chosen to invest in a company and entrepreneur who are going to be in the midst of a fascinating market vortex, and extrapolates to the rebuilt healthcare system we are striving for.

These are great points from the perspective of an investor – but not always of the ‘consumer’. Being passionate about health reform and working to ‘Build an efficient and healthy world’, I want to shed light on alternative perspectives that need attention. In that process, I borrow many words and perspectives from Michael’s blog to connect the two views.

If we further incentivize tiered and ‘branded’ healthcare delivery system, WHILE moving more towards B2C rather than B2B – bulk of the population will be forced to get substandard care – because they cannot afford it. One may argue that is better than many not getting healthcare coverage at all – true, but is that what we are striving to build? It is like telling those consumers: ‘you want to buy from the branded tier, but you can’t afford it’. Healthcare is not a nice to have feature, but a necessity and a significant population of people not getting a good one will affect the others who can afford branded tier – including health of the latter and societal wellbeing.

The other argument about the healthcare cost drop due to ‘insurance cost-sharing initiatives like expanded deductibles and …’, again points to shifting the burden to the consumer. The other part of the statement ‘and the proliferation of innovative healthcare technologies’ include using big data (like EHR/EMR) to justify with data that low cost alternatives work as well on majority of population. Whereas majority of the cost result from a couple of percent population who suffer from illness that cannot be easily ‘cured’ to whom these low cost alternatives may not be the right choice, and subtle differences in effectiveness hurt them a lot. Now, using this population data and depriving the seriously ill (especially ones who cannot afford ‘brand’) who need the higher cost alternative is going to have serious negative consequences to real consumers (not investors) in the not so long run.

Here are few examples:

  1. An example is insurers saying that expensive medicine is excluded from coverage in your tier – the ‘brand’ effect.
  2. Another example is a doctor entrepreneur – whose qualifications cannot be questioned (but motives can be) – building and promoting a model writing that the patient does not need some specialized care or specialized medicine, depending on where they are on the tier and brand.
  3. To those who do not follow this closely, there are enterprises being built with an alternative business model whose sole purpose is to cover medicines and treatments when denied due to circumstances exemplified by above two points.

Most people who go to McDonalds and equivalent rather than more healthy and other ‘brand’ alternatives (of course they cannot live on apples) do so because they cannot afford the latter.

Yes, we all agree that current healthcare model needs a major overhaul that many are working on with lot of passion, and money from institutional investors like VCs (and return for them) is an essential part of this transformation.

We should be more careful in thinking out the healthcare system beyond the five year VC models, lest we end up with another broken healthcare system that needs to be fixed by another ‘New President Care’ (or ‘NACA’ – new ACA) in place of the just implemented ‘Obama Care’ or ‘ACA’. The point is not just about cutting cost but about making the system efficient in a sustainable way.

You can share your thoughts on solutions below comment section, or go on and build the system without these major pitfalls.

*Picture depicts the state we do not want to get to – where sole reasoning driving decision is cost.

A steady state to avoid while adopting Accountable Care Organizations (ACOs) in healthcare

Healthcare is undergoing a major overhaul. The costs are ballooning and we are resorting to Electronic Health Records (EHRs) and Electronic Medical Records (EMRs), remote monitoring and care, quantified-self enabled by smartphones, wearable devices, etc. to gain better understanding of cost control and sources of wasted resources. This post refers specifically to changes happening in the USA.

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With the implementation of the Affordable Care Act (ACA), another major change that will likely be the norm in the near future are ACOs – Accountable Care Organizations , also called pay-for-performance (P4P) in broader contexts. I will use ACO and P4P interchangeably for this post. In this concept the care providers (hospitals, doctors etc.) are reimbursed mainly by metrics signifying quality, appropriateness and efficiency of the health care provided. This contrasts from the current standard where the providers are predominantly paid for each service provided including the number of tests they order during the course of their treatment.

The healthcare industry, while built on compassion and care, still has to control and recover costs and have an operating margin. One major (and welcome) change that is expected with adoption of ACOs is that practitioners of various sub-specialties interact more freely.

Of all the good things that can happen with this change to ACOs, one possible outcome worries me. In this worrisome scenario, the hospitals and care organizations train their staff to achieve the above goal with as much margin as possible and over time reach a steady state that is optimized primarily for the margin, while patient care gets adversely affected. Let us consider the scenario where the patient falls in a socio-economic or other stratification category, or has disease that is not easy to visualize and diagnose – then a couple of physicians independently doubting the patient in their notes can lead to the system claiming that they have provided adequate care and meet the payment criteria, while optimizing the care cost. This patient is unlikely to receive optimal care.

Another example (probably also related to the above) is the 30 day readmission rate as a criterion for evaluation of performance: in this context there will be a strong tendency to compromise patient care if the patient returns for care on day 27, for instance. With all due respect for compassion and care of medical professionals, the need to optimize margin might force them to make decisions that are not optimal care for that day. One evolving trend is highlighted in this article.

To avoid such a scenario, the system: patients, physicians (and other care providers), payers and regulators have to simultaneously achieve their goals of patient care and cost control while balancing everyone’s financial incentives – without burden on one of the players in the equation.

Let us avoid a steady state that compromises patient care while adopting an honorable goal that could forever transform our healthcare system and costs.

Share what you think using the comment option.

Picture based on a reflection captured from subway window in Zurich. It is modified and used to show four major facets in healthcare: Patients, Providers (of healthcare), Payers and Regulators.