New Payment Models’ Impact on Innovation

getimageThe backdrop for this week’s feature article in Modern Healthcare by Jaimy Lee and Sabriya Rice is last week’s annual conference of the Advanced Medical Technology Association. Known as AdvaMed 2014, it is the leading MedTech Conference in North America, representing more than 1,000 companies. Commensurate with the event, AdvaMed released a new white paper that expresses concern over the potential impact risk-based payment models could have on provider adoption of emerging medical technologies.

The “Show me the data” headline connotes the growing demand of private insurers, as well as policymakers and governmental agencies, that the efficacy of such technologies be supported with evidence. And while AdvaMed, ”generally supports the movement toward new payment models that encourage providers to reduce costs through greater coordination of care,” its not too thinly veiled concern, of course, is whether and to what extent the demand for data will serve as a tactical smokescreen supporting cost control at the expense of patient care – as well as those companies’ financial success. Regardless of the relative priorities of those two objectives, pressure to control costs under risk-based contracting will certainly affect future provider decision-making impacting the adoption of un (or, at least, under) proven technologies.

I don’t think one has to belie their political persuasion to reasonably understand the pragmatically challenging conflict of this discussion. The overwhelming trends of transparency and evidence-based care in healthcare necessitate that manufacturers make the required investment to understand and be able to articulate their product’s cost/benefit story (i.e., the value proposition). The MH article shares the experience of Medtronic, a medical-device manufacturer whose research uncovered a tangential benefit of being able to reduce hospital readmissions that it could use to enhance market value.

But we also know from experience that data supporting patient benefit often trails substantial initial investment, trial and error and the ability to assess that benefit over years of a patient’s life. In a delivery system that has been able to support waste and largesse the need for patience has been a tolerable frustration. In a system where a major focus of all participants is now cost containment there’s a lot less patience.

The recurring policy challenge, as if there was just one, is in cutting through the individual agendas of industry participants to try and find some sense of balance between cost reduction and what is in the best interest of patients while not artificially stifling the enormous benefits we have enjoyed in this country from medical technology.

In Malcolm Gladwell’s latest jewel, David and Goliath, he profiles the work of Dr. Jay Freireich in the mid-50s through mid-60s. Freirech and his colleague, Dr. Tom Frei, pioneered the treatment of childhood leukemia by first transfusing patients with platelets to stop chronic bleeding. Following that they advanced the then novel approach of chemotherapy to include multiple drugs rather than a single drug.

In both instances, Freireich and Frei didn’t have to contend with whether or not insurers would underwrite the cost of their efforts. Rather, at the time they could not even get the support of their academic and clinical colleagues, so outlandish and absurd were their unorthodox approaches, which often caused great pain and hardship to their young patients. Except that in 1965 they published, “Progress and Perspectives in the Chemotherapy of Acute Leukemia,” in which they described their successful treatment of childhood leukemia. Today the cure rate is greater than 90 percent, and thousands of children’s lives have since been saved.

Is AdvaMed right to warn us against the impact risk-based payment models will have in the name of cost containment? Could the next Freireich & Frei team of innovators be kept from achieving a dramatic life-saving achievement because cost-containment will trump the patience needed to evidence results? Or is AdvaMed understandably overstating the case in doing what it is expected to do: advocate for the members funding that organization’s existence?


The Future of Medicine is Now: Can We Afford It?

“Imagination is more important than knowledge. For knowledge is limited to all we know and understand, while imagination embraces the entire world, all there ever will be to know and understand.” ~ Albert Einstein

Writing about healthcare public policy is never far removed from contention and conflict. It just comes with the territory. So it’s a treat on occasion to share something that can be appreciated and enjoyed without being debated (that being said, stand by). But first, please enjoy these two videos – in order, starting in the late 23rd century with the original crew of Star Trek.

“What is this, the Dark Ages?”

Now fast forward back to the twenty-first century.

InSightec is an Israeli-based company that has pioneered MR guided Focused Ultrasound, which provides a personalized non-invasive treatment that can replace invasive procedures and offer therapeutic alternatives to millions of patients with serious diseases. Jackob Vortman, PdD, the President of InSightec, shares the remarkable advancements he and his colleagues are achieving.

Future of Noninvasive Outpatient Surgery

Policy Implications

The future of medical technology is indeed exciting. As with many innovations over the course of history what once was only imagined is now becoming a reality. At the same time medical technology is recognized as a fundamental driver of healthcare costs and, in turn, affordability. From a social and political perspective what makes this driver so acutely felt today is the demographic impact on escalating demand for core primary care.

Invoking Star Trek again, the relative merits of individual versus social needs pervade several film episodes with the key line being, “the needs of the many outweigh the needs of the few – or the one.” Of course pragmatists will recognize that’s really more a matter of perspective than any metaphysical reality: i.e., depending on whether you are the one or the many and your personal belief system.

To put a finer point on the issue: how can we possibly continue to fund the types of advancements of organizations like InSightec here in the US and allocate sufficient resources to provide a baseline level of care for a dramatically aging population while not being more direct, more candid and more transparent in how medical care is rationed?

There has always been rationing of care. But it has always been a de facto situation that is for better or worse woven into the fabric of our care delivery system. Can we continue that way without anticipating some real tragedies?


Chronic Care and Technology

Whenever I think about Healthcare and Technology I am reminded of a wonderfully poignant joke that Rita Rudner (think, Rodney Dangerfield’s Young Comedians Special back in the 1980s) used to share:

"They’re trying to put warning labels on liquor now. ‘Caution: Alcohol can be dangerous to pregnant women.’ Did you read that? I think that’s ironic – if it wasn’t for alcohol, most women wouldn’t even be that way."

If it wasn’t for advancements in Medical Technology – and the attendant increase in life expectancy – one has to wonder whether the much maligned Cost Curve would hold sway over our social and political anxiety as it does today.  Undoubtedly, Medical Technology has improved delivery system effectiveness from the standpoint of decreased mortality and longevity.  But it comes at a substantial cost that ultimately impacts the cost of healthcare delivery.

The cost that society bears for increased longevity gained through technology is substantial, and we know that much of this cost is centered in the world of senior housing, aging services and post-acute/long-term care.  Evidence of the costs associated with chronic disease were explored on Tuesday at the second event of a three-part series being presented by the Alliance for Health Reform in Washington, DC.  Speakers at the event, Health Care Costs: The Role of Technology and Chronic Conditions, shared with participants some very interesting data and analysis (I encourage you to view the slide presentations).

I wish I could have participated because the presentation materials, though very informative, on balance seemed to focus more on general trends in how chronic disease drives healthcare costs rather than focusing on the specific role that Medical Technology has played.  But it nonetheless affords the opportunity to offer some thoughts on technology and the costs of managing and treating chronic disease. 

As the demographic Age Wave continues to move ashore – and taking with it an increasing amount of available resources – the theoretical discussion of tradeoffs between investments in technology and direct caregiving is likely to be become more intense.  Applying the concept of value to that discussion should not be viewed as a subjective assessment of the worth of an extra year, an extra month – an extra day of longevity by virtue of technology.  Rather, it should be viewed as a means of evaluating alternative investments of available resources.  This would seem to be a prudent basis for developing future policy surrounding public investments in technology.

Policy aside, however, senior housing and care providers face a daunting reality with respect to technology: the investment requirements can be substantial – and the consequences of making poor investments difficult from which to operationally and financially recover.  Yet to play in a world of integrated care delivery where both Information and Medical Technology provide distinct competitive advantages, ignoring required investments is just as sure a path to quiet obsolescence.

And while providers wrestle with that two-headed dragon, legislators have not yet appropriately recognized the need for parity investment in PA/LTC technology infrastructure, so many organizations are having to do what they can with available resources to position their technology investments in what they believe (hope) will be in alignment with acute care providers.  The irony here is of course thick if not beyond frustrating because the train that is integrated care delivery has left the station without the cars behind that represent the ability to achieve interoperability with PA/LTC providers.

There is also, I believe, a need of both providers – and policymakers – to understand that technology will only be able to help us so much.  It is not the silver bullet that will save us from the need to become more efficient, streamline care continuums, dramatically improve provider communication and tear down delivery setting silos.  In addition, technology may help encourage but it cannot directly change individual behaviors that could go a long way to curbing chronic disease incidence.

I would really like to better understand how different organizations are addressing their technology strategy.  Is it still a wait and watch situation? Is the need to develop EHR/EMR technology enough to deal with right now? What concerns you the most about technology? Who is involved in that thought process?

Please take a moment to share your input – don’t be afraid to be first . . . somebody has to.  Hot smile

  ~ Sparky




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