Nov. 13, 2012 Collaborative IMPACTS in healthcare and medtech

From The Collaborative Reform Series, another great event on IMPACTS in Medtech Innovation, Health, Wellness & Technology, Regulatory & Reimbursement, and Care & Delivery.

Session One: MedTech Innovation Impacts:
Dr. Stephen Oesterle, SVP of Medicine and Technology and Medtronic, opened the panel discussion with observations that MN is a good place for medtech innovation: best cluster of companies, good hospitals, great people examples to follow (Bob van Tassel, Manny Villafana), and a central airport - we can get to and from either coast in a day.

Where will innovation happen?  Where there is a positive, better economic argument.  Areas:

1. Remote patient management.  HF sensors --> PA pressures.  Diabetes. Hypertension.
2. Drug Delivery / Biologics.  Proteins don't go across the blood/brain barrier.
3. Spine.

China will spend 8% on healthcare in 5 years, vs. India at 1.2% on healthcare, in a chaotic market which by necessity will have consumers paying out of pocket --> China is a better bet.   To note a key technology trend, in India, there are more cell phones than SHOES, and yet only 75 Electrophysiologists.  A NEW MODEL is required to serve that country.  For Brazil, medical devices will have to be made there to be accepted; same with Russia. 

Ed Spencer, Chairman of Affinity Capital, noted that two areas have changed dramatically in medtech in the past few years: FDA and Reimbursement.  But also key to positioning is to understand that our demographics will significantly increase the utilization of healthcare, and 90 million+ people will be newly insured under Obamacare.

Session Two: Health, Wellness & Technology Impacts:

Rick Jelinek, CEO of OptumHealth, United Health Group discussed the evolution of the healthcare system, drawing an analogy to banking with ATM's and then online banking.  In healthcare, paper records might be ok with singular conditions, but most people have multiple conditions.  Now, we are using data to connect. In the fragmented HC system, consumers and providers are caught in the middle.  New solutions need to fit together, not just offer innovations of point solutions.  "Meaningful Use" is key in Electronic Health record use, and $ are flowing into incentivising Electronic Health records (i.e. government payment program for Medicare patients.)

Dan Ryan, CEO of Redbrick Health, also provided insights into consumer health engagement technology.  He cited the work of Dr. Vijay Fogg in behavioral research as well.

Session Three: Regulatory and Reimbursement Impacts

Representative Erik Paulsen (another St. Olaf grad) discussed progress and setbacks to repealing the medical device tax, and brought up "user fees" for utilizing FDA review services.

Susan Alpert, M.D. PhD, former FDA reviewer as well as corporate regulatory executive for Medtronic and CR Bard, discussed the changes at FDA and also mentioned that mobile health ("m-health") is a big issue in the regulatory domain.

Session Four: Care & Delivery Impacts

Vance Opperman, Chair of the BoD at BCBS of MN, outlined the impact of the election on healthcare:

• In March 2013, the rollout of Health Insurance Exchanges
• May 17th - final approval of the PRODUCTS in the plans (see the disconnecct there!)
• Oct - registration
• State needs regulations to know how to roll these out!  So far, no detailed directions.  Most states will likely offer the Federal Government exchanges.
• Outcomes based medicine with consolidating provider/payer groups will prevail.
• Proud of the work BCBS did with the war on tobacco.  We can do the same to create a cultural shift around obesity - for example, the bike rental stations, "Do" campaign, ads with grocery stores.  We can make a difference through prevention!

Last but not least, Tony Miller, managing partner of Lemhi Ventures and previous co-founder of Definity Health one of the first high-deductible insurance plans, shared his views on where healthcare is going.  (and another St. Olaf grad!  in my class, though that alone doesn't make me famous, I suppose.)  Healthcare is the single largest market in the U.S.  Now, the industry is in the process of creating a free market where insurance used to reign!  Systems that design and incentivize members around health through good COVERAGE decisions, CONDITION management thru social media; and CARE will succeed.  Individually, the question is, how do we create SHOPPING in each one of those categories for the consumer, so that real market forces revolutionize healthcare? 

Reform itself - three bets on the primary drives for how it will take place:

1. How much volume of employer-based insurance will shift to exchanges?  Unionized Fortune 100 companies are going to get out of the insurance business for their employees and pay the penalty in 2014-5.
2. COST --> Reimbursement.  Really Bad for cost control and Relative Value System.  Base from which everything comes off is backwards from which which every other industry builds efficiency.  ACO law, bundled episodes may be a starting point.  Tony believes that this time around, the Accountable Care Organization will transform the U.S. healthcare system, as well as the huge shifts in behavior at the payer level that influence consumers. 
3. Pure increase in regulation.

It will be fascinating to watch these forces play out over time.  THANK YOU to the Collaborative and to all of the wonderful panelists for sharing their knowledge, wisdom, and insight.