Dec. 5th, 2012 Annual Life Science Alley Conference

LifeScience Alley (LSA), a great non-profit industry group here in the Twin Cities, held its annual conference in Feburary at the Mpls. Convention Center on Dec. 5th.

Earl Bakken started "Medical Alley" likely in the 70's-80's to help industry professionals establish career networks; he recognized the importance of this when big computer firms like Control Data and Honeywell had layoffs and people needed to find new careers (in fact, Medtronic and other device firms probably benefited from the skilled labor pool in MN from those industries.)  When Pawlenty was governor in the mid-90's, the name was changed to reflect a broader-based view of the medtech industry to include biotech and perhaps even agritech.

Often, I feel that LSA's meeting reflects the themes of the times.  Over the years, the keynotes and presenters have focused less on clinical benefits of individual technologies to broader healthcare system issues, and the presenters, panelists, and conference-goers have evolved over time as well.  This year, there was even greater involvement on the part of insurers and providers, offering the medtech world a deeper view into those stakeholders needs and challenges.

LSA makes note-taking easy, and has posted the keynote lectures from the session:
http://www.lifesciencealleyconference.org/2012-keynote-speaker-videos-2

Videos from the 2012 Conference are now available online.  Click here for speaker videos.
Morning Keynote: Julie McHugh, MBA, COO, Endo Health Solutions	Luncheon Keynote: Véronique Roger, MD, MPH, Director, Center for the Science of Health Care Delivery, Mayo Clinic	Afternoon Keynote Panel: Rob Clark, Vice President, Healthcare Modernization, Optum Brent A. Del Monte, JD, Vice President, Federal Government Relations, Biotechnology Industry Organization (BIO) Raymond Frost, Vice President, Public Policy & Government Affairs, Bayer HealthCare Mark Leahey, President & CEO, Medical Device Manufacturers Association

Here are my takeaways as well.

Morning Keynote with Julie McHugh, COO Endo Health Solutions

• Key now for medical device manufacturers is to focus on CARE PATHWAY OPPORTUNITIES.  We need to comprehend and look a the healthcare market a different way.  Having electronic data remains a key gap.
• Economic value is a must.  Innovations must improve outcomes while taking cost out of the system.  Innovation is being redefined by what is needed in healthcare delivery and information technology, (not in meeting unmet clinical needs with new technology solutions - exactly my thinking with the industrialization of healthcare!)
• 5-10 years from now, Julie sees a time when the industry has dismantled the old model and built a new one.

Luncheon Keynote with Veronique Roger, MD, MPH, Director of the Center for the Science of HC Delivery, Mayo Clinic

• Basic though this is for all of us MBA's out there, after reviewing a lot of wonderful history of Mayo and how care has evolved there, Dr. Roger outlined (in a lovely French accent) the Mayo's "new" foundation for re-engineering healthcare delivery: the Patient-Physician-Payer triangle, and the concept that Value = Quality (in terms of Outcomes, Safety) over Cost.  Old news to some of us, but I guess it's new to healthcare!
• She also introduced the idea of "Design Thinking," which again, is an old concept to industry (particularly high-tech companies like Apple) but is mission-critical to the age-old healthcare industry as it seeks to develop new solutions that will WORK for its multiple constituents.

Afternoon Keynote Panel: 2012 Election Results

I found this session to be a bit deep in the weeds of singular issues with FDA & reimbursement, but perhaps some good points to take away....

• FDA needs to be appropriately funded to manage user fee program across med device, pharmal, biosimilar, generic drug
• Most pressing issue from Affordable Care Act  / Blind Spots:
• More unknowns that knowns - 9 proposals since election
• What do small employers do in 2014? Exchanges or offer the benefit?
• How will states deliver?  Commission and independent advisory group...
• For Optum, cost, quality, and access are key, as is the escalation of Accountable Care Organizations (ACO's)
• Sunshine Act...
• 2013 Cost of Care is issue.  What is the solution?  Tech is the solution to the HC problem, not he cause.  4% of the cost, vs. 70% of the cost is labor (one could argue the point that the labor is there to utilize the tech...).  Have to think of new ways to skin the cat.
• Data from devices such as EHR; value vs. fee for service.  MDT, BSX, STJ --> how about # of times lives are saved?
• More work between companies and payors - what do they define as value?
• 2d --> 2 yr plan.  Drive consistency in FDA approval.
• Ideas: Risk sharing contracts between payor and ACO
• Get Payers involved in clinical trial design and patient advocacy (oncology)
• Concern - lack of importance we have on Physicians.  Vital communication between Dr.'s and industry reps.  Shortage of PCP's.
• Need to recognize tha tfor a new technology to be adopted, there has to be a bridge between collecting data and reimbursement.

Dec. 4th, 2012 MidAmerica Healthcare Venture Forum

A luxury meeting for me, I plopped down $650 to attend this event at the Hyatt in Mpls. to hear the stories from entrepreneurs who are starting companies and running startups these days.

My 2012 client, Steve Anderson, the CEO of Preceptis Medical Inc., presented, and it was fun to be there to hear how he described the vision of the company, market opportunity, and next steps to this audience.  I met one of his BoD members, Michael Dale, the President & CEO of Medical Device Innovations, and also enjoyed running into Guido Neels, former COO of Guidant, where I had benefitted as an employee from his great leadership.

The main themes of the conference and a few highlights:

• Mobile technology is disrupting traditional healthcare business models.  We now have the ABILITY through TECHNOLOGY to provide intelligent insights and have real applications for prevention.
• Serial Entrepreneurs: Landscape today vs. 5-10 years ago.  Michael Dale put it straight up: it's COST that matters now, not incremental clinical performance.  He's a man after my own heart: in the course I teach at UST, I tell my students, there is a four-letter word in healthcare and it's not CARE!  A decade ago medical device manufacturers talked to doctors, now they talk to payers.  New innovation has to demonstrate COST SAVINGS to provide value in this environment.
• The Healthcare Investment trend is shifting from Medical to Industrial
• Economic Value Analysis: Innovation and How we Pay for it
• Investing in AgriHealth
• New Models of Financing in BioPharmaceutical Product Development

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.

Oct. 11, 2012 Collaborative MN Finance & Venture Conference

I always enjoy going to the events organized by The Collaborative, a local business networking and events organization that hosts a number of thought-provoking, interesting events throughout the year.

This fall, I was fortunate to be able to attend the 26th annual MN Finance & Venture Conference in Minneapolis on Oct. 11, 2011 on The Future of Innovation, highlighting Health, Cloud, Clean, Commerce, Finance, and Device topics.  Though my industry interests are primarily in Health and Medtech, I find the parallels going on in IT and sometimes other industries to offer additional insights.

HIGHLIGHTS:

• Brad Cleveland, CEO of Proto Labs, shared his wonderful story over lunch.  He applied to a want ad for the CEO position, and it started a fruitful long-term relationship with the engineer/founder of the company and a very successful company.  Proto Labs provides fast prototypes for customers, cheap.  He said that customers really don't want a relationship with you - they want their prototypes fast, cheap!  So don't waste too much energy trying to build relationships.  Figure out what they want and get it to them. I love the story about when he was traveling in Japan with the engineering co-founder, and the engineer designed the next prototyping technology on the bullet train after meeting with a customer.  WOW.  Way to keep your focus on what matters!  (Brad is also near & dear to my heart since he was also a math/physics major at St. Olaf.)
• Ken Paulus, CEO of Allina, shared that there are 10,000 new Medicare patients per day.  A real challenge for our healthcare system.
• Matthew Dornquast, CEO of Code 42 Software for backup in the Cloud (YES, it was named after The Hitchhiker's Guide the Galaxy!!!) was very bright and funny, and so savvy for a midwestern software guy.  So glad we have some great IT talent here in the midwest.
• Tom Erickson, Co-President of First Green Partners, shared his work with Doug Cameron (MIT/Khosla/Piper) with the group.  Chemicals will be made with micro-organisms.  Another St. Olaf grad!
• Dan Sullivan, CEO of superDimension (acquired by Covidien), said MN is in the flyover zone for real innovation in healthcare - we don't see an overall goal out there to shoot for.  He acknowledges the strengths we have as possessing the strongest medtech infrastructure in the world.  Dan't experience in medtech shines through, with SCIMED, Vascular Science, ACIST.
• Buzz Benson, Managing Director of SightLine Partners, a VC firm that invests in later-stage medical device companies, said that "overall VC/LP investments are down, but exits will increase since consolidators have cut back on R&D for new products.  They are willing to pay more with less dilution to increase their growth rates."  Great insight from an expert in the field.

PRESENTING COMPANIES:

• "It is a happy talent to know how to play," Emerson.  Shared by a gaming co CEO.
• Bavia - "spaspital" rooms.  Don't we all need those for good healthcare?  Founded in 2008 by CEO Rachel Swardson.  President/COO Kevin Casey, 30-year UHG executive.
• General Blood, Ben Bowman, CEO.  Full integration of blood bank supply and hospital demand, instead of pockets of inventory management at different prices / creating a market for blood --> INDUSTRIALIZATION EXAMPLE.  Linda Hall Whitman Keller on BOD as well (former CEO of MinuteClinic / executive at Ceridian.).
• Phrazer by GeaCom - Duluth co. run by Mat Johnson.  Patients can communicate in multiple languages with the Phrazer upon entering the hospital, and the information will be automatically input in to the EHR.  GLOBAL HEALTHCARE and competing against traditional methods.  Earl Bakken / Medtronic have invested.
• Mardil Medical - the continuation of the Acorn Cardiovascular heart failure / functional mitral valve regurgitation company.  Jim Buck CEO.  
• Preventice (was BOOST) - utilizes mobile, remote monitoring and the cloud to virtualize clinically validated care plans, enabling continuous connection between patient and healthcare provider.  Mayo.  Dan Schlewitz, EVP of Global Revenue (was DM for MDT when I was in St. Louis; then BioTronik.)
• PreciouStatus - transform care experiences by incentivizing caregivers to provide instant peace of mind to families through mobile technology.  Wayzata, launched in 2012, 5 employees.  Linda Hall Whitman Keller also an expert for this company.
• Zipnosis - yea!  So glad they are now aligned with Fairview.  The provider partnership is key.  Jon Pearce, another St. Olaf grad, presented.

SHOWCASE COMPANIES:

• AUM Cardiovascular - Marie Johnson.  Fast Dx for CAD.
• Awear - neurofeedback for education. Rod Greder.
• CaringShare - online service to help coordinate care for loved ones with chronic and / or complex medical conditions.
• Circle Biologics - POC therapeutic biofluid management.
• Cognific - mental health homework.
• Datuit - cloud-based health data storage.
• Diagnostic Biosensors - POC miniaturized tech.
• Empathic Clinical Suite - practice management technology for behavioral health profession.
• Fitness on Request - fitness programs for wellness facilities.
• Fortiori Design - O2 levels in athletes.
• Mill Creek Life Sciences (Rochester) - cells as drugs.
• On-Point Medical Dx - MRI QA.
• OrthoCor Medical - non-invasive wearable tech to alleviate joint pain, etc.
• Rubigo Therapeutics - transdermal drug delivery.
• Somnatek - snoring solution.
• SpineThera - pharma for back pain.
• 
  

Oct. 12, 2012 - Thinking like a futurist in healthcare with Cecily Sommers

Back to School - and blogging about healthcare.... Centers of Excellence to Focused Factories to the Cheesecake factory...

As we all get back to school in the fall,  it's time to resume the dialogue around what constitutes meaningful innovation in medical technology and healthcare.

For those of us who have been around awhile, the concept of Centers of Excellence (CoE) in Healthcare have existed since the mid-1960's.  The definition of one is "a facility or organization that creates healthcare value above the average found in a specific location.   In the late 1990s, the US Health Care Financing Administration (HCFA) began to examine and compare treatment outcomes among hospitals paid by Medicare.  Following Medicare's model, other divisions of government as well as the private sector have developed their own systems for rating and/or developing these Healthcare Centers of Excellence as well.  (http://pattyinglishms.hubpages.com/hub/United-States-Medical-Centers-of-Excellence).

Building on the CoE concept, Regina Herzlinger, the Nancy R. McPherson Professor of Business Administration Chair at Harvard Business School in Cambridge, MA and identified as #81 in future health 100's healthspottr list, began writing about "focused factories" in healthcare in the 1990's.  In her writing, she described integrated teams of providers who would be organized around a disease. "I use the term 'factory' purposefully to be provocative. The people in the factories … figure out how to improve the production process.”  

“Focused Factories” work because:
1.Volume & Focus creates higher quality & greater efficiency à practice makes perfect
2.Payers can compare costs & outcomes à competition leads to better results3.Examples: McDonalds, Steel Mini-Mills, MinuteClinic


And now, we have Atul Gawande, an absolutely brilliant surgeon and writer out of Brigham and Women's, who has attacked the subject of healthcare, quality, access, and cost with more freshness, wit, intelligence, and common sense than so many others who have worked in the field.  In the August 13 & 20, 2012 New Yorker, Mr. Gawande wrote about "Big Med," with the tagline, "Restaurant chains have managed to combine quality control, cost control, and innovation.  Can health care?"  He tells a rich, delicious, funny story about visiting the Cheesecake Factory, both as a consumer with his 2 daughters and their friends, and then as a student getting into the details of "benchmarking" some of the restaurant's practices and processes.  A few key highlights:

• The Cheesecake factory offers 348 dinner items and 124 beverage choices, with a new menu every 6 months (adding 13 new items) which can be rolled out in 7 weeks.
• The typical entree is <$15, waiters "efficient and friendly," the food is delicious, and the chain serves more than 80 million people a year.  How does it do this profitably?  Size is key - buying power, centralize common functions, diffuse innovations faster.  Precise recipie objectives and processes and standardized cooking methodologies (think manufacturing line), tight oversight, "guest forecasting" to determine quantities, CONTROL on a mass scale to minimize waste and maximize quality. 
• How does this compare to healthcare?  HC is also trying to deliver a range of services to millions of people at a reasonable cost and with reasonable quality.  New large chains are trying to accomplish the same thing.
• The obvious thing to do: study what the best people are doing, figure out how to standardize it, and then get everyone to follow suit.  Two examples: Dr. Gawande chose Dr. John Wright for his mother's knee replacement because he has led a decade-long experiment in standardizing joint-replacement surgery.  "Customization should be 5%, not 95%, of what we do."  Anesthesia, PT, limited inventory of prostheses (one manufacturer for 75% of implants) --> all this led to better patient outcomes in terms of patient mobility, discharge time, and narcotic use.  Needed a great team of 63 people to make it happen.  Another example: Dr. Armin Ernst for "tele-ICU's" "command centers" that monitor care across hospital systems and prevent errors.
• "Our new models come from industries that have learned to increase the capabilities and efficiency of the human beings who work for them.  Yet the same industries have also tended to devalue those employees.... Can we avoid this as we revolutionize healthcare?"
• Final comment: "The critical question is how soon that sort of quality and cost control will be available to patients everywhere across the country.  We've let health-care systems provide us with the equivalent of greasy-spoon fare at four-star prices, and the results have been ruinous.  The Cheesecake Factory model represents our best prospect for change.  Some will see danger in this.  Many will see hope.  And that's probably the way it should be."

THANK YOU, Dr. Gawande - your brilliance inspires us all!

January 26, 2012 Healthcare Innovations Summit recap

A note from Erin Bateman, cisummit@hcidc.org:

"On January 26, 2012, health delivery systems, physicians, innovators, policymakers, academics and venture capitalists gathered at the Care Innovations Summit in Washington, DC.

More than 1,200 individuals participated in person and an additional 3,000 joined online. Hosted by the Centers for Medicare & Medicaid Services (CMS), the West Wireless Health Institute (WWHI), and Health Affairs, this event showcased care delivery and payment solutions already working in the marketplace, catalyzing the dialogue for applying and expanding successful solutions to lower the cost of health care.

The summit marked the third installment of WWHI’s Health Care Innovation Day (HCI-DC) series, which convenes policymakers and the public and private sectors to discuss innovative solutions to our nation’s health care cost challenges.

We encourage you to share this recap to move the conversation forward on care innovation. Have an update you’d like to share? Email us at cisummit@hcidc.org or tweet it using #cisummit, and let us know what you’re up to. Also, stay tuned on hcidc.org for updated content and videos.

We look forward to hearing from you!

https://s3.amazonaws.com/wwhi.org/CIS2012_SummitRecap.pdf



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