Veterans Health Administration Realizes It Should Buy, Not Build Software

Imagine if you learned a government agency built its own office furniture, HVAC, or telephones. Even if there were a massive amount of corruption in government purchasing, it would be remarkable if a bureaucracy could do a better job building than buying.

Yet, for decades, the Veterans Health Administration has tried to do that with its Electronic Health Record (EHR). I cannot think of another health system that has built its own EHR, rather than buy it from a vendor. It makes as little sense as a health system manufacturing its own MRI machines.

Health Technology Forum: DC Meetup December 5, 2016: Crossing the Chasm from Analog to Digital Health Care

Our next Health Technology Forum: DC Meetup will be December 5. All are welcome to join us in Penn Quarter, Washington, DC. Join the Meetup at this link.

There is a lot of digital technology being deployed, but is it actually succeeding in disrupting health care in a positive way, to increase quality and cut costs? Our speakers will discuss digital opportunities are succeeding in achieving this.

As usual, our format will present three speakers. Our first speaker will be Phil Newman, Co-Founder & CEO of Viimed.

Digital Health Entrepreneurs Raising More Capital Than Ever (Probably)

(A version of this column was published by Forbes.)

A trio of new reports shows the fundraising landscape for new digital health ventures remains promising. New York’s Startup Health, an investor and accelerator, has released its report on the digital health venture market for the third quarter. Startup Health estimates $6.5 billion has been invested in digital health deals in the first three quarters of 2016, more than the $6.1 billion invested in all of 2015.

San Francisco’s Rock Health, also an investor, estimates $3.3 billion in new digital health funding through Q3. Startup Health’s figures are likely larger because Startup Health includes deals outside the United States (including a $500 million investment in a Chinses mobile medical service). Startup Health also includes deals as small as $52,000, while Rock Health has previously specified it only includes deals worth at least $2 million.

With respect to U.S.-based companies, both reports note the San Francisco Bay area continues to attract the most capital. According to Startup Health, the total is $1.2 billion – almost twice as much as New York or Boston. However, the pool is getting wider and deeper. Businesses in Philadelphia, Chicago, Minneapolis/St. Paul, Los Angeles, San Diego, Dallas, and Washington, DC, all saw good deal flow.

Artificial Intelligence, Machine Learning, and the FDA

(A version of this column, with hyperlinks, was published by Forbes.)

In July, the Food and Drug Administration issued guidance on three topics important to the future of medical innovation. These welcome guidelines demonstrate the FDA is doing the best it can to ensure it does not interfere inappropriately with advances in medical technology that rely on processing information.

However, the guidelines also show the FDA will be limited in its ability to respond effectively to future innovations. Current law does not really define the FDA’s powers to regulate devices that depend on advances in artificial intelligence and machine learning, as applied to health care. Guidelines give medical entrepreneurs some comfort the FDA will not impose an undue regulatory burden on them, but they are no substitute for legislation precisely defining the FDA’s powers in the digital age.

Will You Ever Understand Your Medical Bill?

It is hard to exaggerate how painful medical billing is for patients. A new crop of entrepreneurs is trying to solve the problem. However, their success will be limited without policy changes.

Read the entire column at Forbes.

Will Congress Fix its Electronic Health Records Fiasco?

There is some hope that Congress will fix – at least partially – the largely bungled Electronic Health Records (EHRs) deployment on which it spent $30 billion since 2009. Doctors are very frustrated by EHRS, which interfere with their practice of medicine. The current government program to have them installed nationwide should be abandoned.

Today, the Senate Health, Education, & Labor Committee marks up a number of bills to remove the regulatory burden in health care. One of them will address EHRs. Will it help? Maybe a little. First, it would force the federal government to reduce the administrative burdens associated with EHRs. Second, it would force the federal government to defer to the private sector on interoperability.

Read the entire entry at NCPA's Health Policy Blog.

Connected Care Cuts Costs, But Can It Overcome Inertia?

“Connected care” refers to a large and growing portfolio of digital tools, from video consultations with psychiatrists to in-home sensors passively detecting when a senior falls to devices that measure diabetics’ blood glucose and send messages to their families’ or doctors’ smartphones when intervention might be needed.

Beyond Electronic Heatlh Records, uptake of connected health is very low. According to a recent report:

• Less than half (45 percent) of patients receive even the traditional telephone appointment reminders.
• Only one in five (21 percent) have access to online appointment scheduling with their doctors.
• Fifteen percent use email to communicate with their provider.
• Just 14 percent have 24/7 access to medical advice.
• Fewer than one in ten (9 percent) receive reminders by text.
• Only a small percentage (3 percent) are able to send a photo of a medical condition over email.
• Just 2 percent have access to video visits.

Even more discouraging are physicians’ attitudes: Fewer than half believe telemedicine (delivering care over the phone or video) is an important evolution in the practice of medicine, while almost one third belief it is “not worth the hype.”

Read the entire column at Forbes.

Connected Care: Moving (And Keeping) Patients Out of Hospitals and Nursing Homes

One of the greatest frustrations in health care is that technology tends to drive up costs. In pretty much every other area of our lives, technology reduces costs. Increased health spending is associated with better health outcomes (as recently summarized by Cynthia Cox of the Kaiser Family Foundation). Nevertheless, we would like to get these benefits at less cost.

The opportunity to achieve this is at hand. A host of technologies promises to significantly reduce costs by eliminating friction in the flow of clinical data between providers and patients, making sense of data from different sources, and allowing patients and providers to interact in new, cost-effective ways. This will allow patients to get more care where they want it, and not where the system demands they show up.

Read the entire column at Forbes.com

Cancel, Don't Delay, Meaningful Use Stage 3 for Electronic Health Records

Over one quarter of the members of the U.S. House of Representatives – 116 of them - just signed a letter to the U.S. Secretary of Health & Human Services urging delay of the next step in the federal government’s struggling effort to impose uniform federal requirements for health information technology.

The rule in question is Meaningful Use Stage 3 (MU3), imposed by the federal government via the HITECH Act of 2009. The so-called “stimulus” act committed almost $30 billion to induce physicians and health facilities to install Electronic Health Records (EHRs) and move patient records beyond clipboards and manila file folders. This proved a huge boon to companies selling EHRs.

Yet, there remains one obstacle: The EHRs were supposed to be interoperable – to speak to each other.  They do not.

Read the entire column at Forbes.

Zombies Stalk The Health Care Landscape!

Accenture, the management consulting firm, has concluded that the flood of venture capital into digital health startups is not only maturing, it has created a race of zombies that will be bought up on the cheap by established players. In language not usually employed by the elite ranks of sober-minded management consultants.

Read the entire entry at NCPA's Health Policy Blog.

Elementary, My Dear Watson: IBM Enters Medical Image Storage

IBM has suffered declining revenues for 13 consecutive quarters. Although (like many U.S. companies) it attributes its poor results to the strong dollar, its once-praised pivot from hardware to software has put in into some crowded and stagnant markets. Nevertheless, it remains a company with great ambitions, largely built around Watson, the supercomputer which famously beat human beings on the game show Jeopardy! In 2011.

IBM has always hoped Watson would transform health care. It launched Watson Health as a strategic business unit in April, since which it has announced three small but significant acquisitions. Last week, IBM announced the friendly takeover of Merge Healthcare for $1 billion.

Read the entire column at Forbes.

Blurring Boundaries Between Biotech, Digital Health, Patient Care Show Need For Regulatory Reform

When was the last time a billionaire entrepreneur en route to New York to raise a couple of hundred million dollars for biotech company stopped in Washington, DC to spend the afternoon in a panel discussion advocating the need for fundamental reform of the Food and Drug Administration?

Patrick Soon-Shiong, MD, founder of the NantWorks group pf companies, did just that on Monday afternoon. At the event, the Bipartisan Policy Center launched a report on advancing medical innovation in America. Written by a team led by former U.S. Senate Majority Leader Bill Frist, MD, and former Representative Bart Gordon, the report seeks support for a number of steps to reform regulatory processes and reduce the cost of medical innovation.

Read the entire column at Forbes.

Regulating Genomic Research: Top-Down or Bottom-Up?

The next frontier in information technology is genomic sequencing, which will create the biggest of big data resources by 2025, according to experts in the field. It has been 15 years since President Clinton announced the first sequencing of the human genome; and it is now clear that researchers’ ability to free the unimaginable wealth of information locked inside our genomes is bumping up against constraints imposed largely by the federal government.

Read the entire column at Forbes.

Goldman Sachs: $32.4 Billion Digital Health Market; Savings “Indefinitely Large”

Goldman Sachs analysts, covering medical technology, life sciences, capital goods, and healthcare supply chain and services, to produce a research report on the potential for the “Internet of Things” to disrupt health care.

The conclusion: The total addressable market is $32.4 billion, and the savings resulting from digitizing health care are “indefinitely large" (see Exhibit 2).

21st Century Cures Passes U.S. House

This morning, the U.S. House of Representatives passed (344-77) the 21st Century Cures Act. This is a monumental achievement, designed to fundamentally restructure the Food and Drug Administration and thereby reverse the staggering decline of productivity in medical research and development.

Read the entire entry at NCPA's Health Policy Blog.

Telehealth Has Best Funding Quarter Ever

Venture funding of health IT deals in 2015 Q2 amounted to $1.2 billion in 138 global deals, according to Mercom Capital Group. This was smaller than 2014 Q2, which saw $1.7 billion raised in 159 deals.

However, telehealth and mobile health continue to blow the doors off.

Read the entire entry at NCPA's Health Policy Blog.

Obama’s Former Health IT Czar Raises $35 Million for New Venture

Bow-tied and charismatic, Dr. Farzad Mostashari, who led the Office of the National Coordinator of Health IT (ONC) from April 2009 to October 2013, has raised a total of $35 million from leading venture capitalists for his new business, Aledade. Aledade’s senior management includes veterans of athenaHealth and Practice Fusion, both firms which I admire for their entrepreneurship and relative (although not perfect) independence from government.

Like those firms, Aledade will provide its Electronic Health Records to independently practicing physicians. Aledade claims its uniqueness lies in an EHR that will ensure doctors’ win the Accountable Care Organization game.

Read the entire entry at NCPA's Health Policy Blog.

Electronic Health Records: Doctors, Hospitals "Literally Terrified"

In a hearing on Meaningful Use Stage 3, interoperability and patient access to data, Sen. Lamar Alexander (R-Tenn.) cut right to the heart of the problem:

“To put it bluntly, physicians and hospitals have said to me that they are literally terrified of the next implementation stage … because of the complexity and because of the fines that will be levied,” he said. (Katie Dvorak, FierceHealthIT, June 10, 2015)

Read the entire entry at NCPA's Health Policy Blog.

88 Percent of Nurses Use Smartphones at Work

According to market intelligence firm InCrowd, almost all nurses use smartphones on the job. THey own them, and their employers do not cover the costs.

I’m all in favor of information technology, but might this not pose a risk to privacy? I had understood most hospitals had very strict policies on BYOD (Bring Your Own Device).

Read the entire entry at NCPA's Health Policy Blog.

Doctors, Hospitals, Medical Groups Demand EHR Rule Delay

Electronic Health Records (EHRs) continue to take on water. The American Medical Association and the Medical Group Management Association adding their voices to the demands to delay the Stage 3 Meaningful Use rule.

I discussed the stage 3 rule when it was published. The response of these professional groups is stunning: They were all happy to take the almost $30 billion the government handed out to induce them to install Electronic Health Records.

Read the entire entry at NCPA's Health Policy Blog.