Shifting perspectives 180° Health Forum 2015

Highlights

Washington, DC June 2015

www.pwc.com/180healthforum

Shifting perspectives

180° Health Forum 2015

http://www.pwc.com/us/en/health-industries/new-health-economy/index.jhtml?wt.ac=healthindustries_180healthforum

B Shifting perspectives | 180° Health Forum 2015 | Highlights

PwC’s goal is to help our clients anticipate and prepare to meet the challenges posed by the New Health Economy™

Shifting perspectives | 180° Health Forum 2015 | Highlights 1

Introduction

At PwC’s 180° Health Forum, nearly 200 CxOs and thought leaders across US health industries met in Washington, DC to discuss the future of healthcare. Attendees spent the day exploring what PwC describes as the New Health Economy™ that is emerging in the United States, characterized by new entrants, changing reimbursement and care delivery models, shifting relationships, and changing revenue and funding flows.

As in previous Forums, some of the most provocative thinkers in the health arena were on hand to share their views of the shifting healthcare landscape with PwC’s health clients. Our goal in leading the Forum was to help our clients anticipate and prepare for the challenges posed by a healthcare economy that’s undergoing a rapid transformation.

For decades, American consumers, policymakers, business leaders, and healthcare professionals have experienced repeated, costly contradictions in our $2.8 trillion fragmented system of care. Put simply, we have not gotten our money’s worth. But the ground is shifting rapidly, with technological advances, empowered consumers, and disruptive new entrants triggering a rapid shift in dollars and major changes in behavior. This is giving way to what we call the New Health Economy™. Thus the theme of the Forum: Shifting Perspectives.

Over the course of the day, eight guest “provocateurs” shared their insights into the challenges facing the US health system in this time of transformation, and innovative ways to address then. Panel discussions with provocateurs and a diverse panel of PwC clients from the health

industries were moderated by Susie Gharib, the award-winning journalist who is a Senior Special Correspondent to Fortune and contributor to “Nightly Business Report” on PBS-TV and CNBC.

Joining the Forum once again was Dr. Atul Gawande, a renowned surgeon, public health researcher, bestselling book author, and contributor to The New Yorker. In this year’s Forum, Dr. Gawande focused on what it takes to create a more consumer-centric world of healthcare, and why it’s so difficult to translate great ideas into practice.

In an afternoon Q&A session, David Plouffe, the mastermind behind President Obama’s election campaigns and now Uber’s Chief Advisor, shared his experience and advice on the challenges of disrupting an industry, and what it takes to succeed. Susie Gharib led the Q&A, with the audience joining in to add provocative questions of their own.

The Forum, led once again by PwC Health Industries principals Rick Judy and Ed Yu, focused on three key themes:

• The implications of a new, “always on” model of care called the “quantified self,” which is shifting the upending the traditional doctor-patient relationship and transforming how consumers manage their health.

• How to rethink the value of innovation as we shift from mass-market treatments to more targeted care.

• The need to transform business models for a consumer-centric world, and the challenges of implementation.

Rick JudyPrincipal, PwC

Ed YuPrincipal, PwC

2 Shifting perspectives | 180° Health Forum 2015 | Highlights

Always on: The quantified selfView telestration

Non-traditional players in the healthcare space, including retailers, wearable device makers, and digital technology companies, are providing consumers with a new, “always on” model of care called the “quantified self”1. New technologies at the intersection of social, mobile, analytics, and the cloud (SMAC) are providing consumers with a wealth of continuous, personalized information to drive their healthcare decisions. How will these technologies alter the healthcare landscape?

Three guest provocateurs explored the challenges and opportunities that the new technologies present. Dr. Eric Topol examined how data and digital technology are democratizing the practice of medicine, and upending the traditional doctor-patient relationship. Susannah Fox focused on how US consumers are tracking their health, the role of technology in tracking, and the importance of harnessing and sharing data to improve the health of individuals and populations. Thomas Goetz addressed the power of patient-reported data to generate compelling new insights for the health industry.

The datafication and democratization of medicine

Dr. Eric Topol Director, Scripps Translational Science Institute

Digitizing humans, democratizing medicine

Today we have the tools to digitize human beings at the cellular level, one cell at a time. “Essentially, we can create a Google map of a human being,” says Dr. Topol. “We can digitalize virtually anything, including a human fetus, and detect things like chromosomal abnormalities, and even cancer, at an early stage.” The process of digitization can be repeated throughout life, from before conception through the end of life, paving the way for “individualized medicine from pre-womb to tomb.”2

The ability to digitize information is democratizing the practice of medicine. A growing array of smartphone-based apps and accessory devices that leverage digitized data are shifting power from providers to patients and consumers. With the help of this technology, consumers today check blood pressure or glucose levels, diagnose ear infections, perform an eye exam or a cardiogram, and more. In some states, they can order lab tests directly, bypassing the doctor.

Soon you won’t even need a smart device to be your own doctor. Inspired by a cover of Time magazine, the start-up company Cicret is developing technology that promises to “make your skin your new touchscreen.”3 To manage your health, just tap on your forearm.

“We have the ability to move to a new form of medicine, one that is datafied, democratized, dignified for patients, and truly reflecting the data science we’re capable of now that we can digitize human beings,” says Topol. “This doctorless patient model has potential to be a much more ideal way to practice medicine in the future.”

1 A term attributed to Wired Magazine editors Gary Wolf and Kevin Kelley

2 Cell 157, March 27, 2014. Individualized medicine from pre-womb to tomb

3 http://cicret.com/wordpress/

Any trademarks included are trademarks of their respective owners and are not affiliated with, nor endorsed by, PricewaterhouseCoopers LLP.

“New mobile technology tools are not just changing what doctors can do but what patients and consumers can do. These are the drivers of democratization, the smartphone being the hub of it.”– Dr. Eric Topol

Cicret Bracelet3

https://www.youtube.com/watch?v=FtMSWFA4HZU

http://cicret.com/wordpress/


Always on: The quantified self

Tracking for health

Susannah Fox Chief Technology Officer, US Department of Health and Human Services

While at the Pew Research Center, Susannah Fox co-authored the first national study of how many US adults track their health, and the methods they use.5 The research found that seven in ten adults track at least some aspects of their health or someone else’s. Six in ten track their own diet, weight, or exercise. One-third also monitor health indicators like blood pressure, blood sugar, sleep patterns, or headaches. Overall, almost half of those who track health indicators do so “in their head” rather than using a formal tracking mechanism.

5 Susannah Fox and Maeve Duggan, “Tracking for Health,” Pew Research Center, Washington, D.C. January 28, 2013, http://www.pewinternet.org/2013/01/28/tracking-for-health/, accessed August 7, 2015.

The avatar will see you now

Technology will reduce the long wait for a doctor’s appointment that many patients experience. To see a primary care doctor in the US takes an average of 2.7 weeks, and in Boston, the delay is six weeks.4

Technology alternatives are emerging that will reduce the delay and help to democratize medicine. In the future, we’ll no longer hear the phrase “the doctor will see you now.” Increasingly, the doctor could be replaced by the smartphone, the robot, or the avatar.

Innovations such as Apple’s ResearchKit will even democratize clinical research by enabling consumers to contribute directly to research efforts via smartphone apps. Topol believes that integrating digital tools into R&D programs will be a boon to biopharma companies, enabling them to conduct research faster, more efficiently and effectively, and at a lower cost.

4 Elizabeth Rosenthal, “The Health Care Waiting Game,” The New York Times, July 5, 2014.

Nudging people to use technology

Adults aged 65 and older are the group most likely to track their health, and they’re most likely to do so using paper and pencil rather than technology. This finding is important to keep in mind as we talk about the promise of technology, according to Fox. “Often those most likely to

be dealing with chronic conditions and could benefit from tracking are older adults, who may not embrace technology as readily,” she says. “How might we move them towards the idea of tracking using technology while respecting the current methods they use? That’s often a piece of paper stuck to the fridge.”

Self-tracking health data

Source: “Tracking for Health,” Pew Research Center, January 2013.

Seven in ten US adults keep track of a health indicator.

60% of US adults say they track their weight, diet, or exercise routine.

One-third of US adults track health indicators such as blood pressure, blood sugar, head-aches, or sleep patterns.

Half (49%) of those who track health indicators do so ‘in their head’.

43

21

http://www.pewinternet.org/2013/01/28/tracking-for-health/

http://www.pewinternet.org/2013/01/28/tracking-for-health/



Persuading people to change requires understanding the “cultural artifacts” they might not be ready to give up. Fox cites the example of cake mixes developed in the 1930s that only required consumers to add water. American women rejected the mixes. “They didn’t feel like they were really making a cake unless they cracked fresh eggs.” The lesson? “If you want people to change, find out where they are now and understand where you might be able to nudge them.”

The need for data sharing

The Internet has made a wealth of medical information accessible to consumers that 15 or 20 years ago was locked away (sometimes literally) in medical journals. Now it’s time for information to flow in the other direction, for consumers to share their tracked data with the health system.

Today there’s little sharing of health information; only about one-third of those tracking their personal data share their information with someone, and of this group, only half share with a clinician. “At this point, all of the home tracking is invisible,” says Fox. “It is not yet being fed up into clinical research or into the medical record.”

Fox sees this as an important next step in the evolution of tracking. Wearables could help, by enabling consumers to upload their information and share it online, with the potential to create what she calls a “learning health system.” By sharing our health tracking information with each other and with the medical establishment, we can gain new insights from our collective experience and improve the overall population health.

Using tracking to manage chronic conditions

With the incidence of chronic illness rising in parallel with the aging of the US population, managing chronic conditions is becoming increasingly important. So it’s encouraging that a survey by the Pew Research Center6 indicates that US adults suffering from chronic conditions are more likely to track their health, and that tracking is making a positive difference.

According to the survey, while adults living with chronic conditions are no more likely to track their weight, diet, or exercise routines than those without chronic illness, they’re far more likely to track other health indicators or symptoms, and the probability increases with the number of chronic conditions. While only 19% of adults with no chronic conditions track health indicators or symptoms, 62% of those with two or more chronic conditions do so.

Survey participants with two or more chronic conditions were also far more likely than those with no chronic conditions to report that tracking had an impact on their health. More than half (56%) said it affected their approach to managing their own health or the health of someone they cared for, 53% said it prompted them to ask new questions of their doctors or seek a second opinion, and 45% reported that tracking affected a decision about how to treat an illness or condition.

The survey results reinforce the power of tracking to help consumers take charge of their health.

6 Susannah Fox and Maeve Duggan, “Tracking for Health,” Pew Research Center, Washington, D.C. January 28, 2013, http://www.pewinternet.org/2013/01/28/tracking-for-health/, accessed August 7, 2015.

“People 65 and older are the most likely to track health indicators, and most likely to use paper and pencil. How might we move them towards the idea of tracking with technology, while respecting the current methods they use?” – Susannah Fox



Turning experience into better medicine

Thomas Goetz CEO, Iodine

As a boy growing up in Minnesota, Thomas Goetz’ favorite book was “How to Stay Alive in the Woods.” As an adult, Goetz thinks a lot about the book and its application to navigating the wilderness of healthcare. “When we think about medicine, we think about it happening in immaculate buildings,” he says. “But medicine happens in life, in the real world. And life is messy. It doesn’t have the organization that you have in hospitals.”

Goetz believes we need new tools to navigate the “wilderness” of healthcare. Dashboards such as those offered by FitBit or Garmin provide a wealth of data, but it’s too much for users to take it in all at once. Rather than dashboards, we need steering wheels—the equivalent of maps or guidebooks that show consumers how to use health data and metrics in a way that helps them to improve and manage their health.

Microphones, not microscopes

Patient-reported data could play an important role in developing those guidebooks. Rather than just approaching people with microscopes (e.g., to explore their genomes), we should give them microphones, according to Goetz. “We should let them not just measure but articulate their sense of self and their experience,” he says. “That is data. It’s qualitative, it’s subjective. But at scale, that qualitative data can become quantitative, and it can become a powerful catalyst for change, as much as genomic data.”

Patient stories can be aggregated to gain a clearer sense of the “big picture.” For instance, when Goetz’s company, Iodine, compared consumers’ “worth it” scores on brand name drugs to the scores for generic alternatives, it found that generics are as “worth it” as very expensive patented drugs—a finding that has major financial implications. “We’re spending billions of dollars on prescriptions of brand name drugs when generics work as well,” says Goetz.

To persuade people to share their experiences requires giving them something in exchange, Goetz believes. “Most people don’t want to track things unless there’s a benefit to them,” he says.

“We need to think of the quantified self as helping people, giving them the maps they need to get through their healthcare wilderness, not collecting metrics. It’s about maps, not metrics.”– Thomas Goetz

64.280

10 10

59

14

63

23 1345

1936

16.219.4

61

Brand averagen=2961

Worth It

Not Worth It

Not sure

Worth It score for 4 top-selling drugs (under patent)(percentage of responses)

Worth It score for 4 generic alternatives(percentage of responses)

Nexiumn=1197

Cymbaltan=172

Crestorn=729

Abilifyn=124

Generic averagen=3208

omeprazolen=1068

venlafaxinen=158

atorvastatinn=1314

quetiapinen=102

17 22

7560 61

22 1744

2036

1128

12 13

Source: Thomas Goetz


This message came through clearly when Iodine conducted an A-B test of two potential marketing approaches designed to persuade patients to join a program to share their experiences of using antidepressant medications (see image above). One ad was all about tracking. The other was about what’s right for each patient. The latter had a much higher conversion rate.

By giving patients a microphone, health organizations can gain a deeper understanding of the patient’s journeys, their paths through the wilderness. “We aren’t getting data, we’re getting personal stories,” says Goetz.

These stories can highlight individual differences that could be otherwise lost or misinterpreted in quantitative data. For instance, Iodine asked people about their experience with an anticonvulsant medication used to treat nerve pain from shingles, among other things. Two patients used the term “comatose” to describe the effects of the medication, but one comment was positive (“Taking this drug in the evening gave me a solid night’s sleep. I started calling it my ‘coma pill.’”) and the other negative (“Tried after back surgery…had BAD reaction…Comatose!”).

“This is the world we need to understand,” says Goetz. “We must understand how health interventions fit into the pattern of patients’ lives.”

Provocateur perspectivesFour predictions for the future of healthcare

1. Patient-reported data will provide new insights and improve overall population health.

2. Personal data will become increasingly valuable to consumers, not just to companies. As consumers are able to exchange their health data for real value, this will be an increasingly powerful catalyst to drive new behaviors and technologies.

3. The move toward consumer-centric healthcare will be accelerated by a new generation of doctors who value patients who share their data in a collaborative fashion, rather than viewing them as a threat.

4. New entrants in the healthcare space that have substantial knowledge of consumers and IT, such as Google, Apple, Microsoft, Facebook, Salesforce, and Intel, will have a major impact on improving healthcare for future generations.

Eric TopolDirector of the Scripps Translational Science Institute

Susannah FoxChief Technology Officer, US Department of Health and Human Services

Thomas GoetzCo-Founder of Iodine and Former Exec. Editor Wired magazine


Source: Thomas GoetzAny trademarks included are trademarks of their respective owners and are not affiliated with, nor endorsed by, PricewaterhouseCoopers LLP.

A B


Balancing act: Innovation & targeted careView telestration

Investments in innovative treatments raise a variety of questions related to financial, business model, operational, societal, and ethical issues. Research and development of specialty drugs, genomic therapies, precision medicine, and personalized care require a different approach than the old blockbuster model. The shift from mass-market treatments to more targeted care requires a new way to look at efficacy, access and cost. How should we manage the costs of innovation?

Three guest provocateurs explored the challenges related to the transition to targeted care. Vicki Seyfert-Margolis discussed the challenges of implementing personalized medicine in a fragmented system that makes it difficult for patients (and providers) to access the tools and information they need to make effective decisions. Sean Nicholson explored the high price of specialty drugs compared to their value, and outlined a new way to assess value. Dr. David Newman explained how information about the potential benefits of a drug therapy or medical procedure can be misleading, and described a more “honest” way to calculate value.

Personalized medicine in the real world

Vicki Seyfert-Margolis CEO and Founder, My Own Med

Genomics research has led to major advances in designing targeted therapies for diseases such as cancer. But while genomics gets most of the attention, it’s only part of the solution to implementing targeted care. We know from research that the rate at which genetically identical twins get the same disease is about 30%. Clearly many other factors contribute to disease, especially complex diseases and chronic conditions. These include comorbidity, baseline severity of disease, and environmental or external factors that contribute to disease progression, such as patient non-adherence to prescribed drug regimens. “We need to understand not just biology but the environment and preferences of patients, and how these contribute to the overall picture of a person’s health,” says Seyfert-Margolis.

System flaws

Flaws in our health systems create additional challenges for personalized medicine. Data is not designed for, or centered around the patient, and it’s not collected continuously, so it only provides a snapshot in time. And the data is siloed, so no provider has the “big picture” on which to make an informed decisions about managing a patient’s health.

In addition, most patients aren’t monitored in between visits to the doctor’s office. “Wearables aside, there’s a lot going on with patients and their families that’s not being captured,” says Seyfert-Margolis. As a result, what happens in the real world is far different from what’s espoused in clinical practice.

“We’re making huge strides in understanding the differences in people’s genetic makeup and creating targeted therapies. We’re not doing as well in understanding the other elements that are critical to managing disease, such as comorbidity, baseline severity of disease, and other environmental or external factors that contribute to disease progression.” – Vicki Seyfert-Margolis

https://www.youtube.com/watch?v=mbxwV4YGPWo


Balancing Act: Innovation & targeted care

Patients are paying the price. In many cases, they leave the doctor’s office with a diagnosis but without clear information about what to do next. This leads to inadequate health management and poor health outcomes.

Our system is paying the price as well. Because clinicians don’t always have access to the right tests and data to determine whether a given targeted therapy is right for a particular patient, some expensive drugs are being overprescribed, reducing their efficacy and value.

Leveraging technology

Digital technology can help to address the behavioral challenges and system flaws that lead to poor health outcomes, especially in underserved communities. “We need to provide patients, families, and caregivers with a shared interface, connect to their healthcare providers, and engage them with their communities through digital technology,” says Seyfert-Margolis. Doing so will create a “virtuous cycle” that will improve healthcare outcomes.

Healthcare systems have many flaws that challenge personalized medicine

Data – currently not designed around the patient •  Current healthcare models are centered around providers and insurance companies… but do

not address patient needs •  Data is siloed and only provides snapshots of patient encounters

Solutions – currently not tracking continuous, real-time engagement •  Limited options for between-visit monitoring and data collection •  Current research efforts are ineffective at tracking data outside the clinic

1

Insights – currently not universal across individual patients or entire populations •  Need more innovative care models and insights for population health

management, particularly for underserved and underinsured populations

…and patients pay the price

2

of patients walk out of physician’s office not knowing what they are supposed to do

50%

55%

1.1M

of patients are not contacted by doctors in between office visits

people die each year due to non-adherence to care plans, medication, etc.

A technology-enabled, patient-centric ecosystem that creates a shared economy / virtuous cycle around healthcare outcomes

Cycle of connectivity via digital

3

Better care, continuous engagement

Access to new products, better healthcare solutions

Deep data tracking, segmented by geography, condition, etc.

Providers •  Small community hospitals •  “Safety Net” hospitals

Patients •  Individuals •  Families •  Communities

Pharma •  Clinical Studies •  Need for data and insights, as well as

advanced analytics and solutions

Source: Vicki Seyfert-Margolis



250515 1

What’s Different About Specialty Drugs?

Source: IMS, 2015; National Hospital Discharge Survey; Blue Cross Blue Shield Report, 2015; Sean Nicholson's analysis.

Annual Treatment cost ($000)

$84 Medicare: $21 Private ins: $31

U.S. patients treated in 2014 (000)

161 719

Total U.S. Spending in 2014 ($ billions)

$10.5 $20

Hepatitis C Knee Replacement

250515 2

Source: Chambers et al., Health Affairs, October 2014.

QACC has fallen for specialty drugs approved by FDA, 1999-2011

12,238 18,300

-6062

-10,000

-5,000

0

5,000

10,000

15,000

Specialty Drugs (n=58)

Change in Medical Spending Change in Health Benefit Change in QACC

784 764

20

0

100

200

300

400

500

600

700

800

Change in Medical Spending

Change in Health Benefit

Change in QACC

Traditional Drugs (n=44)


The specialty drug dilemma

Sean Nicholson, Ph.D. Professor in the Department of Policy Analysis and Management (PAM), Cornell University. Research Associate, The National Bureau of Economic Research

The explosion of specialty drugs

In 2004, about one-fifth of all pharmaceutical spending was on specialty drugs. By 2014, the figure had risen to about one-third, and it will climb to 50% by 2019, based on the mix of new drugs in the pipeline.

The rise of specialty drugs parallels a dramatic slowdown in the growth rate of prescription drug spending in the post-blockbuster era. In the face of declining spending, pharmaceutical firms are shifting to specialty drugs, which deliver strong benefits but carry high price tags.

Cost is relative

The high price of specialty drugs is putting pressure on taxes and health insurance premiums. And it’s caught

the attention of policymakers, the media, patients and health insurers. All the attention obscures two facts: specialty drugs account for only about 3% of total healthcare spending, and the cost of specialty drugs is dwarfed by spending on traditional treatments that are more widely used. For instance, while the media sounded the alarm about the high cost of three new hepatitis C drugs—roughly $84,000 annually per patient, total annual spending on the drugs amounts to $10.5 billion—about half the amount spent on knee replacements7.

QACC: A new way to measure value

Are specialty drugs worth the price we pay? To answer the question, we need to measure the value of

the drugs, not just their cost. To do that, Nicholson proposed the use of a new measure, the quality adjusted cost of care (QACC). It’s an intuitive way to measure the value of any pharmaceutical or medical treatment. Simply calculate the change in spending related to the drug or treatment minus the incremental health benefit it provides, in monetary terms.

When considering all drugs approved between 1999 and 2011, the median QACC for specialty drugs declined over the time period but it increased by about $760 for traditional drugs.8 “This suggests that if anything, there should be more concern about the willingness to pay for traditional drugs because of the lack of health benefits they’re delivering,” says Nicholson.

“If specialty drugs are providing value, there’s an argument to be made that we should pay the price. But even if they’re providing measurable value, it’s still not obvious that we as a society will want to pay the increasingly high price.”– Sean Nicholson, Ph.D.

7 IMS, 2015; National Hospital Discharge Survey; Blue Cross Blue Shield Report, 2015; Sean Nicholson’s analysis.

8 Chambers et al., Health Affairs, October 2014.


Source: Sean Nicholson


Calculating the quality adjusted cost of care (QACC)

The formula for calculating the quality adjusted cost of care (QACC) is simple: Measure the change in per patient medical spending over a particular period of time, and label this “A.” Measure the health gains the new treatments deliver, converted into dollars, and label this “B.” The QACC is simply A minus B.

Suppose the average cost of treating a patient with melanoma (A) goes up by $2,000 due to a new specialty prescription drug. Assume that the drug provides a longer life or higher quality of life, and this translates to a health benefit of $1,500 (B). The QACC would be $500 (A minus B, or $2,000 - $1,500). An economist would say that we’re not getting our money’s worth; the cost outweighs the health benefit. The treatment cost would have to be lower or the health benefit higher to yield a QACC less than zero, making the drug a good value.


If specialty drugs are providing high value, why is access being restricted? The most important reason, according to Nicholson, is that consumers wouldn’t be willing to pay the higher insurance premium required. “Health insurers don’t believe it’s a winning strategy to tell consumers ‘we have the high premium health plan, but we’ll give you access to specialty drugs if you need them,’” he says. “I agree that consumers won’t gravitate to that type of health plan.”

What are the implications for the future of specialty drugs? With a growing number of these drugs in the development pipeline, competition is bound to intensify in the coming years. As new drugs are approved and begin

to compete in the pharmaceutical marketplace, health insurers and PBMs will take advantage of the competition to secure deeper and deeper discounts, as they’ve done with hepatitis C drugs.

Nicholson suggests a more novel approach to addressing the challenge of high-priced specialty drugs: pay for them in the same way that we pay for software. “In the future, could a pharmaceutical firm license its portfolio of drugs, providing unrestricted access to the drugs for clinically appropriate patients? That might that be a way to reward innovation while improving access by reducing the price to the patient.”



The number needed to treat (NNT): A future of value

David Newman, MD Director of Clinical Research, Mt. Sinai School of Medicine

For older adults, getting the shingles vaccine seems like a simple decision. After all, it reduces the risk of contracting shingles by 55%. Or does it? What if it only works for 1 in 60 patients who receive it?

Both pieces of data are true, according to Dr. David Newman, but the key lies is in how the data is presented. And in his view, the more accurate way to present the data is by focusing on the number of persons who must be treated in order for one person to see the benefit.

Understanding the NNT

The number needed to treat (NNT) is a simple statistical concept that makes it easier to assess the value of a given intervention. To understand how it works, consider a clinical trial in which one group gets a vaccine to prevent a disease and the other gets a placebo. Suppose that 12% of those in the placebo group contract the disease, but only 11% of those who received the vaccine get the disease. The difference is 1%, which means that only 1 in 100 people overall benefited from the vaccine. In other words, the NNT is 100.

Ads trumpeting the benefits of a drug to prevent disease often focus only on the impact of the drug on those who received it, and not a placebo, in a clinical trial. This does not consider that some people in each group would have gotten the disease regardless, or would never have contracted the disease, whether or not they took the drug.

“For years we’ve seen a culture of waste in medicine, with providers using interventions like statins or stents where there’s no benefit. Over the next ten years that will change, as health systems get a lump sum at the start of the year to treat a patient population, and they look for waste to cut.”– David Newman, MD

Applying this logic to our shingles example, there is in fact about a 55% reduction in the chance of getting shingles, but only among those who got the vaccine. If you consider everyone in the clinical trial, only 1 out of 60 people are likely to benefit. This statistic provides a truer picture of the vaccine’s value. “This is the most honest way to present the data, and the way that enables consumers to make informed decisions,” says Dr. Newman.



Provocateur perspectives

Guest provocateurs shared their views of how the shift to a focus on value is shaping the New Health Economy™.

More value-based decisions

• “Once there are a lot of specialty drug products on the market, you can’t escape the fact that if a health insurer covers all of them, premiums will increase. And now the conversation is not just what’s more valuable to you—this specialty drug versus that one. It’s ‘do I want the specialty drug, or the knee replacement, or the trip to the Riviera?’” – Sean Nicholson

• “Some healthcare systems are already building decision support tools into their electronic medical record systems. These tools require you to meet certain criteria before a procedure can be performed. And there are requirements for genetic tests before a doctor can prescribe a specialty drug. In the future I think there will be more control exerted on the practice of medicine.” – Vicki Seyfert-Margolis

Selective use of specialty drugs

• “When ACOs and risk-based contracts start to drive decisions over the next ten years, nobody is going to get the priciest drug unless they meet the exact criteria that fit the results of randomized, controlled clinical trials. Because ACOs will be looking for value, looking for high-risk patients that could benefit most from a drug.” – Dr. David Newman

• “Today there’s utilization of some targeted therapies when it’s unclear whether they’re going to work, or the patient doesn’t even have the mutation the drug is targeting. If you don’t have the gene, you don’t want the drug; you’re taking a risk without benefit, but most people don’t realize that. In the future, medicines will be used more and more selectively, and more data will be brought to the table to make those decisions, in order to drive value.” – Vicki Seyfert-Margolis

Realigned incentives

• “As good-hearted a physician as you might be, if you get some compensation when you prescribe the more expensive drug, which is still what happens in oncology, it may affect your decision making. So I think one change we need is to remove situations where oncologists have some stake in the products they’re prescribing.” – Sean Nicholson

• “Stents save lives only if you use them in the throes of a heart attack. But the incentives have been aligned such that, in the US, 98% of stents that are placed are not put in during a heart attack. That will change. In the future, it’s not the interventional cardiologist who will get to choose whether or not to put a stent in a patient. It will be health systems that choose whether or not to send their patients to an interventional cardiologist at all.” – Dr. David Newman

Vicki Seyfert-MargolisChief Executive Officer & Founder of My Own Med

Sean NicholsonNational Bureau of Economic Research/Cornell University

David NewmanMt. Sinai School of Medicine



The disruptor

Keynote: A discussion with Uber’s David Plouffe

David Plouffe is widely known as the architect of President Barack Obama’s improbable campaign victory in 2008 and his reelection in 2012. Now Plouffe serves on the board and is Chief Advisor to the CEO of Uber, the fast-growing transportation and logistics company that operates in over 45 countries and is one of the most disruptive organizations in the world. Uber has upended the taxi and limo industry and has other industries in its sights, including healthcare. In a Q&A with Susie Gharib, Plouffe shared his views on disruptive innovation.

Uber is the product of the imagination of co-founder Travis Kalanick. Instead of targeting a slice of the taxi market, Uber created an entirely new pie. “Uber is not about reallocating the taxi market; it’s about a whole new market,” says Plouffe. “Our data shows that the vast majority of people who use Uber aren’t making a decision not to take a taxi; they’re deciding not to drive their own car, and that’s the game changer.”

A strong vision was necessary but not sufficient to ensure Uber’s success. Making the Uber platform simple, fast, and reliable was also critical. “Increasingly, people expect things to be easy and quick—especially young people,” says Plouffe. “They want to press a button and get a ride. And if they get used to ETAs that are three minutes, and the ETA turns into six, they’re going to be really unhappy.”

To sustain Uber’s success will require strong leadership and ongoing experimentation. “You have to experiment and be willing to make mistakes,” says Plouffe. “At Uber, mistakes get deconstructed so the company can learn from them.”

Uber is a young company but is already the incumbent globally, which makes it a target. Ensuring sustainability will require the ability to stay one step ahead of the competition. “Obviously a lot of people see what we’ve done and would like a piece of it, so we have to be vigilant,” says Plouffe. “One of our cultural values is that we always try and fast forward to the future. Where will things be six months from now, a year from now? And we don’t just look at the transportation sector, because innovations will come from a different sector and move into transportation.”

Uber has upended the taxi and limousine industry, forcing change and improving the customer experience. Plouffe’s advice for healthcare innovators is similar to the recipe for Uber’s success: focus on speed and simplicity. “You’ve got to almost reverse engineer the user experience and say, let’s forget about how it’s done at all. Let’s think about the best practices outside of healthcare, or even the best practices of healthcare companies that are experimenting. How do you make experience for healthcare consumers more seamless, less fraught? At the end of the day, I think that will mean we’ll have a healthier citizenry.”

David PlouffeChief Advisor, Uber; Senior Advisor to President Barack Obama (2011-2013); Campaign Manager, 2008 Obama for President; and New York Times Best-Selling Author


Roadmap for disruption

10 tips from David Plouffe

1. Use your imagination. Envision something new by identifying unmet needs. Uber didn’t just reallocate the taxi market; it created a whole new market for people who didn’t want to use their cars to get around town. It also met a need for transportation in underserved areas. In New York City, only 5% of taxi rides are in the outer boroughs, beyond Manhattan, but that’s where 35% of Uber’s business is, in a market niche that taxis weren’t serving well.

2. Do your homework. Don’t bow to conventional wisdom; instead, focus on what Plouffe calls the “art of the possible.” Do the analysis, and if you think something can be done, pursue it.

3. Keep it simple. Uber often succeeds because the platform makes it incredible simple and fast to hail a ride. “Maybe that seems silly, the word ‘easy,’” says Plouffe. “But that’s the most important thing right now, to be easy and reliable; that’s what people want.”

4. Challenge the rules. There were grey areas of regulation in a number of markets that Uber entered. “Many markets didn’t envision a technology platform providing transportation,” says Plouffe. In markets where regulations were unclear, Uber challenged the rules and began operating. “If we had waited, we’d still be waiting. We’d still be waiting next year, and the year after that.” Once consumers embraced Uber, it was easier to get the rules changed, with the help of enthusiastic users.

5. Set high standards, then over-perform. Affordability is one element of Uber’s success, but Plouffe thinks reliability is even more important. “If you’re making a decision to move around your city, there can’t be any mystery about when the car is going to arrive,” says Plouffe. “If the app shows three minutes, and it turns out to be six minutes, that’s a big difference because people are making decisions based on three. That’s a hugely high standard, but there’s no brand loyalty anymore, so you have to over-perform.”

6. Stay entrepreneurial. Uber strives to remain entrepreneurial by hiring people who have a start-up mentality. “Not everybody is right for Uber’s culture,” says Plouffe. “It’s not a nine-to-five job. Employees must have a sense that people are chasing us.” Constant experimentation also keeps the entrepreneurial spirit alive. Employees can share ideas directly with the CEO, and mistakes are deconstructed so the company can learn from them.

7. Communicate more, and more often. “I think most organizations do not communicate as much as they should with their employees, their investors, and retirees,” says Plouffe. That includes sharing the reasons for key decisions, whether expanding into a new market, developing a new product, or strategically not responding to a competitor’s actions. It’s also important to communicate with customers regularly, especially for fast-growing companies like Uber that are acquiring new customers daily. “You just assume that all the foundational information about our safety procedures, and surge pricing, has been covered by the media. Maybe so, but the new user hasn’t seen it.”

8. Harvest ideas from employees and customers. Most of Uber’s innovations come from customers, employees, and drivers—both new ideas and improvements to the core service. For instance, Uber learned that when drivers have only 20 minutes or so left before they want to head home, they refuse requests for rides in another direction. There was a quick fix: change the technology so drivers are only able to accept trips in the direction of their home. “They get an additional fare, and they still get to see their family,” says Plouffe.

9. Learn from best practices of other industries. Instead of focusing on improving existing processes, reverse engineer the patient/consumer experience, and identify bottlenecks and barriers. Apply best practices from consumer-focused industries and companies to create a faster, more convenient, and more reliable user experience.

10. Scan the horizon. Keep your eye on the future. Continually analyze what might change six months from now, or a year from now, that could prove disruptive to your company. “Every company has to do this more often, due to the rapid pace of change,” says Plouffe. In scanning the horizon, search for internal competition as well as disruptors that could emerge from outside the traditional boundaries of the health industry.



Business models: Transformation for a consumer-centric worldHow can organizations succeed in a health arena that’s becoming increasingly customer-centric? According to Dr. Atul Gawande, a successful business model must address the needs of two customers: patients and the teams that serve them.

The importance of teamwork

Gawande noted that treating patients requires clinicians with specialized knowledge and skills working together as a team rather than autonomously. “Making teams of people successful in medicine, on behalf of a patient, is much more powerful than having them operate in a fragmented, individually driven environment,” he says.

The first case of Ebola in the United States unmasked just how far we have to go in creating basic levels of teamwork. Inadequate teamwork meant that when a man suffering from the disease arrived at a Texas hospital, the patient was released back into the community and, on return, infected two nurses. And there was hardly a health system in the country that could be confident they would have done better.

The protocols for identifying and isolating Ebola patients involve basic infection control skills and techniques that have been around for a century, but our autonomy-based system still

Atul Gawande Brigham and Women’s Hospital/Harvard School of Public Health

routinely fails to deliver on them, Gawande notes. After all, two million people per year pick up infections in hospitals. “We’ve been skimping on infection protocols for decades,” he says. “The basic things we do in an operating room to prevent spread of infections haven’t seemed to have reached the rest of the hospital.”

And the public response to the Ebola case seemed to recognize this. In a radical shift, instead of blaming the doctors or nurses involved for not containing the infection, the public held the hospital accountable—and also the government, for expecting that hospitals would get the teamwork right.


Managing mortality: the need for a consumer-focused business model

For his bestselling book, Being Mortal, Dr. Atul Gawande interviewed more than 200 patients and family members about their experiences in caring for people with serious infirmities or terminal illness, and scores of experts in these areas. From the research he concluded that we need a new business model for managing how patients spend the last phase of their lives.

The problem, says Gawande, is that people have priorities besides living longer, and the medical establishment doesn’t seem to recognize this. “There’s a straightforward way to find out what people’s priorities are, and that’s to ask them,” says Gawande. “But in our health system, we don’t ask.” As a result, he says, for two-thirds of patients, care is “routinely out of alignment” with their priorities and wishes. The one-third whose priorities are considered have far better outcomes on a range of variables, from spending fewer days in the hospital to experiencing less suffering at the end of their lives .

Implementing the concept

Asking dying patients about their priorities is a powerful concept that’s been around for many years, but like antisepsis, it has been slow to gain traction, for similar reasons. “Managing end-of-life does not produce immediate visible change for the patients, so they don’t demand it in the same way they would demand anesthesia. And asking patients about their priorities isn’t necessarily easy or pain-relieving for the team treating the patient.”

To implement a more consumer-focused model of end-of-life care would require easing the pain of implementation, making the benefits visible, and scaling the concept. Gawande had these challenges in mind as he helped to develop the Adult Palliative Care Program at Dana-Farber Cancer Institute and Brigham and Women’s Hospital.

With a limited number of palliative care doctors available to work with dying patients, other clinicians would have to be trained in order to spread the practice. The program leaders distilled the training down to a few basic questions to ask patients, about issues such as their fears and concerns about the future, their goals and priorities if time is short, and what medical treatments they’re willing or not willing to endure.

To ease the pain of implementation, and make the benefits visible, palliative care doctors were given a $200 gift card to a top Boston restaurant in exchange for training other clinicians to hold conversations about priorities with dying patients. As a result of this approach, 80% of the doctors participated, and 5,000 people annually have been touched by the program. The aim is to increase that total to 25,000 patients in 2016.

Business models: Transformation for a consumer-centric world

“The assumption has been that we would know how to implement good ideas,” Gawande adds. “But we haven’t been able to figure out how to make an organization and a team of people successful in ensuring coordination and that basic protocols are followed.” Without teamwork, even the most customer-focused business model won’t succeed.

Shifting the focus of innovation

Gawande believes that we need to shift the focus of innovation, from “delivering stuff--pills and procedures--to delivering outcomes.” This shift will require tools that make teamwork easier across a range of healthcare challenges, from the most basic matters, such as infection control, to the most complex issues, such as managing the end of life.



Industry perspectives

What are health organizations doing to strengthen their focus on the customer? Five industry leaders share their stories.

Pursuing “person-centered care”

Eric Engler Senior Vice President and Chief Strategy Officer, Ascension Health

A few years ago, we did what at the time was pretty novel. We set out to ask our customers—patients and their families—what they would want from a more integrated delivery system, and how that could better support their health and well-being. We took feedback from hundreds of conversations and distilled it down to four statements: Respect me, include me, connect me, and engage me. Those four principles form the foundation of what we call person-centered care at Ascension, and they guide everything we do in the hospital, in the clinic, and in some of our more innovative activities at our population health management company, MissionPoint Health Partners.

Since we adopted these principles, we’re not just focusing on the patient’s episodic interactions with the doctor in 6-10 minute visits. Through MissionPoint, we’re able to wrap a set of caregiver services around the physician, so that we can have a much deeper understanding of the person, not just the patient, the disease, the episode. That allows us to not only better coordinate care related to that day’s interaction with the care team, but to support their longer-term journey to health and well-being.

Disrupting from within

Dijuana Lewis Executive Vice President Consumer Business, Aetna

At Aetna, we are trying to go the way of IBM and Coca-Cola; we’re trying to disrupt from within. I was brought in about a year and a half ago to establish a consumer business unit. In the past year, we developed an entirely new administrative platform—a new shop, buy, and enroll platform, all new consumer-centric products, go-to-market materials, and digital tools that

are only available in our consumer business unit. The goal is to roll this out next January and to test it with customers. Through our digital tools, customers will be able to tell us in real time what’s working or not, what they like or don’t. We feel that it’s pretty state-of-the-art.

The digital tools are available 24 hours a day, and you can do many, many things with them, including click to chat or to schedule an appointment. If customers aren’t that comfortable with digital tools, they can still use an analog version.



Changing the organizational culture

Philip E. Bourne, PhD Associate Director for Data Science, National Institutes of Health

Our primary customers are the 250,000 researchers that we support throughout the country. I came in a little over a year ago. I report directly to Francis Collins, the Director of NIH. And in my first day there we were chatting and I said “give me my job description in one sentence.” And he said, “change the culture of NIH.”

To give you a flavor of things that we’ve been trying, we had a workshop some time ago with gamers. A whole slew of gamers showed up, all of them

Filling an unmet need

Troyen Brennan, M.D. Executive Vice President and Chief Medical Officer, CVS Health

Customers are remarkably happy with our Minute Clinics. The satisfaction scores we get back from our nurse practitioners are very high, and that’s because we’re meeting a need for convenience and transparent pricing. And because of our transparent pricing and guideline-driven approach to healthcare, we not only can sell to customers who walk into a Minute Clinic, but increasingly we’re working with companies that want to send their employees to one of our clinics.

There’s a lot of symbolism in healthcare. When we decided to become a healthcare company, the most important thing was the symbolic action of taking the cigarettes out of the stores. At that point, consumers gave us the opportunity to be a healthcare company, which I don’t think we really had before, even though we had been in the retail pharmacy business for a long time. So I think it’s important not to underestimate the aura that’s around healthcare, and how difficult it is to come into the market.

Everything we’ve done over the last five to ten years has been either pharmacy-related or what I would consider to be foundational primary care. We’ll continue to expand primary care in our settings, and we’ll collaborate with many other players in the health system, bringing our expertise in foundational primary care and pharmacy, but not extending into other areas, such as offering MRIs.

about one-third my age. And they spent two days with a series of biomedical researchers. When you put the two together, the room was electric; there was a real exchange of ideas. The gamers didn’t understand the problem domain very well, but they understand networks, and they understand advertising and visualization.

This workshop generated a lot of really interesting ideas that are going to take us in new directions, and it led to a funding call. It’s a small step in moving us away from traditional funding approaches, which I think is helpful, and it brings different types of people into the mix. If you’re going to change the culture, you’ve got to try new things.



Game changers: Key drivers of shifting money flows in thehealthcare industry

Growing consumer power57% of employers to offer only HDHP’s by 2020, shifting costs to consumers

Up to 57% of consumers using personal health data for health/wellness by 2025

Increased government spend enabling greater consumer choice

Care integration/StandardizationA project 60% of hospitals will be part of integrated health systems by 2025

Standardized care is starting to improve outcomes, reduce readmissions and lower costs

Care anywhere, anytimeRetail clinics are bringing healthcare to every corner

$3B to $12B jump in wearable market by 2020 enabling the “quantified” self

On-demand care tele-health projected to grow 750% by 2018

Focus on whole person health

Population health through community enabled care coordination

66% of provider payments will be value-based by 2020, incentivizing better outcomes

DisruptorsPayors and providers are innovating to redefine their value to consumers

From 2013 to 2014, VC funding for health IT grew 127%, faster than for any other industry

Consumer-centered health

solutions

Sources: HDHP’s: Aon Hewitt 2014 Health Care Survey. http://www.aon.com/attachments/human-capital-consulting/2014-Aon-Health-Care-Survey.pdfPersonal health data: Survey and analysis by Strategy& Hospital integration: Hospitals/Systems Digest 2015, Strategy& analysis Value-based payments: Ryan Mcaskill, “Value-Based Payments to Surpass Fee-For-Service Model by 2020,” RevCycle Intelligence, November 14, 2014. http://revcycleintelligence.com/news/value-based-payments-surpass-fee-service-model-2020Wearables: “Smart Watches to Reign as Wearables Unit Champ, But Smart Glasses Will Take Revenue Crown by 2020,” Technalysis Research press release, May 15, 2015. http://www.technalysisresearch.com/PR.htmlTele-health: Aranca Research infographic. http://www.slideshare.net/arancaresearch/us-telemedicine-market-is-set-for-cagr-of-337-in-2018-an-aranca-infographicVC funding: Digital Health Funding Year in Review 2014 by @Rock_Health. http://www.slideshare.net/RockHealth/rock-health-2014-year-in-review-funding-1Any trademarks included are trademarks of their respective owners and are not affiliated with, nor endorsed by, PricewaterhouseCoopers LLP.


Technology showcase

Throughout the day, forum attendees had access to demonstrations of PwC technology designed to help clients prepare to meet the challenges of the New Health Economy™.

Bodylogical

Bodylogical is a patent-pending, mathematical model that leverages peer-reviewed science to build a representation of the human body. The model provides actionable insights, based on clinical and wearable health data, to simulate how interventions and choices made today (e.g., increasing exercise or changing dietary habits) could impact tomorrow’s health outcomes, for individuals and communities. Simulations of health projections change how we approach health management. For instance, the analytics generated by Bodylogical can be used to determine an ROI for wellness and population health management programs, enable clinicians and patients to engage in more meaningful conversations, and support pharma and life science companies in making strategic pipeline and market targeting decisions.

To learn more, please contact:

Paul D’Alessandro, Principal (312) 298-6810 [email protected]

Payer of the Future Simulation Tool

This simulation tool generates insights based on what-if scenarios that enable an organization to make informed strategic decisions. The tool simulates the impact of an organization’s strategic choices (e.g., premium price or deductibles) on customer behavior, and the resulting operational, financial and brand impacts. It takes into account the behavior/actions of competitors, as well, and can identify strategic pain points. The tool can be delivered as a multi-player game in an immersive visualization environment for use in strategy and board meetings


Jamie Gunsior, Principal (703) 918-4468 [email protected]

Social media listening: insights into wearable

The volume and demographics of consumers searching for wearable brands spurred PwC to explore the types of conversations taking place across social media channels. This demo provided an overview of consumers’ conversations about wearables across Twitter, Facebook, blogs, forums, and online news sites. Within the 700,000 monthly social mentions we identified two recurring themes:

1. There is a strong correlation between the usage of wearables and its impact on population health outcomes.

2. Consumers are already leveraging wearables to remotely track the level of activity of older people for whom they provide care.


Rani Radhakrishnan, Director (510) 300-7050 [email protected]

Patrik Wijkstrom, Director (510) 501-8716 [email protected]





Mike Cohen, Principal (312) 298-4389 [email protected]

Ginger Pilgrim, Managing Director (678) 419-2222 [email protected]

Simon Samaha, Principal (646) 471-1614 [email protected]

STAR and CARE

The STAR application is a dynamic web-based tool that utilizes diverse data along with PwC analytics to quickly identify areas of opportunity for provider organizations and health systems. PwC can help current and potential clients quickly gain insights into areas of opportunity for strategic transformation, organic growth and cost reduction as well as gain a better understanding of their market positioning. In conjunction, CARE helps healthcare providers prioritize care delivery opportunities from the service line down to the physician level based on client, claims, and physician data, to drive inpatient and outpatient cost savings and clinical efficiency.

www.pwc.com/180healthforum© 2015 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

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Continuing the conversation

The 180° Health Forum provided an opportunity to learn from provocateurs who offered their perspectives to help our clients navigate the New Health Economy™. In 2016, PwC will be sharing more insights about the topics explored during the Forum.

For more information, please contact:

Kelly BarnesUS Health Industries and Global Health Industries Consulting [email protected](214) 754-5172

Bob VallettaUS Health Services Leader(617) 530 [email protected]

Mike SwanickUS Pharmaceuticals and Life Sciences Leader(267) [email protected]

Rick [email protected](415) 498-5218

Ed [email protected](415) 498-6408

Todd HallUS Health Industries Marketing [email protected](617) 530-4185

Hindy ShamanHealth Industries [email protected](703) 453-61661

http://www.pwc.com/us/en/health-industries/new-health-economy/index.jhtml?wt.ac=healthindustries_180healthforum

Documents

Shifting perspectives 180° Health Forum 2015