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For the last couple decades, there has been a trend towards greater and greater healthcare spending, even as a percent of GDP. This has helped bring about the Affordable Care Act (ACA, i.e., Obamacare), as well as other national and local efforts. The belief is that provisions of ACA will address the trend in cost increases, as well as lead to better care. Historically, efforts like these have not made a sufficient impact. Out of this backdrop arose the concept of disease management some 20 years ago. The rubric is still going strong, but with only occasional, modest successes. Prevention, and the current approach to clinical guidelines, aren’t enough. Nor is the hope in lower cost technology, which requires a willingness on the part of some commercial entity to take on that strategy, as well as the low probabilities in R&D. Below is a document that lays out a way of thinking for medical products regarding disease management. Some of the underlying drivers for the approach’s success are moving into place, such as the necessary healthcare IT to capture sufficient data. The changes engendered by the ACA will put on even more pressure to change. Moreover, the cost crisis is being felt as never before.
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Disease Management
September, 2013
The Need for Disease Management
• There are myriad trends driving demand for health care, including aging and new technologies. These trends will intensify and place even more pressure on the system over the next two decades as the baby boomers age.
• In a typical market, compeEEve forces and consumer trends would alleviate much of this pressure by forcing out low-‐quality, inefficient products and providers.
• However, the health care industry is different, due to the inefficiencies of third-‐party payor systems, government poliEcs (e.g., Affordable Care Act—Obamacare) with strong consEtuents, and the (paEent) enEtlement mindset.
• Such pressures Are coming to a head, forcing paEents, payors, and providers to move towards more efficient health care.
• Disease management is a powerful way to address this trend.
© 2013 Winton Gibbons 2
Summary of Salient Trends ImpacEng the Health Care Delivery System
• Expensive Medical Technologies • Aging of the U.S. PopulaEon • Longer Life Expectancy • Unwillingness to Accept Restricted Network or to Reduce Health Benefits
• Inefficiency of the Third Party Payor System
© 2013 Winton Gibbons 3
Payor System Leads to Significant Inefficiencies
Who would you pay more to see? • A doctor with 25 years experience, who has performed more than 5,000 cardiac procedures.
• A recent graduate from a residency program who is performing his first post-‐residency operaEon.
Which hospital would you pay more to go to? • The hospital with the lowest infecEon rates, lowest re-‐admission rates, lowest mortality rates, etc.
• The hospital with the highest infecEon rates, highest re-‐admission rates, highest mortality rates, etc.
© 2013 Winton Gibbons 4
Health Care Industry Map Shows the Complexity Patient
Disease Management
Institutional Providers
Physician Office
Home-Based Providers
Ancillary Services
Hospitals
HMOs
ACOs
Medical
Dental
Nursing/Rehab
DME|Therapies
Hospice
Labs
Imaging
Wholesalers / (Specialty) Distributors / PBMs
Contract Sales Organizations (CSOs)
Devices
Generics and Specialty Pharma
Branded Therapeutics / Biotech
Contract Research Organizations (CROs) / Manufacturing
Diagnostics
Life Sciences
© 2013 Winton Gibbons 5
Focus Disease Management on Quality Care & Economic Value in the Health Providers’ Terms
In practice there is a broad variation in the meaning of efficiency and effectiveness.
Specifically, a medical products firm’s role is to facilitate, but not to DO, disease management
CONTRASTING DEFINITIONS OF DISEASE MANAGEMENT FOR MEDICAL PRODUCTS
Disease management is a comprehensive, integrated approach to care and reim-
bursement based on the natural course of a disease, with treatment designed to
address an illness with maximum effectiveness and
efficiency.
MORE THEORETICAL
Disease management by suppliers is to ASSIST in
improving efficiency (lower cost at same quality) and/or
improving effectiveness (better quality at the same
cost ... or through cost justification in a resource constrained environment)
MORE PRACTICAL
Disease management for medical products ≠ Bundling and integrated delivery
© 2013 Winton Gibbons 6
Disease Management Conceptual DefiniEon
Outcomes measurement systems for: • Medical quality • Cost • Behavior or process • Patient|MD satisfaction • Quality of life
Physician Population
Health Plan or System
Patient Population of each Physician
Tools to Segment the Patient Population Interventions appropriate for a particular segment of the patients Methods (e.g. analytes) to meas-ure outcomes of an intervention
{
Establish Need for Change in Disease Approach
Facilities
MD
MD
MD
© 2013 Winton Gibbons 7
Focus Moves from Cost ReducEon Alone to RaEonal Expenditure to Increased Quality Care
Quality
Today: 1. Reduce cost at
same quality
Near Term: 2. Maintain cost and
increase quality
Future: 3. Invest in quality
2
3
1 Today
Future
Cost
1) Today’s drive for efficiency will continue to remove much “fat” from existing systems
2) Quality improve-ments will follow through re-engineering of products and processes, driven by a better understanding of health economics.
3) Health economics (HECON) will reveal the long-term benefits to all of investing in higher quality health care.
© 2013 Winton Gibbons 8
Wide variation in health practice & ensuing outcomes in debilitating and expensive diseases prompted a guidelines push.
Today’s guidelines were guide-lines will be valid-ated by research evidence but also established by expert consensus. Next, their efficacy should be assessed in various patient cohorts.
Path to effecEve disease management Not Only ImplementaEon of Consensus Guidelines
Consensus & evidence guidelines
Evidence & HECON guidelines
Develop and implement evidence-based & HECON guidelines
Develop and implement stratified, HECON guidelines
Only implement evidence & consensus guidelines
• Mitigated cost • High efficacy
• Lower cost • Very high efficacy
• High cost • Moderate efficacy
1-next
wrong answer
Now
Future
2-path
Goal
© 2013 Winton Gibbons 9
Disease Management Based on Knowledge of VariaEon between Cohorts & Intervening Suitably
By identifying useful cohort definitions, one will be able to refine (traditional) patient segmentations using customized stratification tools among three dimensions.
Psychographic
Demographic
Physiological
including disease progress
• Genetics • Concurrent
conditions • Weight
• Depression • Behavior
disorders • Patient
satisfaction
• Age • Ethnicity • Stage of disease • Risk factors • Reimbursement
Cohort
“A group of persons with a
common statistical
characteristic” -- The Concise Oxford English
Dictionary
© 2013 Winton Gibbons 10
HECON Helps Define Key, Cost-‐EffecEve Leverage Points in Treatment of Cohorts
© 2013 Winton Gibbons 11
Compare Rx efficacy
Fixed Elements • Genetics • Age • Ethnicity • Stage of disease Modifiable Elements • Weight • Patient satisfaction • Reimbursement Mixed Elements • Risk factors • Concurrent conditions • Depression • Behavior disorders
Therapy Regiment A
e.g., Therapy Regiment B is a greater leverage point than Therapy Regiment A for this cohort
Since both quality and cost outcomes are considerations, simulation likely to help identify key leverage points.
Therapy Regiment B Fixed Elements • Genetics • Age • Ethnicity • Stage of disease Modifiable Elements • Weight • Patient satisfaction • Reimbursement Mixed Elements • Risk factors • Concurrent conditions • Depression • Behavior disorders
Out-‐come A +
Out-‐come B ++
Cost A
Cost B
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© 2013 Winton Gibbons
