Thursday, May 28, 2015

Uncertain Health in an Insecure World – 42

“Innovation Conflation”

The word innovation has long lost its cachet in business parlance. Ubiquitous, over-hyped and jargonized, innovation may well be beyond hope of meaningful use retrieval.

We have previously examined the importance of health terminology clarity in “Definition-itis” (see post #14). Now more than ever, a clear definitional framework is essential to advancing the life sciences innovation ecosystem.

In this vein, and as emphasized by Harvard’s Business Innovations in Global Health Care program, there are three distinguishable innovation domains – scientific, entrepreneurial and business. What isn’t as obvious is the Achilles heel of each.

Whether basic or applied, peer-reviewed research is foundational to robust scientific discovery and continuing knowledge advancement. However, irreproducibility is pervasive in the pre-clinical life sciences research literature. Inability to replicate or verify published research findings is negatively impacting the development of novel therapeutics. Having largely divested from internal R&D efforts, big pharma relies heavily on published studies as the basis for investing in innovative diagnostics or therapeutics. But the high failure rates of translation from bench-to-bedside can be traced to flaws in the research process that cause irreproducibility. In 2013, the Global Biological Standards Institute has proposed best practices to improve scientific reproducibility.

Products of research flood the intellectual property pipeline, offering entrepreneurial opportunities for commercialization through a process of idea de-risking potentially leading to viable Newco creation. Entrepreneurs embrace risk, ideally timing their investment decisions to prototype deliveries and minimum viable product (MVP) milestones. Their value proposition is usually financial – equity, ROI and market share growth – occasionally with a nod to corporate social responsibility. But for every innovative idea that spawns a Newco, there are a thousand "fail fast" commercialization busts.

The uncoordinated explosion of big data collection & analytics from genomics and other data-intensive life sciences compounds the irreproducibility problem, and adds complexity to Newco. investment timing.

Business innovation has been extensively studied and much maligned in the Harvard Business Review, Wall Street Journal, Forbes,, etc. The term “disruptive innovation” was originally coined in 1997 by Harvard Business School professor Clay Christensen in his excellent book The Innovator’s Dilemma. Back then, it was a really smart idea… both disruptive and innovative! The fact that it’s become faddish since isn’t Clay’s fault. As opposed to more mundane “sustaining innovations”, the healthcare sector could surely benefit from a Silicon Valley “twice as fast, half as expensive” disruptive mindset.

Biotech pharma companies sit squarely in the red-hot messy center of these three innovation domains. Its market growth leaders, companies like Regeneron, continuously analyze and refine the factors that predict the success of innovative therapeutics. Regeneron’s mantra is, “driven by science, and motivated by patients”. The big pharma sector has been challenged by patent expiration, regulatory hurdles and reduced productivity; the emerging powerhouses of the biotech pharma are facing business hyper-competitiveness. In the end, as the bigger bubbles below show, biological drugs (B) appear to have outstripped small molecule drugs (A).

Both big pharma and biotech pharma face the same key innovation challenge – differentiating novel biological mechanism(s) underpinning first-in-class drugs from best-in-class properties of improved follow-on drugs. Historical market studies demonstrate that it is better for business to launch first-in-class drugs instead of best-in-class drugs which have a more limited time window of business benefit. Of interest, first-to-patent does not predict first- or best-in-class drugs.

Amid this scientific, entrepreneurial and business complexity, the F.D.A. is the gatekeeper for first-to-patent new drugs entering the massive U.S. marketplace. The F.D.A. decides what new drug applications (N.D.A.) meet criteria for approved use in man based on drug safety and “substantial evidence” of efficacy in clinical trials. Since the 1980’s, the F.D.A. has expanded the capacity to expedite N.D.A. approvals based on less rigorous data in circumstances of great clinical need:

1983 – allowed expedited orphan drug approval for rare diseases
1988 – created fast track approval in response to the AIDS epidemic
1992 – established an accelerated approval pathway allowing surrogate endpoints                                            for using investigational drugs in a different way
2012 – designated a breakthrough therapy when preliminary evidence suggests                                                 substantial improvement over existing therapies

Fifty-six percent (56%) of the 312 new molecular entities (N.M.E.) approved between 2002 and 2013 benefitted from F.D.A. expediting in either clinical development or regulatory review. The number of NME’s benefitting from more than one F.D.A. program increased from <20% in 1987 to >40% in 2013, partly due to an increase in “specialty drugs” designed to treat smaller subsets of a disease in non-rare patient populations. European compassionate use drugs qualify for F.D.A .fast-track status, reducing the average drug approval timeline from ten to four years.
Presumably, this progressive F.D.A. process change, approved by the U.S. Congress, incentivizes pharma to continue risking long-haul capital in search of the next >$1 billion annual sales blockbuster, and that is good for The Economy.

What is unknown is how much longer entrepreneurial dollars will seek out the solid science behind new biotech drugs when there is likely a faster ROI to be found in the med-tech & high-tech innovation sectors. But with Regeneron-Sanofi projected to sell $4.4 billion worth of cholesterol lowering Praluent, it is hard not to be bullish!

We in the Square understand that new ideas really can’t just equal the best the status quo has to offer… But too often, that's the conflation of what's called innovation.

Monday, May 25, 2015

Uncertain Health in an Insecure World – 41

“Innovation Orientation”

Orientation determines our point-of-view and related actions.

Physicians are trained to determine whether or not a patient is oriented to “person, place and time”.
“Who are you?” Where are we?” What day is it?”

These three simple questions are fundamental to obtaining an accurate medical history, in that those patients who are not “oriented x3” are a danger to themselves, and possibly to others.

Once a patient’s orientation is established, effective humanistic medical care can be delivered. In this way, and as recited in the Hippocratic Oath, the medical profession aspires to “do no harm”.

This month, over 20,000 young MD’s will graduate from North American medical schools. Each new doctor will possess this clinical skill, among others. The same is true of over 100,000 other medical graduates around the globe. 
Entering the health professions workforce requires that certain basics be mastered, before the complexities of healthcare delivery can even be contemplated. As the modern devices & handheld tools show (below), modern medicine is creative and innovative.

But healthcare is not some clever game! And old Hippocrates still advises modern physicians to step away from the patient if they feel their skills have been exceeded.

But how are innovators oriented?

Who decides when incubees are ready to graduate? What are the basic innovator skills? Where does the innovation workforce train up? Just what are the real world implications of being under-prepared when entering the innovation sector – on personal careers and on an entire business?

We have previously addressed the “Innovation Concentration”—the enrichments that foster success in the Silicon Valley (see post #27). In the absence of that unique California innovation ecosystem (or an oath that demands deep professional reflection), just how is innovation’s “harm” mitigated? How is the public interest protected?

Certainly not by the invisible hand of global market forces!

First, let’s all agree that change per se is not always healthy. And whether incremental or disruptive, innovation is not de facto always positive.

What is the general state of health for business innovation?
·         A 2010 Capgemini survey of global executives reported that only 11% of business innovations had a positive financial impact at least 75% of the time.
·         A 2013 Accenture survey of CEO’s found that only 18% of business innovations produced a tangible payoff, and that only 4% recovered the cost of capital invested.

Business models exist to objectively evaluate health status, healthcare access and health system financing. As health and healthcare systems demands increase, the pressure for business innovation grows. Healthcare delivery and insurance leaders are generally risk averse when considering expansion and bundling decisions. The desired outcome should be better health – increased wellness and decreased illness – underpinned by the social contract of healthcare system sustainability.

But is innovation really happening?

Recently, Harvard Global Health and Population professor Peter Berman purposefully differentiated health systems from healthcare delivery systems at the University of California Berkeley Global Health Leadership Forum. In both systems, he noted that, “Change is a constant… driven by new needs and technologies… (based on) recent gains to build upon. Change must improve consequences like health outcomes, not just reorganize”.

Simply put, real health innovation is not just healthcare system change!

Ironically, sometimes the health systems of the poorest global economies prove themselves to be the most innovative – rehydration, short-course TB therapy, antibiotics for childhood acute lower respiratory infection, India’s decade old National Rural Health Initiative are some examples. Chaotic out-of-pocket spending is becoming organized and captured by payment systems.

For doctors, the possible etiologies of a patient’s acute illness fall under the medical term “differential diagnosis”. Make the right diagnosis, and the patient recovers. Make the wrong diagnosis, and the patient develops a chronic illness… or dies. Doctors have more innovative tools in their doctor bags.

For healthcare leaders, an entrepreneur’s wish list of potential breakthroughs is called “opportunities” – genetic testing, telemedicine, novel biotech drugs, integrated care and personalized medicine. Well-informed business and policy decisions can accomplish true innovation. But in this setting, acting without discipline or in the absence of analytics produces change… only change.

When doctors violate the Hippocratic Oath and cause “harm” to their patients, they should be sanctioned by others in the medical profession.

Innovators lacking the business basics may also cause “harm”. In the under-regulated innovation space, the damage done often goes unsanctioned by others, or worse, unrecognized by all.
So, just like a medical school curriculum covers the basics, a comprehensive and consistent analytic framework is needed to evaluate models of purported innovation.

Reorganization by change alone, without true innovation and related outcomes, can be frankly disorienting. And like a disoriented patient, this is potentially dangerous!  

Those of us in the Square who train doctors and try health innovation appreciate the difference.

Friday, May 15, 2015

Uncertain Health in an Insecure World – 40

“The Nudge”

Health behaviors are the hardest to change.

Faced with ever-growing financial, demographic, security and social challenges, governments around the globe are struggling with very difficult decisions about the future of their expensive healthcare services. The stark realization that choice and competition may be the best (or at least ‘least worst’) option has been both influential and controversial.

But choice and competition can be manipulated by public policy and market forces.

Speaking recently with Sir Julian Le Grand (above) at University of California Berkeley about difficult decisions he made while serving as Prime Minister Tony Blair’s health advisor in 2003-2005, it is clear that leadership in this sector requires courage and consistency. Sir Julian has demonstrated the capacity to articulate the benefits of quasi-market reforms in healthcare for the general public, while advocating for public-private partnerships to benefit child care, elder care and long-term care for vulnerable populations.

Such leaders do not retreat in the face of right wing criticism of programs to reduce social inequities. Nor do they waiver when denouncing “zombie ideas” such as increased patient charges in the U.K. National Health Service.

Le Grand’s case in point was the 2006 St. Valentine’s Day Manifesto (Massacre?) in the U.K. House of Commons when Labour Party’s ‘Blairites’ overwhelmingly passed a ban on smoking in all public places, including private clubs and pubs. The smoking ban was likened by critics to Gestapo tactics, and its supporting politicians were called “dullards”.

But smoking prevalence soon fell among British males and females.

In fact, a 2014 Journal of the American Medical Association paper, published on the 50th anniversary of the U.S. Surgeon General’s first report on the health dangers of smoking, noted that while the global prevalence of smoking had decreased (see graph below), global population growth increased the number of daily smokers in 187 countries from 721 million in 1980 to 967 million in 2012.

Once out of government and back at the London School of Economics, in 2009 Le Grand proposed that so-called ‘Nanny State’ U.K. doctors sign permits for nicotine addicts to be allowed to smoke, and that this annually renewable smoking permit cost 200 pounds. He was pilloried in the British press.

Le Grand also proposed that food manufacturers be banned from adding salt, employers provide an exercise hour for all employees during work hours, and fresh fruits be offered as office snacks. Once again, he was lambasted, despite the known relationship of smoking to cancer and coronary artery disease, and the epidemic of obesity sweeping the sedentary nation.

Le Grand’s health policy approach was based on ‘The Nudge’, a concept also called libertarian paternalism, originated by Thaler and Sunstein (2008). The Nudge asks public and private institutions to push people in directions that will make their lives better – longer, happier, healthier – without eliminating their freedom of choice. People can opt in or out, avail themselves of healthy options, being gently nudged by small interventions that preserve choice and do not cause a loss of welfare. 
This is a viable alternative to paternalistic public regulations, taxes subsidies and endless educational programming.

At the time Le Grand noted that, “There is nothing evil about smoking as long as you are just hurting yourself. We have to try to help people stop smoking without encroaching on people’s liberties.” In response to public pressure and politics, the smoking ban was liberalized, and the permit price fell to 10 pounds.

Financial incentives are known to be an effective at encouraging smoking cessation.  Carrot & stick financial reward schemes show that people are more motivated to not lose money, instead of being rewarded. People with their own money on the line – skin in the game – are much more likely to stop smoking for six months. Some 21% of large U.S. employers offer incentives to stop smoking by passing lower health insurance premium costs on to non-smoking employees. This paycheck savings approach is less effective than employees who must worry about losing a deposit of their own funds if they start smoking again.

Given completely free choice, people make mistakes.

In 1738, David Hume wrote, “There is no quality in human nature which causes more fatal errors in our conduct than that which leads us to prefer whatever is present to the distant and remote” (Treatise on Human Nature). Such limitations to reasoning result in procrastination, continued addiction and what psychologists call akrasia.

Life was cheap in 1738, when there were no public healthcare systems and limited taxes.

The U.K. Murder Act of 1752 required that convicted murderers be hung within two days of sentencing. In the period between 1735 and 1799, 323 women were hanged for various capital crimes. On August 13, 1964, the last two men to be executed in Britain went to the gallows for a 10 pound robbery in which the victim was killed.

Limited willpower is not a new human failing. But failing health has become expensive.

Sir Julian modernized a big thought.

Is a 10 pound smoking permit the proper nudge to save a life, or the wrong price to be hung for?

In the Square, we believe a nudge is better than a noose. You decide…

Saturday, May 9, 2015

Uncertain Health in an Insecure World – 39

“49 Reasons, All in a Line…”

“… Some of them good ones, some of them lies.” These Crosby, Stills, Nash & Young song lyrics critiqued the dirty politics of the Richard M. Nixon administration.

The lie of modern data science, according to IBM big data evangelist James Kobeilus, is “overfitting”. He opines that statistical models of historical datasets do not guarantee their future predictive value in the same domain of interest. Data scientists are trained to regularly score their statistical models, but resulting overfitting biases may introduce skewed data that cause predictive modeling failures. Such pseudo-data are often spurious – like the age of Miss America correlating with the incidence of murders by hot steam and hot objects!

This is one just example of how the digital world that tries to help us can hurt us.

Can we make good decisions from sifting through the 2.4 quintillion bits of digital data generated daily from the big data stream in the Cloud? And when an estimated 50% of the digital data generated on individuals and their personal interests is inaccurate, is the aggregated big data a giant solution, or a giant problem?

Who decides what of this data is actually relevant, or “A solution looking for a problem”.
Uber uses Google Map as its customer locator solution. But Uber CEO Travis Kalanick (below) has just put in a $3 billion offer  to buy Nokia’s mapping product, Here, because nobody wants to entrust the future of a data-driven business to the privacy-mining Google platform. 

If patients’ individual little data is being protected by public interest policy, who is assuring that the constraints of privacy and surveillance are balanced in the private sector?

More than half of Kaiser-Permanente patients will willingly trade their healthcare privacy for better care. Who is to say that they don’t have the right to waive their government-given right to privacy? But caution is warranted when the private sector is involved – recall what happened to the Obamacare signup website last fall, when it was revealed that Google and Twitter were sharing enrollees’ personal information.

Subjects enrolled in clinical trials are protected by strict research ethics and rules of conduct designed to guard their confidentiality. But pharma is now encountering & managing the reality that some research subjects are self-identifying on social media, demanding to know whether they received the active drug or a placebo. Does such enlightened self-interest spoil it for others, and could such disclosures render an expensive clinical trial ineligible for regulatory review and new drug approval?

Analytics firms can render big data meaningful, making order of chaos and even predicting the probability of bad (or good) health outcomes. But who makes the call as to the right question for the predictive model to attack… especially when healthcare providers are increasingly viewed by data collectors and analyzers as ‘disintermediaries’, marginalized in the process of care?

Big data analytics do not replace competency.

Big companies, including large healthcare systems, must possess business competencies in order to derive a benefit from what their big data warehouses might reveal. Daily decision-making based on good operating information cannot be replaced by digital data analytics. Customer and patient experiences provide experiential information about system performance at many levels.

When aggregated and thoughtfully analyzed, these little data bytes may provide insights on process improvement that can foster real change. Performance management using big data metrics derived from little data events can be a difference-maker, but only if the organization’s culture allows for people and patients on the ground to understand their roles in making change happen

Kaiser-Permanente makes this happen, but most other healthcare systems fall woefully short. 

Financial services companies use big data analytics to identify prospective ATM machine locations. When it takes me three tries to process an ATM transaction, should somebody at the bank alert my doctor to early signs of Alzheimer’s dementia?

Fitbit’s business success in personal fitness tracking analytics has just prompted it to seek a $100M IPO filing with the U.S. Securities & Exchange Commission (SEC). When I fall below 10,000 steps for three consecutive Fibit days, should the company alert my health insurer of impending type-2 diabetes due to physical inactivity?
Sound absurd? Perhaps...

A Future Watch world of little data collecting and big data analytics is being responsibly applied in the present by progressive employers and healthcare insurers.
In the Square, we can speak freely about the lies – intended and unintentional – that surround this new data movement.

Richard Nixon is no longer the U.S. President, but threats to our personal freedom persist! 

Tuesday, May 5, 2015

Uncertain Health in an Insecure World – 38

“Game of Thrones”

Ex pats and foreigners alike know Saudi Arabia as ‘The Kingdom’. Its ruling family is the largest (>7,000 princes & princesses) and wealthiest royal house in the world. But these days, the crown weighs heavy on the throne.

The House of Saud's wealth differential with the public is the greatest in the world. And while the royals deny the existence of poverty in their country, one quarter of 16 million native Saudis live on <$17 per day. Three-quarters of the Kingdom’s unemployed are in their twenties. Ninety-three mostly poor young Saudi militants were just arrested for plotting terror against in-country targets.

New King Salman recently suffered a stroke and is rumored to have post-stroke dementia. He just removed the ruling dynasty's long serving foreign minister and his heir-apparent, appointing tough interior security official Mohammed bin Nayef (“America’s Favorite Saudi”, below) as the Crown Prince and next in line to the throne.
The new Deputy Crown Prince is Salmon’s 30-something son, Mohammed bin Salmon, who recently became the youngest Defense Minister in Saudi history. This shake-up concentrated power in the conservative wing of the royal family, and is thought to be in response to growing domestic turmoil and regional chaos in Iraq (ISIS) & Yemen (Houthi rebels, Al-Queda in the Arabian Peninsula).

Despite this, The Kingdom provides universal healthcare coverage for its citizens. The public healthcare system offers primary care clinics and urban hospitals. Specialized care is available at referral centers in so-called economic cities. A private sector of 127 hospitals, including a growing number of public-private partnerships and for-profits, has also emerged.

The demand for highly skilled healthcare workforce is high, and foreign-trained physicians and nurses are commonly recruited. Medical career training of local talent is a key target for the government, which has long contracted for specialist training of Saudi doctors abroad in the Europe Union and Canada.

Since the Arab Spring of late 2010 (above), Saudi healthcare spending has ballooned to a projected 4.9% of GDP in 2016 (below), representing a 2011-2016 compounded annual growth rate (CAGR) of +9.3% which still places The Kingdom behind the U.S. (+18.5%), Germany (+11.7%), Japan (+7.9%) and China (+5.9%). By comparison, its population increased by 3.2% to 32.8M over the same period, as compared to only 2.3% growth in the prior decade.

In 1970, there were just 74 hospitals and 9,000 inpatient beds in Saudi Arabia; by 2009, there were 415 hospitals and 58,000 beds. In an effort to placate the poor and underserved masses, the Ministry of Health has built >130 new hospitals with >100,000 additional beds. This cash outlay (there is no capital financing in Islam) combined with lower oil revenues has placed an unusual strain on the royal family’s reserves.

The House of Saud is also stressed by the growing healthcare demands of an aging population that is experiencing a higher prevalence of western world chronic diseases. Life expectancy will increase from 74.1 years in 2011 to 75.3 years in 2016. Unhealthy eating habits and inactivity in 68.8% of the population are driving up obesity and diabetes rates. NCD’s contribute to 71% of all deaths, the majority of which are due to cardiovascular diseases.

Foreign healthcare systems have entered the market, and major global consulting firms have helped to introduce innovative technologies and social media to help staunch these adverse health trends. But the screening infrastructure has not kept pace with the burden of disease, nor with the rapid expansion of healthcare facilities. Some 21,000 mammograms were done in 2013 when population health estimates indicate that >2 million mammograms were needed. As a result, breast cancer is frequently not diagnosed until very advanced stages.

Ironically, in The Kingdom the disconnect between royal wealth and public wellness is a great as the association of regional insecurity to uncertain health is strong. 

The Royals' subjects are being subjected to the best and the worst of healthcare. Benevolent princes are facing the realities of regional strife and global markets, still ruling in ways that may have worked for the last 70 years in The Kingdom.

But we in the Square see that shining healthcare palaces are no defense to the blood in the streets.

And unlike Queen Daenerys Targaryen, there are no dragons to quell the unhealthy masses. 

Saturday, May 2, 2015

Uncertain Health in an Insecure World – 37

“Age of Aquarius - Awakening”

This is definitely not the dawning of the Age of Aquarius (The 5th Dimension, 1969). Self-actualization through Zen beliefs and self-help programs is not the likely path forward to better health for most of the world.

In the Age of Aquarius, patients had medical complaints. In the modern era, people have health concerns.

In the Age of Aquarius, physicians developed patient problem lists. In the new era, providers help people set health goals.

My Fitbit buzzes pleasingly on my left wrist when I top 10,000 steps in a day. My last Fitbit weekly progress report tells me that despite averaging 7 hours and 35 minutes of sleep, I tallied >88,000 total steps and covered 41 miles, and was awarded eight badges. I could have told you that I felt healthier after last week, but such feedback data reinforces a conscious personal behavior change.

This is an era where hand-held devices and wearable technologies populate the Cloud with vital lifestyle data that actually feeds back on and reinforces behavioral queues, which could in turn see the long-awaited dawning of personalized healthcare and population health realized.

Let’s call this personal device-derived information “little data”.

At the Kaiser-Permanente (KP) Garfield Innovation Center, the internet of things (IoT) smart condo and self-directed Nissan LEAF vehicle make it clear that personal little data, once it is “collected, mined and federated” using big data analytic capabilities, can direct more healthy behaviors and target more timely medical care in the future.
At the Kaiser-Permanente San Francisco Medical Center, Garfield’s innovative “form ever follows function” healthy designs await implementation. However, the private KP HealthConnect digital platform already allows for patients to link to providers at >600 medical offices and 37 hospitals. Electronic medical record (EMR) and personal health information (PHI) can be securely mined to individually customize medical care and lifestyle services.

Such little data applications are also scaled-up to big datasets that KP actively analyzes to inform the process of care across an expanding >10 million member health insurance plan and healthcare system.

So the era of healthcare technology virginity – and irrational data misanthropy – is over! KP is personalizing medicine and health behaviors with little data, while re-engineering a system of care with big data. 

In the Age of Aquarius, doctors admitted and discharged patients from hospital, and a few health systems measured patient satisfaction. In the modern era, progressive systems like KP are embedding patient assessed measures (PAM’s) and patient recorded outcomes (PRO’s) into their process management initiatives, reflecting the unambiguous connection between data transparency and process improvement.

A Swiss army aphorism that is reasserted by KP leadership states that, “When the map and the terrain disagree, trust the terrain”.

Patients should be trusted to report their on-the-ground healthcare experiences.

It is also said that, “In large bureaucracies, the scariest resource is not access to data, but individual bravery”

Modern healthcare providers & leaders must screw up their courage to seek out and act upon data – whether little or big.

A new data dawn is slowly creeping across the Square. Let us all go to the light!