09/15/2014

Alert: Change is in the air. The future of health care is in your hands.


by Harry Greenspun, MD, Director, Deloitte Services LP, Deloitte Center for Health Solutions Twitter

Visions and depictions of the future typically revolve around technology (or technology gone awry) that drastically transform the status quo of everyday activities: flying cars, vengeful robots, time machines, “plastics,” dogs on treadmills, etc.  

However, as we gathered views from Deloitte thought leaders on what they saw as the future of health care, an industry that embraces new technology, we were both surprised and impressed by the consensus: the future of health care is information.  

While the rampant use of the term “big data” ensures its permanence in our lexicon, it will likely be the central driver of improvements in the industry. Quality, value, patient-centeredness, genomics, population health, and a host of other priorities depend on the availability, thoughtful analysis, and actionable presentation of data. The widespread adoption of EHRs, mobile devices, and analytics platforms, creates the avenue through which this data and information can connect stakeholders in the care continuum.  

In this video we present one such vignette: data shared across stakeholders, driving action, to support health and wellness while transforming care. Grab some popcorn and enjoy the video. And watch out for robots.  

 

 

 

Harry Greenspun, MD, Senior Advisor, Health Care Transformation and Technology, Deloitte Center for Health Solutions, Deloitte LLP

Harry Greenspun, MD is a director with Deloitte Services LP and the senior advisor at the Deloitte Center for Health Solutions. He has held a diverse range of clinical and executive roles across the health care industry, giving him a unique perspective on current and future challenges.

 

09/11/2014

Social media: opportunity or Achilles heel?


by Harry Greenspun, MD, Senior Advisor, Deloitte Center for Health Solutions, Deloitte LLP 

I am a creature of habit, mainly because of the habits of my creature. Each morning around 6 a.m., my dog Tarot sticks his cold nose in my face to let me know it is time to get up and get going. We wind our way through the neighborhood and return home with a full poop bag and a mound of data, including my steps, average pace and calories burned and Tarot’s activity points from his GPS tracker. Uploaded automatically, I then compare myself to friends and colleagues, while Tarot determines whether he leads his buddy Tucker. Recently, however, our routine came to an abrupt end when I developed searing pain in my right Achilles tendon. But it also launched a new phase in my use of social media. Dethroned from my leaderboard, I posted my X-ray on Facebook and got some remarkably useful advice from several orthopedic surgeon friends, comical advice from a urologist classmate, and an outpouring of sympathy from others. And finally, after weighing my options, I went in for treatment last week.

Like me, nearly one in five consumers used social media in the past year for health-related purposes.1  Consumers share information, compare experiences and garner support, which can enable them to make more informed decisions and become more engaged in their own health and wellness. However, organizations that focus exclusively on consumer use of social media could be missing important opportunities. The health care industry can benefit from enhanced communication with consumers and operations, while gathering deeper knowledge of consumer needs, sentiments and even misperceptions that helps the industry improve products, services and outcomes. Data suggest that the industry sees this coming: While the average share of health care and pharmaceutical marketing budgets devoted to social media is relatively small today, it is expected to grow to over 20 percent in the next five years.2

Of the many applications of social media, two functions may be particularly useful as the industry shifts its focus toward population health: social listening and activation. Through monitoring of social media (i.e., social listening), health care organizations can access consumer insights like their level of awareness of particular issues and factors in decision-making and can even help predict outcomes. In a recent Deloitte Dbriefs webcast, we asked attendees where they saw the greatest benefit of using social media related to health care, and nearly half cited greater access to information.

Infographic 1

Although many have questioned the ability of social media to achieve results, the recent ALS “Ice Bucket Challenge” clearly demonstrates that social activation can be extremely effective. Other health care organizations have been able to leverage social media to not only educate, but to spur action. The American Red Cross, for example, has created a digital operations center to identify areas of need, connect people with resources and engage volunteers where they are most needed (see the 2014 MIT Sloan Management Review and Deloitte social business study for more information).

As with adopting any new modality, obstacles remain. Regulatory and compliance concerns, particularly related to privacy and security, are especially acute in health care. In a recent Deloitte Dbriefs webcast, 45 percent of participants cited patient privacy as their greatest concern related to social media in health care.

Infographic 2

In addition, unfavorable or untrue information and inappropriate use of social media by employees can quickly tarnish brand and reputation. Therefore, it is critical for industry stakeholders to take a risk-based approach to social media:

  • Strategy: A solid vision and strategy can help align social media activities to corporate standards and strategic objectives
  • Risk management: Social media-specific risk management can provide structured management and continuous risk monitoring
  • Governance: Social media governance can set the policy and process framework to manage and mitigate risks
  • Regulation and compliance: Social media compliance can help ensure adherence to relevant regulations, laws, standards and internal policies and procedures
  • Training, education and awareness: Ongoing training and awareness can allow employees to remain current on new and existing policies and procedures related to social media

In this way, organizations can begin to harness the value of social media. By first monitoring data to learn what is important to users, and then progressively engaging those users, health care might ultimately be able to integrate social media across sectors. With a thoughtful and flexible approach, results can come surprisingly quickly.   

Now sporting a cast on my ankle, I’m hoping for some quick results myself. Through social media, I’ve gotten support from friends, connected with others undergoing similar rehab and gotten a pass from my Fitbit® team. However, Tarot still wakes up at 6 a.m., so my (much more athletic) wife, Kerry, is now taking him running. Watch out, Tucker.

Read the entire Health Care Current here and subscribe at: www.deloitte.com/centerforhealthsolutions/subscribe.

Harry

 Email |  LinkedIn

 P.S. What’s your take on the use of social media in health care? Share with us on Twitter by mentioning @DeloitteHealth and don’t forget to follow me at @HarryGreenspun.

Sources:
1 Deloitte Center for Health Solutions, 2013 Survey of U.S. Consumers
2 Duke University’s Fuqua School of Business, “The CMO Survey Report: Results by Firm & Industry Characteristics” commissioned by the American Marketing Association (AMA), February 19, 2014

Harry Greenspun, MD, Senior Advisor, Health Care Transformation and Technology, Deloitte Center for Health Solutions, Deloitte LLP

Harry Greenspun is the senior advisor for health care technology and transformation at the Deloitte Center for Health Solutions. He has held a diverse range of clinical and executive roles across the health care industry, giving him a unique perspective on current and future challenges.

 

09/10/2014

Forget about health IT. Think about IT for health.


by Harry Greenspun, MD, Director, Deloitte Services LP, Deloitte Center for Health Solutions Twitter

For the past decade, our industry has been fixated on health IT.  Remember President George W. Bush’s call-to-action in his 2004 State of the Union Address “to ensure that most Americans have electronic health records within the next 10 years”?  That ushered in the era of the ONC, HITSP, CCHIT, and a host of other acronyms, followed by HITECH and, ultimately, Meaningful Use. 

Last week the Centers for Medicare and Medicaid Services (CMS) announced it has paid out nearly $25 billion in incentive payments to eligible hospitals and providers under the Meaningful Use program.  Those who know me know that I’ve been a staunch advocate of EHR adoption, citing it as an essential element in transforming our health care system.  Achieving major health care goal requires it: population health management, quality, safety, transparency, value. 

Although many have achieved “buzz word” status, the world hasn’t stood still since 2004 and other factors have emerged that stand to be game changers in health care: analytics, mobile, and consumerism to name a few. Each of these is fueled by information and technology that live outside of health care, yet have profound impact on outcomes, cost, and quality.  As we seek to advance patient-centered care, wellness, prevention, and personalized medicine, we will have to draw on a broad array of ideas and data sources that don’t reside in an EHR or a doctor’s office. 

It is time to start thinking about the tools and resources stakeholders will likely need to ensure individuals and populations are well-served by a proactive health care system within communities that support health.   In short, I believe it is time to move from “health IT” to “IT for health.”

 National Health IT Week kicks next Monday, September 15, and I’ll be blogging here and tweeting from @HarryGreenspun and @DeloitteHealth. Follow the conversation and check back daily for new updates. 

 

Harry Greenspun, MD, Senior Advisor, Health Care Transformation and Technology, Deloitte Center for Health Solutions, Deloitte LLP

Harry Greenspun is the senior advisor for health care technology and transformation at the Deloitte Center for Health Solutions. He has held a diverse range of clinical and executive roles across the health care industry, giving him a unique perspective on current and future challenges.

 

09/08/2014

How can a health system leverage analytics to predict future trends?


Many health systems are currently at the retrospective level of analytics. They’re looking in the rear view mirror and organizing their data so they can understand the past. How does a health system move from this to a forward-looking view where they’re learning from every event, able to organize that data, and then predict future trends?  

In the new video Analytics for the modern CIO, Brett Davis, Principal and General Manager, ConvergeHEALTH by Deloitte, Deloitte Consulting LLP; Harry Greenspun, MD, Director, Deloitte Center for Health Solutions, Deloitte LLP; and Tim Smith, Principal and National Leader of Health Care Information Technology, Deloitte Consulting LLP discuss the maturity of analytics, the future of unstructured data, and lessons learned from other industries. The full transcript of the interviews can be found below.

Analytics for the modern CIO is part of a new three-part video series Innovative challenges for the modern CIO which explores the advantages of disruptive technologies, the comparative and predictive nature of analytics, and the evolving role of the CIO as they hedge their bets, manage the IT portfolio across the enterprise, and address the care of growing patient populations with complex needs.

Video transcript

Brett Davis: So analytics is absolutely of maturity. It’s like Zen. It’s in a constant state of becoming. Unlike a transactional system, where you have a go-live day, with analytics you can constantly be moving up the maturity model. So many health systems are sort of at the retrospective analytics level right now. Looking in the rear view mirror, organizing their data so they can understand the past. That’s sort of maturity level one.


The maturity level in the future is then leveraging that data to look at past trends, and really create what the Institute of Medicine calls the learning healthcare system, where every electronic encounter with the system, whether it be a clinical encounter, whether that be a financial encounter, increasingly whether that be patient self-reported data, from a FitBit or from a remote monitoring device. Learning from every event, being able to organize that and then predict future trends is going to be critically important, and it’s kind of where the buck is going.

Harry Greenspun: So, analytics of course grows into comparative analytics. I mean to think and understand, like we did this, versus we did that. What’s better? And, one of the things we are going to find is that, we are going to have to know our only use comparative analytics to understand what happened in the clinical setting, but also use that in a much broader set of information in terms of lifestyle, lifestyle-based analytics, and to put someone on a staten is not going to lower their cholesterol, if three days a week they’re eating fast food, and so how can you understand not only what’s working in terms of the data we normally look at, but how can you bring in other elements of data to make better decisions.

Tim Smith: I worked with a large health system, a national health system for a few years. And one of the things that they were able to do, a few years into having implemented their electronic health record, was really start taking a look and doing predictive analysis against their patient data. So they could look at diabetics for example, and come up with different approaches to dealing with the diabetic population based on that predictive analytic.

Brett Davis: So, there’s a lot that health care can learn from other industries when it comes to analytics, both internal as well as external leverage of data in an analytics environment. A great example is retailers. Retailers leverage data from their point of sales systems, as well as their supply chain systems to reorganize their supply chain, to understand what consumers are buying what and in which areas. Interestingly, they also do great jobs of leveraging external data with that internal data. Things like weather data, so that they know when the storms coming, that certain consumers buy certain products .And they know to put the pop-tarts and pampers in the front of the store as a great example. The future of healthcare analytics is going to be defined in the same way, where health systems not only need to get the own data house in order but need to collaborate and leverage from external stakeholders, to drive insights into how they operate as well.

Tim Smith: I think what is necessary is that the technology of today and tomorrow be able to take in the unstructured data and make it structured in some way, so that it can be used .And so, I think some of the technologies of being able to take whether its textual, whether its sound bites and being able to translate that into something meaningful and use that in decision support, will be critical.

Brett Davis: Unstructured data is one of the last frontiers and challenges in healthcare informatics. A treasure trove of information gets locked in clinical notes. And so, the ability to apply natural language processing technologies and other technologies and merge that with coded structured information is critically important. But it’s still years away. Despite progress in natural language processing, in healthcare it’s not quite at prime time yet. That’s why it’s so important when a health system is implementing their clinical information system, their financial systems that their thinking about the downstream analytics that they want to ask. Because, if they don’t, they have to go back and re-optimize and re-implement their core transactional systems because after all that’s the underlying substrate of data where it’s captured that feeds those analytics environments.

Harry Greenspun: So you have a number of tools to be launched, and are appropriate for analytics programs, the key things you have to understand is what data you are getting, how much do you trust that information, how valid is it, and also how comprehensive is it, because again if we think if we’re only getting one narrow slice of information, you can run analytics up and down all day, and you’re not going to get very valuable predictive information. So, you need a suite of tools which are fed by a large variety of sources that allow all stakeholders to understand what’s going on, what’s important and what should I do next about it.

Brett Davis: So where do you start with analytics? We really need to start with that end in mind. You need to have that enterprise view and understand your competitive landscape and what’s going to be important in terms of insights in your region, understanding your referral patterns, you need to understand from an operational and cost perspective where you need to be in the next five years. From a cost perspective and an efficiency perspective, and then clinically you need to understand where you are going in terms of are you taking on full-risk based contracts in the next couple of years. This is what is so critically important for the CIO to have to see at the table in the executive suite, to be part of those conversations. So you need to start with the enterprise view in mind , and then begin to implement so that you can start putting points on the board and demonstrate values within each of those. But ensuring that you don’t paint yourself into a corner with black box analytics, where you don’t have transparency around the data. Without analytics, you are flying blind as a health system or as a CIO. So, good analytics is the necessary structure substrate for generating the insights for decision making now and in the future.

09/03/2014

The Internet of Things and transformative change for health care


by Eric Openshaw, vice chairman and U.S. Technology, Media & Telecommunications leader, Deloitte LLP

A shopper walks through a suburban mall, returning to his car after visiting several stores. Nearing the drug store just before the exit, a text alert pops up on his phone. It’s the pharmacy calling. His prescription is expiring; shouldn’t he stop in and refill it before heading home? 

With a quick text message, a forgotten task is completed. At the same time, the pharmacy dispatches a companion message to the doctor’s office, negating the need for physician follow-up with the patient. Everyone with an interest in the patient’s well-being and in maintaining his meds – doctor, pharmacist, patient -- is now up to date and on the same page.

It’s as though the pharmacy literally reached through the door with an important reminder about something vital to personal health care that was being neglected. 

That’s just one sign of things likely to come in health care through the Internet of Things (IoT). Using information stored in the cloud and made accessible to patients and providers alike through a massive network of machine and device connections, IoT has the potential to transform the health care industry. 

The ways that can happen are many, but here are a few prospects:

  • Patients can capture, analyze, and share personal health data through wearable technology.
  • Health and wellness providers can offer more personalized treatments based on the available data.
  • Individual health care consumers can connect with a diverse ecosystem of wellness providers, potentially leading to greater value and insight.
  • The role of the traditional health care provider could change dramatically.

A comprehensive, intelligent monitoring system could enable a full range of health care services and treatments – wellness hubs and next-generation smart health dashboards among them.

It’s a sign of the direction various stakeholders in the health care industry are heading as providers, insurers, and patients collaborate on and consolidate issues of quality and affordability.

Projections on the overall growth of IoT place the level of interconnection in the stratosphere. According to one Gartner study, 26 billion devices could be communicating with one another by 2020, with an estimated global economic value-add of $1.9 trillion.

There is wide interest among business executives in making investments in IoT. In one recent survey, 75 percent of executives (across all sectors, not just health care) said their companies are considering or are already moving ahead with IoT. Proponents view it as an exciting new strategic course and a worthwhile financial investment.

Health care offers unique opportunities for comprehensive IoT implementation. Health care treatments, cost, and availability affect all of us striving for longer, healthier lives. IoT is an enabler to achieve improved care for patients and providers. It could drive better asset utilization, new revenues, and reduced costs. In addition, it has the potential to change how health care is delivered.

Future advantages can be projected across all aspects of health care. For providers, you can start with the local hospital. The use of intelligent equipment powered by new medical sensors that allow real-time monitoring of a patient’s vital signs – regardless of whether that patient is down the street or located on the other side of the country – will be an extraordinary benefit.

For the patient, think of that visit to the mall, the ‘conversation’ between pharmacy computer and the consumer’s smart phone. Or the rise of telehealth linking provider and patient remotely, an element of medical care we’re seeing with greater frequency. That surface has barely been scratched.

A patient at home with access to a smart phone or computer and concerned about a medical episode can send health information to hospital nurses through a continually active wireless network. It’s an early-warning system that can tell a nurse or doctor whether the patient is suffering an attack or about to go into duress, and to enable a rapid and perhaps life-saving response.

The potential benefits of IoT in health care are myriad, but there are still concerns and issues facing stakeholders that need to be addressed and resolved.

Developing standards, building interoperability

How to achieve open standards and interoperability, and overcoming proprietary restrictions, are two critical issues that need to be addressed.

There are no simple roadmaps to navigate proprietary systems and technology. The question of how to blend and connect all industries is, to me, the most challenging and interesting. Influential groups such as the Industrial Internet Consortium (IIC) – an association in which Deloitte is a member - is composed of more than 70 of the most provocative and engaging companies involved in IoT, and is examining how to break down siloes, integrate systems, and find ways to interconnect proprietary networks.

The IIC, however, isn’t necessarily fixed on establishing hard and fast standards – indeed it is not a standards organization. It is more involved in how they are shaped, their interoperability and, ultimately, what makes the most sense.

Sharing best practices and applicable case studies from early participants is one way of crafting a working template. What works and what doesn’t can offer an essential guideline in moving forward. Facilitating open forums to share ideas and insights, as the IIC is championing, is another.

Ultimately, learning from experience and developing the boldness and confidence needed to advance IoT will enhance the networks in terms of viability, efficiency, and building a more secure framework.

Privacy and security safeguards

A critical consideration for all participants is this: How do we manage to keep this fast-growing network and the nearly incalculable amount of data moving continually safe and secure?

There are two sides of that equation. Clearly, personally identifiable information remains a concern, and it always will. The notion of cops and robbers, good guys and bad guys, that’s a notion embedded deep within our culture, and will be that way as our communications through the Internet and the cloud continue to grow, deepen, and expand.

We can say with some certainty that encryption will get better, become more sophisticated over time. We can also say that the bad guys are pretty smart, adaptive, and continually hunting for ways to exploit the system. For health care organizations a razor focus on developing supple, comprehensive cyber security programs is imperative. 

The cost of privacy has two important variables. One is fundamental:  What does it cost the health care enterprise to safeguard your data, or the cloud service provider to ensure the cloud is impenetrable (or as close to that ideal as possible)? What does it cost your doctor, or your local hospital, to ensure the safety of vital personal information?

The flip side of the coin is the balance of potential loss against the opportunity IoT offers. Many of us are willing to take a risk with privacy if we feel the return is worth more than the risk assumed. Where that line stops will determine how willing patients are to push IoT in terms of health care data delivery to the limit.

Certainly there are barriers yet to clear in order for IoT to succeed – technology issues, proprietary matters, cost considerations, and regulatory questions.  But those who participate in the IoT ecosystem must work together to create solutions that help unlock industry value, company value, and – on a more personal level – value to the consumer.

To learn more about strategies ‒ for both enterprise adopters and Internet of Things providers ‒ to unlock the business value of connected devices, download The internet of things ecosystem: Unlocking the business value of connected devices.

 

Eric Openshaw, Vice chairman and U.S. Technology, Media & Telecommunications leader, Deloitte LLP

Eric Openshaw has more than 30 years of experience in assisting clients with enterprise transformation, business process reengineering, manufacturing/distribution strategy, technology strategy, M&A analysis and post-acquisition consolidation, order fulfillment, supply chain, information systems strategic planning, technology evaluation, and design-development and implementation of software primarily for discrete and process manufacturing distribution retail and retail distribution.  

08/28/2014

Crafting your 2020 strategy? Don’t try to predict the future


by Jason Girzadas, Principal, National Managing Director, Life Sciences & Health Care, Deloitte Consulting LLP

Professor and economist Irving Fischer once stated, “Stock prices have reached what looks like a permanently high plateau.” While on the surface this phrase might seem fairly trivial, it has actually been burnt into many history books. Why? Because it was 1929 and Professor Fischer said this just before the stock market crashed and the country plummeted into the Great Depression. 

In my travels and conversations with our life sciences and health care clients, I hear a multitude of future strategies – frequently aimed at the 2020 timeframe – from leaders who are trying to predict the future of health care. Some prominent examples of these “future visions” include:

  • The empowered consumer: Consumers will be “empowered” and carry high-deductible insurance plans; they will be personally responsible for navigating the world of health care equipped with enabling tools and information
  • The perfectly managed (and paid for) population: Our health system will be defined by large and, mostly virtually integrated, care systems/teams that are paid (accountable) for actively managing the health of a population 
  • The big data panacea: The future world will be transformed by massive databases compiled from all sources that will be curated and analyzed to unlock insights that create breakthrough innovations that will improve costs, improve quality and safety
  • The seamless and unending technological network: The future will be defined by ubiquitous mobile and social technologies that allow for the virtualization of care and massive changes (improvements) in service levels and personalization
  • The iron fist of government: Regulatory pressures by federal and state bodies will continue to build, and more control will be wrestled away from the private sector
  • The weakened fist of government: Heightened budget pressures will limit the ability of government to sustain its current roles in health care overall. As such, we will see governments increasingly backing away from health care funding and providing care
  • The personalized medicine scenario: Life sciences and med-tech organizations will lead the transformation of the industry to one where personalized medicine is a widespread reality
  • The status quo scenario: Change occurs on the fringes, costs meander and the system only makes incremental improvements with the current industry stakeholders generally holding their positions

Do you recognize these visions of the future? While on the surface these predictions may not seem too far-fetched, I often think back to Professor Fischer and am reminded that no one can accurately predict the future.

So why try to do so now?

The trap that I see many leaders and organizations fall into is that they too frequently attempt to define a single, cohesive future vision despite the proliferation of trends and industry dynamics. The predictions are often linear – based on a single world view – and can create a false goal for a company and waste the time of management teams and boards of directors.

So what’s the alternative? Executives should develop a future strategy centered on scenario planning. In a world of increasing complexity and rapid change, the goal should be to identify several plausible scenarios (alternative future worlds) and identify the strategies that are core across all of them—no matter which world view plays out and turns into reality. It’s not about debating which one future vision is best or more likely.

Scenario planning also allows management teams and boards to identify important elements of a strategy that are contingent on a particular world view or vision materializing. This separation of “core” and “contingent” elements of a strategy can bring tremendous clarity, focus and alignment, as well as improve the efficiency of leadership teams who often get bogged down in strategy development initiatives.

Instead of endless debates using precious time to settle on a single world view, leaders can take an alternative approach, defining the plausible future worlds – which can and likely will include favorable and unfavorable scenarios – like the ones mentioned above.

Once organizations define the array of plausible future visions, then they can go about the important – and demanding – work of determining where they will compete and how they will win across a multitude of these scenarios.

In case you’re wondering, things did not turn out well for Professor Fischer. Economic experts say he lost his credibility after the great crash of ’29. Lesson learned? As life sciences and health care companies look to 2020, they should consider preparing for alternative plausible futures and align around those strategies that will be critical no matter how the future plays out. It might work better than trying to define and predict the future – and ending up in the history books.

Read the entire Health Care Current here and subscribe at: www.deloitte.com/centerforhealthsolutions/subscribe.

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Jason Girzadas, Principal, National Managing Director, Life Sciences & Health Care, Deloitte Consulting LLP

Jason Girzadas uses his nearly 20 years of experience to help many of the nation’s top health care organizations navigate challenges including industry reform, implementing the latest technology, creating operating efficiencies and improving performance. 

08/25/2014

Technology’s aim: Better, longer life


by JR Reagan, Principal, Deloitte & Touche LLP

The fountain of youth, it turns out, exists not in some distant, exotic land but right here in that vast repository of information known as big data.

Medical science is growing in leaps and bounds with the advent of cloud systems able to store previously unimaginable amounts of information; applications to sort, categorize, and connect that data; advances in genetic research; and the rapid expansion of digital and mobile technology. According to physician and author Eric Topol, innovations in technology have enabled us to learn more about disease in the past several years alone than in all of the rest of history combined.

The prognosis: not just longer life, but a better life for all, even in underdeveloped parts of the world.

Cellphones and tablets; smart monitors embedded in wristbands, headbands, wearable patches, shoe inserts, and other devices; and programs to analyze the data they produce can already provide us with up-to-the-instant, continual snapshots of our own vital signs. Our mobile devices can tell us our pulse, blood pressure, and blood glucose levels at any given moment, and give us a view of our sleep patterns, enabling us to keep track of our bodies’ health. Soon, we’ll be able to screen ourselves for various types of cancers. Pregnant women will be able to conduct and view ultrasound scans of their own developing fetuses. We’ll even be able to generate our own genetic maps and interpret the results.1

Think globally, treat locally

The data those technologies generate can now be sifted and studied to teach medical researchers more than ever about disease and its underlying causes. Physicians armed with this information will diagnose treatments specific to not only a particular problem, but also to the individual patient. Already, some medicines’ labels advise different doses—or no dose at all—depending on certain genetic variations. Doctors will be able to do the same by applying big-data trends to their patients based on medical history, genetic makeup, environment, lifestyle, and other factors.

The vast sea of data being collected and stored is also strengthening preventative medicine. Does a town or region have more than its share of cancer cases? Analysts will be able to spot the trend and pinpoint the cause. What role does physical exercise—or a lack of it—play in illnesses of the mind such as Alzheimer’s, or in preventing cancer, or in the development of diabetes? Is it ever too late to build bone density? Big data could answer these questions and more, including those we’d never even thought to ask.

An exciting new age

Doctors aren’t the only ones who stand to gain from these developments. Nutritionists, physical therapists, and even personal trainers may benefit from big data’s big-picture scenarios as well as having a detailed snapshot of each client. Patients, of course, will be the greatest beneficiaries of all.

Just as we shake our heads at some medical practices of the past, future generations will certainly view modern medicine with an incredulous eye. How exciting it is to live in the here and now, on the cusp of revolutionary changes that could foster greater quality of life for us, our children, and all of humanity in the ages to come. Now, what will we do with our longer, healthier lives?

This posting originally appeared in the Essays section of Deloitte University Press.

Source: 1 Karen Weintraub, “Will we all be tweaking our own genetic code?,” BBC News, Technology, September 18, 2011, http://www.bbc.co.uk/news/technology-14919539

JR Regan, Principal, Deloitte LLP JR Regan principal, Deloitte & Touche LLP, CISSP, CISM, CRISC is US Federal Chief Innovation Officer. He also leads the HIVE (Highly Immersive Visual Environment), a state-of-the-art demonstration and development center located with the Center for Federal Innovation in Arlington, Virginia.

 

08/21/2014

An M&A roadmap to enhance the chances of success


by Homi Kapadia, Vice Chairman, U.S. Life Sciences Leader, Deloitte LLP

It’s in the news nearly every week: another major acquisition, key divesture, large joint venture or significant licensing agreement. The competitive landscape for life sciences companies seems to be changing rapidly. As I recently stated in a Forbes article, life sciences companies have many different strategies for the future: some want to be more focused on pure plays in a given segment or therapeutic area, while others want to maintain a broad portfolio of businesses to manage different business cycles. Changes in the health care ecosystem such as expiring patents, shorter product life cycles, formulary coverage challenges, changing commercial models, growth in new markets and value-based reimbursements are all driving the need for companies to reassess their strategies and business models and explore potential M&A opportunities.

At $400 billion, the global value of life sciences sector deals was eight times higher this year than it was last year at the same time. This uptick is expected to continue.1 Some of the recently publicized deals in the sector have involved U.S. firms buying foreign companies, which may allow them to relocate their headquarters overseas and benefit from lower tax rates. This approach is commonly referred to as an “inversion.”

As someone who has personally experienced a cross-ocean move (born and raised in India and then moved to the U.S. for my graduate education) followed by a west coast to east coast transition (driven by a transfer to lead one of our practices) – I can relate. Business opportunities, family, jobs, friends, lifestyle—for many, they’re all factors in the decision to make a big move. And as I think back on the moves I’ve made, I can vividly remember the bumps we experienced along the way. Between coordinating the sale and purchase of homes, enrolling children in schools in an unfamiliar area, transferring my spouse’s professional licensing requirements, moving personal property, and of course, relocating the family dog, a comprehensive roadmap could probably have saved us some time (and money).

As life sciences companies take steps to transform their business strategies through acquisitions, divestitures, or joint ventures, they could also benefit from a roadmap—a framework that allows them to prepare for the potentially bumpy road ahead while focusing on becoming more competitive in areas that will lead to business growth and sustainability. What are some key questions that should be mapped out before this monumental move?

  • Capabilities: What does the target firm offer that might enable us to strengthen our core capabilities, diversify our portfolio and expand product lines in our areas of priority?
  • Future growth: To what degree might we be able to increase our research and development (R&D) pipeline and accelerate our potential for future innovation? What potential does the target firm offer for tapping new markets and strengthening relationships with governments, providers and patients in those new markets? What product or therapeutic area synergies exist to promote further growth?
  • Reputation: How is the target firm viewed by customers and investors? To what extent might teaming with the target firm strengthen our brand recognition in markets that are important to our business? Will we expose ourselves to any risks given the target’s relationships? What potential impact could relocating our operations have on our reputation?
  • Governance: What are the change-of-control, board approval and leadership structure considerations?
  • Geographic location and physical environment: Does the target firm offer locations, facilities and resources that are well-suited for expanding our business? Is there political scrutiny where the target firm is located?
  • Culture: How easily and effectively might the organizational cultures of the target firm and our firm come together? What change management is needed to integrate the cultures?
  • Costs, financing and savings: How do the total costs of this option (due diligence, purchase price, reincorporation and integration costs, moving expenses, including those related to relocating governance and operations, etc.) compare to the costs of other potential deals? What financing alternatives are available? What tax rates, credits and deductions will apply? What potential does this option offer for increasing revenue (e.g., cross-selling the expanded portfolio and reaching new markets) and decreasing costs (e.g., operating synergies achieved by combining capabilities and resources)?
  • Selection process and acceptance: What specific negotiating steps, regulatory requirements and timelines would we need to follow? What are the chances our offer will be accepted?

Another looming question is, “What will Congress do?” Lawmakers are considering legislation to make these kinds of inversion deals less attractive, hoping to encourage firms to stay in the U.S. (see the July 25, 2014 and July 18, 2014 Tax News and Views newsletters). Proposed restrictions would require foreign shareholders to own significantly more of the new entity (50 percent or more) than they are required to now (at least 20 percent). If enacted the new rule would apply for the next two years, potentially making U.S. companies targets for large foreign acquirers. The possibility of such restrictions should be another significant consideration for firms.

More than ever, gaining a competitive edge depends on enhancing – not necessarily maximizing – capabilities. Enhanced capabilities require focusing on areas in which you excel, improving in areas that are important to achieving your goals and letting go of elements that might be holding you back.

For life sciences companies specifically, enhanced capabilities might mean getting more products into their pipelines, becoming more innovative, reaching new markets and expanding portfolios in ways that meet the needs of consumers who are becoming more value-conscious. If properly prepared ahead of time, through roadmaps and frameworks, and if done for the right strategic reasons, partnering or merging with another organization may be an effective option for business growth and sustainability.

Read the entire Health Care Current here and subscribe at: www.deloitte.com/centerforhealthsolutions/subscribe.

Homi

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Source: 1 Beth Kutscher, “Tax reform fears driving Big Pharma mergers.” Modern Healthcare, July 19, 2014

Homi Kapadia, Vice Chairman, U.S. Life Sciences Leader, Deloitte LLPHomi Kapadia is the vice chairman, Deloitte LLP, and leader of its national life sciences industry practice. A principal with Deloitte Consulting LLP, Kapadia has more than 28 years of experience at Deloitte. He has an extensive client-service background advising market-leading organizations in the areas of strategy, operations, enterprise applications and supply chain management, among others

08/18/2014

Benefits and barriers: Thoughts on the use of social media in health care


RespondtoDeloitteHealth

Social media has changed the way health care organizations connect with consumers and other stakeholders. In a recent Deloitte Health Sciences Dbriefs webcast, we asked approximately 1,500 professionals for their views and opinions on the use of social media in health care.

 Below is a snapshot of their responses. For more information on this webcast or to register for upcoming webcasts, please visit: www.deloitte.com/us/dbriefs/healthsciences

DeloitteCenterforHealthSolutions_social media_dbriefs

 

 

08/14/2014

Private health insurance exchanges: Bright long-term prospects clouded by continuing uncertainty


by Greg Scott, Vice Chairman and U.S. Health Plans Leader, Deloitte Consulting LLP

Any reasonable person (as I hope I am) who lives in Pittsburgh (as I do) knows better than to let cloudy conditions today obscure the promise of sunny days ahead. So it is with Private Health Insurance Exchanges (PHIX). Their bright future should not be clouded by the high uncertainty and slow adoption we see in today’s marketplace.

My optimistic forecast is drawn from many lively discussions with Deloitte Consulting LLP’s Retail & Exchange Strategies leader, Paul Lambdin. It is based on a simple prognostication of the incentive-driven behavior of key stakeholders over the next several years.

Employer choices will shape the direction, momentum and success of the PHIX marketplace. Employer groups will increasingly find that PHIX models of various stripes are viable vehicles for achieving a range of corporate objectives. These objectives include improved employee engagement; new product offerings; increased competition for health products and services; reduced administrative hassle; greater use of sophisticated technology; a shift to defined-contribution plans; and most importantly, lower and more predictable costs. Some employers will see PHIX as an option to exit the health insurance sponsorship business altogether over the longer term.

PHIX vendors will respond to marketplace needs and opportunities with more compelling value propositions and technical solutions. Today, there is no “killer app” in the PHIX marketplace. As in many early-stage markets, we see great diversity of strategies, sponsors, investors, entrants, technology platforms, products, pricing and more. Over time, a smaller number of more successful players will capture market share and competitive positioning. For these vendors, the most significant competition over the longer term will likely be the public exchanges.

Health plans will be motivated to play both offense and defense in the PHIX marketplace. Many leading health plans are in the competitive mix today, with a variety of proprietary, partnership and third-party plays and participation. For most health plans, defining and pursuing the right PHIX strategy is challenging and involves complex segmentation and forecasting. From one angle PHIX market developments provide health plans with the opportunity to capture new market share. From another angle they represent yet another threat of disruption and disintermediation. PHIX will likely drive substantial market disruption. Most importantly, PHIX market developments will introduce, incent and empower new entrants. In some cases these new entrants are likely to act as replacements for today’s incumbents. Provider-driven alternatives, such as accountable care organizations (ACOs), are examples of full replacement options that are likely to be enabled by PHIXs. Less dramatically but quite importantly, PHIX vendors can assume certain health benefits administrative functions that are today handled by health plans, often as part of administrative services only contracts with large employers. Health plans are therefore motivated to define their PHIX strategies in order to defend their role in the health insurance value chain.

Federal and state governments will also play influential roles in shaping the PHIX future. The most consequential move that government might make would be federal repeal of the corporate tax deduction for employee health benefit costs. This move could have the greatest chilling effect on the PHIX marketplace, but requires a degree of policy, political and legislative alignment that seems highly unlikely in the foreseeable future. Less dramatically and more likely, federal and state governments could take a number of other legislative and/or regulatory measures that could complicate the development, operations and ultimately penetration of PHIXs. However, the most likely influence of government will be in the realm of public insurance exchange administration. If and when government-run exchanges reach critical mass of enrollment, operational excellence and popular acceptance, public exchanges will crowd out some significant portion of the private exchange business.

The PHIX market will continue to evolve at a measured pace as the many stakeholders work through their options to maximize value in a complex and dynamic marketplace. Certainly, the pace of PHIX activity has hastened significantly in the past year. The comparatively slow evolution of the PHIX marketplace should not cloud our vision of how impactful PHIXs will likely be across the U.S. health care system. Private health insurance exchanges may well be the most important private sector-led health insurance market development of the decade.

Read the entire Health Care Current here and subscribe at: www.deloitte.com/centerforhealthsolutions/subscribe.

  Greg Scott Signature

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Greg Scott, National Sector Leader, Health Plans, Deloitte Consulting LLPGreg Scott was recently named national sector leader of Deloitte’s Health Plans Practice. He not only has an extensive background in professional services but also as a corporate executive and policy leader given prior positions at Anthem and the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services).

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