INNOVATION IN

HEALTHCARE

A CHECK-UP

• LIVING “UNNATURALLY” LONGER

• MAJOR DISEASES ELIMINATED

• PHYSIOLOGY EXHAUSTED

THE RELEVANCE OF INNOVATION

INNOVATION DEFINES HEALTHCARE

Dr. Joseph Lister

conceived of

antiseptic technique

100 years earlier

Dr. Charles Dotter conceived of

angioplasty in 1964

Opposed to Innovation?

• Select Events from Treatment Chronology

▪ LAD/ANTERIOR MI

▪ Transported by car to hospital

▪ Treated: Oxygen Tent, Heparin

▪ Breakfast: Bacon, sausage, hotcakes

▪ Lunch: Hamburger

▪ First work visitor: 17 days

▪ Moved to chair: 28 days

▪ Climbed stairs: 42 days

• Spent last 9 months in Walter Reed w/Ischemic Cardiomyopathy

• Died: Heart Failure

WHAT IS INNOVATION?

CAN WE “SEE IT?” IS THIS INNOVATION?

• Resolve AS

• Replace open heart surgery

• Non-surgical; 1-2 day admit

• 10+ years Quality Life

• Next: Low risk, Mitral and Tricuspid

• Resolve HF

• Replace heart transplant

• MIS cardiac surgery

• 7+ years Quality Life

• Next: Completely percutaneous

TAVR LVAD

IS THIS INNOVATION?DIGITAL PLATFORM FOR TEETH GRINDING (BRUXISM)

• Neuromodulation

• Sensors, Bluetooth, haptic feedback

• Realtime data

• Disruptive technology

• Reduction of bruxism session by 7 sec. at 6 mos.

SHOULD WE PAY FOR THIS INNOVATION?

Maybe no?

Maybe yes?

LEGITIMATE CONTROVERSIES IN INNOVATION

• Robot-assisted surgery: Twice the price

• Is robotic surgery worth the cost?• Robot-Assisted Surgery Costs More

But May Not Be Better

You tell me:

• 45-70 yo male

• Prostate Cancer diagnosis

• Nerve-sparing radical prostatectomy

• “Experienced” surgeon

• Risks:• Clean Margins• Impotence• Incontinence

“No thanks, Doc, I’ve heard it’s not cost-effective”

CASE STUDY: SURGICAL ROBOTICS

Innovative?• Haptic Feedback

• Eye tracking camera motion

• Fixed Fulcrum

• 3-D imaging for all observers

• Replicate Lap Surgery

Cost Effective?• Reusable Instruments

• New Business Model

“I’d like a competitor, I’d like to use

the robot in more procedures without

a cost penalty, and I’d like more

surgeons comfortable using it”

ENABLING MEDICAL INNOVATIONWHAT’S NECESSARY, BENEFICIAL?

MaterialsBatteries

Micro

Motors

Robotics

Telecom

Digital/AI

Sensors

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MACRO DRIVERSPopulation Aging

• 60% of population has a chronic

condition

• >75 million have 3+ chronic conditions

• Between 2000-2030, 46 million more

people with CC (Spain)

• Patients with 4+ CCs use 2x resources vs.

those with fewer

• 83% of spending is on CCs

• Avg: 15 annual office visits

• Avg: 50 annual prescriptions

MACRO DRIVERSCompounding

150 2 4 6 8 10 12 14

Japan

Germany

Canada

Australia

UK

US

Annual Doctor Visits per Person

Source: World Bank

0

2000

4000

6000

8000

10000

12000

Health Care Costs per Capita (US$)

Source: Peter G. Peterson Foundation

WELL DOCUMENTED INEFFICIENCIESPoor outcomes; Underutilized system

WITH NO RELIEF IN SIGHT

0102030405060708090

100110120

1970 1990 2010 2030 2050 2070

Beneficiaries in Millions

10,000 New Medicare Beneficiaries Daily

Medical Device Spending vs. National Health Accounts Expenditures, 1989-2011

DEVICE COSTS A DRIVER?

DEVICE COSTS STABLEUS=EU=JAPAN

GROWTH IN MEDICAL DEVICE PRICING IS LOWUS CONSUMER AND SELECT MEDICAL PRICES

WHAT DO WE KNOW SO FAR?

•

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• PROBLEM OR SOLUTION?

CASE STUDY: HEART FAILURE

•

•

•

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• REPLICATE NATURE (MS+PFO)

• DUMP PRESSURE TO VENOUS “RESERVOIR”

• REDUCE LEFT ATRIAL PRESSURE

• LIVE LONGER, LOWER COST OF CARE

CASE STUDY: HEART FAILURE

• NO GOOD DRUG OR BEHAVIOR FIXES

• COST…$200BB AND 400K DEATHS PER YEAR

• DIABETES, CANCER, HEART DISEASE

• BYPASS SURGERY WORKS: <2% GET IT

CASE STUDY: OBESITY

• RESULTS MATCH SURGERY: > 50% EWL

• IMPLANTS OUT TO 3 YEARS

• NO CHANGE TO DIET/EATING HABITS

Restrict

Insulate

Mix

CASE STUDY: BYPASS WITHOUT SURGERY?

• SPINAL CORD STIMULATION

• INTERRUPT SIGNAL TRANSMISSION

• PAIN RELIEF; OPIOID AVOIDANCE

• < ½ ELIGIBLE PATIENTS OPT IN

• SURGERY, BATTERY

CASE STUDY: PAIN MANAGEMENT?

• NO BATTERY; WIRELESS ENERGY

• PLACE ANYWHERE

• MIGRAINE, NEUROPATHY,

EXTREMITIES

CASE STUDY: PAIN MANAGEMENT

BARRIERS TO INNOVATIONACHIEVING VALUE-BASED HEALTHCARE?

Cost Effectivenessduration, definitions, evidence, judgment

Payment Systemspublic/private

Fee-For-Service structureInsurance cycles and motivation

Fog of innovation

Disease prevalence

System Inertia (e.g., AMA)

PRACTICAL LIMITATIONS OF PAYMENTINNOVATION FITTING CONVENTION?

• MAC’s deliver 3,000,000 claims reviews daily

• yes or no?

• “Maze of regulations”, set into law

• Congressional approval to change

• Every new technology payment process differs

• Home health: DME

• LCDs existing structures

• New Tech add-ons

• “substantial clinical improvement”

• Public and Private systems

• Up to 10 year lag

Good Luck!

INNOVATION INNOCENT VICTIMS

• 10-year Battery Life Pacemaker

• Fewer Replacements

• Who wouldn’t prefer that?

• Balloon Sinuplasty

• Avoid FESS surgery

• Shift to office procedure

• Who wouldn’t prefer that?

Reduced Volume Changed Site

INNOVATION INNOCENT VICTIMMISALIGNED INTERESTS

LAA Closure

1/6 of all strokes linked to AFIB

$40bb conservative annual

cost

LAA implant reduces stroke

Cost Effective

Cardiology Implant “cost”

Neurology Avoidance “saving”

WHAT IF WE DELIVER

PATIENTS CHEMO-THERAPY

WITHOUT HAIR LOSS?

IS INNOVATION ALIVE?

IS INNOVATION ALIVE?

GLAUCOMA

• #1 CAUSE OF BLINDNESS

• SURGERY TO PLACE DRAINS

• WHAT IF…MAKE DRAINS WITHOUT

TOUCHING THE EYE?

IS INNOVATION ALIVE?

GLIOBLASTOMA

• USE LOW FREQUENCY ELECTROMAGNETIC

FIELD TO ALTER CELL FUNCTION AND

MIMIC DRUG AFFECT

• CELLS “SEE” THE SAME EM MESSAGE

AND MAY RESPOND THE SAME WAY

IS INNOVATION ENDANGERED? FEWER START-UPS & LOWER R&D

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Medtech R&D growth pre and post 2007

Will innovation barriers make breakthrough technologies scarce?

THIS REALLY MATTERS!

WHERE DOES THIS LEAVE US?

• INNOVATIONS ADVANCE PATIENT CARE

• DEMAND IS INCREASING RAPIDLY, BEYOND AFFORDABILITY

• DISRUPTIVE SOLUTIONS ARE NEEDED; WITH HIGH HURDLE

• DISRUPTIVE SOLUTIONS MAY NOT FIT NEATLY

• INNOVATORS AND PROVIDERS SHOULD ALIGN:

• MUTUAL UNDERSTANDING OF GOALS AND BARRIERS

• HIGHER PURPOSE AND COORDINATED EXECUTION

• SPEED THINGS ALONG, PLEASE…I’M GETTING OLDER!

EMBRACE THE IDEAL OF INNOVATION!

WHAT’S HAPPENING SYSTEMICALLY?DIGITAL INVESTMENTS ACCELERATING

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• Rise of consumerism

• Increased digitization

• Data and algorithms are

products

“In this environment, the value is in the

clinical insights and trend analysis

that devices spit out, rather than in the

med device itself.”

Donald Jones, Chief Digital Officer

Scripps Translational Science Institute

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•

•

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The new face of healthcare?

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• $10B market growing

at >16% CAGR

• 85% of sales for chronic

disease monitoring

Connected devices

• Focus: Professional care, Insured

applications

• Chronic Disease Mgt

• Dx creates Tx

• Cost Effectiveness

1

EVIDENCE?TO USE? TO FUND?

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Medtech Industry UpdateDisease density driving industry growth

• In medtech we focus on chronic disease

categories with the highest physical and financial

costs (CVD, COPD / Asthma)

• In these very large segments, digital

technologies which capture clinically relevant

data that can standardize treatment protocols

will have enormous cost saving benefits

Source: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group, Dec. 2014 at http://www.cms.hhs.gov/NationalHealthExpendData/

$2,895B$3,057B

$3,207B$3,386B

$3,579B$3,797B

$4,042B$4,307B

$4,578B

$4,862B $5,159B

$0B

$1,000B

$2,000B

$3,000B

$4,000B

$5,000B

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Health spending is projected to be nearly

20% of GDP by 2023

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Industry driversAging + Prevalence = Demand

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OECD Data. https://www.oecd.org/unitedstates/Health-at-a-Glance-2017-Key-Findings-UNITED-STATES.pdf