Why you should (virtually) care
As the pandemic turns endemic, healthcare providers have been eagerly urging patients to return to their offices to enjoy the benefits of in-person care.
But wait.
The last two years have forced all sorts of organizations to be nimble, adaptable and creative in how they work, and this includes healthcare providers’ efforts to maintain continuity of care under the most challenging of conditions. So before we go back to “business as usual,” don’t we owe it to those providers and ourselves to admit that business as usual did not work for most of the people the industry exists to help? If we’re going to embrace yet another period of change – periods that don’t happen often in our complex industry – shouldn’t we first stop and ask ourselves what we’re trying to achieve?
Certainly, COVID has shown that telehealth can be an invaluable tool, particularly for patients in rural and underserved communities that lack access to specialty care. It’s also become clear that many – though not all – healthcare encounters can be effectively conducted from afar. That said, the telehealth tactics that filled the gap during the pandemic were largely stitched together substitutes for existing visit-based workflows: with offices closed, patients scheduled video visits for help managing the side effects of their blood pressure medications or to see their endocrinologist for a quarterly check-in. Anyone whose children slogged through the last year or two of remote learning can tell you that simply virtualizing existing processes doesn’t necessarily improve the experience or the outcomes!
But what if our approach to post-pandemic healthcare came from a patient-driven perspective? We have a fleeting opportunity to advance a care model centered on convenient and equitable access that first prioritizes good outcomes, then selects approaches to care – and locations – tailored to each patient. Using the example of education, imagine how effective it would be if each student, regardless of their school district and aptitude, received such individualized attention.
That’s the idea behind virtual-first care (V1C), a new care model centered on convenient, customized, high-quality care that integrates a full suite of services tailored directly to patients’ clinical needs and preferences. This package includes asynchronous communication such as texting; video and other live virtual modes; and in-person options.
V1C goes beyond what you might think of as standard “telehealth” by using evidence-based protocols and tools that include traditional and digital therapeutics and testing, personalized care plans, dynamic patient monitoring, and team-based approaches to care. This could include spit kits mailed for laboratory tests and complementing clinical care with health coaching. V1C also replaces some in-person exams with ongoing monitoring, using sensors for more ‘whole person’ care.
Amidst all this momentum, we have the opportunity to rethink the goals of healthcare innovation, but that means bringing together key stakeholders to demonstrate that sustainable V1C can redefine healthcare.
Established V1C healthcare providers such as Omada, Headspace, and Heartbeat Health, as well as emerging market entrants like Oshi, Visana, and Wellinks, work with a variety of patients who have complicated long-term conditions such as diabetes, heart failure, gastrointestinal illness, endometriosis, and COPD. V1C is comprehensive in ways that are lacking in digital health and its other predecessors: it has the potential to integrate multiple data streams, incorporate more frequent touches and check-ins over time, and manage a much wider range of chronic health conditions, improving lives and reducing disease burden now and in the future.
Recognizing the pandemic-driven interest in virtual care, significant energy and resources are already flowing fast toward V1C. Some of the world’s largest innovators jumped into V1C early on: Verily, Alphabet’s Life Sciences Company, launched Onduo in 2016 to disrupt the diabetes healthcare market, and is now well positioned to scale its solutions. Major insurers like Aetna and United now offer virtual-first plans to members, responding as organizations expand virtual options for employees. Amidst all this momentum, we have the opportunity to rethink the goals of healthcare innovation, but that means bringing together key stakeholders to demonstrate that sustainable V1C can redefine healthcare.
That was the immediate impetus for IMPACT, a consortium of V1C companies, investors, payers and patients founded last year to ensure access to high-quality, evidence-based V1C. Developed by our team at the Digital Medicine Society (DiMe) in collaboration with the American Telemedicine Association (ATA), IMPACT has begun to explore key issues that include giving patients more integrated experiences when accessing both virtual and brick-and-mortar care.
Digital Medicine Society
V1C is not, nor should it be, virtual-only care. In this new era of hybrid healthcare, success will be defined by how well providers help patients navigate the transitions. How do we smoothly hand a patient off from an onsite primary care physician to, say, a virtual cardiologist? How do we get information from a brick-and-mortar to a digital portal? How do you manage dataflow while still staying HIPAA compliant? There are many complex regulatory implications for these new models, as well as an evolving landscape in terms of privacy, security and interoperability. It will be no small task for groups like IMPACT to determine the best path forward.
None of these factors matter unless the industry can recruit and retain clinicians. Our field is facing an unprecedented workforce crisis. Traditional healthcare is making clinicians miserable, and COVID has only accelerated the trend of overworked, disenchanted healthcare workers leaving in droves. Clinicians want more interactions with patients, and fewer with computer screens – call it “More face time, less FaceTime.” No new model will succeed unless the industry can more efficiently deploy its talent – arguably its most scarce and precious resource. V1C can help with alleviating the increasing burden and frustration borne by individual physicians in today’s status quo.
In healthcare, new technological approaches inevitably provoke no shortage of skepticism. Past lessons from Silicon Valley-driven fixes have led to understandable cynicism. But V1C is a different breed of animal. By building healthcare around the patient, not the clinic, V1C can make healthcare work better for patients, payers and providers. We’re at a fork in the road: we can revert back to a broken sick-care system, or dig in and do the hard work of figuring out how this future-forward healthcare system gets financed, organized and executed. As a field, we must find the courage and summon the energy to embrace this moment, and make it a moment of change.
Breakthrough therapies are breaking patients' banks. Key changes could improve access, experts say.
CSL Behring’s new gene therapy for hemophilia, Hemgenix, costs $3.5 million for one treatment, but helps the body create substances that allow blood to clot. It appears to be a cure, eliminating the need for other treatments for many years at least.
Likewise, Novartis’s Kymriah mobilizes the body’s immune system to fight B-cell lymphoma, but at a cost $475,000. For patients who respond, it seems to offer years of life without the cancer progressing.
These single-treatment therapies are at the forefront of a new, bold era of medicine. Unfortunately, they also come with new, bold prices that leave insurers and patients wondering whether they can afford treatment and, if they can, whether the high costs are worthwhile.
“Most pharmaceutical leaders are there to improve and save people’s lives,” says Jeremy Levin, chairman and CEO of Ovid Therapeutics, and immediate past chairman of the Biotechnology Innovation Organization. If the therapeutics they develop are too expensive for payers to authorize, patients aren’t helped.
“The right to receive care and the right of pharmaceuticals developers to profit should never be at odds,” Levin stresses. And yet, sometimes they are.
Leigh Turner, executive director of the bioethics program, University of California, Irvine, notes this same tension between drug developers that are “seeking to maximize profits by charging as much as the market will bear for cell and gene therapy products and other medical interventions, and payers trying to control costs while also attempting to provide access to medical products with promising safety and efficacy profiles.”
Why Payers Balk
Health insurers can become skittish around extremely high prices, yet these therapies often accompany significant overall savings. For perspective, the estimated annual treatment cost for hemophilia exceeds $300,000. With Hemgenix, payers would break even after about 12 years.
But, in 12 years, will the patient still have that insurer? Therein lies the rub. U.S. payers, are used to a “pay-as-you-go” model, in which the lifetime costs of therapies typically are shared by multiple payers over many years, as patients change jobs. Single treatment therapeutics eliminate that cost-sharing ability.
"As long as formularies are based on profits to middlemen…Americans’ healthcare costs will continue to skyrocket,” says Patricia Goldsmith, the CEO of CancerCare.
“There is a phenomenally complex, bureaucratic reimbursement system that has grown, layer upon layer, during several decades,” Levin says. As medicine has innovated, payment systems haven’t kept up.
Therefore, biopharma companies begin working with insurance companies and their pharmacy benefit managers (PBMs), which act on an insurer’s behalf to decide which drugs to cover and by how much, early in the drug approval process. Their goal is to make sophisticated new drugs available while still earning a return on their investment.
New Payment Models
Pay-for-performance is one increasingly popular strategy, Turner says. “These models typically link payments to evidence generation and clinically significant outcomes.”
A biotech company called bluebird bio, for example, offers value-based pricing for Zynteglo, a $2.8 million possible cure for the rare blood disorder known as beta thalassaemia. It generally eliminates patients’ need for blood transfusions. The company is so sure it works that it will refund 80 percent of the cost of the therapy if patients need blood transfusions related to that condition within five years of being treated with Zynteglo.
In his February 2023 State of the Union speech, President Biden proposed three pilot programs to reduce drug costs. One of them, the Cell and Gene Therapy Access Model calls on the federal Centers for Medicare & Medicaid Services to establish outcomes-based agreements with manufacturers for certain cell and gene therapies.
A mortgage-style payment system is another, albeit rare, approach. Amortized payments spread the cost of treatments over decades, and let people change employers without losing their healthcare benefits.
Only about 14 percent of all drugs that enter clinical trials are approved by the FDA. Pharma companies, therefore, have an exigent need to earn a profit.
The new payment models that are being discussed aren’t solutions to high prices, says Bill Kramer, senior advisor for health policy at Purchaser Business Group on Health (PBGH), a nonprofit that seeks to lower health care costs. He points out that innovative pricing models, although well-intended, may distract from the real problem of high prices. They are attempts to “soften the blow. The best thing would be to charge a reasonable price to begin with,” he says.
Instead, he proposes making better use of research on cost and clinical effectiveness. The Institute for Clinical and Economic Review (ICER) conducts such research in the U.S., determining whether the benefits of specific drugs justify their proposed prices. ICER is an independent non-profit research institute. Its reports typically assess the degrees of improvement new therapies offer and suggest prices that would reflect that. “Publicizing that data is very important,” Kramer says. “Their results aren’t used to the extent they could and should be.” Pharmaceutical companies tend to price their therapies higher than ICER’s recommendations.
Drug Development Costs Soar
Drug developers have long pointed to the onerous costs of drug development as a reason for high prices.
A 2020 study found the average cost to bring a drug to market exceeded $1.1 billion, while other studies have estimated overall costs as high as $2.6 billion. The development timeframe is about 10 years. That’s because modern therapeutics target precise mechanisms to create better outcomes, but also have high failure rates. Only about 14 percent of all drugs that enter clinical trials are approved by the FDA. Pharma companies, therefore, have an exigent need to earn a profit.
Skewed Incentives Increase Costs
Pricing isn’t solely at the discretion of pharma companies, though. “What patients end up paying has much more to do with their PBMs than the actual price of the drug,” Patricia Goldsmith, CEO, CancerCare, says. Transparency is vital.
PBMs control patients’ access to therapies at three levels, through price negotiations, pricing tiers and pharmacy management.
When negotiating with drug manufacturers, Goldsmith says, “PBMs exchange a preferred spot on a formulary (the insurer’s or healthcare provider’s list of acceptable drugs) for cash-base rebates.” Unfortunately, 25 percent of the time, those rebates are not passed to insurers, according to the PBGH report.
Then, PBMs use pricing tiers to steer patients and physicians to certain drugs. For example, Kramer says, “Sometimes PBMs put a high-cost brand name drug in a preferred tier and a lower-cost competitor in a less preferred, higher-cost tier.” As the PBGH report elaborates, “(PBMs) are incentivized to include the highest-priced drugs…since both manufacturing rebates, as well as the administrative fees they charge…are calculated as a percentage of the drug’s price.
Finally, by steering patients to certain pharmacies, PBMs coordinate patients’ access to treatments, control patients’ out-of-pocket costs and receive management fees from the pharmacies.
Therefore, Goldsmith says, “As long as formularies are based on profits to middlemen…Americans’ healthcare costs will continue to skyrocket.”
Transparency into drug pricing will help curb costs, as will new payment strategies. What will make the most impact, however, may well be the development of a new reimbursement system designed to handle dramatic, breakthrough drugs. As Kramer says, “We need a better system to identify drugs that offer dramatic improvements in clinical care.”
Each afternoon, kids walk through my neighborhood, on their way back home from school, and almost all of them are walking alone, staring down at their phones. It's a troubling site. This daily parade of the zombie children just can’t bode well for the future.
That’s one reason I felt like Gaia Bernstein’s new book was talking directly to me. A law professor at Seton Hall, Gaia makes a strong argument that people are so addicted to tech at this point, we need some big, system level changes to social media platforms and other addictive technologies, instead of just blaming the individual and expecting them to fix these issues.
Gaia’s book is called Unwired: Gaining Control Over Addictive Technologies. It’s fascinating and I had a chance to talk with her about it for today’s podcast. At its heart, our conversation is really about how and whether we can maintain control over our thoughts and actions, even when some powerful forces are pushing in the other direction.
Listen on Apple | Listen on Spotify | Listen on Stitcher | Listen on Amazon | Listen on Google
We discuss the idea that, in certain situations, maybe it's not reasonable to expect that we’ll be able to enjoy personal freedom and autonomy. We also talk about how to be a good parent when it sometimes seems like our kids prefer to be raised by their iPads; so-called educational video games that actually don’t have anything to do with education; the root causes of tech addictions for people of all ages; and what kinds of changes we should be supporting.
Gaia is Seton’s Hall’s Technology, Privacy and Policy Professor of Law, as well as Co-Director of the Institute for Privacy Protection, and Co-Director of the Gibbons Institute of Law Science and Technology. She’s the founding director of the Institute for Privacy Protection. She created and spearheaded the Institute’s nationally recognized Outreach Program, which educated parents and students about technology overuse and privacy.
Professor Bernstein's scholarship has been published in leading law reviews including the law reviews of Vanderbilt, Boston College, Boston University, and U.C. Davis. Her work has been selected to the Stanford-Yale Junior Faculty Forum and received extensive media coverage. Gaia joined Seton Hall's faculty in 2004. Before that, she was a fellow at the Engelberg Center of Innovation Law & Policy and at the Information Law Institute of the New York University School of Law. She holds a J.S.D. from the New York University School of Law, an LL.M. from Harvard Law School, and a J.D. from Boston University.
Gaia’s work on this topic is groundbreaking I hope you’ll listen to the conversation and then consider pre-ordering her new book. It comes out on March 28.