DR. JOSEPH SMITHCMO, West Health

The Health Care (R)Evolution: From Gifted Gadgets to Sustainable

Solutions

Joseph M. Smith, MD, PhD

Chief Medical and Chief Science Officer

West Health

But the scariest thing…

An Introduction to West Healthan independent, one-of-a-kind initiative

to lower the cost of health care

US healthcare spending is extraordinary

US healthcare outcomes are not…

US infant mortality (at just over 6/1,000 live births) ranks 49th of 222 listed countries.

US life expectancy (75.9 male, 80.9 female) rank 50th.

…..The World Fact Book (CIA)

https://www.cia.gov/library/publications/the-world-factbook

Medicare and Medicaid have grown enormously as a share of federal spending

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19711974

19771980

19831986

19891992

19951998

20012004

20072010

0%

5%

10%

15%

20%

25%

30%

35%

40%

Defense Social SecurityMedicare + Medicaid

Source: CBO, The Budget and Economic Outlook, Fiscal Years 2011 to 2012

Major Programs as a Share of Total Federal Spending1970 - 2010

Medicare and Medicaid have grown from a combined 5% of the federal budget in 1971 to 23% in 2010

This has partially necessitated a decrease in defense spending from 38% to 20%

Medicare and Medicaid were $925 B in 2010 and will rise to $1,830 B in just 10 years (2020)

A fiscal scenario or a social and financial fiasco?

Coming Fiscal Cliff

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In less than 100 days…

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Over the next 10 years…

A cliff of a different kind…

More spending does not equal more quality

Unsustainable healthcare in the news…nearly every 20 seconds

Economy and Health Care

“This year, the U.S. public debt is projected to reach 62 percent of the economy…nearly double the historical average – with larger problems looming in the future”

…Congressional Budget Office

“For the U.S., one of the most poorly positioned countries, addressing the long-term debt challenge must include prompt reform of Social Security, Medicare, and Medicaid.”

….Heritage Foundation.

“Over the next 20 years, the U.S. will experience the second highest projected increase of all the G20 countries in health care and pension spending as a share of GDP.

…International Monetary Fund

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$2.8 Trillion in Health Care Spending Plagued by Waste and Growing at Unsustainable Rate

Evidence that $765 billion of spending adds little value to health or outcomes

Chronic Disease Burden

20 million Americans have Diabetes

20 million Americans have Kidney Disease

50 million Americans have Hypertension

65 million Americans have Cardiovascular Disease

2 of 3 Americans are overweight; 1 in 5 is Obese

1 in 5 Americans over 40 will develop Heart Failure

Chronic diseases account for 96% of Medicare spending

Complications from chronic disease account for ~75% of overall US healthcare spending!

The Graying Populations

The Graying Populations

The Graying Populations

The Graying Populations

Status quo cannot be sustained

Demand for CarePhysicians

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Advances in Clinical Knowledge Improve Health but also Increase Complexity in Care

Volume of knowledge growing at a near exponential rate, straining cognitive abilities and challenging clinical decision making

Medical Journal Articles Published per Year Facts per Clinical Decision by Year

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Growing Complexity in Care Delivery Taxes Capabilities of Providers

The Imperative is the Opportunity

"We must also address the crushing cost of health care. This is a cost that now causes a bankruptcy in America every 30 seconds.”

…We’re going to make sure that Americans don’t have to choose between a health care plan that bankrupts the government and one that bankrupts families..”

“Most analysts agree that the most important factor contributing to the growth of spending for health care in recent decades has been the emergence, adoption, and widespread diffusion of new medical technologies and services.”

……Congressional Budget Office

Health Care Economy: Role of Medical Devices?

Taking Stock in Medical Device Innovation

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And then there is the medical device tax…

Vision:

Present state: Chronic diseases are episodically diagnosed and intermittently treated, consuming enormous resources driven by exacerbations, clinical decompensations, and complications.

Future state: Chronic diseases will be met with “continuous” care, improving outcomes and lowering costs by iterative course corrections, prediction and prevention of acute presentations.

Path: Near, on, or in-body sensor technology, providing actionable diagnostic information, linked to learning systems and titratable therapies, enabling continuously-tailored, feedback-controlled treatment.

Wireless Health: Reasons for optimism

Worldwide Health Care CrisisWorldwide Opportunity

“…. has an opportunity to be a leader in creating smaller medical devices to enable treatment of chronic diseases in homes instead of hospitals. You can not treat those people in a hospital. You have to treat them at home. Because of the aging population, this could be the economy that develops the devices and the protocols of how to really do home health care.“ …………Jeff Immelt, CEO, General Electric/June 1, 2010

What country was Mr. Immelt referring to?

Prototypical Device Solution

Wireless Sensors for Aging Infrastructure

If we can do it for our cars…?

Electronic Sensors Ensure Safety

• Quick-reaction crash sensors activate the front, side, and curtain airbags, and the tension on the seatbelt.• Seat occupancy detectors send a signal to prevent passenger seat front and side airbags from deploying in the event of an accident, if the seat is empty or if a special child's seat is on board.• Acceleration sensors report if the vehicle is deviating off its vertical axis and if it needs to apply the brakes to one, two or three wheels.• Outside temperature sensors send a signal when there is a risk of black ice. • Engine management system sensors provide information on exhaust gas quality, and still others diagnose the condition of the oil, or amount of oxygen delivered for combustion so that service intervals can be determined more accurately.• Height sensors detect the movements of an approaching vehicle and automatically adjust the headlamps to prevent the drivers of oncoming cars from being blinded.• Anti-pinching sensors in the windows and sliding roof stop them from closing at a pre-defined resistance level to prevent injuries, especially to children traveling in the car.• Sensors are used in conjunction with the Global Positioning System (GPS) to tell the driver where he or she is at any given moment…

Electronic Sensors Ensure Safety

Shouldn’t we do it for ourselves?

Electronic Sensing for our Human Aging Infrastructure

Convergence Pervasive Technologies

ubiquitous sensing

wirelessconnectivity

cloudcomputing

socialnetworks

Ten Targets for Wireless Medicine

Disease # Wireless Solutions

Alzheimer’s 5 M Vital signs, location, activity, balance

Asthma 23 M RR, FEV1, Air quality, oximetry, pollen count

Breast cancer 3 M Ultrasound aided self-exam

COPD 10 M RR, FEV1, air quality, oximetry

Depression/Mood Disorders

21 M Med compliance, activity, communication

Diabetes 24 M Glucose, hemoglobin A1C

Heart Failure 5 M Cardiac pressures, weight, BP, fluid status

Hypertension 74 M Continuous BP, med compliance

Obesity 80 M Smart scales, caloric in/out, activity

Sleep Disorders 40 M Sleep phases, quality, apnea, vital signs

Some anticipate that by 2014 there will be more that 400 million wireless sensors worn – more than one for each person in the US!

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What does your favorite doctor think?

In his/her training:“Facebook didn’t exist, Twitter was a sound, 4G was a parking space, Applications were what you sent to college, and Skype, for most people, was a typo”

……………Tom Friedman

Toward the goal…in Diabetes

Toward the goal…in Heart Failure

Toward the goal…in Epilepsy

Physiological Sensor Development

Even Smaller Solutions

Early stage industry with huge potentialAgainst the backdrop of an obviously unsustainable healthcare system to which we have just increased access…Increased recognition of the wireless healthcare opportunity

…that we have been talking about for 10 years…that requires risk capital to fulfill its potential…that in turn requires regulatory clarity and

timeliness …and that then requires a rational business model

Critical Success FactorsRequired elements to catalyze replacing costly collisions with the beneficial explosion of wireless healthcare

Cost reduction while preserving / enhancing outcomes

Outcome measures (clinically and economically meaningful)

Solutions as opposed to technologies (seamless integration)

Transparent, timely, & predictable regulation and reimbursement

Safe harbor / tort reform

Moving Forward…Aligning IncentivesLack of reimbursement for health care innovations such as wireless health solutions have inhibited deployment in non-integrated delivery settings.

However, innovations within integrated delivery systems show the way forward:VHA Care Coordination Home Telehealth (CCHT) program• 19% reduction in hospital readmissions and average cost of home care $1,600 compared to

up to $77k for nursing home care

Community Care North Carolina (enhanced medical home model)• Estimated savings for FY2006 were $150-$170 million relative to what the state

(Medicaid) would have spent under previous model

Geisinger (ProvenHealth Navigator medical home initiative)• Among innovations, patients communicate online with doctors and send health

monitoring info including blood glucose and blood pressure• Between 2006-2008, demonstrated 20% reduction in hospital readmissions and

18 % reduction in hospital admissions

Our FDA regulates cigarettes!

Our current healthcare system is a “burning platform”

Perfection in medical devices and medical practice is an aspiration, but an irrational expectation, and an impossible regulatory requirement.

The FDA’s handling of cigarettes offers interesting precedents/predicates for medical device regulatory approval.

We need innovation beyond the isolated “gifted gadget” to those system-wide, process, procedure, and protocol innovations that disrupt the paradigm of health care delivery.

One Perspective

Lessons from History:

In 1898, delegates from across the globe gathered in New York City for the world's first international urban planning conference. One topic dominated the discussion. It was not housing, land use, economic development, or infrastructure. The delegates were driven to desperation by horse manure.

The situation seemed dire. In 1894, the Times of London estimated that by 1950 every street in the city would be buried nine feet deep in horse manure. One New York prognosticator of the 1890s concluded that by 1930 the horse droppings would rise to Manhattan's third-story windows.

An earlier lesson…

Thomas Malthus An Essay on the Principle of Population

1798

“It is an obvious truth, which has been taken notice of by many writers, that population must

always be kept down to the level of the means of subsistence…”

Photography had filmTelephones had wiresComputers took up spaceDoctors and Hospitals were the high priests and cathedrals of health care

Are we building gateways to the future of healthcare or icons of the pinnacle of a flawed delivery system?

Hubris and syphrosyne.

Chronos vs Kairos

It’s time (kairos) to deliver…Persistent economic crisis,Threateningly unfavorable demographics,Unsustainable healthcare delivery model, withUnprecedented increased access.

Ubiquitous wireless communicationEmerging pluripotential sensor technologyProven benefits of medical device technologyCost-savings of infrastructure-independent careSocietal trends for personal technology, personalized medicine, technology-enabled social networking

Irresistible opportunity for a revolutionary change in the way we care for patients and view and treat disease.