Jul 25, 2018 | Digital Pathology, Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Management & Operations
While Apple recently debuted features to bring personal health records and protected health information to its mobile devices, Microsoft shuttered HealthVault in favor of focusing on AI-powered healthcare advances
As clinical laboratories and anatomic pathology groups know, lab testing data comprise more than 70% of the average patient’s health record. Thus, creating a universal platform on which consumers can share or review health information and medical histories with caregivers is a critical, yet elusive goal for most major tech companies, including tech giants Apple (Nasdaq:AAPL) and Microsoft (Nasdaq:MSFT).
Apple has big plans for patient health records and is working to bring protected health information (PHI) and healthcare advice to iPhones, iPads, and Apple Watch. Meanwhile, Microsoft is reducing its footprint in the mobile device healthcare market. Instead, it appears to be banking on its Artificial Intelligence (AI) platform. How these two diverging paths play out could have ramifications for the pathology and clinical laboratory industries.
HealthVault Insights versus AI versus Apple Health Mobile Apps
Launched in February 2017, Microsoft’s HealthVault Insights combined machine learning and AI with patients’ PHI and mobile activity tracking. The intent was to create an accessible, interactive platform for patients to monitor important health trends.
However, as of January 2018, Microsoft pulled the mobile app from Android, iOS, and Windows App stores. While summary information that draws on previously collected data is still available from the HealthVault website, new data and detailed insights are no longer available.
“We launched HealthVault Insights as a research project … with the goal of helping patients generate new insights about their health,” states Microsoft’s HealthVault Insights website. “Since then, we’ve learned a lot about how machine learning can be used to increase patient engagement and are now applying that knowledge to other projects.”
According to ZDNet, the closing of HealthVault Insights does not impact the Microsoft Health platform or the HealthVault patient-records system.
However, Microsoft’s shuttering of HealthVault Insights, and Google’s shuttering its Google Health platform in 2012, does seem to make Apple the last major tech company developing apps target at healthcare consumers designed to help them exchange private health information with caregivers through mobile devices. Dark Daily reported on Apple’s update earlier this year. (See, “Apple’s Update of Its Mobile Health App Consolidates Data from Multiple EHRs and Makes It Easier to Push Clinical Laboratory Data to Patients,” March 21, 2018.)
AI Will ‘Dramatically Transform Healthcare’
Shuttering HealthVault highlighted Microsoft’s shift away from consumer-facing health efforts and toward assisting medical laboratories, physicians, and research groups discover and implement treatments driving modern personalized medicine.
In a Microsoft blog post, Peter Lee, Corporate VP of Microsoft Healthcare, stated that Microsoft hopes its Healthcare NeXT platform will “dramatically transform healthcare, will deeply integrate Greenfield research and health technology product development, as well as establish a new model at Microsoft for strategic health industry partnerships.”
HealthVault Insights was one of several projects in Microsoft’s Healthcare NeXT initiative. Run by Microsoft’s AI and Research Group and partnering with major healthcare and research facilities across the country, other projects in the Healthcare NeXT initiative include:
Speaking with Business Insider, Lee noted that healthcare is becoming a “very large business” for Microsoft. “We don’t talk publicly about the dollars, but it’s large,” he concluded.
Microsoft’s EmpowerMD website states the eventual goal is to use the system to connect conversations with the growing trove of healthcare data available. “Our long-term vision is a learning system that incorporates data from longitudinal medical records, medical devices, genomics, population health, research papers, and more.”
AI a ‘Sleeping Giant for Healthcare’
“AI can be viewed as a sleeping giant for healthcare,” Eric Horvitz, PhD, Director of Microsoft Research Labs, told Nasdaq, when discussing Microsoft’s view of technology and healthcare. “AI methods show promise for multiple roles in healthcare. [This includes] inferring and alerting about hidden risks of potential adverse outcomes, selectively guiding attention, care, and interventional programs where [they are] most needed and reducing errors in hospitals.”
One such project involves a strategic partnership with the University of Pittsburg Medical Center (UPMC), which is a “$13-billion Pittsburgh-based system, comprising more than 25 hospitals, a three-million-member health plan, and 3,600 physicians, [that] will be a core partner in our efforts to improve healthcare delivery through a series of projects, beginning with a focus on transforming clinician empowerment and productivity,” according to Microsoft.
“Despite UPMC’s efforts to stay on the leading edge of technology, too often our clinicians and patients feel as though they’re serving the technology rather than the other way around. With Microsoft, we have a shared vision of empowering clinicians by reducing the burden of electronic paperwork and allowing the doctor to focus on the sacred doctor-patient relationship,” Steven D. Shapiro, MD (above), Chief Medical and Scientific Officer of UPMC and President of UPMC’s Health Services division, stated in the Microsoft blog. [Photo copyright: University of Pittsburg Medical Center.]
Medical laboratories and anatomic pathology groups may soon contribute health information to databases that one day will power AI systems. These trends highlight opportunities to both educate physicians on the tools available to utilize patient health data in an effective manner, and on new platforms that clinical laboratories could use to further streamline operations, reduce costs, and boost efficiency.
—Jon Stone
Related Information:
How Microsoft Is Using Advanced Technology in Healthcare
Microsoft Scrapping Personal Health Data App-Based Research Project
An Update on HealthVault Insights
How Microsoft’s Top Scientists Have Built a Big Business in Hacking Healthcare and Helped a Lot of People Along the Way
Microsoft Abandons Its Own HealthVault App: Is This Part of Something Larger?
Here’s How Microsoft Is Investing in AI
Microsoft Rolls Out More AI-Infused Healthcare Services, Software
Microsoft and Partners Combine the Cloud, AI, Research and Industry Expertise to Focus on Transforming Health Care
In Healthcare Push, Microsoft Launches Genomics Service on Azure Cloud
Apple’s Update of Its Mobile Health App Consolidates Data from Multiple EHRs and Makes It Easier to Push Clinical Laboratory Data to Patients
Jul 20, 2018 | Digital Pathology, Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing
Should greater attention be given to protein damage in chronic diseases such as Alzheimer’s and diabetes? One life scientist says “yes” and suggests changing how test developers view the cause of age-related and degenerative diseases
DNA and the human genome get plenty of media attention and are considered by many to be unlocking the secrets to health and long life. However, as clinical laboratory professionals know, DNA is just one component of the very complex organism that is a human being.
In fact, DNA, RNA, and proteins are all valid biomarkers for medical laboratory tests and, according to one life scientist, all three should get equal attention as to their role in curing disease and keeping people healthy.
Along with proteins and RNA, DNA is actually an “equal partner in the circle of life,” wrote David Grainger, PhD, CEO of Methuselah Health, in a Forbes opinion piece about what he calls the “cult of DNA-centricity” and its relative limitations.
Effects of Protein Damage
“Aging and age-related degenerative diseases are caused by protein damage rather than by DNA damage,” explained Grainger, a Life Scientist who studies the role proteins play in aging and disease. “DNA, like data, cannot by itself do anything. The data on your computer is powerless without apps to interpret it, screens and speakers to communicate it, keyboards and touchscreens to interact with it.”
“Similarly,” he continued, “the DNA sequence information (although it resides in a physical object—the DNA molecule—just as computer data resides on a hard disk) is powerless and ethereal until it is translated into proteins that can perform functions,” he points out.
According to Grainger, diseases such as cystic fibrosis and Duchenne Muscular Dystrophy may be associated with genetic mutation. However, other diseases take a different course and are more likely to develop due to protein damage, which he contends may strengthen in time, causing changes in cells or tissues and, eventually, age-related diseases.
“Alzheimer’s disease, diabetes, or autoimmunity often take decades to develop (even though your genome sequence has been the same since the day you were conceived); the insidious accumulation of the damaged protein may be very slow indeed,” he penned.
“But so strong is the cult of DNA-centricity that most scientists seem unwilling to challenge the fundamental assumption that the cause of late-onset diseases must lie somewhere in the genome,” Grainger concludes.
Shifting Focus from Genetics to Proteins
Besides being CEO of Methuselah Health, Grainger also is Co-Founder and Chief Scientific Advisor at Medicxi, a life sciences investment firm that backed Methuselah Health with $5 million in venture capital funding for research into disease treatments that focus on proteins in aging, reported Fierce CEO.
Methuselah Health, founded in 2015 in Cambridge, UK, with offices in the US, is reportedly using post-translational modifications for analysis of many different proteins.
“At Methuselah Health, we have shifted focus from the genetics—which tells you in an ideal world how your body would function—to the now: this is how your body functions now and this is what is going wrong with it. And that answer lies in the proteins,” stated Dr. David Grainger (above), CEO of Methuselah Health, in an interview with the UK’s New NHS Alliance. Click on this link to watch the full interview. [Photo and caption copyright: New NHS Alliance.]
This is how Methuselah Health analyzes damaged proteins using mass spectrometry, according to David Mosedale, PhD, Methuselah Health’s Chief Technology Officer, in the New NHS Alliance story:
- Protein samples from healthy individuals and people with diseases are used;
- Proteins from the samples are sliced into protein blocks and fed slowly into a mass spectrometer, which accurately weighs them;
- Scientists observe damage to individual blocks of proteins;
- Taking those blocks, proteins are reconstructed to ascertain which proteins have been damaged;
- Information is leveraged for discovery of drugs to target diseases.
Mass spectrometry is a powerful approach to protein sample identification, according to News-Medical.Net. It enables analysis of protein specificity and background contaminants. Interactions among proteins—with RNA or DNA—also are possible with mass spectrometry.
Methuselah Health’s scientists are particularly interested in the damaged proteins that have been around a while, which they call hyper-stable danger variants (HSDVs) and consider to be the foundation for development of age-related diseases, Grainger told WuXi AppTec.
“By applying the Methuselah platform, we can see the HSDVs and so understand which pathways we need to target to prevent disease,” he explained.
For clinical laboratories, pathologists, and their patients, work by Methuselah Health could accelerate the development of personalized medicine treatments for debilitating chronic diseases. Furthermore, it may compel more people to think of DNA as one of several components interacting that make up human bodies and not as the only game in diagnostics.
—Donna Marie Pocius
Related Information:
The Cult of DNA-Centricity
Methuselah Health CEO David Grainger Out to Aid Longevity
VIDEO: Methuselah Health, Addressing Diseases Associated with Aging
Understanding and Slowing the Human Aging Clock Via Protein Stability
Using Mass Spectrometry for Protein Complex Analysis
Jul 13, 2018 | Digital Pathology, Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Management & Operations, News From Dark Daily
Popularity of the pocket-sized gene-sequencing device continues to prove that DNA testing away from clinical laboratories in remote clinics and outlying field laboratories is not just possible, but in some cases preferable
Once again, Oxford Nanopore Technologies (ONT) is demonstrating how next-generation gene sequencing technology can make it cheaper, simpler, and faster to sequence without the need for big clinical laboratories. And its successful raising of $180 million to expand development worldwide shows the support it has with capital funding investors.
Dark Daily has repeatedly reported on the development of the UK-based company’s point-of-care DNA sequencer going back to 2011. Called MinION, we predicted in 2015, that once brought to market, the pocket-sized gene sequencing machine “could help achieve the NIH’s goal of $1,000 human genome sequencing and, in remote clinics and outbreak zones, shift testing away from medical laboratories.” (See Dark Daily, “Point-of-Care DNA Sequencer Inching Closer to Widespread Use as Beta-Testers Praise Oxford Technologies’ Pocketsize, Portable Nanopore Device,” November 4, 2015.)
Since then, MinION’s use worldwide “for a number of biological analysis techniques including de novo sequencing, targeted sequencing, metagenomics, epigenetics, and more” has only expanded, according to multiple sources and ONT’s website.
How Does MinION Work as a Gene Sequencer?
The MinION nanopore sequencing device weighs about 100 grams (less than four ounces), is about the size of a standard deck of cards, operates off a laptop USB plug, and can sequence genetic material in a matter of minutes.
To perform the nanopore sequencing, a strand of deoxyribonucleic acid (DNA) or ribonucleic acid (RNA) is pushed through small pores in a membrane. An ionic current is then applied to the material and voltage is implemented to measure any disruptions in the current. The resulting measurement represents an electrical signal that is converted to human-readable sequence.
“It’s like the ultimate barcode,” Gordon Sanghera, PhD, Chief Executive Officer at Oxford Nanopore, told BBC News.
Oxford Nanopore Technologies’ diminutive MinION gene-sequencing device has the capacity to directly recognize epigenetic markers that control gene activity and cellular processes involved in the onset and development of disease. Early detection of cancers, testing for birth defects and infectious diseases, and blood screening are possible future clinical laboratory applications for the MinION. Click on this link to watch video on MinION. (Photo copyright: Oxford Nanopore Technologies.)
Why is MinION Important?
One advantage to this technology is that it has the ability to sequence much longer strands of DNA when compared to existing technologies. The MinION can sequence over a million letters or bases, around 2% of a DNA strand or chromosome with 96% or above accuracy. The device can read remarkably long stretches of consecutive DNA letters. Readouts of several thousand letters are common and the record for the MinION is 882,000 consecutive DNA letters, Technology Review noted.
“One of the most important findings of this research was that, even though the human genome reference was completed or thought to have been completed a while ago, it still contains many missing pieces and we were able to close some of those gaps in the sequence by developing a new method for developing these extremely long reads using nanopore sequencing,” Nick Loman, PhD, Professor of Microbial Genomics and Bioinformatics at the School of Biosciences at the University of Birmingham, UK, told Pharmaphorum. Loman worked on research with Oxford Nanopore on nanopore sequencing.
“We’ve gone from a situation where you can only do genome sequencing for a huge amount of money in well-equipped labs to one where we can have genome sequencing literally in your pocket just like a mobile phone,” Loman told BBC News. “That gives us a really exciting opportunity to start having genome sequencing as a routine tool, perhaps something people can do in their own home.”
Using MinION in the Field
According to the Oxford Nanopore website, the MinION:
- Is pocket-sized and portable;
- Has up to 512 nanopore channels;
- Has a simple 10-minute sample preparation time;
- Allows real-time analysis for rapid and efficient results; and,
- Is adaptable to direct DNA or RNA sequencing.
The MinION Starter Pack is available for purchase on the company’s website with prices starting at $1,000. The kit includes:
- The MinION device;
- Flow cells;
- Sequencing kits;
- Wash kits; and,
- MinION community support.
Researchers at The Kinghorn Center for Clinical Genomics at the Garvan Institute of Medical Research in Darlinghurst, Australia, are currently using the MinION for research purposes.
Members of the Zebra Project (above), an international group of scientists, used Oxford Nanopore Technologies’ MinION to sequence genomes during epidemics in Latin America. With just a laptop computer for power, MinION can run complex gene-sequencing and achieve superior results than other similar technologies. It is in use worldwide bringing clinical laboratory testing to patients in remote, outlying locations. (Photo copyright: Ricardo Funari.)
“I think it’s really expanding the arsenal of tools we have to peer into cell biology and the root causes of cancer and various diseases,” Dr. Martin Smith, Head of Genomic Technologies at the center, told Australian Financial Review. “It’s really just starting to open the lid off the jar and peer more deeply into the genomics of the cell.”
Dr. Sanghera hopes the gadget could be utilized in the future to identify common infections at home and help consumers avoid unnecessary trips to doctors, clinics, and hospitals, and avert the misuse and overuse of prescription medications. He also feels MinION has applications outside the healthcare industry, such as detecting the presence of harmful microbes in food and water supplies.
As gadgets like MinION become more popular, the potential to move DNA sequencing closer to the patient (and out of the core lab) has implications for clinical laboratories and anatomic pathology groups. However, core labs would still be a preferred source to collect the raw data, store that data, then do the annotation of the DNA sequences and report the findings to the referring physician.
—JP Schlingman
Related Information:
How Knowing Your Genetic Code Could Lengthen Your Life
Genome in the Palm of Your Hand
Molecular Machines and the Place of Physics in the Biology Curriculum
Oxford Nanopore’s Hand-Held DNA Analyzer Has Traveled the World
Hostplus Sinks $27m Into Hand-held DNA Sequencing Firm Oxford Nanopore
GIC, Others Invest £100m In Hand-held DNA Sequencing firm Oxford Nanopore
Handheld Device Sequences Human Genome
Breakthrough Leads to Sequencing of a Human Genome Using a Pocket-sized Device
Oxford Nanopore’s Tech Reaches Genome Sequencing Landmark
Point-of-Care DNA Sequencer Inching Closer to Widespread Use as Beta-Testers Praise Oxford Technologies’ Pocketsize, Portable Nanopore Device
$900 Point-of-Care DNA Nanopore Sequencer May Hit Market in Next 12 Months
Is Whole-genome Sequencing Reaching a Tipping Point for Clinical Pathology Laboratories?
Jul 9, 2018 | Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Testing, News From Dark Daily
Could biometrics increase security and safety of clinical laboratory patient identification and specimen tracking processes as well?
Positive patient identification is a common problem for all healthcare providers, including medical laboratories. That is why there is strong interest in developing technologies that use biometric data to identify patients. The challenge has been to find a biometric solution that has acceptable accuracy and can make the positive identification in a speedy fashion, particularly when the patient presents for service or to provide a clinical laboratory specimen.
One Canadian company believes it has a biometrics-based solution almost ready to bring to market. AceAge, Inc., a Canadian healthcare technology company, recently added facial recognition software to their Karie at-home medication dispensing appliance, according to Biometric Update. The Ver-ID facial recognition authentication application they chose was developed by Ontario-based Applied Recognition, Inc.
Karie (above right) is designed to help patients accurately schedule, monitor, and take their medications. The companion facial recognition software—one of several security features—will enable homebound individuals who use mobile devices or the Internet to electronically sign-in and notify caregivers that medication was taken as ordered, an AceAge news release noted. “Now, our end users can dispense their prescriptions at a glance and without worry that, for example, a child might inadvertently get access. This will help bring security to medication in people’s homes,” Spencer Waugh, AceAge’s CEO (above), stated in the news release. (Image copyright: AceAge.)
The new Karie automated solution, is expected to launch later this year. Developers anticipate that the facial recognition feature also could be of value to researchers in late-stage clinical trials, where documentation of medication adherence is critical.
How Does Facial Recognition Software Work?
According to Applied Recognition, Ver-ID uses an algorithm that is more than 99% accurate in detecting and recognizing faces. Here’s how it works:
- A patient registers his or her face using the camera on a mobile device or camera-enabled computer;
- The patented Ver-ID algorithm matches 75 points and creates a “facial print” or “signature,” capturing unique features;
- Then, as the person uses their mobile device or computer, the facial signature is authenticated against the registered signature to control access to the app or device.
AceAge’s Karie device would authenticate the patient’s facial image against a stored facial signature in the same manner.
Fingerprint Readers Give People Identity, Care Access in Africa
Danny Thakkar, co-founder of Bayometric of San Jose, Calif., a global provider of fingerprint scanners and biometric software, says biometrics improves patient identification and is faster and more reliable than manual identification of patient records in a master patient index.
“The process of patient enrollment and admission becomes fast and hassle-free as a simple biometric scan is all it takes to identify and admit a patient,” Thakkar noted in a blog post.
In fact, biometrics technology has made it possible for residents of developing countries, without driver licenses or credit cards, to secure identity and access to healthcare services, according CNN.
COHESU, a Kenyan community health charity, is reportedly working with Simprints, a nonprofit technology company in the UK that makes fingerprint scanners for mobile platforms and charities worldwide, to implement biometrics for patient identification.
After having their fingerprints registered by the Simprints biometric scanner, Kenyan patients receive a unique identifier that can be matched to their healthcare records. Caregivers use mobile apps to access their patients’ health records and review or update them, CNN reported.
“Biometrics as a technology has completely changed our way of thinking. Without it, they would probably stay at home and accept their fate,” Nicholas Mwaura, a systems and database administrator with COHESU told CNN.
Hospitals Have Outdated Patient ID Methods, Says HealthsystemCIO Survey
Meanwhile, 42% of hospital CIOs acknowledged in an Imprivata/HealthsystemCIO.com survey that patient matching is a top priority at their organizations, according to a news release. Another 24% of CIOs surveyed said patient matching is not a priority, but it should be.
“Many hospitals still rely on methods that do not guarantee accurate patient identification, such as a person’s date of birth or a health insurance card. By implementing a registration solution—such as biometric identification technology—that accurately identifies patients and matches them with their correct EMPI (enterprise master patient index) and EHR (electronic health record) records, hospitals can reduce the very real risks highlighted in this survey,” Sean Kelly, MD, Imprivata’s Chief Medical Officer, told EHR Intelligence.
Clinical laboratory leaders already use processes and software to identify patients and match them with records and specimens. In the near future, biometric facial recognition might provide additional patient identification, safety, and medical laboratory security.
—Donna Marie Pocius
Related Information:
Medication Delivery Device Maker Adds Ver-ID for Biometric Patient Verification
AceAge Selects Applied Recognition to Provide Face Recognition Technology for Biometric Identity Authentication
Biometrics for Accurate Patient Identification
How Biometrics is Giving Identities to ‘Invisible Citizens’
Mismatched Patient Records: An Under-Recognized and Growing Problem at Most Hospitals, Imprivata CIO Survey Finds
42% of Healthcare CIOs List Patient Matching Issues a Top Priority
Jul 2, 2018 | Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Management & Operations, News From Dark Daily
Growing interest in more transparency for the prices of prescription drugs is reflected in a study published in the Journal of the American Medical Association (JAMA) that highlights disparities in pharma prices for patients, pharmacies, and payers
Consumer demand for increased transparency in the prices patients, health insurers, and others pay for healthcare services continues. The Kaiser Family Foundation (KFF) reports that patients are facing higher deductibles, higher premiums, and increasingly complex—and opaque—pricing for everything from medical laboratory tests and routine checkups to prescriptions and out-of-network care. (See Dark Daily, “KFF Study Finds HDHPs and Increased Cost-Sharing Requirements for Medical Services are Making Healthcare Increasingly Inaccessible to Consumers,” April 20, 2018.)
However, while reference pricing and pricing databases help savvy patients compare prices across a range of procedures, much about pharmaceutical pricing remains shrouded in mystery. This is why calls for greater transparency in how prescription drugs are priced are increasing as well.
The Trump administration, state governments, and advocacy groups have each targeted drug costs as a problem in the current healthcare system. And a March 2018 study published in the Journal of the American Medical Association (JAMA) may further fuel the fires facing big pharma.
Overpayments and the Silence Behind Them
Analyzing 9.5 million claims from Optum’s Clinformatics Data Mart over the first half of 2013, researchers found that approximately 23% of all claims involved overpayments—situations in which the co-pay charged to the patient exceeded what the insurer paid the pharmacy to fill the prescription.
While data from 2013 might not reflect the current state of pharmaceutical pricing, the study brings exposure to trends in both politics and media coverage surrounding the industry.
The study authors found that overpayments totaled $135-million in 2013. Generic medications saw a higher portion of overpayments with more than one in four generic prescriptions costing patients more than what payers paid the pharmacy. However, in the 6% of claims involving branded medication, overpayments were nearly twice as high with an average overpayment of $13.46 per claim.
The researchers also cited data from a National Community Pharmacists Association (NCPA) survey of 628 pharmacies in which 49% claimed to have seen 10-50 occurrences of “clawback fees” in the past month. A further 35% reported seeing more than 50 clawback fees in the past month. These “fees” are part of contractual obligations that payers can use to recoup such overpayments to pharmacies.
Other contractual arrangements, such as “gag clauses” (AKA, non-disclosure agreements), wherein pharmacists cannot disclose to patients when their copay exceeds the cost of filling the prescription without coverage, have garnered coverage in the media.
The Hill recently outlined efforts from senators to stop this practice for both traditional insurance plans and Medicare Advantage and Part D participants. “Americans have the right to know which payment method—insurance or cash—would provide the most savings when purchasing prescription drugs,” Senator Susan Collins (R-Maine) told The Hill.
Rebates, Secretive Deals, and Red Tape in Government Crosshairs
Rebates are another contested aspect of current pricing models. Traditionally, pharmacy benefit managers (PBMs) serve as a middleman between pharmaceutical companies and pharmacies to negotiate prices and maintain markets. PBMs negotiate deals for insurers in the form of rebates. Insurers, however, are using these savings to offer lower premiums, rather than forwarding the savings directly to the customer.
UnitedHealthcare unveiled plans to pass these rebates directly to consumers in early March, The Hill reported.
In a press release, Department of Health and Human Services (HHS) Secretary Alex M. Azar II stated, “Today’s announcement by UnitedHealthcare is a prime example of the movement toward transparency and lower drug prices for millions of patients that the Trump Administration is championing. Empowering patients and providers with the information and control to put them in the driver’s seat is a key part of our strategy … to bring down the price of drugs and make healthcare more affordable.” (Photo copyright: Washington Post.)
The Trump Administration also recently outlined their new “American Patients First” plan for reducing drug prices and out-of-pocket costs for patients.
Key elements of their proposed approach include:
- Eliminating gaming of regulations, such as the Risk Evaluation and Mitigating Strategies (REMS) requirements manufacturers use to avoid sending samples to creators of generics;
- Promoting biosimilars;
- Allowing greater substitution in Medicare Part D;
- Including list prices in pharma advertising;
- Restricting rebates through Anti-Kickback Statue revisions; and,
- Eliminating gag clauses or clawback fees.
However, pharma industry coverage of the plan is mixed. MarketWatch sees little to worry about, predicting, “[the plan] isn’t expected to hurt drug makers or pharmacy-system middlemen.” Meanwhile, Forbes claims, “[the plan] represents a sea of change in pharmaceutical pricing policy, one that will have a significant effect on drug prices in the future.”
Anatomic pathology groups, medical laboratories, and other diagnostics providers can view this as yet another example of healthcare providers trying to shore up financials and protect profits by protecting sensitive pricing information, as the industry faces increasing scrutiny. Nevertheless, regardless of the outcome, these latest trends emphasize the role that transparency is likely to play—and how clinical laboratories will be impacted—as healthcare reform progresses, both in terms of public relations and regulatory requirements.
—Jon Stone
Related Information:
Frequency and Magnitude of Co-payments Exceeding Prescription Drug Costs
Impact of Direct and Indirect Remuneration (DIR) Fees on Pharmacies and PBM-Imposed Copay Clawback Fees Affecting Patients
Copay Exceeds Drug Cost in 23% of Claims: JAMA Research
You’re Overpaying for Drugs and Your Pharmacist Can’t Tell You
Oregon, the Latest State to Tackle High Drug Prices, Pushes through Transparency Law
Governor Brown Signs HB 4005, Creating New Transparency in Drug Pricing
UnitedHealthcare Will Pass Drug Rebates Directly to Consumers
Senators Target ‘Gag Clauses’ That Hide Potential Savings on Prescriptions
FDA Commissioner Says ‘Rigged’ System Raises Drug Costs for Patients, Discourages Competition
FDA Puts Drug Supply Chain on Notice
The FDA Commissioner Just Laid Out How ‘Everybody Wins’ in the US Healthcare System except the Patients
Your Guide to the Trump Drug Price Plan: Who It Affects and How
The Trump Plan to Reduce Prescription Drug Prices Will Have a Major Impact
American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs
Secretary Azar Statement on UnitedHealthcare Drug Discount Announcement
Reference Pricing and Price Shopping Hold Potential Peril for Both Clinical Laboratories and Consumers
Consumers Now Use Medical Cost Websites to Price Shop for Clinical Pathology Laboratory Tests and Other Medical Procedures
KFF Study Finds HDHPs and Increased Cost-Sharing Requirements for Medical Services Are Making Healthcare Increasingly Inaccessible to Consumers
Jun 29, 2018 | Laboratory Hiring & Human Resources, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology
While consolidation is a common trend across many sectors—including anatomic pathology groups and hospital systems—UnitedHealth Group is the latest example of the payer-provider consolidation trend impacting medical laboratories nationwide
Pending the successful completion of a $4.9-billion acquisition of DaVita Medical Group, UnitedHealth Group (UNH) will be poised to become the largest single employer of doctors in the U.S., according to numbers reported by leading sources.
Clinical laboratories, anatomic pathology groups, and other service providers that service those doctors should already be taking a serious look at their revenue flows and efficiencies to maintain margins and weather the shift into a model of value-based reimbursement.
Controlling Costs with Direct Care
According to a press release, UnitedHealth Group’s (NYSE:UNH) direct-to-patient healthcare subsidiary, OptumCare, currently employs or is affiliated with 30,000 physicians. And, DaVita Medical Group, a subsidiary of DaVita Inc. (NYSA:DVA), lists 13,000 affiliated physicians on their website. Should acquisition of DaVita Medical Group go forward, OptumCare would have approximately 43,000 affiliated or employed physicians—roughly 5,000 more physicians than HCA Healthcare and nearly double Kaiser Permanente’s 22,080 physicians—thus, making OptumCare’s parent company UNH the largest individual employer of physicians in the U.S. The acquisition is reportedly to reinforce UNH’s ability to control costs and manage the care experience by acquiring office-based physicians to provide services.
OptumCare has seen significant growth over the past decade. OptumHealth, one of three segments of UNH’s overall Optum healthcare subsidiary, includes OptumCare medical groups and IPAs, MedExpress urgent care, Surgical Care Affiliates ambulatory surgery centers, HouseCalls home visits, behavioral health, care management, and Rally Health wellness and digital consumer engagement.
“We have been slowly, steadily, methodically aligning and partnering with phenomenal medical groups who choose to join us,” Andrew Hayek, CEO of OptumHealth (above), told Bloomberg. “The shift towards value-based care and enabling medical groups to make that transition to value-based care is an important trend.” (Photo copyright: Becker’s ASC Review.)
Acquisitions of Doctors on the Rise; Clinical Lab Revenues Threatened
Independent physicians and practices have been a hot commodity in recent years. A March 2018 study from Avalere Health in collaboration with the Physicians Advocacy Institute (PAI) showed that the number of physicians employed by hospitals rose from 26% in July 2012 to 42% in 2016—a rise of 16% over four years.
By acquiring physicians of their own, insurance companies like UnitedHealth Group believe they can offset the cost and shifts in service of these prior trends. “We’re in an arms race with hospital systems,” John Gorman of Gorman Health Group told Bloomberg. “The goal is to better control the means of production in their key markets.”
According to Modern Healthcare, the acquisition of DaVita Medical Group is UnitedHealth’s third such acquisition in 2017. Other acquisitions include:
Along with Surgical Care Affiliates came a chain of surgery centers that, according to The New York Times (NYT), OptumCare plans to use to perform approximately one million surgeries and other outpatient procedures this year alone, while reducing expenses for outpatient surgeries by more than 50%.
NYT also noted that acquisition of DaVita Medical Group doesn’t bring just physicians under the OptumCare umbrella, but also nearly 250 MedExpress urgent care locations across the country.
By having physicians, clinical laboratories, outpatient surgery centers, and urgent care centers within their own networks, insurance providers then can steer patients toward the lowest-cost options within their networks and away from more expensive hospitals. This could mean less demand on independent clinical laboratories and hospitals and, with that, reduced cash flows.
According to NYT, Optum currently works with more than 80 health plans. However, mergers such these—including those between CVS Health (NYSE:CVS) and Aetna (NYSE:AET), and the proposed agreement between Humana (NYSE:HUM) and Walmart (NYSE:WMT) to deliver healthcare in the retailers’ stores—indicate that insurers are seeking ways to offer care in locations consumers find most accessible, while also working to exert influence on who patients seek out, to generate cost advantages for the insurers.
This consolidation should concern hospitals as payers increasingly draw physicians from them, potentially also taking away their patients. The impact, however, may also reach independent medical laboratories, medical imaging centers, anatomic pathology groups, and other healthcare service providers that provide diagnoses and treatments in today’s complex healthcare system.
Deep Payer Pockets Mean Fewer Patients for Clinical Labs and Medical Groups
As this trend continues, it could gain momentum and potentially funnel more patients toward similar setups. Major corporations have deeper pockets to advertise their physicians, medical laboratories, and other service providers—or to raise public awareness and improve reputations. Such support might be harder to justify for independent healthcare providers and medical facilities with shrinking budgets and margins in the face of healthcare reform.
Shawn Purifoy, MD, a family medicine practitioner in Malvern, Ark., expressed his concern succinctly in The New York Times. “I can’t advertise on NBC [but] CVS can,” he noted.
While further consolidation within independent clinical laboratories and hospitals might help to fend off this latest trend, it remains essential that medical laboratories and other service providers continue to optimize efficiency and educate both physicians and payers on the value of their services—particularly those services offered at higher margins or common to menus across a range of service providers.
—Jon Stone
Related Information:
With 8k More Physicians than Kaiser, Optum Is ‘Scaring the Crap Out of Hospitals’
30,000 Strong and Counting, UnitedHealth Gathers a Doctor Army
CVS’s Megadeal to Change U.S. Health Care Faces Stiff Challenges
Updated Physician Practice Acquisition Study: National and Regional Changes in Physician Employment 2012–2016
The Disappearing Doctor: How Mega-Mergers Are Changing the Business of Medical Care
UnitedHealth’s Optum to Buy DaVita Medical Group for $4.9B: 6 Things to Know
UnitedHealth Buys Large Doctors Group as Lines Blur in Healthcare
UnitedHealth’s Optum to Buy DaVita Medical Group for $4.9 Billion
UnitedHealth Is Buying a Major Doctor Group on the Heels of the CVS-Aetna Deal
DaVita Medical Group to Join Optum
