When consumer health technology leapfrogs medical science 

At a recent health system physician leadership retreat, two cardiologists presented a fascinating update on the electrophysiology (EP) service line. Electrophysiologists use advanced heart mapping and ablation technologies to diagnose, pinpoint, and treat abnormal heart rhythms, and the field has made dramatic advances over the past decade. The success rate of interventions has risen, and procedures which used to take hours in a cath lab are now performed in a fraction of the time—with some patients even able to go home same-day. 

This increased efficiency has expanded the EP program’s capacity, but the system still finds itself overwhelmed with demand. The system is located in a high-growth market, and demand is also fueled by shifting demographics, with more aging Baby Boomers seeking care. But a key driver of growth has been the spread of “smart watches” like the Apple Watch and Fitbit, which tout the ability to detect abnormal heart rhythms like atrial fibrillation. With “half of the community walking around with an EKG on their wrist”, the number of patients seeking evaluations for “a-fib” has skyrocketed: at this system, over 50 percent growth in patient volume, leading to 25 jump in procedures during the pandemic. 
 
While the doctors were excited about growth, they also stressed the need to rethink care pathways to make sure that electrophysiologists’ time was prioritized for the patients who needed it most. The system should look to develop care pathways and technology that enable other physicians to readily triage and manage routine atrial fibrillation.

But smartwatch-driven self-diagnosis raises larger questions about how doctors and hospitals must adapt when consumer technology outpaces the science evaluating its effectiveness, and the health system’s ability to meet new demand. With private equity firms now focused on acquiring cardiology practices, this massive spike of demand, coupled with the ability to move more heart rhythm procedures outpatient, is seen by investors as a significant profit opportunity—making it even more critical for doctors, researchers, and hospitals to ensure that sound clinical guidelines are developed to drive high-quality, appropriate management.  

The important role of the CFO in innovation

Although CFOs often hold the key to resources, acting as gatekeepers, they can also be critical allies in innovation, enabling programs and initiatives, according to an April 12 McKinsey report

While innovation is often thought of in a traditional sense, with new offerings and services coming to mind, innovation can also mean disruption and change in business models, productivity improvements and new ways to service consumers. The CFO has the perspective to see where fresh ideas are needed in the business from a financial perspective, and the power to make them happen.

Innovation also requires resources and capital, of which the CFO has control and say as to how it gets used. The CFO is an important part of determining which innovations will go ahead and is akin to a venture capitalist, deciding whether to invest in a start-up. 

As members of the C-suite, CFOs also have an important role in encouraging a culture of openness and innovation where staff members feel comfortable coming to company leaders with new ideas. By creating an atmosphere of innovation, the company can build a pipeline of innovative talent and concepts, which the CFO can help bring to fruition.

Mark Cuban’s pharmacy started with a cold email

A Dallas-based generic drug startup bearing Mark Cuban's name just came out  of stealth

The Mark Cuban Cost Plus Drug Co. launched its online pharmacy in January, offering low-cost versions of high-cost generic drugs. And it all started with a cold email. 

Alex Oshmyansky, MD, PhD, fired off an email to Mr. Cuban with a simple subject line: “Cold pitch.” The then 33-year-old radiologist told Mr. Cuban about work he was doing in Denver with a compounding pharmacy and the business plan behind a company he founded in 2018, Osh’s Affordable Pharmaceuticals. 

I asked him a simple question, because this was when the whole pharma bro thing was going down,” Mr. Cuban said on NPR podcast The Limits, referring to convicted felon Martin Shkreli. “I was like, ‘Look, if this guy can jack up the prices 750 percent for lifesaving medicines, can we go the opposite direction? Can we cut the pricing? Are there inefficiencies in this industry that really allow us to do it and really make a difference?'”

Dr. Oshmyansky answered yes. Their weekly email correspondence continued for months. The Mark Cuban Cost Plus Drug Co. was quietly founded in May 2020, and Dr. Oshmyansky now serves as its CEO. The company is organized as a public-benefit corporation, meaning it is for-profit but claims its social mission of improving public health is just as important as the bottom line.

“We basically created a vertically integrated manufacturing company that will start with generic drugs,” Mr. Cuban told NPR. A major component of the strategy is to bypass pharmacy benefit managers, which Mr. Cuban likens to bouncers at a club.

They’re the ones who say, ‘Hey, I’m controlling access to all the big insurance companies. If you want this insurance company to sell your drug, you’ve got to pay the cover charge. All these drugs pay the cover charge to these PBMs through rebates, and because they’re paying the cover charges, the prices are jacked up,” Mr. Cuban told NPR. “We said we’re going to create our own PBM, we’re going to work directly with the manufacturers, and we’re not going to charge the cover charge.”

The Mark Cuban Cost Plus Drug Co. marks the prices of its drugs up 15 percent, charges a $3 pharmacy fee to pay the pharmacists it works with, and a fee for shipping. “That’s it,” Mr. Cuban said on NPR. “There’s no other added costs. The manufacturers love what we’re doing for that reason.”

Others have set out before to disrupt pharma the way Mr. Cuban and Dr. Oshmyansky intend, but their downfall is cooperating or giving in to the PBMs, the entrepreneur noted

“People always ask, well why didn’t somebody do this before? The reality is there’s so much money there, it’s hard not to be greedy,” Mr. Cuban said on the podcast. “If you get to any scale at all, those PBMs will start throwing money at you and saying, ‘Look, just play the game.’” 

Mr. Cuban has indicated he has no intention to play the game. 

“I could make a fortune from this,” Mr. Cuban told Texas Monthly last fall. “But I won’t. I’ve got enough money. I’d rather f— up the drug industry in every way possible.”

Amazon expands employer health solutions to 20+ new markets

Amazon Care Goes National With Hybrid Model | PYMNTS.com

Amazon Care, which contracts with employers, will now deliver its virtual care services nationwide. It also plans to expand its hybrid service offering—in which care is delivered by nurses dispatched to employees’ homes—to more than 20 new cities this year, including San Francisco, Miami, Chicago, and New York City. The company also announced it has secured new contracts with its subsidiary Whole Foods Market, as well as Hilton Hotels, semiconductor manufacturing company Silicon Labs, and staffing and recruiting firm TrueBlue.

The Gist: Amazon Care is looking to differentiate itself with a virtual-first, asset-light, hybrid service offering. But given the slow-moving and complex nature of employee health benefit contracting, Amazon’s recent moves could displace employer-facing point solutions, but present less of a threat to incumbent providers, instead offering a partnership opportunity for downstream care. 

Ultimately, Amazon could combine its care delivery offerings with its pharmacy and diagnostics businesses to launch a robust direct-to-consumer offering—should the company find healthcare a lucrative and manageable market. 

Taking Away the Vetoes

LICA - LICA Continues To Fight Sand Mine Legislation

A brainstorming session with the CEO of a digital health startup this week highlighted a frustration familiar to anyone who’s tried to make innovation happen in the slow-moving world of health systems.

Meeting with a system executive team to discuss a new approach to virtual care delivery, he described the cross-enterprise collaboration required, and said, “You could see everyone looking around the table to see what everyone else thought, before anyone was willing to react.” 

No surprise, as complex bureaucracies don’t reward risk-taking by leaders; often, innovation is slowly suffocated by internal politics and turf-protecting behavior.

That’s why we often repeat advice from one of the most progressive, successful system CEOs we’ve worked with: “You’ve got to eliminate the vetoes if you want to get stuff done. I don’t let people leave the room until we’ve managed to set aside all the reflexive objections and arrive at a resolution. 

I expect leaders to be solution-driven, not objection-driven.” For all the times we’ve been asked how to build a successful “innovation infrastructure,” it strikes us often the answer lies in leadership, not org charts.

JPMorgan launches healthcare company, Morgan Health

JPMorgan Chase launches new healthcare-focused unit for U.S. employees |  Reuters

JPMorgan Chase on May 20 unveiled its new healthcare company, dubbed Morgan Health, which its top executive told Becker’s Hospital Review can be viewed as a continuation of Haven, an ambitious healthcare venture that recently disbanded

“We learned a lot from the Haven experience,” Dan Mendelson, CEO of Morgan Health, said. “The Haven experience focused us on primary care, digital medicine and specific populations. … You can see this as a continuation of the work that was started at Haven.” 

However, Mr. Mendelson said there are several key differences between Morgan Health and Haven, the healthcare venture launched by Amazon, Berkshire Hathaway and JPMorgan Chase in 2018. For one, it has a much more simplified business structure, as it is a unit of JPMorgan Chase. Second, it has a philosophy of striking partnerships to meet its goals rather than working from the ground up. 

“We don’t want to create things from scratch,” Mr. Mendelson said. “We are going to be collaborating with outstanding healthcare organizations nationally to accomplish our objectives. That’s another piece that differentiates this effort from the prior one.” 

Morgan Health said its new business is focused on improving employer-sponsored healthcare in the U.S. and bringing meaningful innovation into the industry by targeting insurance and keeping populations healthy. Success for the company will be measured by whether it improves the Triple Aim: quality of care, access to care and cost to deliver care, Mr. Mendelson said. Morgan Health initially will focus its efforts on improving care for JPMorgan Chase employees, but its long-term goals are to become a leader at improving healthcare in the U.S. and to create a successful model other employers can adopt.

“We come at this with the benefit of having 285,000 employees and dependents,” Mr. Mendelson said. “We have a very strong interest in driving quality improvements for them and also creating models that are reproducible across organizations. We are looking to take a leadership role to improve care in the United States.” 

Morgan Health said it has three core focus areas at its launch: improving healthcare by investing $250 million into organizations that are improving employer-sponsored healthcare; piloting new benefits for employees; and promoting healthcare equity for its employees and the broader community. 

One employee benefit Morgan Health will be piloting is advanced primary care, Mr. Mendelson said. Morgan Health said it is working to create improved primary care capacity to enable employees to better navigate the healthcare system. One example of this is instead of having employees see just a primary care physician, they would be directed to a clinic that leverages more healthcare talent, such as pharmacists and nurses, to improve health outcomes. 

Morgan Health said it will work with a range of partners, including provider groups, health plans and other employers. One such organization is CVS Health/Aetna, which is one of JPMorgan Chase’s insurance carriers, Mr. Mendelson said. 

“CVS Health has a lot of innovation within the organization that we are not currently tapping into,” Mr. Mendelson said. “It’s a great example of a great American company that is ripe for further partnership and innovation in this effort.” 

Morgan Health initially will have 20 dedicated employees, but Mr. Mendelson said the healthcare unit is tapping talent from other existing departments at JPMorgan Chase, including its legal, communications and benefits departments. 

“This is a company that is very passionate about leading; there’s a very deep reservoir of support from the organization to accomplish the objectives,” Mr. Mendelson said. “These are objectives that are hard — it will take us time to accomplish and to show meaningful improvement. But there’s a sense that this is so important that there’s going to be a sustained effort in this regard and that we will achieve our objectives together.” 

Prior to joining Morgan Health, Mr. Mendelson served as an operating partner at private equity firm Welsh, Carson, Anderson & Stowe. He also is the founder and former CEO of healthcare advisory firm Avalere Health and worked in the White House Office of Management and Budget during the Clinton administration. 

Mr. Mendelson said his passion for establishing collaborative partnerships in healthcare will help him succeed in his new role.