OUR BLOG

Recon takes an analytical look behind select developments in healthcare

Convenience care, telemedicine and breaking down barriers to geographic competition – a speculation

A few problems Geographic barriers to the entry have long protected providers from best-in-class competition.  Provider consolidation – theoretically a logical response to the current operating environment — reinforces these barriers by locking up referrals and making systems too big / too few to fail.  Instead of pushing providers aggressively on value, payers and regulators may end up nursing underperforming systems (e.g. Highmark’s bail-out of the West Penn Allegheny system) and discouraging disruptive entrants for fear of unintended damage to the stability of the local provider infrastructure.  Even if consolidation is

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Working paper: the coming age of algorithmic medicine

Summary In this working paper, we develop the following thesis. In the not so distant future (a decade or two), medicine will be largely governed by algorithms — highly deterministic clinical pathways characterized by a high level of reproducibility of care — that will be developed and improved by providers. These algorithms will include individual patient preference branch-points but not individual provider preference.  As a result, payers and providers will agree on coverage on the basis of a set of algorithms and a process of how they should evolve; providers

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The Ochsner Health Network: has Ochsner gone “a hospital too far”?

Over eight months between October 2014 and June of this year, Ochsner formalized alliances with five major provider systems in Louisiana. The first wave (with St. Tammany Parish, Terrebonne and Slidell) reinforced Ochsner’s stronghold in New Orleans. The second wave (with Lafayette General and CHRISTUS) secured pathways to markets west along I-10 and the coast and northwest along the I-49 corridor to Shreveport. This collection of alliances — dubbed the Ochsner Health Network (OHN) — is effectively statewide with ~30% of the hospital beds and ~30% of the physicians. Key

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NEJM Highlights September 2015: cells, cells, cells

Promise for systemic amyloidosis (and beyond?) Systemic amyloidosis is an uncommon disease in which abnormal cells (typically antibody-producing B cells) produce large amounts of protein that deposit as amyloid fibrils in various organs (heart, kidney, liver). These are the same kind of deposits that create plaque in the brain in Alzheimer’s disease.  In systemic amyloidosis, the deposits cause organ damage, failure, and death and treatment options are limited.  GSK is developing a monoclonal antibody directed at serum amyloid P (SAP), a naturally occurring glycoprotein that binds to amyloid fibrils. The

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Can convenience care be a platform for an insurance product?

Summary A Portland-based urgent care operator is launching a health plan from scratch The strategy targets the busy and healthy with the convenience of a retail network providing “store brand care”; a simple, consumer oriented service model at low cost. Carving out this segment can plausibly allow for sustained advantage in admin, medical cost and revenue management. The plan has hit a speed bump with regulators on pricing, so evidence of this model’s market appeal will come slowly. Convenience care has historically played nice with the ecosystem, but Oscar’s explosive

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NEJM Highlights August 2015: cancer and joints

The emergence of a new approach to drug development in cancer Cancers are classified by the organ or tissue from which they arise, but as our molecular understanding increases, another level of categorization is emerging based on the molecular characteristics of the tumor. In a novel but sure to be growing approach, Roche/Genentech tested their drug vemurafenib (Zelboraf, currently approved for melanomas with the BRAF V600 mutation) in a study population that was largely agnostic to tumor provenance as long as it was BRAF V600 positive. 122 patients were enrolled

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So what if PCPs in ACO practices are not paid differently?

In a recent study, Ryan, Shortell, et al analyzed the composition of PCP compensation (broken down into salary, productivity and quality/other components) across practices with ACO contracts vs. those with more traditional business models.   This note will: provide a quick summary of results offer an alternative interpretation of the data describe two methodological points regarding the data set The major finding As of 2012/2013, there are no major systematic differences in how PCPS are paid in ACO practices vs. others.  Whether in an ACO or not, PCPs were paid on

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NEJM Highlights July 2015: a first in class drug for cancer, Sovaldi cures renal failure too (sometimes), convenient primary care

Palbociclib – first to target cyclin dependent kinases – breast cancer As all biology majors know, cyclin dependent kinases are critical elements controlling the machinery of cell proliferation.  They have proved difficult targets due to their ubiquitous activity in both normal and abnormal tissue – until now. In a phase 3 study, about 500 patients with metastatic hormone positive, Her2 negative breast cancer were treated with palbociclib (Ibrance, Pfizer, recently FDA approved) vs. placebo.  The median disease progression time for patients on drug was 5 months longer than for placebo

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NEJM Highlights for June 2015: the flavor of the month is distinctly cardiovascular

Interventionalist treatment for stroke: In the 80s and 90s, treatment of myocardial infraction was greatly advanced by the introduction of systemic clot busting drugs (t-PA and others); further advance occurred in the 90s when it was shown that immediate cardiac catheterization produced even better results. Acute embolic stroke has followed the same path – in the 90s, it was shown that t-PA treatment within 3 hours of onset of symptoms was beneficial, and ever since there has been a move toward treatment modalities where an interventional radiologist acts on the

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NEJM Highlights May 2015: a read on ACO performance, progress in cystic fibrosis treatment, yes developing new drugs is expensive, rethinking industry-medicine relationships, CVS Caremark and smoking cessation

Early results of the ACO experiment: directionally right, but impact is still small In this study, the authors compare metrics for Medicare beneficiaries assigned to the 32 ACOs part of the Pioneer program vs. matched beneficiaries who were not in an ACO.  With respect to costs, they find that compared to contemporaneous trends observed in non-ACO members, the ACO beneficiaries yearly spending was approximately $100 below trend (a 1% savings). In a hint of a reversal of a secular trend in health care, office spending visit expenditure increased more in

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NEJM Highlights April 2015

The rise, fall, and rebirth of the Chinese healthcare system A fascinating account of the evolution of the Chinese healthcare system which almost seems to be an upside-down picture of the rest of the country’s development. Tremendous public health improvements occurred in the 50s, 60s, and 70s but the transition to a free market model of healthcare in the 80s seems to have been a disaster only mitigated by the general increase in wealth of the population. Seeing this as a major threat to social stability, the Chinese government has been

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Comparing the emerging national networks of Cleveland Clinic and Mayo Clinic

The build-out of the Cleveland Clinic and Mayo branded networks continues apace. Most recently, the Virginia Hospital Center joined the Mayo Clinic Care Network in March and Sequoia Hospital (Dignity), Piedmont Healthcare and Valley Health System (NJ) signed up with Cleveland Clinic this past March and early April. Growth of the networks and current snapshot These four deals cap torrid growth in the networks especially in 2013 and 2014. As of the end of the first quarter of 2015, Mayo has affiliations with systems totaling 13.4K beds (and a rough

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NEJM Highlights March 2015: Progress against Crohn’s, PCSK9 inhibitors coming through, comparative effectiveness for diabetic macular edema, Eric Lander encourages the FDA on genomic testing regulation

A promising agent for Crohn’s Disease, a miserable illness Crohn’s is an inflammatory bowel disease that is notoriously unpredictable; flares can affect any part of the digestive tract and lead to grave complications. In this double-blind phase 2 study, patients were dosed with mongersen (licensed by Celgene) an anti-sense oligonucleotide that down-regulates the expression of a protein implicated in the inflammatory cascade. In general these classes of medications have to be given parenterally but in this case the target is the gut so it can be taken orally. At two weeks

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A sizeable step forward but miles still to go: CMS’ Next Generation ACO model

CMS has issued a “Request for Applications” describing its Next Generation (NG) ACO. The model makes progress on three issues that have generated plenty of analytical handwringing from MedPAC and the broader ACO community. It also signals a strategy to set ACOs up to compete more directly with Medicare Advantage (MA). (1) Enhancing predictability The Medicare Shared Savings Program (MSSP) and Pioneer ACO models had different approaches to solving the same business parameters. With NG, CMS has generally picked the ones which enhance simplicity and predictability (see table). For example,

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Biopharma innovation: Will there be sufficient incentives in the future?

Ezekiel Emanuel wrote an op-ed in the New York Times last month, which highlighted the low number of new antibiotics that have been brought to market in the past two decades. Antibiotics are a unique market compared to therapeutics for other diseases. Infectious disease clinicians prefer to use innovative new products as a last line of defense against highly resistant infections, relying on tried-and-true antibiotics as their primary options. Paradoxically, the “reward” for being a highly innovative, effective new antibiotic is to be sparsely used. Emanuel points out this conundrum while

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NEJM Highlights February 2015: the most boring month in my NEJM reading memory

Our selection from a month with relatively few exciting articles – perhaps this long Boston winter has us all down. Precious metals and health plan buying: The implementation of the ACA has placed new decision making on individuals purchasing health insurance on the exchanges. In this report, the authors argue based on experiments that for many individuals, reversing the gold-silver-bronze nomenclature (gold becomes bronze and vice versa) reverses the preference independently of the underlying characteristics of the plans. For the public health advocate this highlights the need for educating shoppers, and

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NEJM Highlights January 2015: Dengue vaccine, Informed consent, Cancer drugs and Tiering for selection

A vaccine for dengue finally nears the market Dengue is a mosquito transmitted viral infection that is often severe and occasionally fatal, and that has been identified as a growing public health threat, largely in the developing world but also with inroads in developed countries with hundreds of millions of cases yearly world-wide. At this time, there is no vaccine or treatment for dengue other than supportive care. In a placebo-controlled study, a dengue vaccine from Sanofi-Pasteur covering all 4 serotypes of dengue was found to be 60% efficacious in preventing

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Cosgrove moves south: competitive implications of the formation of the Midwest Health Collaborative

A few days ago, Cleveland Clinic announced the formation of the Midwest Health Collaborative (“the Collaborative”), a new company jointly managed by six Ohio delivery systems across the state. The company’s goals are to share best practices, collaborate to reduce costs (e.g., procurement synergies) and “explore the business case” for developing a state-wide provider network. Notably, the deal was announced just eighteen months after Cleveland Clinic’s key competitor in Ohio, Mercy Health (formerly Catholic Health Partners), announced its own state-wide alliance, Health Innovations Ohio; this new deal also links three

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Shifting lines in the mobile health competitive battlefield: Aetna makes a strategic retreat while United digs in?

The battle to own healthcare’s consumer relationship is being nowhere fought more intensely than in the mobile arena. Tea leaves suggest that Aetna has pulled back from trying to own this relationship in favor of a more collaborative “ecosystem” strategy, but United appears determined to lead. The thinking is speculative but I let me point out the emerging evidence and offer some guesses on what will come next. Strategy environment for consumer mobile health At the risk of oversimplification, let me offer six hypotheses regarding the strategic context for consumer

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