Health Care Goes to Silicon Valley: The Future of Managed Care Part 2

In case you missed part 1, you can find it here.

As Silicon Valley sets its sight on health care, First Report Managed Care asked a panel of experts to tell us which initiatives they think have the most traction, which will help payers the most (and which ones could hurt), and what health insurers can do now to stay on top of the rapidly-accelerating tech curve.

Our roundtable of managed care experts included Catherine Cooke, PharmD, research associate professor at the University of Maryland School of Pharmacy; Charles Karnack, PharmD, BCNSP, assistant professor of clinical pharmacy, Duquesne University; David Marcus, director of employee benefits, National Railway Labor Conference; Arthur Shinn, PharmD, president, Managed Pharmacy Consultants; Norm Smith, president, Viewpoint Consulting, Inc; and F Randy Vogenberg, PhD, RPh, principal, Institute for Integrated Healthcare.

Verily Life Sciences

Formerly known as Google Life Sciences, Verily is aiming to develop tools to collect and organize health data, and create interventions for care management. What do you think of its ambitions?  

Mr Smith: I wonder if [Google parent] Alphabet really understands the difficulties, time, regulations, and failure rates of real pharma. It’s certainly not one of Alphabet’s core competencies as far as I can tell.

Dr Vogenberg: There are lots of players in this space, and they are not very well differentiated. A lot of hype but no performance, so it’s still a wide-open playing field in my view.

We have heard Verily called a high-end think tank that has not yet yielded much of anything practical or useful. Do you agree?

Dr Vogenberg: Yes.  The same holds true IBM Watson and others. They are plagued by poor platforms and incomplete data feeds into their high-performance IT systems. Garbage in equals garbage out.

Mr. Smith: Gathering data is a core competency, and could be very valuable in the “internet of everything” environment we are moving towards. That is where I think Verily should focus.

So, concentrating on the data and not the interventions might move the needle on such initiatives?

Dr. Shinn: Express Scripts and others have talked about data synchronization for a long time. It makes sense, and I think we will eventually get there. Express Scripts processes over a billion prescriptions a year. Can you imagine the kind of data that it has, and how it can slice and dice that data by gender, age, geography, physician, drug, concurrent drugs, etc? 

You could potentially know which drug is most commonly used concurrently with another drug. And if that concurrent usage is more common in certain age groups, or in one gender over another.  Plus how long the two drugs used together? This kind of information is probably being collected, but I don’t know if anything meaningful is being done with it yet? 

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How Payers Should Prepare

Which initiative do you think payers need to be most prepared for?

Mr Marcus: I think Amazon’s entry into the PBM business would be most disruptive.  Mail order pharmacy programs, albeit not heavily utilized now, can generate tremendous cost-savings for payers and individuals.  Additionally, studies show that these mail order programs improve health outcomes because they encourage adherence with drug treatment plans. Automatic mail order refills ensure that individuals have supply on hand.

Dr Vogenberg: I agree that Amazon will likely have the biggest short-term impact on business models.

Mr Smith: A lot depends on the decision America must make about single payer health care. If we migrate to such a system it might lead to more emphasis on outcomes and less on paying claims.

Single payer is a very big hurdle. What about other barriers?

Mr Smith: What payer would trade its Epic EMR system for Apple’s platform? Some might, but many plans have invested significantly in Epic. It will take decades to switch to a new system. Also, the legal systems developed over the last century in the US will need to catch up to the changes in technology. That takes a lot of time. There’s a reason why self-driving cars are not on the road now.

What should payers be doing now to get ready?

Dr Vogenberg: Determine how to best leverage technology today with current health system IT limitations. Then grow in breadth and scope of applications as source data improves over time.

Mr Smith: Payers need CIOs that can judge the utility of new technologies for the individual plan. Member mix may be an important factor in adoption. Most baby boomers are limited in their ability to effectively use technology for themselves; it may take a generational change before these advanced technologies will justify their costs.

Mr Marcus: Payers seeking to utilize technology to study, or perhaps improve, health outcomes for their population can do so already.  One way is to reach out to their consultants to assess what’s available. Whether the benefits of these programs outweigh the cost is not clear—studies are mixed. But as technology improves and individuals become more health conscious, payers should be ready to integrate data analysis into their benefit programs.