Eight IoT barriers for connected medical devices…and how to overcome them has been saved
Eight IoT barriers for connected medical devices…and how to overcome them
Health Care Current | August 14, 2018
This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies, and provides updates and insights on policy, regulatory, and legislative changes.
Eight IoT barriers for connected medical devices…and how to overcome them
By Greg Reh, vice chairman, US and Global Life Sciences leader, Deloitte Consulting LLP
Think about this: There are now more than a half a billion types of medical devices manufactured around the world.1 Through the Internet of Things (IoT), a growing number of these devices are collecting, analyzing, and transmitting health data or images to the cloud or to internal servers. Over the next decade, as many as 50 billion medical devices will connect to clinicians, health systems, patients, and to each other.2
Last month, our UK Centre for Health Solutions released a report that examined connected medical devices and their potential to transform health care. Within the next five years, medical technology companies anticipate that 68 percent of their devices will be connected through IoT, up from 48 percent now, according to an online a survey Deloitte conducted with 237 companies. Within five years, 44 percent of respondents predicted that all of their devices will be connected, according to our research.
Challenges and opportunities for medtech
Devices that diagnose, monitor, and help treat patients touch every part of health care. The connected-medical-device market is expected to more than triple, from $15 billion in 2017 to $52 billion by 2022, according to the research firm MarketsandMarkets.
Our research identifies eight challenges that medtech companies should consider addressing as they transition from being suppliers of innovative products to insightful partners in health care.
- Developing an in-depth understanding of end users: As the idea of value-based care gains more traction in health care, stakeholders will likely push medical technology companies to demonstrate the value of their products.
Solution: Manufacturers of connected medical devices should forge closer ties to health system leaders, clinicians, and to patients who rely on their products. They should build new business models and scenarios that demonstrate how their devices can improve patient outcomes and create value to stakeholders. Nearly 40 percent of medtech companies are, to a large extent, taking a value-based approach to their pricing, according to the results of the survey.
- Building funding, business, and operational models: Only about half of surveyed medtech companies say they are implementing new business models to a large extent, while just 10 percent of respondents said they are not adding any new models.
Solution: The fee-for-service payment model does not reward health systems or clinicians for their ability to prevent illnesses or to avoid long-term costs. We are probably still years away from having a value-based health care system that effectively rewards innovation, but the industry is working toward it. We recently worked with the Advanced Medical Technology Association (AdvaMed) to launch a strategic value initiative—a framework that assesses the value of medical technologies that can be adopted by medtech companies, health systems, health plans, and other industry stakeholders. Innovation will likely require different business models, and progress will depend on medtech companies developing new ways to take on risks and rewards.
- Improving interoperability: If health care stakeholders are to take full advantage of connected medical devices, interoperability could be critical. Interoperability can be a significant barrier to creating a patient-centered, digitally-enabled health care ecosystem. There are privacy and security challenges associated with the exchange of health information, and there is no single standard for electronic health records (EHR) systems. There is also little incentive for the private sector to move toward a more interoperable system.
Solution: Open platforms, based on open-data standards, could allow health plans, health care providers, and technology vendors to come together to make data more available to each other. Stakeholders should work toward developing a unified platform through which clinical data can be shared. They also will likely need to develop a consensus for interoperability standards.
- Maintaining cybersecurity: Nearly 70 percent of medical device manufacturers say an attack on their medical devices is likely, but just 17 percent of those companies are taking significant steps to thwart cyberattacks, according to research from the Ponemon Institute.
Solution: Our survey results indicate that most medtech companies are working to maintain the security of their connected devices. More than 80 percent of respondents said they were “reasonably well prepared” (44 percent) or “very well prepared” (37 percent) to protect their devices. Just 14 percent of respondents indicated that they were “not very well prepared,” or “not at all prepared” to protect their devices from a cyberattack. Medical device manufacturers should consider adopting a “security-by-design” approach where a device is built from the ground up to be secure, rather than having security features added after it has been delivered and deployed.
- Navigating regulatory change: A variety of security issues related to connected medical devices has prompted new regulations and guidelines that medtech companies need to navigate.
Solution: Survey results indicate that medtech companies are prepared to comply with regulatory changes. Forty-three percent of respondents said they were “reasonably well prepared,” while 39 percent said they were “very well prepared.” Medtech companies should build strategies to engage with regulators on their innovation models. They should also consider involving clinicians and patients when designing products. The US Food and Drug Administration’s (FDA) initiatives to develop a more collaborative approach to innovation could provide a path for regulators outside of the US to follow.
- Attracting digital talent: There is some concern among stakeholders that they might lack the skills needed to deploy connected devices, which could hinder market growth. To stay competitive, medtech companies should build a tech-savvy workforce.
Solution: Nearly 80 percent of surveyed medtech companies said they are prepared to build digital capabilities within their companies. Resourceful recruitment and retention strategies could include collaborations and partnerships with a diverse range of existing and emerging players (e.g., academia, engineering companies, technology firms, and innovative new start-ups).
- Maintaining trust in a digital age: The success of connected medical devices can hinge on the willingness of patients to share their health data. This is probably less likely to happen if patients aren’t sure how their data will be used. As more devices become connected, medtech should be vigilant in protecting patient data. In a My Take a year ago, I wrote why medtech companies need to make sure patient data are secure.
Solution: Medtech companies should earn the trust of providers and patients by developing strong privacy and security arrangements through the use of data encryption and authentication mechanisms. They should also give patients control over their own data (including the right to keep it from being shared), and allow the patient to see who is using data and for what purposes. Nearly 70 percent of surveyed medtech companies agree that patients will eventually own their health data. Embedded blockchain-like technology could offer a real-time mechanism for tracking how data are processed.
- Improving the adoption of medical technology: More than 70 percent of medtech companies said health care systems and clinicians are not yet prepared to use data generated from connected medical devices. According to our recent surveys of US health care consumers and physicians, half of consumers use technology to track their health information and 53 percent said they shared this information with their doctor. However, only 9 percent of providers have implemented technology for remote monitoring and/or integration of data from wearables, and just 27 percent intend to add this capability within the next couple of years.
Solution: Medtech companies should provide health care stakeholders with robust and reliable evidence that the data generated by their devices can reduce costs, improve efficiencies, and lead to better patient outcomes. They also should demonstrate that the devices are intuitive and easy to use, and, when necessary, offer training and support to staff.
As connected medical devices become more sophisticated and mainstream, we can move closer to having an interconnected health care system. Along with allowing clinicians to change how and where medical care is provided, connected medical devices have the potential to gather, analyze, and share data that could help improve our understanding of patients and their diseases.
1 European Commission, Fact sheet: New EU rules to ensure safety of medical devices
2 IBM Institute for Business Value, http://www-935.ibm.com/services/multimedia/GBE03620USEN.pdf
In the news
CMS proposes redesign of Medicare ACO program
The US Centers for Medicare and Medicaid Services (CMS) is proposing to overhaul the Medicare Shared Savings Program (MSSP)—under which 561 organizations serve more than 10.5 million Medicare beneficiaries—to increase the number of organizations taking risk for losses, also known as downside-risk arrangements. The agency intends to create two track options for participation:
- Basic track: The agency would combine Tracks 1 and 2 of today’s MSSP into a Basic track. Organizations would sign five-year agreements. During the first two years, they would share in savings only (also known as an upside-only arrangement), and downside risk would phase in over the last three years of the agreement. Basic track organizations would qualify as Advanced Alternative Payment Models (APMs) under the Medicare Access and CHIP Reauthorization Act (MACRA) during the fifth year of the agreement. This would let participating physicians earn higher payments from Medicare.
- Enhanced track: Organizations would enter a five-year agreement, and the upside- and downside-risk levels would remain the same throughout that period. Organizations that selected this track would automatically qualify as Advanced APMs. The Enhanced track is modeled after today’s MSSP Track 3.
The program would also allow any ACOs that accept downside risk to pay beneficiaries a $20 incentive for receiving certain services, such as preventative services.
CMS Administrator Seema Verma stated that the agency aims to move more organizations into downside-risk arrangements.
New agreements will begin July 1, 2019. ACOs with agreements that expire on December 31, 2018 could extend their contracts for six months, but will then be required to select either the Basic or Enhanced arrangement.
CMS updates Hospital Inpatient Prospective Payment System rules for 2019
CMS finalized updates to the Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital (LTCH) Prospective Payment System (PPS) on August 2. The final rule reflects CMS’s efforts to prioritize patients, encourage hospital price transparency, improve EHR interoperability, and reduce provider administrative burdens, such as:
- Keeping a shorter EHR reporting period: CMS will only require hospitals to report for 90 continuous days in 2019 and 2020 under the newly-renamed Promoting Interoperability Program. However, it will require hospitals to upgrade to the 2015 Edition of Certified Electronic Health Record Technology (CEHRT).
- Requiring greater transparency into hospital prices: Hospitals must publish a list of their standard charges, via the internet and in a machine-readable format, starting in 2019. These lists must be updated annually.
- Finalizing two new e-prescribing measures related to opioids: The Query of Prescription Drug Monitoring Program measure will be optional in 2019 and required in 2020. The Verify Opioid Treatment Agreement will be optional for both 2019 and 2020.
- Updating the Hospital Inpatient Quality Reporting (IQR) Program’s measure set, including rationale for removal: CMS will evaluate the cost and benefit associated with measures when determining if they should be removed. CMS is removing “topped-out” measures and “de-duplicating” certain measures to simplify and streamline reporting.
- Approving new technology add‑on payments: CMS finalized its payment approach to Chimeric Antigen Receptor (CAR) T‑cell therapy, which FDA approved in May for a second indication (see the May 15, 2018 Health Care Current).
- Updating hospital payment rates: In 2019, CMS will increase—by 1.85 percent—payments to acute care hospitals that participate the Hospital IQR Program and use EHRs.
- Distributing $8.3 billion in uncompensated care payments for 2019: This $1.5 billion increase from 2018 reflects an expectation of higher uncompensated care for hospitals.
The final rule applies to hospital discharges that occur on or after October 1, 2018.
CMS will allow step therapy in Medicare Advantage coverage of Part B drugs
On August 7, CMS announced that starting in January 2019, Medicare Advantage (MA) plans can use step therapy for Part B, physician-administered, drugs. Step therapy involves requiring a newly-diagnosed patient to start with a cost-effective treatment before moving to costlier therapies if the first treatment doesn’t work or has unacceptable side effects. According to the guidance, this could include requiring a patient to begin with a Part D, self-administered, treatment before moving to a physician-administered drug.
The previous administration prohibited step therapy under Part B unless it was also required under traditional Medicare. The new guidance only applies to new prescriptions. MA organizations must disclose to patients in their plan documents that they use step therapy.
(Source: CMS, CMS empowers patients with more choices and takes action to lower drug prices, August 7, 2018)
On August 6, FDA released new guidance for the development of novel medication-assisted treatment (MAT) drugs for opioid use disorder (OUD). The guidance, “Opioid Use Disorder: Endpoints for Demonstrating Effectiveness of Drugs for Medication-Assisted Treatment,” provides new ways for drug developers to consider measuring and demonstrating the effectiveness and benefits of new or existing MAT products.
MAT is the use of medications—in combination with counseling and behavioral therapies—for the treatment of OUD. The medications used in MAT aim to block other narcotics, or help withdrawal symptoms, without the euphoric high associated with opioid misuse. Mounting evidence shows that the use of MAT can significantly reduce overdose deaths, as well as improve health status and quality of life for patients. The prescription drugs commonly used in MAT include buprenorphine, methadone, and naltrexone.
FDA’s recent guidance aims to bring new medications to market by providing a pathway for drug manufacturers to use clinically-relevant measures to develop new drugs. Clinical trials to evaluate the effectiveness of MAT for FDA approval have generally used reduction in drug-taking behavior (drug-use patterns) as an endpoint. The new draft guidance identifies several additional potential clinical endpoints, and other outcome measures, for drug developers to consider. These include the impact on adverse outcomes such as mortality, emergency medical interventions, and the proportion of patients who transition from severe to moderate OUD based on their drug use and the impact on their wellbeing.
RELATED: Deloitte’s recent report, Strategies for stemming the opioid epidemic, discusses strategies health plans and pharmacy benefit managers (PBMs) are using to combat the opioid crisis in their member populations and in their communities. The report includes an interactive map that allows the reader to explore where to find MAT facilities, and shows opioid-prescription rates, opioid-related death rates, and demographic information. The map also shows the gaps in availability of MAT treatment.
(Source: FDA, FDA takes new steps to encourage the development of novel medicines for the treatment of opioid use disorder, August 6, 2018)
Spending has declined among dual-eligible population, study finds
People who qualify for both Medicare and Medicaid have significantly higher medical costs when compared to those who are eligible for Medicare only. However, annual spending growth among the dual-eligible population is decreasing, according to a study published in Health Affairs. The study analyzed spending trends among Medicare fee-for-service beneficiaries and dual-eligible beneficiaries between 2007 and 2015.
Dual-eligible recipients make up roughly 20 percent of Medicare beneficiaries, yet account for 34 percent of the program’s spending. In the drive to control Medicare spending, and as value-based care payment models continue to gain traction, the dual-eligible population continues to be a major focal point.
According to the study, spending levels for dual-eligible beneficiaries were 2.11 times greater than for Medicare-only beneficiaries in 2011—an increase from 2007. In 2015, dual-eligible spending levels were 2.06 times greater than spending levels for Medicare-only beneficiaries. In the same year, spending for Medicare-only beneficiaries grew 0.4 percent, compared to a 0.7 percent decrease for dual-eligible beneficiaries. The report’s authors note that spending-growth patterns are useful in developing cost-containment strategies for dual-eligible beneficiaries.
RELATED: Deloitte’s 2015 report, Drilling down on dual eligibles, describes an analytical approach to segmenting the Medicare-eligible population that is substantially more effective in identifying attributes associated with dual-eligible status than a traditional, unsegmented approach. Health plans regularly collect but might not use sociodemographic, lifestyle, and other non-medical data that could be helpful in segmenting or describing patient populations. The report discusses how health plans could use analytics to develop well-targeted, tailored interventions for the dual eligible population.
(Source: Keohane et al., “Trends In Medicare Fee-For-Service Spending Growth For Dual-Eligible Beneficiaries, 2007–15,” Health Affairs, August 2018)
Risk-adjustment program will be budget neutral for 2018 plan year, CMS says
In an August 8 proposed rule, CMS affirmed that the individual market risk-adjustment program will be budget neutral for the 2018 plan year. The agency also explained why it will use the statewide average premium to calculate transfers instead of basing transfers on individual plans’ premiums. The proposed rule follows an interim final rule that outlined the methodology for the 2017 plan year. That rule was issued in July, shortly after CMS halted risk-adjustment payments to comply with a federal district court ruling (see the July 31, 2018 Health Care Current).
CMS said that the risk-adjustment program must be budget neutral to remain financially stable. The agency also says the Affordable Care Act (ACA) did not appropriate nor authorize funding to reimburse health plans if payments exceeded collections made through the program.
Risk adjustment distributes funds from health plans that attract lower-risk members to health plans that attract sicker members in the individual and small-group markets. It is the one permanent program of three premium-stabilization programs created by the ACA and it applies to health plans both on and off the exchanges.
(Source: CMS, CMS issues proposed additional rule to address risk adjustment program for the 2018 benefit year, August 8, 2018)
Artificial intelligence: The near- and long-term outlook for transforming health care
While many millennial employees in businesses around the country have never sent a fax at work, fax machines remain integral for more than 100,000 physicians across the US. Faxes are the most commonly-used method for practitioners to communicate lab results, specialist consult notes, and prescriptions. In addition to these important faxes, physician offices still receive a high number of “junk faxes,” including menus and travel specials. All faxes, both useful and not useful, require resources and time to review and sort.
A major US health care organization is using artificial intelligence (AI) and machine learning to automate the categorizing of faxes—and estimates that the health system saved more than three million hours of work last year. The health system is developing software to scan lab results and flag urgent findings for immediate attention. It is also developing an algorithm that can help automatically schedule high-risk patients for follow-up exams.
One leading research and teaching hospital in the US is using an AI command center to make operations more efficient. The system pulls together data from multiple information technology systems and—based on need—can prioritize activity in specific sections of the hospital. The command center makes assigning beds and discharging patients more efficient, and allows the hospital to accept more complex and time-consuming cases.
These kinds of uses for AI and mobile apps might not sound revolutionary compared to some other innovations in health care, but they are important to help reduce physician burnout. They can also free up talented staff to spend more time on patient care and interaction—and less time on tedious administrative tasks.
Clinical applications of AI
Many stakeholders hope that AI will help revolutionize patient care. A new tool developed by a team in Toronto might help reduce the time it takes to develop radiation-therapy treatment plans for patients who have cancer. The tool mines historical radiation therapy data and uses algorithms to develop recommended treatment strategies. A study of more than 200 head and neck cancer patients found that patients who had a radiation therapy schedule developed via the tool received comparable plans to patients who received a treatment schedule developed using traditional methods. The tool could potentially save valuable treatment time for patients who have fast-growing tumors.
Research findings published last month in the Journal of Digital Imaging demonstrated that AI could identify tumors, with 93 percent accuracy—in images from colorectal cancer patients. The study was based on 30 patients, so researchers will likely want larger-scale studies.
For now, AI and machine learning in health care are largely being used to automate administrative processes, gather best practices, and provide better guidance for treatments of certain conditions. Some stakeholders are looking to a future where data are more integrated, and AI can be applied to data from remote-monitoring and wearable devices to personalize care—and ultimately get better outcomes in a wide range of diseases.
(Source: Hongjun Yoon et al., Tumor Identification in Colorectal Histology Images Using a Convolutional Neural Network, Journal of Digital Imaging, July 31, 2018)