Healthcare is one of today’s most critical challenges. In the recent midterm elections, 71 percent of voters rated healthcare as the top issue on their mind, according to the Henry J. Kaiser Family Foundation. While the healthcare system is often framed as a purely public sector issue, it also has its roots in business. Hospitals, insurance providers, medtech, and biotech —all operate as part of the US healthcare system, and each of these segments of the healthcare sector function as a business.
On October 26, Stern students and industry experts gathered on campus to discuss how healthcare delivery is transforming during the NYU Stern Healthcare Association’s annual conference. The theme this year was “Opportunities and Challenges in Precision Medicine, Value-based Care and Cost Education” and featured experts from Aetna, Johnson & Johnson, Sanofi, Memorial Sloan Kettering Cancer Center, and the Icahn School of Medicine at Mount Sinai, who shared their views to help frame the healthcare industry through multiple lenses and paint a holistic picture of how insurers, providers, pharmaceutical companies, and startups are responding to demands in order to develop precision medicine, provide value-based care, and stem cost escalation.
The event kicked off with keynote speaker Karen Weinseiss, SVP of International Health Management at Aetna International, who discussed the advances of value-based care across the industry as well as Aetna’s efforts to improve and spread the value-based care model. Weinseiss believes that the biggest problems facing the industry stem from uncoordinated experiences and unaligned incentives, stating that “the disconnected payer-provider model of health care delivery continues to disappoint consumers.”
One of the reasons Aetna is pushing for more value-based care reimbursement models is that the company tends to shift focus from volume and patient turnover to improving patient outcomes and redefining financial incentives toward reduced costs. One example Weinseiss used was conducting detailed telephone screens on patients after they had been discharged from the hospital. These telephone screenings have shown to reduce re-admittance rates for patients and lower healthcare delivery costs. In the long run, this will hopefully lead to lower costs and improved patient outcomes.
After Weinseiss’s speech, participants joined a panel led by Melissa Aldridge from Icahn School of Medicine at Mount Sinai, Andrew Isaacs from StartUp Health Ventures, Christy Manso from Memorial Sloan Kettering Cancer Center, and Michael Dickstein from Stern to discuss innovations on the provider side of the industry. Panelists focused on three major areas of innovation: technology in the home, advances in geriatric and palliative care, and innovations in clinical trials. On the home front, Isaacs continually pointed to the increasing popularity of Amazon’s Alexa and the company’s willingness to branch out into new industries (i.e. their acquisition of Whole Foods) as a way for Amazon to completely change the future of medical care. By combining all of their data on what consumers are eating and ordering with their healthcare record, Amazon and their partners could make huge advancements in medical care.
Access to care was the main theme for Aldridge and Manso, though each focused on different types of care. Aldridge stressed the need to expand palliative care options for patients, while Manso believes that changing demand for chronically ill patients necessitates the opening of more ambulatory (outpatient) facilities. In both cases, increasing access to care will help manage the costs of disease while increasing patients quality of life outcomes.
While improving, in-home technologies and access to care can help lead to better patient outcomes and lower long-term healthcare costs, prescription drug costs are one of the major drivers of current healthcare costs. An estimate by Micah Hartman of the Centers for Medicare and Medicaid Services found that 10 percent (or $330 billion) of healthcare costs in the US are driven by drug costs. While this may seem like an insurmountable problem to solve, Raj Arora from Sanofi, Yoni Falkson from Regeneron Pharmaceuticals, Sangeetha Ramsagar from Johnson & Johnson, and Rishi Jaggernauth from Regeneron Pharmaceuticals believe that the pharmaceutical sector has already begun adapting to help lower costs. Falkson brought up the start-up company SpringWorks Therapeutics that he co-founded as a B-corp (or Benefit corporation). The purpose of B-corps, according to non-profit B Lab, is to “balance purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment.” In layman’s terms, Falkson states he is legally obligated to attempt “to deliver promising, transformative science to underserved patients” and credits Stern with introducing him to the concept of B-corps during his time as an MBA here.
While drug pricing is partially in the hands of corporate decision makers, there are some forces outside of pharmaceutical company boardrooms that may put downward pressure on prices. The most obvious driver of said pressure is the increasing presence of generic players in the market. According to the Association for Accessible Medicine, generic drugs have saved the US consumer $1.67 trillion over the last decade, and an increased generic presence has already forced companies such as Mylan and Teva to drop prices on some of their products.
A less obvious driver is the rise of digital media technology in the industry. According to Ramsagar, Johnson & Johnson and its competitors are forming digital media teams that control all things digital like marketing, social media, online patient communities and more. She stated that increasing your brand’s digital presence can tremendously improve patient engagement to go “beyond the pill”. This type of engagement can help better inform consumers on the most beneficial drug for them, but also offer them information on how to care for themselves outside simply taking their medication to limit the long-term necessity for said medication. Moreover, Ramsagar discussed how improvements in diagnostic tests and personalized medical plans will help to minimize the steps necessary to diagnose treatment, thereby limiting the cost of the overall treatment plan.
The experts at the Stern Healthcare Association’ annual conference were all optimistic that innovations in technology and patient engagement were already leading to positive changes in healthcare delivery. Closing speaker Adele Gulfo, Chief of Commercial Development at Roivant Sciences wrapped up the day by expounding upon the near term benefits of these advances while also warning attendees that progress is not without its challenges. In particular, Gulfo mentioned that while precision medicine and value-based prescription drug pricing will undoubtedly lead to better patient outcomes the industry must find a way to make the accompanying biomarker testing, which matches patients with medication and then measures its efficacy, more affordable. Despite these challenges, it is clear that the private sector has taken the necessary first step towards improving healthcare delivery and outcomes in this country.
Photo: Karen Weinseiss, SVP International Health Management at Aetna International, addresses the audience