Market Opportunities in Healthcare IT

Today I wrote a guest post for Xconomy entitled Health Records are Going to the Cloud, Going Mobile, and the Feds Are Still Paying.

The post represents what I see as the primary trends in healthcare IT and correspondingly, where the majority of interesting innovations will come from. This is not to say there isnt going to be a lot of activity with ACOs, but there is likely going to be little in the way of innovation or real economic opportunity in areas such as this. I base that statement on one thing: history. ACOs are just the newest machination of organizations that have been tossed around for almost a decade. While there are differences from RHIOS etc, they are not enough to get me too excited. Mobile and cloud computing on the other hand, are wide open frontiers and innovation we have seen in the consumer sector for a decade is about to influence healthcare in meaningful ways.

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The FDA Kills Innovation

According to a post in FiercePharma, the Obama administration is proposing to shorten the length of biologics exclusivity to seven years from 12 years. This push to get drugs to the less expensive generic market is short-sighted and dangerous.

I went back to a post from Fierce just two years ago as they asked “What can we expect from Obama’s FDA?” Here was the answer:

“The principal question facing President Obama’s FDA will not revolve around drug safety or transparency, says Robert Goldberg, Co-founder and vice president of the Center for Medicines in the Public Interest. Obama’s FDA will have to answer the question, ‘Who lost innovation?’”

The answer is simple: THE FDA IS KILLING INNOVATION!

As Steve Forbes correctly writes in his recent article “How the FDA May Be Killing Us”:

“FDA’s behavior is no surprise to the organization’s watchers: Approve a medication that has an unintended side effect and congressional headline-seekers will be giving officials the third degree. Better to let people die by depriving them of new medicines than to be excoriated by the likes of McCarthyite demagogues such as Representative Henry Waxman (D-Calif.).”

Forbes goes on to quote the recent book by David Shlaes Antibiotics: The Perfect Storm:

“Regulatory agencies like the FDA are contributing to the problem with a constant barrage of clinical trial requirements that make it harder, slower and more costly to develop antibiotics.” Another bad guy: “The National Institutes of Health was for many years [biased] against funding antibiotic research.”

Federal bureaucrats need to stop the bloviating and recognize government is not the answer to innovation it is the antithesis of innovation.

Get out of the way! The new Congress has a lot of work to do, but nothing could have a bigger impact on rejuvenating an innovating environment for drug and device makers than a total overhaul of the FDA.

Do you have a nightmare story of lengthy trials or burdensome regulatory hurdles getting a drug or device to market? Send me your story.

The $1,000 Genome Debate

Is the $1,000 genome going to happen or not? Mathew Herper writes a post for Forbes in January 2011 titled “Why You Can’t Have Your $1,000 Genome” In his post  he states “Great idea, but it may never happen, especially when we are talking about genomics in medicine. Research costs are dropping, but doctors will need better quality data and analysis…More important, the health care system tends to charge not what things cost but what they’re worth.”

A week ago I attended the Xconomy event: “Computing in the Age of the $1,00 Genome.”  EMC subsidiary Isilon Systems was even generous enough to give all attendees of the conference a copy of the book The $1,000 Genome: The Revolution in DNA Sequencing and the New Era of Personalized MedicineCliff Reid of Complete Genomics not only expressed the certainty of the $1,000 genome, but predicted the cost would go much lower and the consumer demand would reach the millions in a few short years. The anchor panelist of the event was world-renowned geneticist Leroy Hood of the Institute for Systems Biology. His view was that the low cost genome is one thing, but the analytics and intelligence needed to make use of that genome are altogether another thing. Bob Nelson of Arch Ventures commented correctly that one of the key the challenges is delivering the value from the genetic innovation out to physicians. Today the market does not possess an efficient mechanism for distributing education, analytics and decision support to the provider market. To say it’s fragmented is an understatement. Couple that challenge with the massive FDA bureaucracy required to get new treatments to market and you have a recipe for failure. This is precisely why venture funds are increasingly chasing life sciences deals in Europe and Asia and not the US.

Last year at another Xconomy event, Don Listwin, the former #2 executive at Cisco Systems and founder of Canary Foundation had this to say “Cycle time is the villain in healthcare,” Listwin said. “Personalized medicine is a crock. It takes 20 years to get pills through the system. All this business about ‘we’re going to sequence everything and it’s going to be great’ is interesting but…it’s not going to happen for a long, long, long, long time.”

What do you think?

Meaningful Use – Where is it Headed?

The 2011 HIMSS conference is rapidly approaching as is the first reimbursement opportunity for physicians who have adopted electronic medical records. Interesting timing given that that Dr. David Blumenthal, the national health IT coordinator is stepping down from his post.

I have had several physicians ask me recently where Meaningful Use will be in a year. Will we move closer toward the pantheon of interoperability? And most importantly to doctors, how should they think about this?

First let me speculate that the complexities of interoperability are immense and, while everyone talks about the clear benefits that would result, I wouldn’t hold my breath. There is simply too much money and too many bureaucrats in the mix for there to be true consensus and support. Companies will feign participation and support to a point. That IS the point. The proverbial last mile might as well be 1,000 miles. That said, I am confident the market will produce clever solutions that don’t rely on decades of standards committee pow-wows and bureaucratic red tape.

As for physicians, Dr. Blumenthal makes some valid points in a recent interview with FierceHealthIT. You can reach the interview by CLICKING HERE. I think his most pragmatic comment was the fact that EMRs are here to stay and the financial reimbursement for adopting is really a one-time deal. So, it’s time to jump in despite the downsides.

For some exposure to the efforts underway regarding interoperability, read this recent update on the Direct Project.

If you have thoughts on where Meaningful Use will be in a year or whether there will be any true interoperability, send me your comments.