Last week, we published part 1 of our digital health trends and predictions piece, covering big picture trends like vertical integration and healthcare consumerization, as well as some of the buzzy tech trends of voice, AI, and blockchain.
This week, with the help of a range of expert stakeholders, we’re zooming in on four specific areas in digital health to look at what we can expect in the year to come from remote patient monitoring, telemedicine, the FDA, and digital therapeutics.
Read on for part 2 of our 2018 trends and predictions roundup, then check out part 1 here if you missed it.
4. Reimbursement could mean a big uptick in remote patient monitoring
Two major things can hamper the adoption of a good idea in healthcare: too much regulation and not enough reimbursement. It’s the latter that has held back the adoption of remote patient monitoring. However, as of 2018, a new reimbursable Improvement Activity is being added to the Centers for Medicare and Medicaid Services' Merit-based Incentive Payment System (MIPS), which encompasses using digital tools to monitor patients outside the hospital.
“This is a big game changer,” Gary Capistrant, chief policy officer at the American Telemedicine Association, told Babyforyou.net.ua. “They don’t consider this telehealth, so it’s available to people in metropolitan areas and providers are moving forward. And it fits into the coverage they’ve added in recent years for chronic care management. That’s the big opportunity that’s there.”
Morgan Reed, president of ACT | The App Association, stressed that remote patient monitoring isn’t just reimbursable, it’s potentially going to be one of the best ways for providers to get full value from MIPS.
“Under this program, if a physician requests that a patient provide them with patient-generated health data and then they review that data, that counts as an improvement activity under MIPS,” he said. “And why that’s important is this is the highest quality score for an improvement activity. It means money in their pockets through the bonus from the MIPS program.”
Reed said CMS expects a quarter of a million claims to be made under the new code next year. And the existence of the code will likely have trickle down effects for private payers as well.
“In short, the whole field of remote patient monitoring and patient engagement has had a chicken or egg problem,” Reed said. “We could build the software, but if it wasn’t economically or, from a liability perspective, good for the physician, they wouldn’t buy it. Physicians would request it, but if there weren’t enough physicians out there requesting it, than we wouldn’t build it. So the important part of what’s happened is it’s a marriage of the two aspects you need. The support from the physicians to make it worthwhile for them to buy our software, and that makes it worthwhile for us to write the code so they can start utilizing these capabilities.”
Of course there is further still to go for reimbursement, Reed said.
“The other thing that I think will need to be done is ensuring that for certain remote monitoring devices you can get a portion of the cost of those devices reimbursed through your HSA or FSA,” he said. “Right now you can go get your bottle of aspirin covered as long as your doctor writes you a prescription for it. If the physician writes you a prescription to say ‘I need to monitor your a-fib,’ you should be able to use your HSA or FSA to cover the cost of a remote patient monitoring device that you might wear on your wrist.”
Dr. Eric Topol, founder and director of the Scripps Translational Science Institute and a longtime digital health thought leader, said he expects further technological innovation on sensors as well — something else that could be accelerated by the availability of reimbursement.
“I think we still haven’t seen the combinations of technologies, so for example I’m very keen on remote monitoring of all vital signs,” Topol said. “That would include blood pressure, heart rhythm and rate, oxygen saturation in the blood, temperature, respiratory rate, right? We should have that now and we don’t have it yet. That would be the equivalent of a hospital room in the patient’s bedroom. So the problem we have is we have the parts, but not the sum of the parts. And no one has done the assembly to equate a patient’s bedroom to the hospital room with respect to vital sign monitoring. I’m waiting for that to happen. I think it will happen.”
The other trend that will drive a shift toward care in the home is the “silver tsunami” of the aging baby boomer population, combined with an institutional realization that home care can actually be cheaper for hospitals and more satisfying for patients.
“Demographic trends … have now converged in the past four or five years with the realization that treating people at home is actually more effective and cheaper if you can scale it,” John Gardner, managing partner at NGP Capital, told Babyforyou.net.ua. “That taking people and guiding them into large institutional settings, the assumption that that was a cheaper way to provide healthcare to the mass market is actually not true. … That’s a huge opportunity that’s going to see a lot of progress.”
Dr. Joseph Smith, whose company Reflexion Health is built around caring for seniors at home via technology, agrees.
“No surprise, when you ask seniors where they want their care delivered, they want it in their home,” he said. “Why do people go to the hospital? It’s because they have to. They don’t want to be there and they certainly don’t want to be in skilled nursing facilities. And they certainly don’t want the hassle of going back and forth to a physical therapist’s office. Keeping people off the roads, particularly people who are recently post-surgery, all of that just makes a world of sense.”
The other Dr. Joe, Partners Healthcare VP of Connected Health Dr. Joseph Kvedar, cautioned that as this space opens up hospitals might need to fight to hold onto it as their own.
“It seems like illness management for sure is a new beachhead for any number of individuals,” he said. “As providers, we don’t do a particularly good job. We’re much more incentivized and geared toward managing things that are acute illness — whether it be accidents or injuries. We are set up to manage things when you get sick. Hopefully we do a good job of making you feel better. Chronic illness management is less episodic, much more ongoing. We’re not incentivized to do it financially, set up, or trained to do it. That leaves it as an open area. Companies like CVS and Walgreens are very interested in that space.”
5. Telemedicine adoption will continue to boom, but more people will get it from their family doctor
Unlike with remote patient monitoring, there’s no single major legislative shift set to transform telemedicine in 2018. There are a number of legislative victories on the cusp of passing, including the CHRONIC Act, which would expand telemedicine coverage under Medicare Advantage Plan B in 2020 and give Accountable Care Organizations more freedom to use telemedicine, and the VETS Act, which would enable VA providers to practice medicine across state lines via telemedicine. But these and other legislative wins are just more fuel in the fire of an industry that’s growing organically because of a combination of demand and momentum.
“I think it's just poised for success,” Topol said. “The costs are in check, the patients who have tried it have had satisfaction, there’s good competition. Everything is aligning for it to grow rapidly. The one thing that still holds it up is the requirement for licensure state by state. There should be a national licensure. Outside of that, there are not many factors that are getting in the way.”
Legislatively, state and local governments continue to pass laws making telemedicine easier to practice, and some progress is even being made on reimbursement.
“I think we’re increasingly seeing legislatures being interested in removing artificial barriers to people getting telehealth and just treating it as healthcare and not something special that needs to be specially regulated and specially defined,” Capistrant said. “It’s just healthcare and it should be treated that way in coverage, in practice regulations, in all kinds of things. Particularly, lawmakers continue to move toward that. An increasing number in the medical profession are moving toward that.”
In fact, Capistrant says, the current climate of political polarization could be a boon for telemedicine, which tends to be the rare thing politicians of different parties can readily agree on.
“Telehealth continues to be a bipartisan issue and this will be a very partisan year as we get closer and closer to the elections,” he said. “It’s very rare to have such bipartisanship, but it still is there and we work very hard to keep that in place. … Sometimes it might be hard to find a legislative vehicle to move things forward because of that partisanship on everything else. But there is lots of interest in including telehealth provisions on any of those vehicles moving forward.”
Kvedar said he’s watched telemedicine’s public perception go from a “Jetsons-esque” pie-in-the-sky vision, to an idea believed to have failed, to a period of skeptical interest. Now, it’s entered a fourth stage.
“It seems like about a year ago things changed where people were saying ‘Gosh, everyone is doing this and we better do it too.’ That’s the 'fear of missing out' sort of mentality,” he said. “That’s the phase we’re at now with providers: this is happening, we got to get onboard, we have to have an offering, let’s figure out later how to make it work from an ROI perspective, but in order for us to maintain relationships with healthy patients this is an important part of our future, we have to have this offering. So I think that means there will be more and more of it offered.”
But as more providers get on board with telemedicine, what happens to the “big telemedicine” infrastructure of companies like Teladoc, American Well, MDLive, and Doctor On Demand, who largely work through health plans to provide patients with telemedicine through a separate channel?
“When we get to the point where you can actually get your primary care doctor’s office as opposed to a clinician who’s on call from who knows where — if we get to that point — I think the primary care doctor will start to win all of that business because people like that integrated care, they like their doctor, they’re familiar with the doctor, etc,” Kvedar said. “They’d rather phone their practice than Teladoc or CVS or Walgreens or any of the other options. But right now what’s happened is that since you can’t get it from your own doctor then you’re going to get it from one of these other channels.”
Jon Pearce is CEO of Zipnosis, a company that placed a bet on telemedicine being delivered via the provider a long time ago. He agrees with Kvedar that that balance is going to shift.
“You’ve seen these external networks like Teladoc, AmWell, MDLive, and Doctor On Demand kind of come up and meet a market need,” he said. “But now we’re seeing the providers get into that game and a lot of our growth in the future is about helping them connect their services, their local brand back into the market. And we know the economics are going to be way more favorable for them than anything the external people can do.”
This could still shake out either way, but even the big telemedicine providers are hedging their bets. American Well, especially, has invested heavily in its provider channel and in The Exchange, its vehicle for connecting specialists across different hospitals.
Reimbursement is still a challenge for telemedicine. Reed drove the point home with some sobering numbers.
“Last year, CMS paid out a trillion dollars,” he said. “The total reimbursement for telemedicine was about $14 million. So it’s terrible. At it’s core is still the question of how do we get a system that essentially treats telemedicine as a photocopy of a face-to-face meeting with your doctor into something that’s more relevant and more realistic about the way that we use technology today.”
One other trend we’re keeping an eye on is the redefinition of telemedicine from videos and phone calls to increasingly popular chat platforms and even, likely, voice platforms, which could escalate if necessary to phone or video. Both Zipnosis and Kaiser Permanente are starting to have success with these models, and companies like Sherpaa have been beating that drum for some time.
6. An evolving FDA will likely encourage innovation
In an administration characterized by controversial political appointees, FDA Commissioner Dr. Scott Gottlieb has been surprisingly popular across the aisle. Under Gottlieb, the FDA has accelerated its plans for digital health regulation to a pace that may finally be fast enough to catch up to innovation in the space.
The flagship of this approach is the agency’s bold pre-certification program. The basic goal of the Pre-Cert program, which sets it apart from previous FDA regulatory ventures, is that it will focus not on particular products but on firms and developers. If the FDA is satisfied that the firm is responsible and safe in its development, then it won't need to regulate each product from that firm. The initial pilot of the program includes big names like Apple, Samsung, Fitbit, Verily, Roche, and Johnson & Johnson.
“We’ve been struggling with an innovation platform that can move very fast, running up against a regulatory system that doesn’t have the same speed,” Smith said. “So I think the notion of validating companies’ approach to innovation as opposed to a per-product basis, I think that’s right-headed. I don’t think we’ll ever get away from the notion of scrutiny for particular products, but I think if we can get presumptive approval based on the strength of a company’s quality system and their standard operating procedures, I think that’s going to be right.”
Still, the approach is not without its risks, as Reed pointed out.
“I was part of the original pull-together meetings with the FDA on this Pre-Cert and one big area was really basic stuff like how does FDA maintain quality of software when we’re moving from a waterfall development model to this kind of high-speed development model that everyone uses in the industry today,” he said. “How do they regulate software that’s constantly improving, constantly being iterated and is developed with a mindset that’s minimum viable product, get it out there, improve, improve, improve? If one of those improvements backfires and it harms someone, that’s terrible. So how do we balance a fast, agile development world with a slow, careful, considered FDA process?”
It’s difficult to gauge the effect regulatory uncertainty — or regulatory clarity — is having on innovation. Certainly the industry will be watching the Pre-Cert pilot closely as well as eagerly awaiting the final guidance on clinical decision support, the draft of which received a lukewarm reception.
“Whatever you think of the current administration there, they’re pretty telehealth friendly,” Kvedar said. “The CMS administrator has been incredibly telehealth friendly, and the FDA if anything is relaxing constraints on digital health innovation, so one would think that would spur more innovation. [But] about eight or 10 years ago before they had MDDS guidelines there was a chill on innovation because people felt that the FDA was going to come out with something, and we don’t want to do anything until we know what it is. So, if there’s change in the air, sometimes that holds it back. But in this case, because there’s change in the air and an administration that’s generally anti-regulatory, it probably will encourage innovation in the marketplace.”
7. Digital therapeutics could have a big year
Digital therapeutics hit the main stream in 2017 with a series of big news stories from some of the companies on the front edge of the trend. Eddie Martucci, CEO of Akili Labs, which makes a video game for assessing and eventually treating conditions like ADHD, thinks that was a significant moment for the burgeoning space.
“It felt to us like [the latter half of 2017] was that turning point where, from some of the companies that have been doing this for the long haul, … that have been going the clinical route and taking time to try to establish themselves as medical, from some of the more well-known companies — us, Proteus, Pear, a handful of others in different categories — had some pretty defining events. You know, Proteus’ FDA clearance of the Abilify/MyCite product, Pear’s clearance of their novel class, our data on the first ever Phase 3 trial run, those all came within a few months of each other. … Now all three of the companies and many others are on commercial paths, defining their commercial plans— not thinking about the validation phase anymore, but now starting to think about what does this look like in mainstream medical practice.”
And as startups start to see success, validation, and funding in digital therapeutics, it seems likely that big pharma may finally follow suit.
“[What] I predicted some years ago and have not seen was that pharma companies would start seeing the opportunity for them to be in the software business, because engaging software on a mobile platform can be as effective as a chemical therapeutic,” Kvedar said. “That’s of course what gave rise to digital therapeutics. That is probably going to be a hot area in 2018.”
Martucci says he’s witnessed firsthand a dramatic shift in how pharmas are thinking about digital therapeutics.
“Back when these ideas were popping out and companies like Akili were getting formed, when we were sitting with pharmas there was a big dose of skepticism,” he said. “So, you’d get a meeting, and people would say ‘Huh, that’s kind of interesting,’ but they’d also say ‘Why are we talking about a videogame?’ There was just enough intrigue to warrant a conversation, but there was not really a good appreciation of how anything like this could be useful.”
That attitude has changed a lot, he says.
“I think over the last year, year and a half, those discussions are now much more concretely focused. … We get asked somewhat routinely from companies in this space ‘Hey, if we were considering this down the road, what would the exact sales rep look like, what is the territory?’ You know, questions that [show] you’re actually thinking about concrete tactics commercially. That’s a big deal to me.”