For the last couple decades, there has been a trend towards greater and greater healthcare spending, even as a percent of GDP. This has helped bring about the Affordable Care Act (ACA, i.e., Obamacare), as well as other national and local efforts. The belief is that provisions of ACA will address the trend in cost increases, as well as lead to better care. Historically, efforts like these have not made a sufficient impact. Out of this backdrop arose the concept of disease management some 20 years ago. The rubric is still going strong, but with only occasional, modest successes. Prevention, and the current approach to clinical guidelines, aren’t enough. Nor is the hope in lower cost technology, which requires a willingness on the part of some commercial entity to take on that strategy, as well as the low probabilities in R&D. Below is a document that lays out a way of thinking for medical products regarding disease management. Some of the underlying drivers for the approach’s success are moving into place, such as the necessary healthcare IT to capture sufficient data. The changes engendered by the ACA will put on even more pressure to change. Moreover, the cost crisis is being felt as never before.

1. Disease
Management
September,
2013

2. The
Need
for
Disease
Management
• There
are
myriad
trends
driving
demand
for
health
care,
including
aging
and
new
technologies.
These
trends
will
intensify
and
place
even
more
pressure
on
the
system
over
the
next
two
decades
as
the
baby
boomers
age.
• In
a
typical
market,
compeEEve
forces
and
consumer
trends
would
alleviate
much
of
this
pressure
by
forcing
out
low-­‐quality,
inefficient
products
and
providers.
• However,
the
health
care
industry
is
different,
due
to
the
inefficiencies
of
third-­‐party
payor
systems,
government
poliEcs
(e.g.,
Affordable
Care
Act—Obamacare)
with
strong
consEtuents,
and
the
(paEent)
enEtlement
mindset.
• Such
pressures
Are
coming
to
a
head,
forcing
paEents,
payors,
and
providers
to
move
towards
more
efficient
health
care.
• Disease
management
is
a
powerful
way
to
address
this
trend.
©
2013
Winton
Gibbons
2

3. Summary
of
Salient
Trends
ImpacEng
the
Health
Care
Delivery
System
• Expensive
Medical
Technologies
• Aging
of
the
U.S.
PopulaEon
• Longer
Life
Expectancy
• Unwillingness
to
Accept
Restricted
Network
or
to
Reduce
Health
Benefits
• Inefficiency
of
the
Third
Party
Payor
System
©
2013
Winton
Gibbons
3

4. Payor
System
Leads
to
Significant
Inefficiencies
Who
would
you
pay
more
to
see?
• A
doctor
with
25
years
experience,
who
has
performed
more
than
5,000
cardiac
procedures.
• A
recent
graduate
from
a
residency
program
who
is
performing
his
first
post-­‐residency
operaEon.
Which
hospital
would
you
pay
more
to
go
to?
• The
hospital
with
the
lowest
infecEon
rates,
lowest
re-­‐
admission
rates,
lowest
mortality
rates,
etc.
• The
hospital
with
the
highest
infecEon
rates,
highest
re-­‐admission
rates,
highest
mortality
rates,
etc.
©
2013
Winton
Gibbons
4

5. Health
Care
Industry
Map
Shows
the
Complexity
Patient
Disease
Management
Institutional
Providers
Physician
Office
Home-Based
Providers
Ancillary
Services
Hospitals
HMOs
ACOs
Medical
Dental
Nursing/Rehab
DME|Therapies
Hospice
Labs
Imaging
Wholesalers / (Specialty) Distributors / PBMs
Contract Sales Organizations (CSOs)
Devices
Generics and Specialty Pharma
Branded Therapeutics / Biotech
Contract Research Organizations (CROs) / Manufacturing
Diagnostics
Life Sciences
©
2013
Winton
Gibbons
5

6. Focus
Disease
Management
on
Quality
Care
&
Economic
Value
in
the
Health
Providers’
Terms
In practice there is
a broad variation
in the meaning of
efficiency and
effectiveness.
Specifically, a
medical products
firm’s role is to
facilitate, but not
to DO, disease
management
CONTRASTING DEFINITIONS OF DISEASE MANAGEMENT FOR MEDICAL PRODUCTS
Disease management is a
comprehensive, integrated
approach to care and reim-
bursement based on the
natural course of a disease,
with treatment designed to
address an illness with
maximum effectiveness and
efficiency.
MORE THEORETICAL
Disease management by
suppliers is to ASSIST in
improving efficiency (lower
cost at same quality) and/or
improving effectiveness
(better quality at the same
cost ... or through cost
justification in a resource
constrained environment)
MORE PRACTICAL
Disease management for medical products ≠ Bundling and integrated delivery
©
2013
Winton
Gibbons
6

7. Disease
Management
Conceptual
DefiniEon
Outcomes measurement
systems for:
• Medical quality
• Cost
• Behavior or process
• Patient|MD satisfaction
• Quality of life
Physician
Population
Health Plan or System
Patient Population
of each Physician
Tools to Segment the Patient
Population
Interventions appropriate for a
particular segment of the patients
Methods (e.g. analytes) to meas-
ure outcomes of an intervention
{
Establish
Need for
Change in
Disease
Approach
Facilities
MD
MD
MD
©
2013
Winton
Gibbons
7

8. Focus
Moves
from
Cost
ReducEon
Alone
to
RaEonal
Expenditure
to
Increased
Quality
Care
Quality
Today:
1. Reduce cost at
same quality
Near Term:
2. Maintain cost and
increase quality
Future:
3. Invest in quality
2
3
1
 Today
Future
Cost
1) Today’s drive for
efficiency will continue
to remove much “fat”
from existing systems
2) Quality improve-
ments will follow
through re-engineering
of products and
processes, driven by a
better understanding of
health economics.
3) Health economics
(HECON) will reveal the
long-term benefits to all
of investing in higher
quality health care.
©
2013
Winton
Gibbons
8

9. Wide variation in
health practice &
ensuing outcomes
in debilitating and
expensive diseases
prompted a
guidelines push.
Today’s guidelines
were guide-lines
will be valid-ated
by research
evidence but also
established by
expert consensus.
Next, their efficacy
should be
assessed in
various patient
cohorts.
Path
to
effecEve
disease
management
Not
Only
ImplementaEon
of
Consensus
Guidelines
Consensus
& evidence
guidelines
Evidence &
HECON
guidelines
Develop and
implement evidence-
based & HECON
guidelines
Develop and
implement stratified,
HECON guidelines
Only implement
evidence &
consensus
guidelines
• Mitigated cost
• High efficacy
• Lower cost
• Very high efficacy
• High cost
• Moderate efficacy
1-next
wrong
answer
Now
Future
2-path
Goal
©
2013
Winton
Gibbons
9

10. Disease
Management
Based
on
Knowledge
of
VariaEon
between
Cohorts
&
Intervening
Suitably
By identifying useful
cohort definitions, one
will be able to refine
(traditional) patient
segmentations using
customized
stratification tools
among three
dimensions.
Psychographic
Demographic
Physiological
including disease progress
• Genetics
• Concurrent
conditions
• Weight
• Depression
• Behavior
disorders
• Patient
satisfaction
• Age
• Ethnicity
• Stage of disease
• Risk factors
• Reimbursement
Cohort
“A group of
persons with a
common
statistical
characteristic”
-- The Concise
Oxford English
Dictionary
©
2013
Winton
Gibbons
10

11. HECON
Helps
Define
Key,
Cost-­‐EffecEve
Leverage
Points
in
Treatment
of
Cohorts
©
2013
Winton
Gibbons
11
Compare
Rx efficacy
Fixed Elements
• Genetics
• Age
• Ethnicity
• Stage of disease
Modifiable Elements
• Weight
• Patient satisfaction
• Reimbursement
Mixed Elements
• Risk factors
• Concurrent conditions
• Depression
• Behavior disorders
Therapy Regiment A
e.g., Therapy Regiment B is a greater leverage
point than Therapy Regiment A for this cohort
Since both quality and
cost outcomes are
considerations,
simulation likely to help
identify key leverage
points.
Therapy Regiment B
Fixed Elements
• Genetics
• Age
• Ethnicity
• Stage of disease
Modifiable Elements
• Weight
• Patient satisfaction
• Reimbursement
Mixed Elements
• Risk factors
• Concurrent conditions
• Depression
• Behavior disorders
Out-­‐
come
A
+
Out-­‐
come
B
++
Cost
A
Cost
B

12. • LinkedIn
– hip://www.linkedin.com/in/wintongibbons/
• Twiier
– @wingibbons
• Blog
– hip://www.wingibbons.wordpress.com
©
2013
Winton
Gibbons