Smoke on the Water: Fireworks at the Cleveland Clinic Medical Innovation Summit

10/10/11Follow @venturevalkyrie

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companies are going elsewhere to do First-in-Man studies and to launch new innovations where it’s easier to get them approved.” Daniel Starks, CEO of St. Jude noted, “Tax policy and FDA behavior are driving jobs elsewhere because corporations need to continue to support innovation; it’s great for multinational corporations but bad for the US economy.” Starks pointed out that there are around 400,000 medical device jobs in the US presently and that each of these creates 1.5-4 additional related jobs; thus, if we send the device jobs overseas, it is a big negative for the US economy. He added, “we still have the best ecosystem for innovation but if we let it take place elsewhere, then all the economic benefit goes elsewhere and they’ll sell it back to us at a profit.” Yikes.

Another notable theme of the conference was one I’ve written about often: the meteoric rise in the demand for healthcare IT solutions. Similar to the MedTechVision conference I wrote about recently (see summary here), IT got more than it’s share of mindspace for what is supposed to be a medical device conference. Almost every talk I saw led to this topic at one point or another and there was widespread recognition that physician adoption of clinical analytics, in particular, can meaningfully improve healthcare delivery and costs. Harry Rein said that you can still see people pushing carts full of paper charts around at hospitals (even in Cleveland) but you never see that in the halls of banking institutions. “Technology has skipped medicine,” he said.

To highlight the healthcare IT theme, the conference had a significant presence from Watson, IBM’s technology tour de force. A panel of physicians and IBM experts discussed how the effective use of data could dramatically improve clinical decision-making. Dr. Basit Chaudhry of IBM noted that physicians are drowning in the deluge of knowledge now available about patients and treatments. “An MD needs to know about 15-20 facts to make a good clinical decision today. It used to be 5. Pretty soon it’s going to be 100 and we need new tools to handle it.” Dr. Douglas Johnston of the Clinic added, “something like Watson can help interpret the onslaught of data from the patient, monitors, and EMR into real time,” adding that ,”we still need figure out how to integrate this concept into our workflow.”

Unfortunately, all of the panelists thought Watson would be best suited to start its role in the world of healthcare on the administrative side ( to optimize billing, claims, etc) rather than on the clinical decision side. I guess physicians are not quite ready to relinquish their jobs to machines.

As a lark, there was an hour set aside for two teams of the Clinic’s most esteemed cardiologists and cardiovascular surgeons (self-titled the Gladiators and the Defibrillators) to play Jeopardy against Watson. Watson cleaned their clocks, which was no surprise since the categories were such things as popular movies and New York Times food and wine. I mean, seriously, a bunch of physicians from Cleveland had no chance against Watson. They clearly do not get out much and I’m not sure first run movies even make it to Cleveland (note that the nerdy physicians beat Watson in the 11-letter words category). Maybe if they had “famous Cleveland water-based fires” or “rock stars I’ve operated on” as categories the whole outcome would have been different. One thing is clear: a combination of great physicians and Watson could be a powerful tool for the betterment of healthcare. Click here for a previous post I wrote about this idea.

Lastly, this conference is famous for announcing an annual list of the Top 10 most important innovations in medicine. This year’s list, which you can see here, includes such things as genetically-modified mosquitoes to reduce disease threat and wearable robotic prosthesis (can you hear the Six Million Dollar man now?). It also includes CT scans for the early detection of lung cancer, once thought a death sentence but now known to be curable if caught early.

Since it was a cardiology conference, I’ll end in that area. Number 1 on the list of most important innovations was a new method for treating hypertension called Catheter-Based Renal Denervation. This newly developing approach holds significant promise in reducing some of the most common and deadly problems that can afflict people on the neurology and cardiology front. According to the Cleveland Clinic, “one in three adult Americans has hypertension, which puts them at significant risk for strokes, heart attacks and kidney failure. In fact, more than two thirds of individuals who have a first heart attack and three quarters of those who have a first stroke have hypertension. Hypertension, not smoking, is the number one risk factor for death in the world.”

Most people are able to control hypertension through inexpensive medications, but it is estimated that about 25 percent cannot. Thus the need for an interventional approach. Clearly such an approach is potentially life-altering for those who cannot reach their target blood pressure rate through medication. The countervailing risk is that such a procedure will be overused because it generates far more revenue for a hospital than does dispensing inexpensive anti-hypertensive drugs. It is an interesting challenge to ensure that only the right people are subjected to procedures such as this one given that one man’s savings is another man’s lost revenue. Since the Summit did not include the payer community, most of the individuals present represented organizations that make a lot more money when there are more surgeries, interventional procedures, etc. than not. Ah, healthcare…it’s never easy.

Lisa Suennen is an independent consultant, board member of AngioScore, and a former managing member of the Psilos Group, as well as the co-author of Tech Tonics: Can Passionate Entrepreneurs Heal Healthcare With Technology? and author of the blog Venture Valkyrie. Follow @venturevalkyrie

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  • Bob Kocher

    Really interesting summary!

    Pretty shocking that Toby Cosgrove, CEO echos the myth that payors are highly profitable, “we must manage insurance company profits.” his margins are certainly higher than most of the plans reimbursing him.

  • http://www.thehealthcareblog.com Matthew Holt

    That’s because Toby understands monopoly better than the Ohio Payers do, Bob!

    Meanwhile, it makes sense for GE’s Immelt to be wondering if they should make profit in health care to stave off their health care costs, but the rest of the device manufacturers there make bundles more than the cost of health care for their employees–so it’s clearly better for them for overall costs to rise.

    The question for our Venture Valkyrie is why Xerox and the others are such a bunch of pussies and why they haven’t done the rational thing that Chrysler talked about in the 1980s and handed over the responsibility for their employees health care to the government.

    My guess? Most businesses are run by people who cant do math.

  • David Miller

    I wonder what a clinical site in, say, Argentina or Brazil charges per patient for a clinical trial versus American sites like Cleveland Clinic?

  • http://venturevalkyrie.com Lisa Suennen

    Yeah, it was an interesting meeting guys. I think that we will see a profound transition of employees into defined contribution plans (as compared to the defined benefit current status quo) at companies like Chrysler, which has already done this with their retirees. It gives them a way to be insulated from healthcare inflation by indexing the defined contribution accounts to “regular” inflation and get out of the medical business. As for Cosgrove, you would have to be crazy to offer up your own profits as a sacrifice!

  • http://payer-strategies.blogspot.com/ Torsten Bernewitz

    Thanks for the great summary! The employers’ voice regarding healthcare costs is interesting, as recently many payers seem to refocus their attention on the individual consumer (and may thus be distracted from employers).
    In this light it is perhaps no wonder that no payers were present at the conference. This could be a strategic mistake as there are a lot of changes in the employers segment. Employers’ priorities and benefit strategies will change and diverge significantly. Health insurers must keep the pulse on their evolving needs, create stronger differentiation through products and services, tailor their offering, and become more impactful in bringing the value proposition across. In many cases this means that insurers must get much closer to employers than they currently are. Seems in Cleveland they missed a chance to do this.

  • JP

    The repeated digs against Cleveland were unnecessary and distracting from the purpose of the piece. You spent more time snarking on the completely irrelevant 40-year-old river fire than you did on the “top 10 innovations.” Next time, leave the cheap shots aside and spend your words on thoughtful analysis.

  • http://venturevalkyrie.com Lisa Suennen

    Torsten, thanks for the note. I agree: the employers are a key part of the push for change and will continue to play a key role in the market dynamic, particularly as the Health Insurance Exchanges come to the fore in a greater way.

  • Nicholas Parmelee

    A nice overview of what sounded like a very interesting conference. It is an unfortunate development that one of the more progressive provider organizations in the country totally left payers out. This is concerning and does not bode well for the ACO model.

    The writer Lisa Suennen appears to be an individual of great knowledge and intellect. I was saddened to see her devalue the hard work she put into this piece by loading it with smears of a very proud community.

    I love when some from the coasts site the supposed close mindedness and dated thinking of people in the American Midwest, especially in regard to the electorate. These are the same open minded intellectuals that will strike at the first bate to call Cleveland “the mistake by the lake” or classify all of the American Midwest as “fly over states”. Talk about close mindedness and dated thinking.

    Sounds like it was a good conference. Ah the rants of a proud Clevelander, but frankly we are tired of the jokes. I just want someone to write a review of something progressive that occurred in Cleveland without the mention of something that occurred 40 years ago (polluted river on fire). I don’t see bussing and all of the racial undertones surrounding that black eye mentioned in every article about an occurrence in Boston.

  • http://www.claimppi.co.uk ryan

    Quite an interesting take on the role taht empliyes generally play.