CHIME keynote speaker Robin Farmanfarmaian outlines how retailers and startups are transforming the healthcare landscape and how health systems can jump in to create new revenue streams.
For early-stage healthcare entrepreneur and angel investor Robin Farmanfarmaian, the future of healthcare has already arrived, and glimpses of it are unfolding in her Palo Alto, California, living room. As someone who has dealt with a chronic disease since childhood, she has become an expert on consumer-driven healthcare and the companies that are emerging or adapting their business models to address the growing focus on consumers. She operates ahead of the curve because rather than traveling to healthcare facilities, she arranges IV infusions, lab tests, flu shots, and other medical services to be delivered in the convenience of her home.
Farmanfarmaian was one of the featured keynote speakers at the College of Healthcare Information Management Executives CHIME20 Digital Recharge event, a virtual educational forum for digital health executives. She spoke about the changing healthcare landscape and how it will impact hospitals and health systems. One dynamic that will affect these organizations most is the shift of primary care delivery into retail sites and the home. In addition, there will be pressure from payers and competition from players outside the healthcare sector to deliver other services in ways that are more consumer-friendly. While these changes threaten the status quo, she said that they also present opportunities to better meet changing patient expectations by offering new services and to create additional revenue streams. She offered seven area of innovation to watch.
The co-founder of Face Touch Aware, and author of The Patient as CEO: How Technology Empowers the Healthcare Consumer has been involved with more than 25 early-stage technology startups in biotech, pharma, medical device, and digital health. Her personal life goal is to impact more than 100 million patient lives with these technologies.
1. New Approaches to Primary and Urgent Care
With increased competition from retailers and payers, the delivery of primary care is changing, said Farmanfarmaian. "I get the vast majority of my healthcare in my apartment or within a two-block radius. Proximity matters."
She continued, "Over the next one to five years, we're going to see a massive shift in [moving] primary care out of the hospital and into retail clinics, as well as the home. And with that, there goes your very valuable referral network to your specialists," she said.
Health systems can seek partnerships with some of these players or become inspired to deliver primary care in new ways that will enhance convenience to patients. Among the trends she cited:
- CVS is spending "hundreds of millions of dollars to beef up their primary care–style offices" inside the company's retail locations, said Farmanfarmaian. In addition, the retailer is focusing on some of the most expensive chronic diseases, including coronary artery disease, diabetes, and hypertension.
- Walmart is "building up their primary care–style offerings," she said, along with dental services. "Now a patient can go there, do their grocery shopping, see the doctor, get a prescription filled, have their teeth cleaned, and then when walking out, can buy some new lawn furniture."
- Walgreens also is expanding into the primary care market. In addition, said Farmanfarmaian, the retailer is focused on offering telemedicine for behavioral health and dermatology.
- UnitedHealthcare now sends a doctor or a nurse to members' homes once a year for free, according to Farmanfarmaian. This year, the payer also sent flu and coronavirus kits to their Medicare Advantage patients, containing antiviral medication, a COVID PCR test, and a thermometer. Putting these tools in patients' hands limits the need for in-person visits.
- Another factor impacting this sector is the emergence of companies that offer convenient house calls, sending physicians or other practitioners into patients' homes to provide care. Heal is one such example, she cited. Based in California, its physicians make house calls any day of the week—even to deliver flu shots—and the cost is covered by most insurance plans. The company also offers telemedicine.
2. Other Factors Influencing Care at Home
Retailers, startups, and the government are influencing trends to deliver more care at home in other ways, she said.
- Best Buy Focuses on Seniors: "Had you asked me 10 years ago if Best Buy would be competing directly with hospitals, I would have laughed, but you know, it's 2020, and everything is possible," said Farmanfarmaian. The retailer bought connected health technology company GreatCall in 2018 and formed Best Buy Health, which focuses on "enriching lives through technology," according to the company. Much of these efforts are designed to help seniors live longer in their homes.
The retailer just launched a new phone product for seniors, the Lively Flip. It includes an urgent response button, as well as the ability to use voice commands for calls and texts via built-in Amazon Alexa functionality, and packages offering 24/7 access to virtual urgent care. Kaiser Permanente has jumped into the mix, partnering with Best Buy to offer the phones to the organization's Medicare patients, says Farmanfarmaian.
The retailer also offers a number of internet-enabled health devices. In yet another partnership arrangement, consumers can buy a TytoCare remote exam kit, which includes an exam camera, thermometer, otoscope, and stethoscope. Users can download an app and connect with a doctor for a fee, or have results delivered to an electronic health record. TytoCare has partnered with health systems in some states to provide the telehealth services.
- Home IV Therapy: Other companies offering home-based services to consumers also are entering the market, says Farmanfarmaian. The I.V. Doc, which operates in 35 cities, delivers at-home intravenous therapy for recovery and wellness following a video consult with a physician.
- CMS' ET3 Model: Another interesting development Farmanfarmaian mentioned is a new Medicare payment model designed to provide greater flexibility to ambulance care teams to address the emergency healthcare needs of Medicare Fee-for-Service beneficiaries following a 911 call. Emergency Triage, Treat, and Transport (ET3) is a voluntary, five-year payment model that "aims to improve quality and lower costs by reducing avoidable transports to the ED and unnecessary hospitalizations following those transports," according to the Centers for Medicare & Medicaid Services (CMS). The emergency care team can set up video consults with a physician to determine whether patients can be cared for in their own environment or whether they need transport to urgent care or the emergency department, said Farmanfarmaian.
3. Portable Dialysis
A payer shift to in-home dialysis and the development of portable dialysis units could lead to opportunities for hospitals and health systems.
Humana and CMS are "making a big push" to deliver dialysis in patient's homes, said Farmanfarmaian, who noted that 92% of the dialysis market—a $24 billion a year industry—is currently controlled by two companies. As payers shift to home care, "those two companies need to put out a lot of capital expenditure to get things like portable dialysis machines," she said, opening the door to competition.
Outset Medical, a company that recently went public, offers a self-contained portable dialysis unit.
"If I were a hospital right now, I'm probably thinking about doing just a very basic cost-value analysis," she said. "How much do these machines cost? If I bring it to each patient's house three times a week, how many field nurses do I need to hire? I bet it would work out pretty well in some cases."
4. Alternative Infusion Sites
In an effort to reduce costs, insurance companies are beginning to push hospitals to deliver infusions at alternative sites or at home, Farmanfarmaian said.
"This is another one of those massive opportunity spaces because the alternative site infusion market already is about $14 billion dollars," she noted. She expects a significant shift in care delivery over the next three to four years as infusing these "high-cost meds moves out of the hospital."
While Option Care Health controls the majority of the market, it would make sense for a company like Walgreens to get into this business, she said, but hospitals should also explore their options as well, capitalizing on the close relationships chronic care patients often develop with their specialists.
5. Clinical Trials at Home
Opportunities to expand clinical trials are multiplying as trial sites move into patients' homes.
"Almost a third of drugs fail in late stage trials purely because of patient drop out and recruitment problems," said Farmanfarmaian. "That is heartbreaking because by the time you get to stage three, you've spent hundreds of millions of dollars."
Companies like Marken, which is owned by UPS, and Science 37, which she described as an "interesting startup" have the potential to change these circumstances. The pharmaceutical giant Sanofi has invested in Science 37. The operating model is similar to home infusion companies: medication is shipped to participants' homes and a nurse is deployed, if needed. All clinical trial visits occur virtually.
One innovation in this sector that Farmanfarmaian did not mention is TrialJectory, an artificial intelligence–powered decision support platform that sorts through thousands of clinical trials to help cancer patients find matches to suitable cancer clinical trials. The tool was named one of TIME’s 100 Best Inventions of 2020.
6. Remote Monitoring Devices
A move toward home-based remote monitoring offers numerous opportunities for health systems to transform care delivery and generate new revenue streams. Farmanfarmaian noted that CMS offers reimbursement for several aspects of remote monitoring including educating patients, and conducting the monitoring itself, as well as follow-up communications with patients. Among the novel devices she mentioned:
- Devices to Predict Readmission: VitalConnect has developed a wireless biosensor that measures eight critical vital signs via a patch placed on the body. By combining data input with predictive analytics, the system is able to determine a patient's probable trajectory. "This one's cool," she said, because by sending the sensor home with patients at discharge, the system can predict 6.5 days in advance with about 80% accuracy which congestive heart failure patients are at risk for readmission.
- Implantable Glucose Monitors: Many people are already familiar with continuous glucose monitors from companies such as Dexcom and FreeStyle Libre. These wearable devices measure glucose in interstitial body fluid. Eversense now offers the first three-month implantable device, said Farmanfarmaian. "Your diabetes patients have to go to the clinic to have it implanted, she said, "but once there, it stays there for three months."
- Sensors on Asthma Inhalers: Several companies, including Propeller Health and Adherium have developed sensors that fit onto asthma inhalers that track medication use and gather data to help with asthma reduction initiatives.
- Sensors Embedded in Clothing: Another innovation is the emergence of sensors embedded into clothing. Siren, said Farmanfarmaian, has developed a sock that monitors the feet of diabetics to detect hot spots. In diabetics, early detection of hot spots may help prevent the development of ulcers, which can lead to costly health issues, including amputations. Patients subscribe to the service, which delivers five pairs of socks at a time and is covered by CMS.
Farmanfarmaian wrapped up her presentation with a mention of her "favorite of all the robot dolls," Spot, a four-legged robot outfitted with an iPad and four cameras with sensors to measure skin temperature, breathing rate, pulse rate, and blood oxygen saturation from a distance of two meters. Developed by Boston Dynamics in concert with Massachusetts Institute of Technology, the mechanical creature is being tested at Brigham and Women's Hospital to limit staff exposure to patients with COVID-19 symptoms.
“Over the next one to five years, we're going to see a massive shift in [moving] primary care out of the hospital and into retail clinics, as well as the home. And with that, there goes your very valuable referral network to your specialists.”
Robin Farmanfarmaian, healthcare entrepreneur and angel investor
Mandy Roth is the innovations editor at HealthLeaders.
Retailers offering primary care present one of the biggest threats to hospitals and health systems because, in addition to impacting revenue for primary care physicians, it disrupts the referral network to specialists.
Portable dialysis units and home-based infusions offer opportunities for hospitals to develop new revenue streams.
As remote patient monitoring escalates, a new generation of devices offers even more options for potential reimbursement and reduction of readmissions.