Important Insights from Athena Madros at Open Minds

Executive Briefing | by | December 5, 2017


Athena Mandros
Athena Mandros

It appears we’re on the verge of moving to an era of digital treatment. It’s not like we haven’t seen web-based and smartphone-based therapies in the previous decade, we certainly have. In fact, there are over 165,000 health and medical apps on Google play and in the app store, and about 30% of the adult population owns a wearable (see The Impact Of Tech In The Future – & The Reality Of Tech In The Presentand Remaking Health Care With Wearable Technology & Digital Health – A View To The Future).

But, from a policy perspective, the FDA has finally officially recognized that many of these therapies go beyond advisory or adjunctive and will become an integral part of the treatment process. (For more on coverage of the FDA activities in this area, see Digital Health; FDA Selects Participants For New Digital Health Software Precertification Pilot Program; and Thinking Of Creating A Digital Health App?.)

What is the range of digital treatment technologies? Digital treatment technology is a broad term used to describe a technology tool that can be used to treat a consumer’s physical, behavioral, or cognitive health condition. These tech tools include mobile apps, devices that feed information into medical apps, wearables, and telehealth.

In the past few months, we have seen major digital treatments cleared by the FDA in the behavioral health space. In September, the FDA approved reSET®, a prescription mobile cognitive behavioral therapy (CBT) app for non-opioid outpatient addiction treatment. It is the first mobile application for addiction via a prescription (see FDA Approves Pear Therapeutic reSET Prescription Mobile CBT App For Outpatient Addiction Treatment). And, in November, the FDA approved Abilify MyCite, the first pill with an ingestible digital sensor to track medication adherence. The sensor records that the medication was taken and communicates that information to a mobile application, via a wearable patch (see FDA Approves Abilify MyCite® (Aripiprazole Tablets With Sensor), A Pill With Digital Sensor To Track Oral Antipsychotic Ingestion Additionally, Carrot received FDA approval for the first FDA-cleared digital smoking cessation program (see The FDA just approved the first mobile device and app to help you quit smoking). Another non-behavioral device that has received clearance is WellDoc, who received clearance for BlueStar, a diabetes management program (see WellDoc receives FDA clearance for non-prescription version of diabetes management app). In total, there are now 220+ FDA-cleared medical apps on the marketplace. And, to review what’s been cleared check out: Examples of Pre-Market Submissions that Include MMAs Cleared or Approved by FDA.

What does this mean for strategy and clinical service delivery for provider organizations? There are implications for planning, for clinical operations, for financial sustainability, and for consumer engagement. The planning implications are straightforward. Management teams need new planning capabilities—the ability to evaluate digital treatment technologies and, for those selected, recommend as appropriate. And, when using these new treatment technologies, establishing a process to use the “big data” that comes from digital treatment both in individual treatment planning and in population health management.

The operational implications are more obvious. The selected digital treatment technologies need to be integrated into existing treatment protocols and along with that integration, clinical teams need to accept and learn to excel in using these new tools. But the financial implications are more complex. Bringing in these new technologies will inherently create a “substitution effect” with technology replacing some elements of care delivered by staff changing the cost of care and price points.

Finally, these new digital treatment technologies alter an organization’s relationship (and clinical professionals’ relationship) with consumers. There is more consumer control and more consumer information transparency. Digital treatment technologies allow for real-time feedback and detailed data collection that is in the hands of consumers and direct caregivers. The treatment process and the information relies on consumer involvement in the care management process.

For most provider organization executive teams, “technology” has traditionally meant billing systems and EHRs. In the years ahead, technology will be more focused on the twin goals of population health management and consumer engagement (see How Technology Is Changing Case Management)—and be an integral part of the treatment process.

For more, join us at The 2018 Strategy and Innovation Institute in New Orleans on June 5 for the session Innovation In Addiction Treatment: The New Community-Based, Tech-Enabled Models led by Steve Ramsland, Ed.D., Senior Associate, OPEN MINDS.

There are great opportunities in the chaos that is our health care system. Even the investment climate is disorganized.

Big Data Advancing The Greater Good

Recent data about small business confidence is reason for cautious optimism, and in reading the recent surveys, something has crystallized for me. The improvement in sentiment and thawing risk aversion at the grassroots level is directly attributable to the end of QE. It would seem counterintuitive that a rise in rates would be the key to growth, but I realize now that QE was not a growth initiative, but rather a stabilizing initiative. The Fed’s end game was to de-risk banks by keeping long term interest rates low and hence allow them to bolster reserves. The consequence of this was increased credit availability to long-term mega borrowers (e.g. Cisco’s recent $8B bond offering), yet decreased credit for short-term oriented small businesses. The unwinding of QE is allowing the credit seesaw to tilt to small businesses which are the key to growth, not Cisco. These are the first signs of a potential slingshot for the economy. In 18 months the fear mongers could very well be talking about runaway inflation, but for now the prospect of organic growth, job creation, and the end of price controls in the credit markets are cause for market purists to rejoice.

You may love Bob Dylan, you may hate him – but no one who can argue that the man is a genius.  And it is further indisputable that if you like almost any “popular” record made after 1962 that you owe it to him and the path that he paved for all who followed him.  In 2012 he released an album, exactly fifty years after his first.  The album was good — not thrilling, not fabulous, but good.  In an of itself, it is an album worth listening to. That opinion isn’t based on a comparison to Blood on the Tracks or Blonde on Blonde, or any of his seminal works that laid the foundation of popular music as we know it. It’s just based on an evaluation in a moment in time.  He’s not the man or the artist he was decades ago.  It would be unfair to compare him to himself, wouldn’t it?  It would be unreasonable.  It would be unproductive.

For the last year I have been listening to the debate in the financial blog-o-spheres about Apple.  Let me throw it out there right off the bat that I am not a Tim Cook fan.  That being said, as a witness to Apple’s loss of market value and present valuation in the marketplace, I think that some of what the stock is enduring is the result of an unfair comparison of the company to itself.  I say some because I agree that Apple has not been the innovative company it was under the great genius direction of Steve Jobs.  It has recycled and facsimiled versions of existing products with new bells and whistles and some improvements at the margin; but, it has not given us the disruptive, cult like products that we learned to expect from it.  And so some significant compression of its valuation is justified.  As any stock transitions from “growth” to “value”, it will endure the same process.  It is inevitable and wholly appropriate.

I really don’t want to turn this into a complex financial argument, so in the simplest of a terms I will point out that by most widely accepted measures Apple is valued between 30%-40% ‘cheaper’ than its peers.  It’s not growing as fast as they are, it’s not perceived to be innovating as well, and its management team is not held in as high a regard.  BUT — Apple’s profitability is enviable, its products are still extremely relevant, it has over $100B in cash, it has no debt, and we all still sit on the edge of our seats wondering what they might be giving us next.  So I caution everyone not to make the mistake of comparing today’s Apple to it’s former self.  Like Dylan, it may not be the genius we once knew, but that does not mean it’s not still great.

After 20 Years, “Athlete of the Month”

After half a decade of Federal Reserve monetary expansion, interest rate markets are in a state of flux. Bernanke has telegraphed his punch – the party is not going to go on forever. And that is a very good thing. The trick to managing any crisis is to ensure that the emergency measures do not outlast the emergency. So while many an analyst would suggest that economic data do not support a complete suspension of QE, the analysis cannot be merely based on unemployment, housing starts, and durable goods orders, but also on an evaluation of what the incremental impact is on the economy of each additional dollar of expansion of the Fed’s balance sheet. I am sure that everyone would have hoped for more than 2% GDP growth given the TRILLIONS of dollars that our government has effectively lent to itself, but the reality is that the efficacy of the “program” is waning dramatically. So it’s getting to that point in the process where it’s time to start planning for the end of free money, for better or worse.  Bernanke has given us that warning.

But if US Treasury Bonds reclamation of market driven equilibrium price discovery wasn’t going to be volatile if not painful enough on it’s own, we have an added layer of complexity to deal with. Chairman Bernanke is tired and he’s ready to write a book and start teaching Econ 101 again. The man has been fighting a war for the last 5 years and he is toast. So on top of the over-televised, over-blogged, over-discussed issue of where the 10 year bond is going relative to the strength of the economy, we have to hear and read on a daily basis about the Yellen vs. Summers debate. Who’s good for equities? Who’s bad for bonds? Who’s a better leader? Would it be cronyism to hire Summers? Would it be too much of the same to give it to Yellen? It’s enough to make you want to crawl under a rock, never watch Bloomberg or CNBC again, and cancel your Twitter account. And in my opinion, it is exacerbating the already difficult process of the bond markets finding their new levels given the Fed’s eggression.

So who is to blame for this added and wholly unnecessary volatility in bonds? Speculators? Seeking Alpha bloggers? CNBC talking heads? Hedge funds? The answer is “E” – NONE OF THE ABOVE. The responsibility for this nonsense is none other than the White House. The President has told the world from his vacation in Martha’s Vineyard that he needs some “space” to make his decision about the new Fed ChairPERSON. He needs space. What is this? A college girlfriend he doesn’t have the courage to break up with? I get it…He’s tired and needs to play some golf, hang with the kids before school starts, have a beer on the beach with his wife. We all need that once in a while. But while President Obama is an amazing communicator from the stage of a political rally with adoring fans cheering for him, when it comes to managing his “business”, it’s not really his strong suit. Markets have been climbing the wall of worry for the last 5 years despite Obama’s opacity throughout. And while of course there needs to be a rigorous and through process for these kinds of major decisions, and they cannot be dictated or rushed by hyper-sensationalism on social media and journalism outlets, sometimes pragmatism has to prevail. I believe now is one of those times. There is no need to perpetuate the added drama of this debate and its exacerbation of already challenged credit markets, despite the fact that the President needs a vacation. Markets, homebuyers, and businesses need some visibility. They need some communication on this issue. They deserve it just as much the President deserves a vacation.

Out of deference to my favorite Einstein quote and business mantra above, I feel compelled to post this Natasha Lomas blog post that appeared in TechCrunch earlier this week.  My first boss back in 1994 managed his firm on the KISS model (Keep It Simple, Stupid), and it has stuck with me since (Thanks Dad).  My big takeaway is that startups must understand that simplicity is not just about messaging, but about their business models in general.  It may feel like a conundrum as today’s investors all seem to be looking for the 50X exit, but the longest of journeys begin with a single step. Solve a problem. Be agile. And remember that Johnson & Johnson was founded with a first aid kit as its first product.