Bill Russell on Interoperability Headwinds and Behind Amazon’s Pill Pack

This Week in Health IT News - Bill Russell
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It’s Tuesday, News day and here is what we have on tap.
  1. Lawmakers call for a delay in implementing interoperability rules
  2. Aetna’s Consumer Tech Bet: Teaming Up with Apple to Keep Patients Healthier
  3. The inside story of why Amazon bought PillPack
  4. Why Google believes machine learning is its future

Episode Videos

Bill Russell:                   00:00                Welcome to this week in health it news where we look at four stories in 20 minutes or less. That’s going to impact health it today. While makers look to delay interoperability rules. Apple, Aetna health APP launches a an inside look at the PillPack acquisition by Amazon and Google’s machine learning is advancing rapidly. My name is Bill Russell. Recovering healthcare CIO and creator of this week in health it. A set of podcasts and videos dedicated to developing the next generation of health it leaders. This podcast is brought to you by health lyrics. Have a struggling health care project. Do you need to go? Well, let’s talk visit Health to schedule your free consultation. We are the fastest growing podcasts and the health it space with news and interviews that are targeted to the application of technology. In healthcare, we have two shows every week. We have this week influence a discussion with industry influencers and this week news where we explore the news impacting the professionals such as yourselves, so they’re focused on the use of technology and the delivery of health.

Bill Russell:                   01:10                If you enjoy the show, please share it with a peer. If you have a story you want us to cover, please shoot me a note in the email [email protected] and now onto the news lawmakers called for a delay in implementing interoperability rules. There’s an article by Heather Landy on fierce health And what you’re seeing here is that you’re, you know, HSS onc came out with rules around interoperability and, uh, now you’re starting to see it sort of filter through the system. And now you have senators who are debating this on Capitol Hill and you just see the powerful forces behind them, uh, as their words sort of, uh, uh, tell us what people are thinking. So you have a, and this is both sides of the aisle, uh, there’s a fair amount of people calling for delay and their, um, their rationale is that it’s unrealistic.

Bill Russell:                   02:04                Uh, the timeline is unrealistic and that would pose a significant compliance burden on health insurers, providers, and other stakeholders. Um, but you know, there are people on both sides of this argument. Uh, for example, Senator Mike Braun, Republican from Indiana says that, uh, this is a healthcare industry is an industry that’s dragging its feet. He called the healthcare industry dysfunctional and not consumer driven. Uh, he goes on to say that the healthcare industry is full of smart individuals and big corporations who have figured out how to take advantage of the rules. Um, I interesting debate that’s going on in Capitol Hill. This is a little different actually. It’s a lot different than what we saw at the keynote at himss. We saw officials from multiple administrations, both parties across decades. Literally you had Obama Administration, you had Bush administration, you had the elder Bush administration going back that far.

Bill Russell:                   02:58                And you know, they were telling us that the time was now we had learned a lot and that um, you know, that uh, secretary of Asr and Seema Verma was onstage, that the onc HSS were spot on in what they were talking about with regards to interoperability, who at the time was now to empower the consumer with their health data. The technology is ready. We have the experience with fire Api are more common in the Industry Api. are just comment in general. College kids are graduating today, know how to use them. Mobile applications have proliferated. Uh, security models are there. We have all sorts of the, the timing is right to make this happen. There was bipartisan agreement to take the next step. So just as a reminder, what we’re talking about here, CMS has proposed some uh, some rules for anyone participate in programs like Medicare, Medicaid, uh, the exchanges.

Bill Russell:                   03:54                And it would, they would be required by January 1st to have the capability to give 125 million patients electronic access to their personal health information at no cost to the patients. Okay. So that’s what they’re talking about. The, uh, senator suggested that HHS should adopt a more phased in approach, um, instead of hard deadlines that it would be over time and it would be, it’s just a lot softer. Uh, I thought one of the more interesting comments, senator, Mitt Romney, Republican from Utah question whether trying to achieve nationwide interoperability was a bridge too far at this stage. We might need to rethink how we approach this goal of interoperability and move to a more standard oriented process versus an implementation process. Wow. I would love to know what that means. Um, but, uh, I, it’s, it’s interesting to ask the question of are we going about this incorrectly?

Bill Russell:                   04:52                That’s what I think is interesting about that comment. I’m not sure what the end of that comment really means, but to say, are we doing this correctly? Are we approaching this correctly? I think is what he’s saying. So, um, the last thing from this article, national coordinator for health, it dan Rutger and d pushed back on the changing of the timelines, noting that the majority of providers have access to health it software that meets the interoperability standards today. The risk of delaying this is that the American public is not in charge of their healthcare, are paying far more or paying more for their care and not getting as good of care as they could get. So you’re starting to see this thing play out. Here’s the A, I think the big takeaways from this is there’s a potential delay in the works. Powerful forces are at work behind the scenes making this happen.

Bill Russell:                   05:43                Uh, the good news is no one’s really arguing the need, just the speed. So it’s, it’s not about doing interoperability, it’s just a matter of the pace at which we’re bringing in about. So what we’re gonna try to end each one of these stories with a so what, so what is still remains the right thing to do. The economics may not line up yet. Uh, the use cases are, may not line up yet. Still the right thing to do. People are still heading in this direction. Uh, so we should probably be heading in this direction one way or another. I don’t hear any sound arguments for why we should not be sharing the data with the patient and empowering the patient. So no one’s making that argument yet. So all this is, is a delay buys a little bit of time. Uh, so that’s, you know, potentially a good thing for some, uh, for others like us, all of us who are patients. It may not be a good thing. So we will see. We’ll see how this transpires.

Bill Russell:                   06:40                Second story, apple, Aetna health app gets released. So let me tell you what I, what I’ve seen in this story. So this story is from health, uh, HC innovation So healthcare innovation, uh, is, uh, online journal magazine that’s out there titled the Articles Edna’s Consumer Tech Bet why the insurer’s teaming up with the apple to keep patients healthier. Uh, let me just break this one down. There’s not a lot of quotes and things to really read about this, but cvs Aetna is releasing an APP, they’ve been piloting, piloting it, uh, they’ve grown the, uh, pilot to about 250 to 300,000 users of their 22 million members that they have. And the APP is called attain a, I’m looking at some of the screens here, and to be honest with you, it looks an awful lot like a health wellness app for an employer program. So you have, uh, the ability to track things, track your exercise goals, your weight loss goals.

Bill Russell:                   07:41                Probably a couple of others that I’m not seeing here. Uh, it’s linked to your, uh, watch. So it’s receiving that information directly. The, uh, has some, uh, some health tips I guess if you will. It has some challenges. I don’t know if it has the ability to challenge others, but you get some challenges sort of delivered through the APP itself. And then as a rewards program. So as you, as I’m describing it, you can picture this from any one of the wellness organizations that has an app out there for, uh, for large organizations, uh, to utilize for their employees. This, uh, it’s interesting because of the large, a large part of this article talks about, um, patient privacy, privacy of the information, which I find interesting from this perspective. Privacy. It’s not really talky. I mean it’s talking about privacy, like protecting the data, like my step data and all that other stuff.

Bill Russell:                   08:38                I don’t think it has data in there that I’m really worried about anyone getting hold of except the insurer. To be honest with you. I’m afraid the insurer’s going to get it. Take a look at the number of steps and say, Hey, you don’t take that many steps. We’re going to increase your rates, are going to look at my weight and say, Hey, you were, you put on 10 pounds, we’re going to increase rate. So it’s interesting you’re talking about privacy. Uh, it’s, it’s anyway, they, it, it just doesn’t seem like they’re, uh, they’re focused on the right thing. They should be more focused on the privacy of my data, going to the very people who created the APP, which I think is one of the challenges. So I think there’s three things here. One is a, this is a consumer discerner mediation play and all that means is Aetna.

Bill Russell:                   09:22                Cvs are clearly positioning themselves between the patient, the consumer and the health system because they want to direct where care goes. Um, the APP looks very much like most employer engagement tools that are out there. Uh, the third thing I would say is they talk about this, that there’s been a lot of failures in this space, but I think that’s all the more reason to have a strategy, not one of those things where you just throw up your hands and say, ah, we can engage consumers or we haven’t been able to. So, uh, so what’s the, so what on this article, I think that’s, so what is, we keep seeing these disintermediation plays. Healthcare systems cannot afford to be disintermediated from their consumer. So you have to figure it out. Listen to the consumer figure out what they want. Build, buy or partner, whatever it takes to get there.

Bill Russell:                   10:08                You have to have a play to keep from being disintermediated from the consumer. So that’s the, so what on that article, let’s go on to the next one. Next one’s interesting. the inside story of why Amazon bought pill pack in its effort to crack the $500 billion prescription market. So on June 28th, Amazon bought pill pack for $753 million. Um, the reason they did that as the spending in US prescription medication is approaching about 500 billion a year with gro growth rate of about 7%. And uh, it goes on to say in more detail why they did it. Um, PillPack has spent years going through the hard work of getting licenses to ship to every state except Hawaii. And they’ve built a system that automatically manages refills and works with insurance insurers on behalf of customers. It’s sorts pills and provides dispensers to make everything as easy as possible.

Bill Russell:                   11:12                So the two things about this acquisition, one is a pill pack as a software called a pharmacy os, which was a big part of why Amazon bought this. And the second is they have a very consumer friendly way of delivering the, uh, medications, right? So you’re used to getting the big pill with the UN openable bottle. Now you get these pill packs, which essentially are labeled Sunday, Monday, Tuesday, Wednesday. You just open Sunday, you take your pills in a way you go. So why, why did Amazon do it? Um, uh, Fred Destin, early PillPack investor described it as a complicated and expensive space with a potentially big prize. In other words, it’s a type of business that Amazon CEO, Jeff Bezos loves you, DA, huge dollars antiquated technology and so many regulatory barriers. That’s the smart money is running away. So they did the hard work. They went out and they got the licenses in every state, which is not a small deal.

Bill Russell:                   12:07                They’ve created the software that’s going to help automate it and now they’re moving to scale. And that’s what Amazons, uh, saw. Um, here’s an interesting quote on this. Amazon bought the one company in the space that all the PBMs and other pharmacy businesses were threatened by said Yumin Choi, uh, health tech investor at being capital ventures. So, uh, you know, it’s interesting, this article, it’s, it’s a good article. It’s a good read because it talks a lot about how this sort of came about. It talks about the history of the founders and the acquisition itself. I think one of the more interesting aspects, it talks about how, um, the PBMs actually went after them a little bit and how they combated that. They hired a, a bunch of, uh, pretty powerful people from former administration’s to help orchestrate a, a, a defense, uh, against the PBMs and what they were doing and they were successful.

Bill Russell:                   13:04                I think that’s pretty interesting. Another, um, you know, another reason that Amazon bought it, and I think this is fascinating as well, uh, for Amazon, which recorded over 230 billion in sales last year at PillPack doesn’t move the needle at its current size. The value for Amazon is in the promise of plugging the delivery network into a giant ecommerce machine, especially when considering the average PillPack user in 2018 was worth $5,000 in revenue through insurance payments and patient copays. According to the slide presentation that’s far more than average prime member who spends about 1300 plus. It’s a completely different demographic. It’s an older demographic, which they, uh, are looking to attract and go after. Um, so, you know, what are the three takeaways here? The, uh, you know, Amazon loves these businesses. They, they go after high barrier of entry and, um, businesses that could benefit from automation and economies of scale.

Bill Russell:                   14:02                And this is perfectly in that space. Uh, the sec second is you can look at this and say, Amazon as a strategy has had added at part of its strategy is to replace the visits to the local pharmacy, the right. So there’s almost nothing that you get at a cvs that you cannot get on Amazon, uh, with the addition of medication, right? So you can even get, um, you know, home goods and those kinds of things. You can get whatever you want off of Amazon and get it delivered, uh, in a, in a much more automated, in better form factor. They’re looking to grow this, by the way, I missed talking about this in the story. They’re looking to grow this by partnering with payers. And going directly to payers, are going directly to consumers and going directly to their prime, a prime customers. And so that’s a way that they’re looking to grow this and is seeing a pretty rapid growth pace.

Bill Russell:                   14:55                Uh, the last thing I would say, the last thing on this is the software pharmacy Os was a, a key component of the purchase. And it also lends itself to the strategy that Amazon typically looks too, which is leveraging software and automation to take complexity out, to remove friction of the transaction and to build just a better overall a supply chain and experience for the consumer. Because it’s Amazon. Everything is about the consumer. So what, so if your health it, why, why even cover this story? Because it represents new business models and uh, the, the new business models that are most dangerous are the ones that are, uh, at scale. And this one just immediately went to scale at 200. It was at 200 million already. It’s well on its way to a billion, uh, with Amazon’s capabilities. Uh, you’re looking at a business model that is going to be disruptive.

Bill Russell:                   15:55                So keep an eye on this one. I think it’s really worth, uh, worth taking a look at potentially partnering with who knows, who knows what your health system strategy are. But that, uh, could be, could be something to take a look at. So our last story comes from a ars technica. It’s why Google believes machine learning is it’s future, right? So Google io just happened and they did really cool stuff, uh, with Google’s voice assistant and things that, you know, it’s pretty basic stuff in terms of writing an email, but it was much more like natural language things like you’d have to say the subject to this email is going to be, they would just say, um, you know, they would just say, you know, subject, you know, set the back to the Yellowstone adventures. I would set it, then they just go on and continue to dictate or say things and it would immediately drop down to the body.

Bill Russell:                   16:52                So there’s a bunch of things. It did, is it really showcased the fact that they were able to really hear and match patterns for how I was dictating the email and putting it in play. So, not a lot of new, um, let’s say announcements at Google io around this, just showcasing some of the sophisticated features that Google is able to do with the technology. So, you know, so what are we looking at here? Some of the things I thought were interesting from this story is that, uh, they talked about the three legged stool of deep learning and they are better algorithms, more training data and, uh, much more computational power, right? So when I read those things, better algorithms, more training data, more computing power, I immediately think of healthcare because we have a ton of algorithms, we have a ton of data and computing power is available to us.

Bill Russell:                   17:52                So however you get there, there’s an opportunity to utilize machine learning and AI. So the other thing I picked up from this article is, um, oh, uh, they are starting to move machine learning down to the phone itself, giving it a 10 x advantage in terms of performance. I’m not entirely sure how they’re doing this, that they don’t really go into details. But if they’re able to move it down to the phone, uh, down to the mobile device without connectivity to the Internet, then you’re looking at a significant change in the way that, um, voice assistance operate and potentially how we inter-operate, uh, how we interact with things like our EHR. And there’s, there’s definitely some opportunities to use mobile technologies and mobile phones to really transform the, uh, the clinician experience with some of those systems. So something to keep an eye on. So what are the three things on this?

Bill Russell:                   18:49                Um, you know, they just showed off their prowess for machine learning and AI basic tax today, but it should very sophisticated interaction. They talked about the three legged stool of deep learning, better algorithms, war training data, more computing power, and they talked about moving ml and AI to the mobile device for a 10 x improvement. So what, uh, I would say the, so what is, what is your machine learning and Ai Strategy? If I were a board member today, I would pull the CIO in and I would say, tell me what we are, how are, how am I supposed to be thinking about machine learning and AI? And, uh, I actually did speak to a CIO today and asked him that very question about machine learning and AI. And he had a very clear and well thought out AI and machine learning strategy and approach.

Bill Russell:                   19:36                It’s not that he knew where it was going, it’s not that he knew everywhere he was going to use it. Um, it’s not necessarily that your board is looking for answers on that, but your board’s looking for as a coherent strategy to coming up to speed on it, to, uh, where you’re going to be implementing it. Uh, you know, maybe on the clinical side, maybe on the administrative side, but they, they’re not really looking for answers at this point. They’re looking forward direction. And so that is the, so what on that Google, every time you read machine learning and Ai, there are very few people that don’t think it’s going to really transform the industry. And so it’s time to get ahead of it. So those are the four stories in 20 minutes or less. Uh, keep in mind, we have an exciting lineup on this week in health it influence, that’s the show every Friday.

Bill Russell:                   20:24                Uh, Johnathan Manis was on, the CIO for Christus was on last week. Andrew Rosenberg, a Michigan Medicine Cio is going to be on in the coming weeks. Chad Brisendine, Saint Luke’s university health network CIO. Uh, it’s going to be on as well. Charlie lougheed, former CEO of explorers is now starting a company for applying a blockchain. And so he’s blockchain health tech entrepreneur. And I’m looking forward to talking to him about the state of the industry there. Eric Jablonka is the CIO for Stanford, Stanford Medical Center and a, all those people are scheduled to be on on Friday on the Friday show. So you’re gonna want to check back every Friday and every Tuesday we’re going to continue to do, uh, this new show where we try to do four stories and under 20 minutes that shows a production of this week in health it for more great content. You can check out our website or the youtube channel thanks for listening. That’s all for now.


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