Lab Soft News

CROs Favored by Investors Due to Growth in Phase IV Studies

I have previous notes about Covance, a contract research organization (CRO) with special expertise relating to lab testing in controlled clinical trials. A recent article called attention to this company as well as other CROs and suggested that such firms are attracting more attention from investors (see: Drug-testing firms attracting more investors). Below is an excerpt from the article (boldface emphasis mine):

Increased regulatory scrutiny of new drug candidates in recent years has produced more business for companies that conduct clinical trials for pharmaceutical firms....But despite trading at historically high valuations, further growth is likely because of the rising number of lucrative post-market studies and as the sector becomes a shelter from a political storm that could target health care, many experts said. Growth of the research organizations has been powered by an increased number of clinical trials, thanks in part to a rise in outsourcing at pharmaceutical companies, which have been cutting costs as they face rising competition from generic medication, emptier product pipelines and a tougher regulatory environment....The big reason for optimism in the stocks is a relatively new phenomenon in the drug-approval process—the growth of post-market studies. These Phase IV studies, which track a drug after it receives Food and Drug Administration approval, are lucrative for the research organizations because the studies are large, long in duration and unlikely to be canceled.

In a previous note (see: DOD Will Share Electronic Medical Records with the FDA), I discussed how the FDA planned to interrogate DOD-supported electronic medical records in a program called the Sentinel Network in order to study the efficacy and safety of prescription drugs already approved for use, which is to say Phase IV studies. This current news reflects another response to the growing interest in monitoring drugs already on the market, this time describing the bullish interest in CROs for whom participation in such studies enhances their bottom lines.

Just to round out this note and to bring a few other points to bear on the discussion, here's how the Wikipedia defines Phase IV studies:

Phase IV trials involve the safety surveillance (pharmacovigilance) and ongoing technical support of a drug after it receives permission to be sold. Phase IV studies may be required by regulatory authorities or may be undertaken by the sponsoring company for competitive (finding a new market for the drug) or other reasons (for example, the drug may not have been tested for interactions with other drugs, or on certain population groups such as pregnant women, who are unlikely to subject themselves to trials). The safety surveillance is designed to detect any rare or long-term adverse effects over a much larger patient population and longer time period than was possible during the Phase I-III clinical trials. Harmful effects discovered by Phase IV trials may result in a drug being no longer sold, or restricted to certain uses: recent examples include cerivastatin (brand names Baycol and Lipobay), troglitazone (Rezulin) and rofecoxib (Vioxx).

World's Smallest Ultrasound Device Unveiled

It doesn't seem so long ago when Leonard McCoy, nicknamed Bones and the Starship Enterprise surgeon, would wave a hand-held device over an injured or sick crew member (or some alien species) and then obtain the diagnosis from the display screen. Not only was such a device unavailable at that time but it was also unimaginable. Now comes news about the availability of a handheld ultrasound device that seems to be moving in this same direction (see: Siemens Introduces The World's Smallest Ultrasound Unit For Emergency Diagnostics). Below is an excerpt from the story (boldface emphasis mine):

...Siemens is now offering a mini ultrasound unit that will enable patients to receive medical treatment faster than ever before. Because this unit is just as compact as a PDA cell phone, weighs only about 700 grams, and easily fits into the physician's pocket....The "Acuson P10" mini ultrasound unit offers decisive advantages for first aid in outpatient areas, rescue helicopters and intensive care units: It is mobile, easy to operate and available to physicians whenever and wherever it is needed. When set to high-definition ultrasound image acquisition, it can, for example, be used to detect accumulations of liquids in the body and heart action, display any damage to arteries and examine the pelvis....The ultrasound images are displayed on a folding monitor located on the unit. The unit can easily be controlled with your thumb much like a PDA pocket computer. Its storage batteries enable ultrasound images with a total length of approximately one hour before they require recharging. The treating physician can save the images, transfer them to the hospital information system and assign them to the patient file.

I posted a previous note about how portable ultrasound devices were being distributed to medical students for use in their clinical studies (see: Portable Ultrasound Devices Introduced into Medical School Curriculum). It seems to me that these portable ultrasound devices will become indispensable for clinicians in selected outpatient and emergency department settings. It's also obvious that a much greater swath of physicians will need to be trained in their use -- not just radiologists. Emergency medicine training programs are offering ultrasound fellowships. For example, Stanford advertises the availability of such a program in both its adult and pediatric emergency departments (see: Stanford Emergency Medicine Ultrasound Fellowship).

Of some interest is how the radiology leaders will view this leakage of ultrasound  imaging outside of their specialty boundaries. My reading and discussions in this area suggest that the radiologists currently have their hands full deploying new CT and MRI imaging modalities such as the hybrid variants and don't seem to be lamenting the loss of some of the ultrasound studies.

Pharmacists and the Care of Diabetic Patients

I have posted a number of previous notes about the evolving and extended role of pharmacists in the healthcare delivery system (see: Local Pharmacies Emerge as Centers for Care of Diabetics; Pharmacist-Staffed Coagulation Clinics in a Large Health System). Another recently published article suggests that the role of the pharmacist as a manager and coach for patients with diabetes will be pushed even further in some settings soon (see: UT professor hopes to revolutionize medication prescription process). The business model proposed by CeutiCare involves the integration of pharmacists into the actual primary care clinic setting. They meet with patients after their physician visit for assistance in developing a drug regimen with the highest probability of achieving the therapeutic goal with the lowest risk of adverse effects. Below is an excerpt from the article (boldface emphasis mine):

A professor of pharmacology ...has a business concept that could change the way medications are prescribed in medical practices and improve the outcomes for patients, he says. Kenneth Bachmann has started a company called CeutiCare to improve health care outcomes through medication therapy management [by pharmacists]. His business involves the collaboration of pharmacists and physicians to improve treatment of patients with better management of their prescribed medications ....If a diabetic patient's medication is poorly managed, the long-term consequences can be dramatic and costly....In the pilot program with 300 patients, 70 percent reached their goals in all three levels and 90 percent reached at least one of those goals, Bachmann said....The patient is educated about their medications and treatments by seeing the pharmacist once a month until they reach their therapeutic goals. Once those goals are met, they  see the pharmacist once a quarter for follow-up visits, Bachmann said.

I am not sure if this model of the integration of pharmacists into primary care clinical settings will succeed. However, I am fairly certain that insufficient time is frequently allocated to counseling diabetic patients in office settings and during follow-up visits to determine whether they are adhering to their drug and diet regimens.

What is most interesting about the CeutiCare model, as described on its home page, is the tight link between the services delivered by the pharmacists and the pay-for-performance (P4P) reimbursement from HMOs returned to the practice for achieving performance goals with diabetic patients, described thusly:

Generate bonus payments (Pay-for Performance or P4P) based on patients reaching therapeutic goals, which will help: (1) cover fixed costs; (2) return dollars to HMOs: (3) return dollars to physicians; (4) generate profit for CeutiCare .

Obviously this P4P business model will only work in those areas where such payments are sufficient to cover the cost of the pharmacist-patient counseling activities. CeutiCare plans to drive down the cost of these services by the introduction of automated systems such as electronic medical records.

Checking a Physician's Credentials on the Web

I have posted a number of previous notes focusing on the topic of Health 2.0 by which is meant, in part, the opportunity for healthcare consumers to easily access relevant and useful information on the web. This lesson is borne out by a recent article emphasizing the need to check the professional credentials of one's physician or surgeon on the web (see: Considering plastic surgery? Check credentials). Below is an excerpt from the article (boldface emphasis mine):

Sometimes, says physician Stephen Miller, people spend more time and effort shopping around for a car mechanic than they do for a plastic surgeon. The death of rapper Kanye West's mother, Donda West, ...serves as a reminder that cosmetic surgery is not merely a beauty treatment, so patients need to examine doctors' qualifications before choosing a surgeon, medical experts say. West, 58, died a day after having cosmetic surgery in Los Angeles....A spokesman for plastic surgeon Jan Adams told the Associated Press that Adams, who has appeared on Oprah and had his own series on Discovery Health, operated on West. A quick check of information available on the Internet showed that Adams is not board-certified and that the Medical Board of California is seeking to revoke or suspend his license to practice because of multiple criminal convictions for alcohol-related offenses. The medical board filed a complaint against Adams in April, months before West's surgery...."You want to know all kinds of things about the doctor, but, at the very least, you want to make sure that doctor is certified by an ABMS board and is concentrating on an area you want him to be concentrating on," [said the president and CEO of the ABMS].

Here's a link to the American Board of Medical Specialties (ABMS) home page and here is a link to its web page for launching a search to check a physician's credentials. Free registration is required but it takes only a few minutes. One needs to first register as a healthcare consumer who wants to use the service.

I am certain that all reputable hospital and academic medical centers maintain offices to check the credentials of all of the physicians who receive appointments to their staffs. However, occasional mistakes are possible. I believe that this is particularly important when contemplating cosmetic surgery which seems to attract some practitioners with sketchy backgrounds, as the story above suggests.

I can't help but reflect on the ease of this process with the results of a search returned in minutes. I suspect that such a transaction for an interested consumer would have taken days or even weeks only a few years ago. There is really no excuse today for not taking advantage of these web resources.

 

Growth of Online CME Interpreted as Bad News for Pharma Marketers

A recent blog note about the growth of on-line continuing medical education (CME) for physicians caught my attention (see: Online CME Growth is Bad News for Pharma Marketers). For me, the note touches on three topics that are of great interest to me: (1) the future of CME; (2) the web as a vehicle for educating healthcare professionals; and (3) the reliance of some physicians on pharmaceutical companies as a major source for their information about the drugs that they prescribe. Below is an excerpt from the article (boldface emphasis mine):

It's very instructive to peruse ACCME's annual report data if you want to understand the trends in pharma support of physician continuing medical education (CME). ACCME stands for Accreditation Council for Continuing Medical Education.... Doctors need a certain amount of CME credits every year to maintain their licenses. The ACCME data includes information about the number of physician participants in CME programs, the CME hours delivered ....And it breaks this information down according to the type of CME provider ....Last year, the pharmaceutical industry provided $1.19 billion to sponsor CME programs ($1.44 billion if you include advertising and exhibits at CME events). Meanwhile, the number of physicians participating in online CME “events” has increased dramatically, especially in 2006 ....Approximately one quarter of physician participants in CME activities occur via the Internet....This is bad news for the pharmaceutical industry. Online CME is delivered mostly via physician Web sites like Medscape.....As far as pharmaceutical marketers are concerned, the more physicians that get CME credits online, the less likely they are to attend live events where collateral marketing can easily occur.

I consider the increasing interest by physicians in the web as a source for CME in a very positive light and as possibly a way to dilute the influence of Big Pharma on the choice of drugs by physicians. One reason for the increasing popularity of the web for CME activities, and my support for it, is that it's less expensive than presentations in live settings. The playing field is thus more level. Another reason is that it's easier for busy physicians to fit web-based CME activities into their busy days. Lastly, the web tends to provide broader access to a wide range of data and opinions for the learner. For example, information about the efficacy a particular drug or side effects based on research studies are usually only a click of two away. The Medscape CME offerings are free and the web site will even keep track of CME credits earned.

I need to emphasize that web-base CME will never be a total substitute for live speakers or conferences. This blog, Lab Soft News, has a companion conference, Lab InfoTech Summit, that provides an invaluable opportunity to hear lectures by a large set of faculty, view the product offerings of many vendors in the same room, and network with peers from around the country. However, it is important to avoid conference venues where sponsors or exhibitors control the messages that are delivered or where commercial bias is not clearly recognizable.

A Closer Look at the Vertical Cloud in Healthcare Computing

In a recent note here that was stimulated by a blog note by Nicholas Carr (see: Look, ma, no servers), I raised this issue of the so-called serverless approach to the provision of internet services and then proceeded to discuss its applicability to healthcare IT (see: The Potential for "Sereverless" Healthcare Computing). Simply put, a serverless architecture, or cloud computing, means that server time is "rented" by the provider of IT services, such as a hospital, rather than owning and managing the physical computing resources.

Nicholas Carr is my favorite blogger in the area of general IT strategy and I have made frequent references in Lab Soft News to his notes in RoughType. He took my suggestion about the serverless architecture as it might apply to healthcare and pushed it even further (see: The vertical cloud). In this latter note, he refers to the "vertical cloud" by which he means the application of the serverless architecture in a vertical industry like healthcare.

In response to my original note, about serverless healthcare The PACS Designer (TPD) submitted the following comment (boldface emphasis mine):

The serverless computing concept has been around for years but is just being recognized by Dr. Bruce and others in healthcare recently. What has brought the concept into the mainstream media is the proliferation of storage solutions for images and other personal information. Even e-mail services may be renting servers for their clients or using the existing grid structure that has been developed by Dell, HP, Oracle and others. InsiteOne, a healthcare imaging storage provide, currently has over one billion image files stored for over 400 hospitals who pay a fee for each stored file which can be accessed at any time for referral. The vertical cloud continues to get bigger with time and healthcare is joining this cloud in even greater numbers. You can look at server utilization now in the same light as your electric, water, and other utilities services.

As usual in the area of PACS and radiology, TPD is way ahead of me. On its home page, InsiteOne claims that the company has now archived more than 20.5M studies and 1.5B images for radiology practices. It probably should come as no surprise that the vertical cloud is alive and well in the PACS world given the current computer storage demands in radiology.

So let's draw the logical conclusions from what we have learned from all of this in the form of an email to all hospital CEOs:

Mr. Hospital CEO, you are already storing your radiology image data remotely using a vertical cloud approach. Why not consider this same approach for other aspects of your enterprise IT services? You can divert some of the money that you have saved to your clinical labs to invest in molecular diagnostics upon which much of the future of healthcare delivery will rest.

Sunquest Dusts Off Its RIS and Pursues a "Convergence" Strategy

I have posted previous notes about the purchase of the Misys LIS and RIS by Vista Equity Partners, including some unsolicited advice to the new owners about the LIS business (Some Unsolicited Advice for Vista Equity Partners About the Misys LIS Purchase). Note that this LIS/RIS enterprise has now reverted to its old name of Sunquest. Contained in this latter blog note was the following observation (boldface emphasis added):

Some onlookers are even promoting the idea of an integrated "department of diagnostic medicine" created by the convergence of pathology, lab medicine, and radiology. If and when you invest in enhancements to the LIS that you have just purchased, keep in mind that the LIS and RIS worlds may be converging and integrated functionality of these systems may be highly valued in the future.

Now comes a clue about one aspect of the Sunquest revitalization plan derived from a recent company press release (see: Sunquest Announces New Investment and Market Focus for Its Radiology Information System). Below is an excerpt from it (boldface emphasis mine):

Sunquest Information Systems...today announced it has increased investment for its award-winning Sunquest Radiology Information System (RIS) software and will begin actively marketing it again to the healthcare industry. Sunquest's decision to increase investment in its radiology offering follows the acquisition of the company by Vista Equity Partners in October and the re-evaluation of the role of radiology solutions in the Sunquest product portfolio. "Radiology has an increasingly important role in diagnostic medicine and we believe that there will be an accelerated convergence of laboratory workflows with image-based diagnostics. Our RIS solution shares a common code base with the Sunquest Laboratory Information System, which readily facilitates its advanced diagnostic reporting capabilities," said Mike Snow, Chief Technology Officer, Sunquest Information Systems.

I have referred to in-vivo/in-vitro diagnostic integration in previous notes as IVD2 because the full name is too much of a mouthful. The reference to convergence in the press release above seems to be a step in this direction. I am inclined, however, to describe this move as high risk/high gain for Vista/Sunquest. It's high risk because this is an unproven approach to hospital computing, at least at the level of system integration that I envision. It's also high risk because it pits them against some of major players in the field, Siemens and GE, who control much of the medical imaging hardware market. It is still early days in the pursuit of IVD2 but Sunquest is the first major company to approach is as a pure software play.

It's also of interest to examine Cerner, one of the new company's major competitors in the LIS market. Cerner, is betting all its chips on a hospital-wide EMR strategy. My own belief is that this strategy is seriously flawed due to cost overruns and a history of dauntingly complex and often unsatisfactory installs (see: When Doctor's Say "No" to EMR Deployments; Lab Software and the Trend Toward Complexity). I believe that the EMR of the future will be primarily a "reporting vehicle" for specialized modularized systems such as the LIS or the RIS or a convergent "diagnostic medicine" module (LIS + RIS). I have referred to this architecture in previous notes as a federated approach.

I am personally excited about this seemingly new direction by Sunquest. To restate the obvious, however, success in this challenging medical diagnostic market roiling with new ideas will depend on flawless execution of an untested information management and workflow strategy.

The Potential for "Serverless" Healthcare Computing

Maintaining a blog such as Lab Soft News is relatively inexpensive because the cost to rent time on the server used to publish and archive the daily notes is very low. Succinctly put, server time has become a commodity. Server time is so commoditized, in fact, that a recent blog note (see: Look, ma, no servers) made reference to "the serverless internet economy." This is a bit of a misnomer but please read on (boldface emphasis mine):

Robert Scoble notes the rise of "the serverless Internet company" that can launch and run a webwide business through the window of a browser. He writes of a recent conversation he had with Max Haot, the CEO of Mogulus, a site that lets people produce and broadcast video programs: At one point Max seemed like he was joking around with me when he told me “we don’t own a single server.” ....He nicely and calmly explained that, yes, every server the company owns is actually running on Amazon’s S3 and EC2 services....Now ANYONE can build an Internet company and get it up to scale. What's particularly noteworthy about Mogulus is that it shows how layers of utility computing services can be built atop a single shared infrastructure. Mogulus runs its business by drawing on computing and storage services provided by Amazon Web Services, allowing it to avoid any capital investment in computing gear. And then Mogulus offers a set of sophisticated computing services to its own customers, including video editing, storage, and transmission, that until recently would have themselves required big investments in expensive software and hardware.

The reason that the term "serverless" is a bit misleading in the article is that server access remains as a critical component of any internet business. However, the point being made is that the internet service companies themselves are not required to invest capital in computer hardware. They simply rent access to servers from other companies that specialize in this business. In addition, it is also now possible to layer multiple internet service companies on what is referred to above as a single shared infrastructure. In other words, Mogulus provides internet services to other companies that also take advantage of the servers that Mogulus itself rents.

Healthcare IT has traditionally lagged about a decade behind computing in other corporate sectors. However, it seems to me inevitable that hospital EMRs, LISs, RISs, and other information systems will eventually run on rented servers rather than on hardware owned and managed by the hospitals themselves. In time, the potential cost savings will be irresistible. It also occurs to me, however, that hospital executives would never be able to tolerate using, say, an Amazon server farm or "computing cloud" because of the perception that healthcare computing is different than corporate computing or e-commerce.

Therefore, I envision specialized companies, or even subdivisions of existing companies like Amazon or Google, that will have "healthcare" in their names and will serve only the healthcare industry. In this way, they will be able offer an array of services specifically tailored to the needs of their healthcare clients. Paramount, of course, will be non-stop computing, rapid response time/disaster recovery, and iron-clad data security/confidentiality. Frankly, these demands will not be that different than those demanded by many current e-business customers but I am sure that the perception of specialized services will be comforting to the hospital executives.

Who Derives Benefits from IT Deployment in Physician Practices?

I have posted a number of previous notes about physician office EMRs, focusing on  the utility, cost, and incentives to deploy them. A recent article in the New York Times (see: Who Pays for Efficiency?) was particularly good in detailing the cost and ROI of such systems (boldface emphasis mine):

The experience of Dr. Richard Baron, who practices with three other physicians in an office in Philadelphia, provides a glimpse into the predicament [of deploying office IT].... His office spent $140,000 on personal computers, including tablet PCs, servers, software and installation. The office’s annual technology costs, he said, were about $50,000, including maintenance and technical support, and he plans to upgrade the three-year-old computers at a cost of $54,000....Dr. Baron’s office has saved money — in transcribing medical reports, for example — and his practice now handles its 6,000 patients with three fewer office employees....But it has not yet paid off in dollars and cents: the savings in salaries is less than the costs entailed in computerization....Today, an estimated one-fourth of primary-care doctors use electronic health records, but only 5 percent of them are in offices with five doctors or fewer — where about half of all doctors practice....Physicians get only about 11 percent of the savings from electronic health records; the real benefit goes mainly to private and public insurers because, for one, they are paying for fewer unnecessary tests, and automated record-handling is a big cost saving for the payers.

Smaller physician office practices and independent large multispecialty clinics operate as self-sustaining businesses. They therefore will tend to avoid IT investments unless and until they provide an adequate return-on-investment for them in terms of savings or enhanced office revenue based on increased office referrals. As noted above, however, most of the benefits from office EMRs are reaped by the private and public insurance providers for whom billing transactions are facilitated. For me, it seems obvious that these companies or the government should provide some incentives for private physicians to invest in office IT.

I know that the development of such incentives is very complex, so I won't even hazard a guess about how it should best be done. Such incentives get quickly caught up in discussions about inappropriate compensation, safe harbors, and anti-kickback rules. However, I suspect that there is so much pressure to reduce the cost of healthcare delivery being placed on both public and private payers that there would be little inclination on their part to move in this direction. This leaves the office practices in a bind until such time as the cost of office automation is reduced enough to make more economic sense. 

As I was writing this note, I decided to revisit the eClinicalWorks web site to check the current cost of office systems. I have previously blogged about this particular office EMR. Subscription pricing for their entire EMR/Practice Management system is  quoted as $400 per month for the first provider with a 10% decrease for each additional provider. This fee would cover only the software. The company claims about 3,000 current customers.

National reference labs and lab outreach programs have understood for more than a decade that it was both necessary and desirable to provide physician offices with IT support in the form of lab portals, both PC and web-enabled, to automate lab test order-entry and results reporting. Unfortunately for the recipients, such applications provide no help for the total office automation that now seems increasingly necessary.

Beckman Coulter to Acquire Flow Cytometry Business From Dako

Beckman Coulter and Dako Denmark announced that Beckman Coulter will acquire Dako's research flow cytometry instrumentation business, which is based in Fort Collins,
Colorado (see: Beckman Coulter to Acquire Flow Cytometry Instrumentation Business From Dako).  Dako's president and CEO, Patrik Dahlen, said, "This action reinforces
our strategic intent to create a more focused business in anatomic
pathology and tissue-based cancer diagnostics. Dako's flow cytometry instrument business workforce of almost 200 people includes sales, marketing, research, manufacturing and administrative personnel.