Building connected health services

Pulse of the industry 2016

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EY - Hans-Peter Frank

Hans-Peter Frank
Global Head, Integrated Solutions
Vifor Fresenius Medical Care Renal Pharma

As demographic, digital and financial forces continue to transform how health care is delivered and reimbursed, the currency determining value now — and in the future — is not first-in-class medicines or technologies. Instead, it’s the data those products generate in real-world studies.

In this environment, the very definition of a medtech or biopharma product is changing. In primary care areas such as diabetes or heart disease, there is much discussion about moving “beyond the product,” adding patient services tied to adherence or home monitoring to the traditional medtech or pharma, offering to demonstrate real-world value.

In the renal space, where my company, Vifor Fresenius Medical Care Renal Pharma, operates, we are expanding the product definition even further. Our “product” is the delivery of improved outcomes for chronic kidney patients and the health systems that pay for those patients’ care. As such, our product is an integrated health service combining pharmaceutical products, dialysis and other clinical services, and predictive algorithms developed from the anonymized outcomes data we collect.

When the product is also the algorithm

Let me give you a real-world example. Chronic kidney patients suffer from severe anemia as a result of both dialysis and decreased kidney function. In addition to experiencing shortness of breath, severe fatigue and impaired cognition, these patients must be monitored closely because of comorbidities such as cardiovascular disease.

We can counteract the anemia with intravenous iron and erythropoietin stimulating agents (ESAs), but these drugs are costly and have side effects. ESAs, for instance, increase a patient’s risk of blood clots in the veins, heart attack and stroke.

Imagine if we could monitor laboratory measurements such as hemoglobin levels to predict which patients are most likely to develop severe anemia. Based on a predictive marker, we could intervene preemptively and selectively, improving the quality of life of those patients at greatest risk, while helping the rest avoid unnecessary side effects.

We’re in the process of commercializing an algorithm that can do this, leveraging approximately 100,000 patient life years of data collected at Fresenius Medical Centers. We have already validated the algorithm in our own dialysis centers.

Now we are working with providers in the UK to replicate and further validate our results; we anticipate launching our first commercial pilots in other European nations by the end of 2017.

The algorithm is considered a Class I medical device. Our goal is to use these data as a basis for a new integrated health service. Vifor Fresenius will be reimbursed if we help patients avoid severe anemia based on internationally defined guidelines.

Implementation hurdles

We started working on this initiative 12 months ago as the market evolved from selling pills and devices to collaborating around value. But while it’s an obvious win-win for patients, payers and manufacturers, implementing this model is not trivial.

Different health systems have different levels of readiness when it comes to reimbursing outcomes as a service. We’re most interested in launching this service first in health systems in Italy, Spain, France, Canada and the UK.

In Germany, health care services and products are reimbursed independently, making this model harder to effect. In the US, the diversity of payers adds significant complexity.

The algorithm for anemia hinges on structured data collected from laboratory reports. With the evolution of enabling technologies such as cloud computing and machine learning, we now have the ability to gather valuable information from unstructured data sources.

For instance, we’re beginning to integrate environmental and health data that influence outcomes with lab data to create a second algorithm to better manage bone and mineral disorders associated with chronic kidney disease. By mid-2017, we are confident we will have a usable algorithm.

A big opportunity

Significant investments are required to create these algorithms, but we expect the returns will be worth the costs. From now until 2025, one-third of Vifor Fresenius’ revenues will come out of these initiatives.

Medtechs or biopharmas interested in building similar outcomes-as-a-service programs should keep in mind two things:

  • First, strategic collaborations are essential. It’s hard for companies to build the required skills organically because they include expertise from three different knowledge pools: pharmaceuticals, services and data analytics.
  • Second, even though it’s difficult to change today’s health care delivery paradigm quickly, the evolving regulatory framework means there are new opportunities to create data-driven outcomes-based services. As an industry, we need to seize these opportunities.

This summary is excerpted from our annual medical technology report, Pulse of the industry: Medical technology report 2016. Download the pdf for more from our annual report. See also these featured articles from our report: