Population Health: The Call to Community - Pharmaceutical Executive


Population Health: The Call to Community

Pharmaceutical Executive

Population health is the brick and mortar foundation for much of what is truly new in US health reform: expanding healthy behaviors on a community-wide basis; around broadly defined, well-distributed measures of outcomes; in places beyond the institutional setting where care is actually delivered. For big Pharma, it represents yet another escalation in expectations. With the principles of population health firmly embedded in the Obama Administration's Affordable Care Act, drugs now need to do more than simply treat disease. Instead, they must perform a more holistic function in raising the quality of medical interventions, helping hospitals to save money, and keeping well people healthy while preventing sick people from regressing. The problem pharma faces is the lack of a policy consensus on what is population health: how can you execute against something you can't define?

Photo credit: Ted Grudzinski
To shed light on this new movement in health care, Pharm Exec met last month with one of the leading advocates of population health, Dr. David Nash, founding Dean of the Jefferson Medical University School of Population Health in Philadelphia. Nash, like the function he supports, is a practiced multi-disciplinarian. He is a board-certified internist MD; member of the boards of directors of Humana and Endo Health Solutions; chair of the technical advisory group of Pennsylvania's Healthcare Cost Containment Council; and editor of four major peer-review journals. Despite these heady credentials, Nash touts a simple message: to help Americans live longer and better, providers must engage around the patient's 99 per cent – not the one per cent when he/she is "in" the health system.

PE: The School you founded here at Jefferson University is centered on the concept of population health. Can you define population health and explain how it relates to biopharmaceuticals?

Nash: In a word, population health is a management tool designed to acknowledge and respond to the transformations taking place in our health system. It is a systematic approach to coordinating the preventive and chronic care needs of patients: to efficiently manage risk, promote full transparency of information, lower costs and improve health outcomes. We do this through active program interventions based on strong patient data analysis and the cultivation of close ties with community and social service organizations, professional groups – especially primary care providers – as well as hospitals and other institutions directly responsible for care, in both the acute and ambulatory settings. I believe population health management ranks as a true disruptive innovation; we are not defending "business as usual."

Jefferson University, which houses the School of Population Health launched in 2008 and where I currently serve as Dean, is a living illustration of this focused, integrated approach. There are 141 medical schools in the US, but few of them bear any resemblance to Jefferson. Jefferson is a graduate-level health sciences university, with six schools each representing the key stakeholders in the health care system – biologic science, medicine, nursing, pharmacy, allied health professions, and population health – all arrayed around one of the country's largest urban teaching hospitals, a major academic center in its own right.

PE: There appears to be an intimate link between population health and the broader social and economic environment in which health services are financed and delivered. This connection has often been ignored or downplayed by health researchers – but if we are moving toward an incentive system that rewards overall outcomes, isn't it time to shift the discussion on reform back toward the big picture?

Nash: Precisely. There is unassailable evidence that almost all of the factors that determine healthy well-being are social in origin: the operative estimate is 85 per cent. These factors include socio-economic status, where you live, family background, gender and education. I would also add access to preventive health services such as nutrition, screening for basic diseases, reproductive counseling and vaccinations. This 85 per cent figure renders a sobering judgment about the efficacy of the US health system. Practically, it means only 15 per cent of individual well-being is attributable to the pharmaceutical industry and the complex network of academic medical centers, specialist physician practices and 5,000 community-based hospitals that deliver acute care services for millions of patients. The cost is staggeringly disproportionate: nearly 20 per cent of US GDP is spent on that 15 per cent contribution to keeping people well.

How do we population health advocates respond to this statistic? We call a time out. Our message is "stop, think and find a better way to allocate resources and obtain more value for the money we spend on health services."

PE: Doesn't this imply there is a need for an activist agenda tied to legislation and policy reforms as well as the focus on changing individual behaviors?

Nash: Yes. We are a society of laws and governance. The social determinants of health can be influenced – for better or worse – by legislative and regulatory actions. The Obama Administration's Affordable Care Act [ACA] is already having a demonstrable impact on the practice of population health, as do rules handed down by the FDA, the Centers for Disease Control [CDC], the HHS Center for Medicare and Medicaid Services [CMS], and many other regulatory bodies, including those at the state level. Our work here at the School and with others seeks to shape the policy environment so that it supports the broad, multi-disciplinary objectives I cited earlier: inclusion, transparency, evidence and value.

PE: What about quality standards? There are huge, largely unaddressed costs linked to the high rate of medical errors in treating vulnerable patients.

Nash: Quality and safety are central to population health, if only because endemic failures in this area diminish the value of that institutional 15 per cent contribution to well-being. Medical errors now constitute the fourth leading cause of death in the US, claiming on average more than 200,000 lives each year. This occurs despite the substantial evidence we now have on best practices that, if applied consistently, would shrink this lamentable statistic. Many experts assume that solving medical errors is a simple task – much like requiring bicyclists to wear helmets or to drive within the speed limit. The truth is far more complex. One of the biggest contributors to the problem is that quality does not follow the patient when he leaves the hospital. The vital outpatient experience is not addressed, patients will fail to follow instructions or not understand them. Either way, the end result is an unacceptably high rate of hospital readmission, often leaving the patient in a worse condition than before.

PE: Quality and safety problems are hardly new. The seminal work on this topic remains the National Institutes of Medicine [IOM] study "To Err is Human," which was published 14 years ago. Does this suggest to you that population health is not hitting the mark, in terms of fostering improvements in the standard of care?

Nash: It's a fair question to ask why there has been so little progress. Data shows the US is actually trending worse; figures updated by the IOM to July 2013 put medical error in fourth place on the mortality charts, whereas the original study had it at sixth. And the IOM cities the US at 17th –just behind Slovenia –among countries in outcomes for the money we spend on health care.

Why the lag? It's because progress has not been uniform; the implementation of standards is piecemeal and haphazard. We have an inverted pyramid of incentives, where massive resources are being poured into resolving highly complex interventions for the very sickest patients while we neglect longer-term, community-based investments around the social determinants of health. In the former case, we see an explosion of quality and safety measures that hospitals must meet under the ACA; if they don't, they face penalties involving the forfeiture of federal reimbursement payments when patients are readmitted within 30 days of discharge, or where there are too many hospital-acquired infections. There is now an economic incentive to deliver more value, especially when patients are being treated in the more costly acute care setting.

This change is important. It represents progress. Hospital costs represent the largest category of health spending. Hospitals now have an economic incentive to deliver value. The ACA has several important provisions that also require these institutions to demonstrate their activities deliver a broader benefit to the community, which is a key tenet of the population health approach. Instead of just certifying to HHS that a facility provided x dollars for uncompensated care, the law stipulates the provision of evidence that such spending had an empowering impact on the community.

PE: How are these external trends influencing the priorities and work plan of the School?

Nash: Jefferson's program is but five years old – it also happens to be one of the most exciting and consequential periods in health system reform. Our curriculum has a strong emphasis on learning to navigate within the health sector, with four Master's degree programs: including public health policy [online], healthcare quality and safety [online], and finally a new online Master's in health economics and outcomes research. No one else in academia has put this constellation of inter-disciplinary products in one place, under a single roof. In terms of research, our faculty is working on a variety of projects. One example is a study of Italian pensioners looking at strategies to ensure pharmaceuticals deliver the highest value for reimbursement. Another is a review of the economic challenges to treating cancer here in the US, where we are examining the most cost-effective pathways to new drug therapies based on genomics. And we have a large body of research focused on making the governance structure of US hospitals more efficient – what structure is best suited to improving health outcomes?

Our faculty also makes a point to participate in the policy arena. I work as an adviser to the Pennsylvania Health Care Cost Containment Council, which advises the Governor and legislature on the efficient delivery of state health services; and where I also chair the Council's Technical Advisory Group. The Council and our group compile and publish outcomes data from every hospital in the state. It should be no surprise that we uncover some really amazing variations in outcomes across the state. Spreading best practices to limit these variations is a key goal, one where we have made some progress. At the federal level, I am a member of a National Quality Forum expert panel charged with the task of creating new standards to measure how well hospitals do on community engagement. Finally, the School is working with the city of Philadelphia on smoking cessation and obesity programs for young people that emphasize direct community involvement outside the health sector, including parents, teachers, pharmacists and employers.

PE: In light of this active role in policy, what is your perspective on the direction of US health reform in advancing medical innovation? Where are the real pockets of progress taking place?

Nash: The US is a very heterogeneous society. There is no one single source of insight or innovation. Hence I would disagree that government – or the Obama Administration – is in the driver's seat where system change is concerned. One example I would cite of a creative response to health care challenges are multi-specialty physician practices like the Everett Clinic in Seattle, where the physicians work together as employees and have a laser focus on producing value for every treatment dollar spent. Another is the proliferation of interest among academics, providers and payers in supporting dozens of peer-reviewed journals publishing good research on quality and safety.

Likewise, there is no doubt that the US leads the world in generating good data on disease interventions; what used to be unfathomable questions are now being answered. The problem is in executing on the basis of this data to measurably improve outcomes that lead to advances in the standard of care. Even here, however, we can point to significant gains – there are hospitals that go a year without a single case of ventilator-induced pneumonia or an i.v. line infection of the blood stream. Just five years ago, these assaults on patient safety used to be frequent, repeatable incidents in most every facility.

The states are incubators of innovation, especially Oregon and Arkansas, who are using federal waivers under Medicaid to initiate novel ways to cover patients with chronic disease.

Finally, consumer engagement in health care is an exploding reality – a source of" creative destruction" as Professor Eric Topol contends in his book. The evidence is clear: if consumers see a positive economic incentive, they will act to change their behavior. When obese people find their insurance rates go up, more will opt for diet and exercise. Wellness programs among employers do appear to lower the absentee rate.

What binds all this is the capacity to forge consensus out of our diversity. That consensus is simple: every major player in the US system acknowledges there is a better way to treat and pay for the health services our society expects. I believe this consensus is due to the practical intellectual approach initiated through our work in population health

PE: It is interesting that none of the innovations you cite involve the use of biopharmaceuticals. Do you support the premise that the industry's expressed support for outcomes – services "beyond the pill" – is more rhetorical than real?

Nash: I have been a member of the Board of Directors of Endo Health Solutions, so I am familiar with the industry business model. In reference to your question on the industry commitment to delivering outcomes, I would say its half real – and half rhetoric. For many years, drug companies had a winning formula built on the blockbuster product. Sales of these billion dollar medicines helped boost research pipelines along with a commitment of resources unmatched by any other country.

But the blockbuster model has run its course; the science of drug discovery is harder and the growth of generic rivals means society has less need for a tenth in class beta-blocker or the 12th consecutive version of a drug for erectile dysfunction. What we do need today is the ability to demonstrate, with evidence, that appropriate use of the pharma armamentarium will produce a good outcome, for payers as well as patients. For 20 years, I have advocated precisely this approach, asking companies to work with us on the delivery side to demonstrate value in the products that come from their labs. In fact, I believe this is now one of the key battlegrounds of 21st century health policy: to get big Pharma to move beyond rhetoric to register the true value of their products in the competitive marketplace.

Some companies are already there. J&J has been engaged with Jefferson for five years on a partnership called Health Policy Excellence, where our faculty conducts regular interchanges with company managers on health economics and other relevant topics.

Clearly, however, industry has the capacity to do more. These actions must become institutionalized for the industry to show it has moved from rhetoric to reality in demonstrating value. Failure to turn this impression around will prevent a more important industry objective, which is to establish itself as a full partner in the health care delivery system. For years, medicines have been treated as a commodity purchase, separated from the continuum of patient care. Until recently, therefore, it has not been possible to show how use of a drug influences the other services patients receive, often eliminating the necessity for surgeries or other high-cost interventions. Unfortunately, this separation is now being compounded by the increasing scrutiny of drug promotion, in which physicians are barred from seeing field force representatives or participating in company educational campaigns to encourage the uptake of a new medicine.

Taken together, these trends effectively give the industry no choice but to pursue answers to the following question: how do we get from a business model centered on the volume of pills we sell to the value our customers derive from each purchase? If you don't have a strategy focused on this central point, you are missing the future.

PE: One reason why big Pharma has not fully embraced an outcomes agenda is the difficulty it has in leveraging good data. Making data transparent and shareable is complicated by competitive issues, while key outcome indicators are often missing due to the health system's failure to integrate the various parts of the delivery chain. Asking drug companies to perform head-to-head comparison trials against a close competitor or even one its own products requires a big leap of faith. How do you open the floodgates and get people to trust and have confidence in data as the arbiter of access?

Nash: It requires a change in behavior motivated by incentives to make this change economically feasible. And it starts in one place: the pharmacy and therapeutics committees that both the public and private sectors rely on in choosing drugs for reimbursement. As a member of the committee at Jefferson Hospital, I know that our members will not consider recommending a formulary listing until they see an economic dossier of the medicine's potential impact on costs.

This is not the same as saying "hand us your proprietary clinical trial information." Instead, our goal is to condition pharma companies to supplement clinical information with a broader economic perspective. Understanding the payer perspective begins with the simple recognition that the payer is bearing all the economic risk. To the payer, "value" means finding drugs that are efficacious, safe and advance the standard of treatment, at a price that also allows for a margin from the sale. Drug companies that understand this basic fact of life for payers will succeed, with the added social benefit of preserving the decades-long hegemony that the US innovative drug industry has enjoyed worldwide.

PE: There is much emphasis on the obligation of big Pharma to understand the payer perspective. Might it not be better to see this relationship as a two-way street? Do PBMs and insurers – the major payers for medicines in the private sector – bear any responsibility for advancing the dialogue?

Nash: Yes. I am a member of the Board of Directors of Humana. Despite the connection, I don't think insurers do a good job in articulating what they provide to the health care system. For example, it's a misnomer that the big insurers tell physicians how to practice medicine. It is also misleading to state that insurers won't pay for drugs, if they don't like the evidence. Humana is a facilitator, not an arbiter, of care. This is the proposition: insurers, Humana among them, say to their providers: "here is your money upfront. Use it to decide what you think is the best way to treat your patients. But because there is a limit to this money, you would do well to practice based on the best available evidence of value for that money. And if you perform that task well, we will add a bonus – if you create more value for money, we will give part of that value back to you."

PE: As a population health advocate, what is your view on implementation of the 2010 Affordable Care Act [ACA]? Are you a proponent – or an opponent – of what the Obama Administration is doing?

Nash: The law is a step in the right direction. The US is the only industrialized nation where upwards of 15 per cent of the population has no health insurance. If nothing more ends up being done than covering these uninsured, then President Obama deserves recognition for a great act of social justice. The problem I have is the way the legislation was enacted, in a series of fudges and compromises required to obtain the bare majority of votes, all from one party in Congress. As a result, few of the cost fundamentals that drive our system – such as rewarding providers for a service, rather than an outcome – will be resolved anytime soon.

Nevertheless, there are promising experiments under way; many are financed through the law. "No outcome, no income" is the operative concept. The ACA introduces a new model, the Accountable Care Organization [ACO] that promises to attract millions of enrollees, particularly those eligible for Medicare. There is also provision for patient-centered medical homes, a care delivery model centered on transparency, accountability, and evidence-based practice. You can also point to the widespread adoption of electronic medical records, a transition facilitated by the law.

One downside is the negative media coverage of enrollment in the new insurance exchanges. That too has to be put in perspective. Looking back, no major legislation involving health has been implemented without controversy. The American Medical Association [AMA] fought Medicare and opposed prospective payment reform in the 1980s. Patient power led to repeal of catastrophic care coverage in the 1980s and a backlash against HMO managed care in the 1990s. Liberal Democrats almost torpedoed the Medicare Part D benefit in a fit of partisan pique against a Republican president. So the histrionics over "Obamacare" have to be placed in context. How could anyone believe that confrontation would not occur in a sector that accounts for a sixth of US economic output?

In a larger sense, the dysfunction on reform underscores how little is known about insurance as a social and economic instrument. Most Americans still have trouble understanding the basic principle behind insurance: diverse pools of people contract to spread the risk of illness equally, among the sick and healthy, thus mitigating the disproportionate financial consequences of illness for the individual. Health insurance is seen as an assault on personal freedom, even though living in an interdependent world should carry some obligations to the collective.

A significant omission in the ACA is in preparing the health care workforce for the expansion in coverage. We do not have enough primary care physicians to enable full implementation of the law. At present, there are three specialists for every one primary care physician in practice. This distortion in the labor supply is entirely due to economic factors. Medical school students now graduate with an average tuition debt of $190,000 – the equivalent of a new mortgage here in the northeast. As the ACA is phased in, changes are needed to increase training slots for primary care physicians and to raise their reimbursement rates. Incomes for the sub-specialties have to go lower, across the board. And opportunities have to increase for crucial care team members, including nurses, physician assistants and community health workers. One of the priorities of our population health strategy is to insist that all these practitioners work closely together, at the top of their game, and for the purpose for which they were trained: to get people well, and as quickly as possible. That is another challenge in itself.

But the biggest flaw in the law is the cost. I believe it will drive up spending much faster than anyone has imagined. The precedent is the 1965 Medicare Act, where Congress was off target by a factor of 400 in what it estimated health coverage for the elderly would cost the government then, and what it costs today. Although expansion of insurance cover is a major advance in social policy, it must be weighed against the capacity of society to pay for it. To me, this dilemma is a stimulus to action because promoting a cost control and quality agenda centered on population health is more vital than ever.

PE: Will health reform impose any other structural changes to the financing and delivery of care?

Nash: There are several. The first is the transformation of health insurance around a tableau of consumer choice. Health insurance is going to go retail, in a marketplace where consumers will be forced to choose, just like they buy soap. In net terms, I think that's a good change. I am pleased that my company, Humana, is moving in this direction. The second is the trend away from a defined benefit approach to insurance — where plans are managed through employers who contract with insurers to deliver a specified package of benefits – to a defined contribution, where employers offer a lump sum to workers, who are then on their own to shop for cover and contract and spend separately with an insurer. This shifts more of the risk to the consumer, forcing him to actively manage the insurance package, including covered procedures, deductions, and co-pays. Employers gain from this by linking pay to performance and becoming more competitive against countries where benefits are subsidized by third parties or government.

PE: Based on these trends, what will the US health care system look like in 2020?

Nash: I expect in 2020 the system will be fundamentally reordered around the patient, accentuated by this broader "retailization" of health services. In this new world, the biggest competitors to pharma will not be other drug companies, but other health organizations that emphasize this retail experience. Patients are going to have access to an extraordinary amount of information, all of it accessible in real time. Instead of being husbanded by the professional elite, information will be "democratized." Will this shift be seen as beneficial by my 85 year old mother? Probably not. But my two daughters now in their late twenties are going to demand it – to know what care they can get, for how much, and when. And the background color of the web site ought to be pleasing to them as well. On balance, I think this is a good thing. We are already seeing an explosion in new businesses – start-ups – to help consumers make sense of all the new options created by the marriage between data and technology. I just met with a company in Minneapolis, clear.md, which is pioneering the video prescription, reinforced with a direct message from your physician on taking the medicine properly.

PE: Can you identify any "disruptive innovations" that will force big Phama to modify or adapt the way it does business?

Nash: The most disruptive action that a pharma company can take is to trump the competition with new and more effective tools to educate the patient. It's very simple: the most sensible investment is one which will contribute to making patients better consumers of medicine.

A prime example is Sanofi Aventis' partnership to create the glucometer, a simple, pain-free way for diabetics to record their blood sugar. I call it disruptive because it gives power to the patient and takes it away from the physician.

Another form of disruptive innovation is the capacity to build non-traditional partnerships with new actors in the health system. Big Pharma is contracting with a host of different organizations like software firms, retail vendors, consumer-based market research, and health economists. All this is geared to discovering new ways to achieve value. It simply requires a change in mindset. Just consider what can be done when drug companies start valuing the information they possess as a profit center rather than an internal service function.

Some others I can cite stem from the elimination of the cost barrier in establishing the genetic profiles of individual patients. Personalized medicine will finally realize its potential when prescribing is fully matched to your genes. The high cost and risks of clinical trials will come down because sampling will be more precise – instead of testing 1,000 people in a cancer trial, we will need only 100 that can be pre-screened for a specific mutation. You can see: I am optimistic about the future.

William Looney is Pharm Exec's Editor-In-Chief. He can be reached at


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