Open models healthcare v5 7

THE FUTURE OF OPEN MODELS FOR DIABETES CARE 2012 DiabetesMine Innova1on Summit Ikhlaq Sidhu, Megha Raghavan UC Berkeley Fung Institute for Engineering Leadership UC Berkeley

Macro Market Forces in Healthcare •  Healthcare Spending: Total NaDonal $2.2T in US$6.6T Globally 25% $5 Health Expenditures 2019: $4.6T •  Growing Need: Baby $4 Boomer + Diabesity 20% 2011: $2.7T $3 •  18% of the US economy! 15% $2 $1 •  Price Pressure and Declining Margins 10% $0 2000 2005 2010 2015 2020 •  Chaos! Year Source: Centers for Medicare & Medicaid Services, Oﬃce of the Actuary: Data from the Na1onal Sta1s1cs Group, October 2010 2

Total Health Expenditure per Capita, U.S. and Selected Countries, 2008 $8,000 $7,538 $7,000 $6,000Per Capita Spending - PPP Adjusted $5,003 $5,000 $4,627 $3,970 $4,063 $4,079 $4,000 $3,677 $3,696 $3,737 $3,353 $3,470 $3,129 $2,870 $2,902 $3,000 $2,729 $2,000 $1,000 $0 Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en (Accessed on 14 February 2011). Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. Numbers are PPP adjusted.

Macro Trend #2: A Larger Market but with Lower Margins Annual Revenue Growth Approximate Breakdown •  Services = 80% 20% •  Devices / equipment = 8% 16% •  Pharma = 12% 12% Predic1on: 8% •  Target across sectors 4% •  Volume Business 0% 2004 2006 2008 2010Source: 2011 free cash ﬂow and revenue growth projected by JPMorgan for 12 large medtech companies: ABT, BCR, BAX, BSX, COV, EW, ISRG, JNJ, MDT, STJ, SYK, ZMH. 4

Outline •  The current state of diabetes data and soiware •  Why this is a problem •  What we can learn from other diabetes therapies and open standards in IT •  Recent Progress •  Key ques1ons

Diabetes Data and Soiware Today •  Ver1cal •  Closed •  Proprietary •  Not Standardized

Diabetes Data and Soiware Today Source: Timothy Bailey, Journal of Diabetes Science & Technology 2007; photo provided by Dr. Bruce Buckingham

WHY IS THIS A PROBLEM?

SMBG data downloading •  45% of 907 type 1s never download their meter •  75% of 1,165 type 2s never download their meter •  Only 37% of type 1s are sa1sﬁed with downloading Source: dQ&A pa1ent panel, 3Q2010. Self Monitoring of Blood Glucose Data from dQ&A

Pa1ents Don’t Download! •  Data from the T1D Exchange – 25,000 pa1ents with type 1 diabetes at 69 leading clinical centers across the US. •  Blood glucose meter downloading: –  68% never download –  21% download less than once a month •  CGM downloading: Burden on doctors –  43% never download to see and analyze data –  35% download less than once a month Source: n=25,000 pa1ents in the Helmsley Charitable Trust T1D Exchange

…but there is a shortage of providers •  New York: 1.8 million people with diabetes, only 600 diabetes educators (2nd highest # in US) •  “Overall, there appear to be only one-‐half the endocrinologists required to the ﬁll the needed posi1ons in the U.S.” –  ~4,000 endocrinologists to care for the ~25-‐100 million pa1ents who could poten1ally be seen Source: D Jornsay, AADE 2012 Annual Mee1ng, Las Vegas; A Stewart, J Clin Endocrin Metab 2008

…and providers have li{le 1me with pa1ents! •  In a study of pa1ents with type 2 diabetes, medical residents spent an average of only ﬁve minutes during visits discussing diabetes! •  Average primary care visit length in 2005: 21 minutes •  Best case: Four hours per year with an endocrinologist vs. 8,756 hours of self-‐ management Source: Barnes et al., Diabetes Educ 2004; Chen et al., Archives of Internal Medicine 2009

SOFTWARE CAN HELP BRIDGE THE GAP, BUT…

HOW DO YOU GET MORE PATIENTS TO USE IT?

What we can learn from •  1. Characteris1cs of other commercially successful diabetes therapies •  2. Open standards in informa1on technology

1. Where is industry growth coming from? Share of Overall Diabetes Industry Growth Insulin pumps CGM Others GLP-‐1s Insulin DPP-‐4s

1. Why are DPP-‐4s so successful? •  Easy for pa1ents – once per day pill •  Li{le thinking/educa1on required •  Low HCP hassle – no training needed, not 1me consuming •  Low adherence barriers for pa1ents •  Standardized – all DPP-‐4s are pre{y much the same

2. What can we learn from IT? 1980s: IBM was late so they oﬀered an open architecture (5150) 1970’s: Ver1cal, • Higher volume proprietary, closed • Best in class components • Horizontal Late 70s 1990s: IBM tries to go Perfect storm: Chaos + back to proprietary OS growing market and loses market share And, who made the money?

Takeaways from the IT Case 1.  Open standards modularity: It will happen. (Usually demanded by customers.) 2.  It only takes one single player (to change the landscape of the industry) 3.  Change is irreversible once it happens – IBM example in the PC market

What are the parallels to diabetes healthcare? Millions US PC Sales Units of Units US PC Sales Units 10 150 8 6 100 4 50 2 0 0 1975 1980 1985 1990 1995 2000 2005 2010 2015 1975 1980 1985 1990 Introduc1on of Interconnec1vity Mobile Open Standards & Networks Data In personal compu1ng, the drivers of mass adop1on were: –  Ver1cal closed to open standard (1980) –  Giving power to user (1980 to 1990) –  Widespread Network Connec1vity (1995-‐2000) –  Mobile compu1ng and mobile data (2005+) Source: ETForecasts

Recent Progress

The Future? •  A single standardized report Automa1c •  Accessible on any Wireless device Transmission •  Ac1onable insights •  Data analy1cs

Key Ques1ons •  Could open standards improve diabetes care? •  What is preven1ng more open standards in diabetes care? •  Why don’t more pa1ents use soiware and download data? How can this be addressed? •  ____ is the biggest problem with obtaining/ interpre1ng diabetes data. It could be solved by ____

Master of EngineeringFung InsDtute for Engineering Leadership Ikhlaq Sidhu Chief Scien1st and Founder, Fung Ins1tute Faculty Director, Center for Entrepreneurship & Technology Academic Director, Engineering Leadership Professional Program 2009 Emerging Area Professor Award sidhu@berkeley.edu

Open models healthcare v5 7

by Alliance Health Networks on Nov 26, 2012

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