The pandemic is having a huge impact on our health system. When Covid-19 caught on last year, it stalled electoral processes that drive hospital revenue and enrollment in clinical trials. News reports over the past 18 months have shown the toll it has taken on doctors, nurses and health workers. But it has also paved the way for wider adoption of virtual care platforms and other digital health tools to aid in remote patient monitoring
Support the broader goal of moving from paid to value-based care.
Fredrikson & Byron shareholders Ryan Johnson and Jeffrey Steinle are co-chairs of the law firm’s Life Sciences Group. Johnson, who serves on the firm’s health law group, helps clients develop and implement innovative business models that aim to improve the quality, accessibility and affordability of health care. He serves as the external general counsel for digital healthcare companies, healthcare providers and life science companies that are transforming healthcare through innovation and cutting-edge science and technology. He advises investors, executives and corporate boards of directors on the strategic threats and opportunities arising from new technology and new laws and regulations, particularly those affecting the healthcare industry.
Steinle, who works in the firm’s corporate and securities group, advises life science
Companies that conduct M&A, financing, joint venture, licensing and doing business
Transactions. He also serves as external general counsel for life science companies. He navigates highly regulated environments and negotiates effective strategic and
Business relationships to help customers develop, market and sell their products.
Johnson and Steinle shared their insights into the impact of the pandemic on digital health and investments in medical technology in a recent interview.
To learn more from Ryan Johnson and Jeffrey Steinle, watch their Spotlight video interview.
“Health systems lost billions of dollars because they couldn’t run elections. The virus has shown that the health system is not resilient to things like personal protective equipment supply chain and health worker exhaustion, ”Steinle said. “But if a silver lining can be drawn from this health crisis, then it is the rapid introduction and scaling of telemedicine and forms of virtual care as well as a stronger focus on health equality.”
Steinle noted that hospitals are focusing more on models of care with virtual care, reflecting how far-reaching social changes we witnessed during the pandemic are causing hospitals and state governments to rethink how they deal with Covid-19 surges in relation to their system capacity.
Johnson noted that the impact of the pandemic on hospitals has highlighted the vulnerability of fee models. Value-based care models, in which the provider’s source of income is tied to a patient population, were also disrupted by the pandemic.
The suspension of some regulatory requirements on telemedicine-based health systems to adapt their services for virtual care is a trend that could have long-term effects on the use of these services for value-based care and the health of the population. For example, CMS has adapted its rules to enable the use of smartphones for telemedical encounters. Another is the increasingly robust investment by health systems in these technologies, which they also want to integrate.
“As state and federal governments waived certain onerous requirements for telemedicine and remote patient monitoring during Covid-19, providers began offering more items and doing more patient monitoring,” Johnson said. “You are buying new tools and technology to support these virtual maintenance and remote monitoring programs. All of these tools are very helpful for value-based care models. The waivers in support of these programs will continue and will be permanent. They will enable better patient engagement
and better management from a public health perspective. “
The Covid-19 pandemic has exposed racial differences in healthcare, with higher hospitalization rates and death rates affecting different populations. This has sparked interest in doing more to promote the improvement of the social determinants of health and population health – a process that includes quantifying the effectiveness of these programs.
Steinle noted that the format behind these programs has shifted to include contributions from community members to develop health programs that are uniquely tailored to the needs of those communities and then supported by academic centers, health systems, or payers rather than ” One size “. all “programs that may not meet the needs of local communities.
Although both Johnson and Steinle believe that payers are keenly interested in social determinants of health and identifying health disparities based on economic, neighborhood, and other demographic factors, they emphasized the importance of developing programs that are measurable and Show objective improvement with repeatable results, especially startups.
One challenge that Steinle sees in public health programs, especially in components for remote patient monitoring, is the discrepancy in reimbursement models between device manufacturers, for whom the reimbursement model is still the predominant reimbursement model, and value-based care models that use bundled payments.
The medical device sector is slowly adding digital components to create patient data streams and clinical decision aids to better understand a particular patient’s condition.
“In moving to broader public health programs, a big part of the problem is figuring out some of the improvements in health and the cost savings that come with them,” Steinle said. “Then as an entrepreneur, if you are a device company moving into digital health, how can you demonstrate these cost savings? I think there are some really promising things coming out of academic centers and some health systems. But I am not entirely sure of our refund
The system is really designed to make the most of a few things that can be quite effective. “
When asked about best practices for value-based nursing initiatives, Johnson found that, for some programs, there was a mismatch between the need for health data and the capabilities of the technology providers use for those programs. He found that EHR providers are sometimes not set up to give providers the most accurate assessment of a patient’s individual risk and lack the right tools to make informed decisions about their treatment.
“I think it’s really important to ensure that when groups are putting together these value-based care assessments, they understand what doctors and care providers need to get the best results, and also understand how best to engage patients – what are they Best Apps, What is the best platform to ensure effective communication between patients and providers so that providers can better manage the health of their patient population, “said Johnson.
Steinle and Johnson found that several factors contributed to the resilient healthcare investment landscape. The abundance of dry powder from Strategic, Private Equity, Venture Capital and SPACs. There have been many investments that have boosted ratings from digital health companies. The low interest rates have made it advantageous to enter into M&A deals and investments.
Johnson said in recent years he has seen more hospitals and health systems activity in digital health technology, licensing digital health tools through an affiliate, and even purchasing them directly from digital health companies. This reflects the trend that vendors would rather source technology than develop it themselves.
The success of the healthcare systems investment arms in recent years has proven that the ability of strategic healthcare investors has gone a long way in shaking off the skepticism that traditional venture capital investors used to perceive these investors.
“Most healthcare systems have very sophisticated, intelligent investor teams who can evaluate deals to make very intelligent investments that add great value to their goals,” said Johnson.
Steinle pointed out that most strategic investors have their roots in classic venture capital. He added that digital health startups are well served when they have strategic healthcare investors on their boards and traditional VCs as investors, which gives these companies great momentum.
Both Steinle and Johnson view behavioral health and remote patient monitoring through medical devices as hot investment areas that they expect will continue to gain momentum.
“The ability to use your smartphone to monitor your heart on a platform that is linked to your doctor via a telemedicine program will be expanded further and result in fewer personal visits to the doctor.”
Although the effects of the coronavirus pandemic will continue to be felt for the foreseeable future, new insights from the use of virtual care and the advancement of digital health companies that benefit from investments will shape the future of the patient and doctor experience.
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