Funding, Deals & Partnerships: BIOLOGICS & MEDICAL DEVICES; BioMed e-Series; Medicine and Life Sciences Scientific Journal – http://PharmaceuticalIntelligence.com
The Continued Impact and Possibilities of AI in Medical and Pharmaceutical Industry Practices
Reporter: Adam P. Tubman, MSc Biotechnology, Research Associate 3, Computer Graphics and AI in Drug Discovery
Researchers have been able to discover many ways to incorporate AI into the practices of healthcare, both in terms of medical healthcare and also in pharmaceutical drug development. For example, given the situation where a doctor provides an inaccurate diagnosis to a patient because the doctor had an incomplete or inaccurate medical record/history, AI presents a solution that has the potential to rapidly and correctly account for human error and predict the correct diagnosis based on the patterns identified in other patient’s medical history to disease diagnosis indication. In the pharmaceutical industry, companies are changing and expanding approaches to drug discovery and development given the possibilities that AI can offer. One company, Reverie Labs, located in Cambridge, MA, is a pharmaceutical company utilizing AI for application of machine learning and computational chemistry to discover new possible compounds to be used in the development of cancer treatments.
Today, AI uses have had many other applications in medicine including managing healthcare data and performing robotic surgery, both of which transform the in-person patient and doctor experience. AI has even been used to change in-person cancer patient experiences. For example, Freenome, a company in San Francisco, CA uses AI in initial screenings, blood tests and diagnostic tests when a patient is being initially tested for cancer. The hope is that this technology will aide in speeding up cancer diagnoses and lead to new treatment developments.
The future will continue to bring many possibilities of AI, provided an acceptable level of accuracy is still maintained by AI technologies and that the technology remains beneficial. If research continues to focus on diagnosing diseases at a faster rate given the potential human errors in having an inaccurate or incomplete medical record upon diagnosis, AI could provide an improved experience for patients given the quicker diagnosis and treatment combined with less time spent either treating the wrong underlying condition or not knowing what condition to treat when accounting for an incomplete medical record. If this technology is proven to be successful not just in theory, but in practice, technology would then be available and could be beneficially applied to all diagnoses and treatment plans, across the world.
However, the reality regarding AI development is that its evolution depends on how much human effort is involved in its development. Therefore, the world won’t know or see the full benefits of AI until it is developed and actively applied. Similarly, the impact that AI will have in medical and pharmaceutical practices won’t be known until scientists fully develop and apply the technologies. Many possibilities, including a possible drastic lowering of the cost for pharmaceutical drugs across the board once drugs are much more readily discovered and produced, may carry a profound benefit to patients who currently struggle to afford their own treatment plans. Additionally, unforeseen advances in the medicinal and pharmaceutical fields because of AI development will lead to unforeseen effects on the global economy and many other life changing variables for the entire world.
For more information on this topic, please check out the article below.
Optimism for Future Equality of Access to Healthcare in the Inaugural address as AMA President, Jesse M. Ehrenfeld, MD, MPH | AMA 2023 Annual Meeting of House of Delegates
In his inaugural address as AMA President, Jesse M. Ehrenfeld, MD, MPH, highlights the need for a more inclusive and equitable future in medicine. He shares personal experiences of discrimination and emphasizes the importance of advocacy, addressing health disparities, and fighting against disinformation to ensure equitable care for all patients.
Health Care Policy Analysis derived from the Farewell remarks from AMA President Jack Resneck Jr., MD | AMA 2023 Annual Meeting
Curators: Aviva Lev-Ari, PhD, RN, Stephen J. Williams, PhD and Prof. Marcus W. Feldman
Bot Name: ChatGPT, GPT-4
Date of Update: 07/03/2023 Programmer’s Name: Frason K. Human Verifier: Aviva Lev-Ari & Dr. Stephen J. Williams
On June 10, 2023, I watched the video, below which represents the delivery of the Farewell remarks from AMA by the AMA President, Jack Resneck Jr., MD at the AMA 2023 Annual Meeting on 6/10/2023.
Upon completion of watching this video, I concluded that I should include it as an embedded video in this article as a new Audio Podcast in our Library of 300 “Interviews with Scientific Leaders” same title of a research category in the ontology of LPBI Group’s PharmaceuticalIntelligence.com Journal.
The context for the decision made in favor of embedding the video of AMA President, Jack Resneck Jr., MD, Farewell remarks from AMA at the AMA 2023 Annual Meeting on 6/10/2023 is one of Policy Analysis of the Health Care system in the US in 2023.
Aligned with this decision was to qualify Dr. Resneck Jr, MD speech to be an equivalent to an “Interview with a Scientific Leader in the domain of Health Policy” to be included in LPBI Group’s Library of 300 audio podcast Interviews planned to be published in July 2023.
Key points made by Dr. Resneck Jr, MD in the video
growing number of states and courts forcing themselves into the most intimate and difficult conversations patients and physicians
The challenges facing the medical profession and delivery of care by Providers:
A dysfunctional health care environment, and
The climate of anti-science aggression
In his own words: Dr. Resneck Jr, MD
We need to fix what’s broken in health care, and it’s NOT the doctor.
The Wisconsin Supreme Court agreed with us that patients and judges can’t force physicians to administer substandard care.
Courts have invalidated parts of No Surprises Act rules that plainly ignored Congressional intent and put a thumb on the scale to favor insurance companies… thank you Texas Medical Association and AMA!
The 5th Circuit Court is staying- for now – an egregious ruling that would have stripped patients of the right to access preventive care service with no out-of-pocket costs, a key piece of the Affordable Care Act.
The U.S. Supreme Court is delaying attempts by a single district judge with no scientific or medical training to take mifepristone off the market nationally and upend our entire FDA drug regulatory process.
We’ve helped shift the national conversation about protecting patient data and making sure digital health and AI tools are proven BEFORE being deployed.
We’ve broadened and intensified our work to embed equity and racial justice, and to push upstream to affect structural and social drivers of health inequities.
The AMA doesn’t win every battle. But we are more resolute in our work because of the threats to our profession and our patients.
I’m still appalled by the Medicare cuts. What on earth was Congress thinking? Practices are on the brink. Our workforce is at risk. Access to care stands in the balance
Physician burnout
One in five physicians plans to leave their practice within two years, while one in three is reducing hours.
Only 57 percent of doctors today would choose medicine again if they were just starting their careers.
two in five physicians go beyond mere daydreams of another career to wishing they had never chosen this path in the first place
And shame on political leaders, fueling fear and sowing division by making enemies of public health officials, of transgender adolescents, of physicians doing anti-racism work, and of women making personal decisions about their pregnancies.
The burnout and the moral injury are real … I’ve felt it myself. I hear this concern in the voices of medical students, residents, and even young physicians when they ask me … “Am I going to be okay?” “Have I made the right career choice?”
Medicare payment reform for “a dilapidated Medicare payment system”
fighting for long overdue fixes to a broken Medicare payment system, and obnoxious prior auth abuses, even when policymakers have neglected the problems for decades.
We absolutely must tie future Medicare payments to inflation, and we’re readying a major national campaign to finally achieve Congressional action.
Linking physician payment to inflation is an absolute top priority, an existential must to keep practices afloat, and pillar #1 of our plan. An important step on that path was the recent introduction of a bipartisan bill to finally align the Medicare fee schedule with MEI.
key role in legislation to extend Medicare Telehealth coverage.
State after state is making progress to constrain prior authorization, and CMS issued rules to do the same in Medicare Advantage plans.
Medicaid work requirements that conflict with AMA policy were kept out of the debt ceiling bill.
Scope of practice expansions
In partnership with states and specialties, our advocacy has helped protect patients from outrageous and broad scope expansions more than 50 times so far this year.
defending against broad scope expansions that put patients at risk, even when it requires gearing up again and again, in state after state.
When politicians force their way into our exam rooms Interfering with the sacred patient-doctor relationship is about CONTROL. : battling in state legislatures and courthouses for the very soul of our nation and our profession – to protect patients from those outside influences wanting to dictate the terms of their care … …telling them what medical treatments their physicians can provide … …what FDA-approved medicines we can prescribe…. …even what words we can use …
I loved traveling to Mississippi and witnessing their progress from startling COVID inequities to achieving one of the nation’s top vaccination rates among Black residents.
And we have been instrumental in helping create confidential wellness programs for physicians and removing outdated questions from past impairment from licensing and credentialing forms.
Gun Violence Victims – Preventable and needless homicides and suicides continue, and the political inaction is atrocious.
But solid majorities of Americans believe in commonsense gun reforms in line with our AMA recommendations.
You wouldn’t know it from 20 state legislatures racing to criminalize abortion and rob women of access to reproductive health care… But most people in this country support our policies and the fundamental rights of patients to make their own decisions about their health.
>> Insurance impact on delivery of care by providers
m health insurers still bullying us with prior auth delays and denying care …
We’ve joined others in suing Cigna for shortchanging doctors and patients.
The Voice of Dr. Stephen J. Williams
The outgoing president of the AMA, Dr. Jack Resneck, gives an impassioned speech about his concerns for the present and future of medicine, his profession, and the issues which will face future physicians, and all involved in healthcare. These issues have been building up for decades now in the U.S. and his remarks hopefully will be taken more to heart by those who can enact change, instead of wafting in the ongoing partisan debates in Washington. He eventually outlines the actions which could be taken but ultimately laments the inaction of many parties involved, including business, the political class, and his own physician profession. Dr. Resneck rightly states that the AMA must carry the burden of equitable and sustainable healthcare into the future and must continue the fight in this regard. He likens this fight for equitable and sustainable medicine like a marathon, where there is no defined end, no finish tape for medical professionals except to persevere in their task.
However, there are more extraneous issues to the profession where the physician has to
get back up, shake the dust off, and keep running
He notes some of the problems occurring not in direct control of the profession are
the constant onslaught and tiresome battle against disinformation
large insurers
a political class that has jeapardized the physician/patient relationship with either their action and inaction
the financial burdens placed on the small physician practice of rising third party “inflators” like higher rents, increased drug prices, higher operating costs
These laments have been felt by many parallel professions where the standards and practice to the profession have been subjugated and hijacked by other outside interests (middle men). And when the ultimate decisions of conduct are not governed by the constituents or stakeholders of the profession but by a cadre of business people, profiteers or social engineers problems like this result. As such, Dr. Resneck sees the draconian Medicare cuts as such an onslaught. This has been voiced in an earlier posting describing how these problems have crept in the biomedicine and biotech field as well as in medical care in Can the Public Benefit Company Structure Save US Healthcare?
One must consider then, as Dr. Resneck had, is it time to reinvent the healthcare structure in this country to allow more equitable, sustainable delivery of healthcare and to stave off a potential crisis in the number of physicians staying in the profession? As such he had suggested the AMA move forward with their “revival plan” in order to force legislation to reform Medicare as well as individual regulatory reform. To date there has been some success by the AMA to this effect, but as he eluded to, these efforts have been rather piecemeal instead of an overall reform.
The Voice of Aviva Lev-Ari, PhD, RN
Gun Violence, all should not have to happen and burden the care delivery system designed to deal with chronic and acute diagnoses.
As Supervisor of a Long Term Acute Hospital in Waltham, MA in 2010:
I became familiar with care plans of patients victims of gun violence and the life long disabilities cause by ONE gun shot to the brain or to the spine. Accidents that are preventable and needless.
I found Dr. Resneck’s address to be a call for continuation of a long term fight the AMA is involved in, with all the constituents of the Medical profession. They are very many and very powerful:
Big Pharma,
FDA,
State and Federal legislators,
HMOs,
Health Insurers,
For-profit, and
not-for-profit institutions
all having interests that are private and public and often conflicting ones, chiefly are the following:
Gun reforms made impossible by The National Rifle Association (NRA)’s supporters linking the defense to bear arms with the Constitution
20 state legislatures racing to criminalize abortion and rob women of access to reproductive health care…
Drug pricing and Insurance denying coverage
Need for redesign of the Curriculum of in Medical School to include the rapid change in technology, medical devices, knowledge base in life sciences and more
Dr Resneck’s talk has three components: two are rather pessimistic and concern Medicine as a profession and Health-care as a goal of medicine. The positive part, which was quite brief, concerned the continuing work of the AMA in its advocacy for better conditions for physicians and for a more equitable distribution of health care.
Medicine as a part of science continues to be assailed by anti-science political groups. 57% of doctors surveyed said they would not choose Medicine as a profession if given the chance to relive their lives. Part of this is the failure of Medicare and other insurance mechanisms to properly compensate physicians. Part is due to attacks on the profession by anti-science anti education social media and state legislatures. Whereas Medicine was once the profession of choice for the best students, universities are seeing the premed majors overtaken by computer-related fields. Dr. Resneck also referred to the importance of maintaining high standards of medical ethics, which is increasingly difficult in today’s political and economic climate.
With respect to the specifics of health care, Dr. Resneck stressed the attack on the medical professions by laws and regulations that outlaw people rights to their own bodies, manifest in anti-abortion and anti-gender affirming procedures, anti-education book banning, political opposition to measures, supported by the majority of Americans, that would reduce gun violence, and the difficulty of achieving improvements in government procedures for reimbursement of health care services. The AMA is involved in trying to elicit medically sound decisions on these.
Dr Resneck was positive, if not very optimistic about the AMA’s important role in advocacy for reform of Medicare and the Health-Care system, reform that is essential for the sustainability of Medicine as a profession.
We recommend AMA to add to their Library resources from LPBI Group:
Reporter: Frason Francis Kalapurakal, Research Assistant II
Researchers from MIT and Technion have made a significant contribution to the field of machine learning by developing an adaptive algorithm that addresses the challenge of determining when a machine should follow a teacher’s instructions or explore on its own. The algorithm autonomously decides whether to use imitation learning, which involves mimicking the behavior of a skilled teacher, or reinforcement learning, which relies on trial and error to learn from the environment.
The researchers’ key innovation lies in the algorithm’s adaptability and ability to determine the most effective learning method throughout the training process. To achieve this, they trained two “students” with different learning approaches: one using a combination of reinforcement and imitation learning, and the other relying solely on reinforcement learning. The algorithm continuously compared the performance of these two students, adjusting the emphasis on imitation or reinforcement learning based on which student achieved better results.
The algorithm’s efficacy was tested through simulated training scenarios, such as navigating mazes or reorienting objects with touch sensors. In all cases, the algorithm demonstrated superior performance compared to non-adaptive methods, achieving nearly perfect success rates and significantly outperforming other methods in terms of both accuracy and speed. This adaptability could enhance the training of machines in real-world situations where uncertainty is prevalent, such as robots navigating unfamiliar buildings or performing complex tasks involving object manipulation and locomotion.
Furthermore, the algorithm’s potential applications extend beyond robotics to various domains where imitation or reinforcement learning is employed. For example, large language models like GPT-4 could be used as teachers to train smaller models to excel in specific tasks. The researchers also suggest that analyzing the similarities and differences between machines and humans learning from their respective teachers could provide valuable insights for improving the learning experience.The MIT and Technion researchers’ algorithm stands out due to its principled approach, efficiency, and versatility across different domains. Unlike existing methods that require brute-force trial-and-error or manual tuning of parameters, their algorithm dynamically adjusts the balance between imitation and trial-and-error learning based on performance comparisons. This robustness, adaptability, and promising results make it a noteworthy advancement in the field of machine learning.
References:
“TGRL: TEACHER GUIDED REINFORCEMENT LEARNING ALGORITHM FOR POMDPS” Reincarnating Reinforcement Learning Workshop at ICLR 2023 https://openreview.net/pdf?id=kTqjkIvjj7
Concrete Problems in AI Safety by Dario Amodei, Chris Olah, Jacob Steinhardt, Paul Christiano, John Schulman, Dan Mané https://arxiv.org/abs/1606.06565
Other related articles published in this Open Access Online Scientific Journal include the following:
92 articles in the Category:
‘Artificial Intelligence – Breakthroughs in Theories and Technologies’
Sperm damage and fertility problem due to COVID-19
Reporter and Curator: Dr. Sudipta Saha, Ph.D.
Many couples initially deferred attempts at pregnancy or delayed fertility care due to concerns about coronavirus disease 2019 (COVID-19). One significant fear during the COVID-19 pandemic was the possibility of sexual transmission. Many couples have since resumed fertility care while accepting the various uncertainties associated with severe acute respiratory syndrome coronavirus 2 (SARS-Cov2), including the evolving knowledge related to male reproductive health. Significant research has been conducted exploring viral shedding, tropism, sexual transmission, the impact of male reproductive hormones, and possible implications to semen quality. However, to date, limited definitive evidence exists regarding many of these aspects, creating a challenging landscape for both patients and physicians to obtain and provide the best clinical care.
According to a new study, which looked at sperm quality in patients who suffered symptomatic coronavirus (COVID-19) infections, showed that it could impact fertility for weeks after recovery from the virus. The data showed 60% COVID-19 infected men had reduction in sperm motility and 37% had drop in sperm count, but, 2 months after recovery from COVID-19 the value came down to 28% and 6% respectively. The researchers also of the view that COVID-19 could not be sexually transmitted through semen after a person had recovered from illness. Patients with mild and severe cases of COVID-19 showed similar rate of drop in sperm quality. But further work is required to establish whether or not COVID-19 could have a longer-term impact on fertility. The estimated recovery time is three months, but further follow-up studies are still required to confirm this and to determine if permanent damage occurred in a minority of men.
Some viruses like influenza are already known to damage sperm mainly by increasing body temperature. But in the case of COVID-19, the researchers found no link between the presence or severity of fever and sperm quality. Tests showed that higher concentrations of specific COVID-19 antibodies in patients’ blood serum were strongly correlated with reduced sperm function. So, it was believed the sperm quality reduction cause could be linked to the body’s immune response to the virus. While the study showed that there was no COVID-19 RNA present in the semen of patients who had got over the virus, the fact that antibodies were attacking sperm suggests the virus may cross the blood-testis barrier during the peak of an infection.
It was found in a previous report that SARS-CoV-2 can be present in the semen of patients with COVID-19, and SARS-CoV-2 may still be detected in the semen of recovering patients. Due to imperfect blood-testes/deferens/epididymis barriers, SARS-CoV-2 might be seeded to the male reproductive tract, especially in the presence of systemic local inflammation. Even if the virus cannot replicate in the male reproductive system, it may persist, possibly resulting from the privileged immunity of testes.
If it could be proved that SARS-CoV-2 can be transmitted sexually in future studies, sexual transmission might be a critical part of the prevention of transmission, especially considering the fact that SARS-CoV-2 was detected in the semen of recovering patients. Abstinence or condom use might be considered as preventive means for these patients. In addition, it is worth noting that there is a need for studies monitoring fetal development. Therefore, to avoid contact with the patient’s saliva and blood may not be enough, since the survival of SARS-CoV-2 in a recovering patient’s semen maintains the likelihood to infect others. But further studies are required with respect to the detailed information about virus shedding, survival time, and concentration in semen.
Big pharma companies are snapping up collaborations with firms using AI to speed up drug discovery, with one of the latest being Sanofi’s pact with Exscientia.
Tech giants are placing big bets on digital health analysis firms, such as Oracle’s €25.42B ($28.3B) takeover of Cerner in the US.
There’s also a steady flow of financing going to startups taking new directions with AI and bioinformatics, with the latest example being a €20M Series A round by SeqOne Genomics in France.
“IBM Watson uses a philosophy that is diametrically opposed to SeqOne’s,” said Jean-Marc Holder, CSO of SeqOne. “[IBM Watson seems] to rely on analysis of large amounts of relatively unstructured data and bet on the volume of data delivering the right result. By opposition, SeqOne strongly believes that data must be curated and structured in order to deliver good results in genomics.”
Francisco Partners is picking up a range of databases and analytics tools – including
Health Insights,
MarketScan,
Clinical Development,
Social Programme Management,
Micromedex and
other imaging and radiology tools, for an undisclosed sum estimated to be in the region of $1 billion.
IBM said the sell-off is tagged as “a clear next step” as it focuses on its platform-based hybrid cloud and artificial intelligence strategy, but it’s no secret that Watson Health has failed to live up to its early promise.
The sale also marks a retreat from healthcare for the tech giant, which is remarkable given that it once said it viewed health as second only to financial services market as a market opportunity.
IBM said it “remains committed to Watson, our broader AI business, and to the clients and partners we support in healthcare IT.”
The company reportedly invested billions of dollars in Watson, but according to a Wall Street Journal report last year, the health business – which provided cloud-based access to the supercomputer and a range of analytics services – has struggled to build market share and reach profitability.
An investigation by Stat meanwhile suggested that Watson Health’s early push into cancer for example was affected by a premature launch, interoperability challenges and over-reliance on human input to generate results.
For its part, IBM has said that the Watson for Oncology product has been improving year-on-year as the AI crunches more and more data.
That is backed up by a meta analysis of its performance published last year in Nature found that the treatment recommendations delivered by the tool were largely in line with human doctors for several cancer types.
However, the study also found that there was less consistency in more advanced cancers, and the authors noted the system “still needs further improvement.”
Watson Health offers a range of other services of course, including
tools for genomic analysis and
running clinical trials that have found favour with a number of pharma companies.
Francisco said in a statement that it offers “a market leading team [that] provides its customers with mission critical products and outstanding service.”
The deal is expected to close in the second quarter, with the current management of Watson Health retaining “similar roles” in the new standalone company, according to the investment company.
IBM’s step back from health comes as tech rivals are still piling into the sector.
@pharma_BI is asking: What will be the future of WATSON Health?
@AVIVA1950 says on 1/26/2022:
Aviva believes plausible scenarios will be that Francisco Partners will:
A. Invest in Watson Health – Like New Mountains Capital (NMC) did with Cytel
B. Acquire several other complementary businesses – Like New Mountains Capital (NMC) did with Cytel
C. Hold and grow – Like New Mountains Capital (NMC) is doing with Cytel since 2018.
D. Sell it in 7 years to @Illumina or @Nvidia or Google’s Parent @AlphaBet
1/21/2022
IBM said Friday it will sell the core data assets of its Watson Health division to a San Francisco-based private equity firm, marking the staggering collapse of its ambitious artificial intelligence effort that failed to live up to its promises to transform everything from drug discovery to cancer care.
IBM has reached an agreement to sell its Watson Health data and analytics business to the private-equity firm Francisco Partners. … He said the deal will give Francisco Partners data and analytics assets that will benefit from “the enhanced investment and expertise of a healthcare industry focused portfolio.”5 days ago
5 days ago — IBM has been trying to find buyers for the Watson Health business for more than a year. And it was seeking a sale price of about $1 billion, The …Missing: Statement | Must include: Statement
5 days ago — IBM Watson Health – Certain Assets Sold: Executive Perspectives. In a prepared statement about the deal, Tom Rosamilia, senior VP, IBM Software, …
Feb 18, 2021 — International Business Machines Corp. is exploring a potential sale of its IBM Watson Health business, according to people familiar with the …
3 days ago — Nuance played a part in building watson in supplying the speech recognition component of Watson. Through the years, Nuance has done some serious …
NCCN Shares Latest Expert Recommendations for Prostate Cancer in Spanish and Portuguese
Reporter: Stephen J. Williams, Ph.D.
Currently many biomedical texts and US government agency guidelines are only offered in English or only offered in different languages upon request. However Spanish is spoken in a majority of countries worldwide and medical text in that language would serve as an under-served need. In addition, Portuguese is the main language in the largest country in South America, Brazil.
The LPBI Group and others have noticed this need for medical translation to other languages. Currently LPBI Group is translating their medical e-book offerings into Spanish (for more details see https://pharmaceuticalintelligence.com/vision/)
Below is an article on The National Comprehensive Cancer Network’s decision to offer their cancer treatment guidelines in Spanish and Portuguese.
PLYMOUTH MEETING, PA [8 September, 2021] — The National Comprehensive Cancer Network® (NCCN®)—a nonprofit alliance of leading cancer centers in the United States—announces recently-updated versions of evidence- and expert consensus-based guidelines for treating prostate cancer, translated into Spanish and Portuguese. NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines®) feature frequently updated cancer treatment recommendations from multidisciplinary panels of experts across NCCN Member Institutions. Independent studies have repeatedly found that following these recommendations correlates with better outcomes and longer survival.
“Everyone with prostate cancer should have access to care that is based on current and reliable evidence,” said Robert W. Carlson, MD, Chief Executive Officer, NCCN. “These updated translations—along with all of our other translated and adapted resources—help us to define and advance high-quality, high-value, patient-centered cancer care globally, so patients everywhere can live better lives.”
Prostate cancer is the second most commonly occurring cancer in men, impacting more than a million people worldwide every year.[1] In 2020, the NCCN Guidelines® for Prostate Cancer were downloaded more than 200,000 times by people outside of the United States. Approximately 47 percent of registered users for NCCN.org are located outside the U.S., with Brazil, Spain, and Mexico among the top ten countries represented.
“NCCN Guidelines are incredibly helpful resources in the work we do to ensure cancer care across Latin America meets the highest standards,” said Diogo Bastos, MD, and Andrey Soares, MD, Chair and Scientific Director of the Genitourinary Group of The Latin American Cooperative Oncology Group (LACOG). The organization has worked with NCCN in the past to develop Latin American editions of the NCCN Guidelines for Breast Cancer, Colon Cancer, Non-Small Cell Lung Cancer, Prostate Cancer, Multiple Myeloma, and Rectal Cancer, and co-hosted a webinar on “Management of Prostate Cancer for Latin America” earlier this year. “We appreciate all of NCCN’s efforts to make sure these gold-standard recommendations are accessible to non-English speakers and applicable for varying circumstances.”
NCCN also publishes NCCN Guidelines for Patients®, containing the same treatment information in non-medical terms, intended for patients and caregivers. The NCCN Guidelines for Patients: Prostate Cancer were found to be among the most trustworthy sources of information online according to a recent international study. These patient guidelines have been divided into two books, covering early and advanced prostate cancer; both have been translated into Spanish and Portuguese as well.
NCCN collaborates with organizations across the globe on resources based on the NCCN Guidelines that account for local accessibility, consideration of metabolic differences in populations, and regional regulatory variation. They can be downloaded free-of-charge for non-commercial use at NCCN.org/global or via the Virtual Library of NCCN Guidelines App. Learn more and join the conversation with the hashtag #NCCNGlobal.
[1] Bray F, Ferlay J, Soerjomataram I, Siegel RL, Torre LA, Jemal A. Global Cancer Statistics 2018: GLOBOCAN estimates of incidence and mortality worldwide for 36 cancers in 185 countries. CA Cancer J Clin, in press. The online GLOBOCAN 2018 database is accessible at http://gco.iarc.fr/, as part of IARC’s Global Cancer Observatory.
About the National Comprehensive Cancer Network
The National Comprehensive Cancer Network® (NCCN®) is a not-for-profit alliance of leading cancer centers devoted to patient care, research, and education. NCCN is dedicated to improving and facilitating quality, effective, efficient, and accessible cancer care so patients can live better lives. The NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines®) provide transparent, evidence-based, expert consensus recommendations for cancer treatment, prevention, and supportive services; they are the recognized standard for clinical direction and policy in cancer management and the most thorough and frequently-updated clinical practice guidelines available in any area of medicine. The NCCN Guidelines for Patients® provide expert cancer treatment information to inform and empower patients and caregivers, through support from the NCCN Foundation®. NCCN also advances continuing education, global initiatives, policy, and research collaboration and publication in oncology. Visit NCCN.org for more information and follow NCCN on Facebook @NCCNorg, Instagram @NCCNorg, and Twitter @NCCN.
Please see LPBI Group’s efforts in medical text translation and Natural Language Processing of Medical Text at
Can the Public Benefit Company Structure Save US Healthcare?
Curator: Stephen J. Williams, Ph.D.
UPDATED 3/15/2023
According to Centers for Medicare and Medicare Services (CMS.gov) healthcare spending per capita has reached 17.7percent of GDP with, according to CMS data:
From 1960 through 2013, health spending rose from $147 per person to $9,255 per person, an average annual increase of 8.1 percent.
the National Health Expenditure Accounts (NHEA) are the official estimates of total health care spending in the United States. Dating back to 1960, the NHEA measures annual U.S. expenditures for health care goods and services, public health activities, government administration, the net cost of health insurance, and investment related to health care. The data are presented by type of service, sources of funding, and type of sponsor.
Graph: US National Healthcare Expenditures as a percent of Gross Domestic Product from 1960 to current. Recession periods are shown in bars. Note that the general trend has been increasing healthcare expenditures with only small times of decrease for example 2020 in year of COVID19 pandemic. In addition most of the years have been inflationary with almost no deflationary periods, either according to CPI or healthcare costs, specifically.
U.S. health care spending grew 4.6 percent in 2019, reaching $3.8 trillion or $11,582 per person. As a share of the nation’s Gross Domestic Product, health spending accounted for 17.7 percent.
And as this spending grew (demand for health care services) associated costs also rose but as the statistical analyses shows there was little improvement in many health outcome metrics during the same time.
Graph of the Growth of National Health Expenditures (NHE) versus the growth of GDP. Note most years from 1960 growth rate of NHE has always been higher than GDP, resulting in a seemingly hyperinflationary effect of healthcare. Also note how there are years when this disconnect is even greater, as there were years when NHE grew while there were recessionary periods in the general economy.
It appears that US healthcare may be on the precipice of a transformational shift, but what will this shift look like? The following post examines if the corporate structure of US healthcare needs to be changed and what role does a Public Benefit Company have in this much needed transformation.
Hippocratic Oath
I swear by Apollo the physician, and Asclepius, and Hygieia and Panacea and all the gods and goddesses as my witnesses, that, according to my ability and judgement, I will keep this Oath and this contract:
To hold him who taught me this art equally dear to me as my parents, to be a partner in life with him, and to fulfill his needs when required; to look upon his offspring as equals to my own siblings, and to teach them this art, if they shall wish to learn it, without fee or contract; and that by the set rules, lectures, and every other mode of instruction, I will impart a knowledge of the art to my own sons, and those of my teachers, and to students bound by this contract and having sworn this Oath to the law of medicine, but to no others.
I will use those dietary regimens which will benefit my patients according to my greatest ability and judgement, and I will do no harm or injustice to them.
I will not give a lethal drug to anyone if I am asked, nor will I advise such a plan; and similarly I will not give a woman a pessary to cause an abortion.
In purity and according to divine law will I carry out my life and my art.
I will not use the knife, even upon those suffering from stones, but I will leave this to those who are trained in this craft.
Into whatever homes I go, I will enter them for the benefit of the sick, avoiding any voluntary act of impropriety or corruption, including the seduction of women or men, whether they are free men or slaves.
Whatever I see or hear in the lives of my patients, whether in connection with my professional practice or not, which ought not to be spoken of outside, I will keep secret, as considering all such things to be private.
So long as I maintain this Oath faithfully and without corruption, may it be granted to me to partake of life fully and the practice of my art, gaining the respect of all men for all time. However, should I transgress this Oath and violate it, may the opposite be my fate.
Translated by Michael North, National Library of Medicine, 2002.
Much of the following information can be found on the Health AffairsBlog in a post entitled
Limitations of For Profit and Non-Profit Hospitals
For profit represent ~ 25% of US hospitals and are owned and governed by shareholders, and can raise equity through stock and bond markets.
According to most annual reports, the CEOs incorrectly assume they are legally bound as fiduciaries to maximize shareholder value. This was a paradigm shift in priorities of companies which started around the mid 1980s,aphenomenon discussed below.
A by-product of this business goal, to maximize shareholder value, is that CEO pay and compensation is naturally tied to equity markets. A means for this is promoting cost efficiencies, even in the midst of financial hardships.
A clear example of the failure of this system can be seen during the 2020- current COVID19 pandemic in the US. According to the Medicare Payment Advisory Commission, four large US hospitals were able to decrease their operating expenses by $2.3 billion just in Q2 2020. This amounted to 65% of their revenue; in comparison three large NONPROFIT hospitals reduced their operating expense by an aggregate $13 million (only 1% of their revenue), evident that in lean times for-profit will resort to drastic cost cutting at expense of service, even in times of critical demands for healthcare.
Because of their tax structure and perceived fiduciary responsibilities, for-profit organizations (unlike non-profit and public benefit corporations) are not legally required to conduct community health need assessments, establish financial assistance policies, nor limit hospital charges for those eligible for financial assistance. In addition to the difference in tax liability, for-profit, unlike their non-profit counterparts, at least with hospitals, are not funded in part by state or local government. As we will see, a large part of operating revenue for non-profit university based hospitals is state and city funding.
Therefore risk for financial responsibility is usually assumed by the patient, and in worst case, by the marginalized patient populations on to the public sector.
Tax Structure Considerations of for-profit healthcare
Financials of major for-profit healthcare entities (2020 annual)
Non-profit Healthcare systems
Nonprofits represent about half of all hospitals in the US. Most of these exist as a university structure, so retain the benefits of being private health systems and retaining the funding and tax benefits attributed to most systems of higher education. And these nonprofits can be very profitable. After taking in consideration the state, local, and federal tax exemptions these nonprofits enjoy, as well as tax-free donations from contributors (including large personal trust funds), a nonprofit can accumulate a large amount of revenue after expenses. In fact 82 nonprofit hospitals had $33 billion of net asset increase year-over-year (20% increase) from 2016 to 2017. The caveat is that this revenue over expenses is usually spent on research or increased patient services (this may mean expanding the physical infrastructure of the hospital or disseminating internal grant money to clinical investigators, expanding the hospital/university research assets which could result in securing even larger amount of external funding from government sources.
And although this model may work well for intercity university/healthcare systems, it is usually a struggle for the rural nonprofit hospitals. In 2020, ten out of 17 rural hospitals that went under were nonprofits. And this is not just true in the tough pandemic year. Over the past two decades multitude of nonprofit rural hospitals had to sell and be taken over by larger for-profit entities.
Hospital consolidation has led to a worse patient experience and no real significant changes in readmission or mortality data. (The article below is how over 130 rural hospitals have closed since 2010, creating a medical emergency in rural US healthcare)
And according to the article below it is only to get worse
The authors of the Health Affairs blog feel a major disadvantage of both the for-profit and non-profit healthcare systems is “that both face limited accountability with respect to anticompettive mergers and acquisitions.”
More hospital consolidation is expected post-pandemic
Hospital deal volume is likely to accelerate due to the financial damage inflicted by the coronavirus pandemic.
The anticipated increase in volume did not show up in the latest quarter, when deals were sharply down.
The pandemic may have given hospitals leverage in coming policy fights over billing and the creation of “public option” health plans.
Hospital consolidation is likely to increase after the COVID-19 pandemic, say both critics and supporters of the merger-and-acquisition (M&A) trend.
The financial effects of the coronavirus pandemic are expected to drive more consolidation between and among hospitals and physician practices, a group of policy professionals told a recent Washington, D.C.-based web briefing sponsored by the Alliance for Health Policy.
“There is a real danger that this could lead to more consolidation, which if we’re not careful could lead to higher prices,” said Karyn Schwartz, a senior fellow at the Kaiser Family Foundation (KFF).
Schwartz cited a recent KFF analysis of available research that concluded “provider consolidation leads to higher health care prices for private insurance; this is true for both horizontal and vertical consolidation.”
Kenneth Kaufman, managing director and chair of Kaufman Hall, noted that crises tend to push financially struggling organizations “further behind.”
“I wouldn’t be surprised at all if that happens,” Kaufman said. “That will lead to further consolidation in the provider market.”
The initial rounds of federal assistance from the CARES Act, which were based first on Medicare revenue and then on net patient revenue, may fuel consolidation, said Mark Miller, PhD, executive vice president of healthcare for Arnold Ventures. That’s because the funding formulas favored organizations that already had higher revenues, he said, and provided less assistance to low-revenue organizations.
HHS has distributed $116.2 billion from the $175 billion in provider funding available through the CARES Act and the Paycheck Protection Program and Health Care Enhancement Act. The largest distributions used the two revenue formulas cited by Miller.
No surge in M&A yet
The expected burst in hospital M&A activity has yet to occur. Kaufman Hall identified 14 transactions in the second quarter of 2020, far fewer than in the same quarter in any of the four preceding years, when second-quarter transactions totaled between 19 and 31. The latest deals were not focused on small hospitals, with average seller revenue of more than $800 million — far larger than the previous second-quarter high of $409 million in 2018.
Six of the 14 announced transactions were divestitures by major for-profit health systems, including Community Health Systems, Quorum and HCA.
Kaufman Hall’s analysis of the recent deals identified another pandemic-related factor that may fuel hospital M&A: closer ties between hospitals. The analysis cited the example of Lifespan and Care New England, which had suspended merger talks in 2019. More recently, in a joint announcement, the CEOs of the two systems noted that because of the COVID-19 crisis, the two systems “have been working together in unprecedented ways” and “have agreed to enter into an exploration process to understand the pros and cons of what a formal continuation of this collaboration could look like in the future.”
The M&A outlook for rural hospitals
The pandemic has had less of a negative effect on the finances of rural hospitals that previously joined larger health systems, said Suzie Desai, senior director of not-for-profit healthcare for S&P Global.
A CEO of a health system with a large rural network told Kaufman the federal grants that the system received for its rural hospitals were much larger than the grants paid through the general provider fund.
“If that was true across the board, then the federal government recognized that many rural hospitals could be at risk of not being able to make payroll; actually running out of money,” Kaufman said. “And they seem to have bent over backwards to make sure that didn’t happen.”
Other CARES Act funding distributed to providers included:
$12.8 billion for 959 safety net hospitals
$11 billion to almost 4,000 rural healthcare providers and hospitals in urban areas that have certain special rural designations in Medicare
Telehealth has helped rural hospitals but has not been sufficient to address the financial losses inflicted by the pandemic, Desai said.
Other coming trends include a sharper cost focus
Desai expects an increasing focus “over the next couple years” on hospital costs because of the rising share of revenue received from Medicare and Medicaid. She expects increased efforts to use technology and data to lower costs.
Billy Wynne, JD, chairman of Wynne Health Group, expects telehealth restrictions to remain relaxed after the pandemic.
Also, the perceptions of the public and politicians about the financial health of hospitals are likely to give those organizations leverage in coming policy fights over changes such as banning surprise billing and creating so-called public-option health plans, Wynne said. As an example, he cited the Colorado legislature’s suspension of the launch of a public option “in part because of sensitivities around hospital finances in the COVID pandemic.”
“Once the dust settles, it’ll be interesting to see if their leverage has increased or decreased due to what we’ve been through,” Wynne said.
About the Author
Rich Daly, HFMA Senior Writer and Editor,
is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare
The quality of care at hospitals acquired during a recent wave of consolidations has gotten worse or stayed the same, according to a study led by Harvard Medical School scientists published Jan. 2 in NEJM.
The findings deal a blow to the often-cited arguments that hospital consolidation would improve care. A flurry of earlier studies showed that mergers increase prices. Now after analyzing patient outcomes after hundreds of hospital mergers, the new research also dashes the hopes that this more expensive care might be of higher quality.
Get more HMS news here
“Our findings call into question claims that hospital mergers are good for patients—and beg the question of what we are getting from higher hospital prices,” said study senior author J. Michael McWilliams, the Warren Alpert Foundation Professor of Health Care Policy in the Blavatnik Institute at HMS and an HMS professor of medicine and a practicing general internist at Brigham and Women’s Hospital.
McWilliams noted that rising hospital prices have been one of the leading drivers of unsustainable growth in U.S. health spending.
To examine the impact of hospital mergers on quality of care, researchers from HMS and Harvard Business School examined patient outcomes from nearly 250 hospital mergers that took place between 2009 and 2013. Using data collected by the Centers for Medicare and Medicaid Services, they analyzed variables such as 30-day readmission and mortality rates among patients discharged from a hospital, as well as clinical measures such as timely antibiotic treatment of patients with bacterial pneumonia. The researchers also factored in patient experiences, such as whether those who received care at a given hospital would recommend it to others. For their analysis, the team compared trends in these indicators between 246 hospitals acquired in merger transactions and unaffected hospitals.
The verdict? Consolidation did not improve hospital performance, and patient-experience scores deteriorated somewhat after the mergers.
The study was not designed to examine the reasons behind the worsening in patient experience. Weakening of competition due to hospital mergers could have contributed, the researchers said, but deeper exploration suggested other potential mechanisms. Notably, the analysis found the decline in patient-experience scores occurred mainly in hospitals acquired by hospitals that already had a poor patient-experience score—a finding that suggests acquisitions facilitate the spread of low quality care but not of high quality care.
The researchers caution that isolated, individual mergers may have still yielded positive results—something that an aggregate analysis is not powered to capture. And the researchers could only examine measurable aspects of quality. The trend in hospital performance on these standard measures, however, appears to point to a net effect of overall decline, the team said.
“Since our study estimated the average effects of mergers, we can’t rule out the possibility that some mergers are good for patient care,” said first author Nancy Beaulieu, research associate in health care policy at HMS. “But this evidence should give us pause when considering arguments for hospitals mergers.”
The work was supported by the Agency for Healthcare Research and Quality (grant no. U19HS024072).
Co-investigators included Bruce Landon and Jesse Dalton from HMS, Ifedayo Kuye, from the University of California, San Francisco, and Leemore Dafny from Harvard Business School and the National Bureau of Economic Research.
Public benefit corporations (versus Benefit Corporate status, which is more of a pledge) are separate legal entities which exist as a hybrid, for-profit/nonprofit company but is mandated to
Pursue a general or specific public benefit
Consider the non-financial interests of its shareholders and other STAKEHOLDERS when making decision
report how well it is achieving its overall public benefit objectives
Have limited fiduciary responsibility to investors that remains IN SCOPE of public benefit goal
In essence, the public benefit corporations executives are mandated to run the company for the benefit of STAKEHOLDERS first, if those STAKEHOLDERS are the public beneficiary of the company’s goals. This in essence moves the needle away from the traditional C-Corp overvaluing the needs of shareholders and brings back the mission of the company and in the case of healthcare, the needs of its stakeholders, the consumers of healthcare.
PBCs are legal entities recognized by states rather than by the federal government. So far, in 2020 about 37 states allow companies to incorporate as a PBC. Stipulations of the charter include semiannual reporting of the public benefits bestowed by the company and how well it is achieving its public benefit mandate. There are about 3,000 US PBCs. Some companies have felt it was in their company mission and financial interest to change incorporation as a PBC.
Some well known PBCs include
Ben and Jerry’s Ice Cream
American Red Cross
Susan B. Komen Foundation
Allbirds (a shoe startup valued at $1.7 billion when made switch)
Bombas (the sock company that donates extra socks when you buy a pair)
Lemonade (a publicly traded insurance PBC that has beneficiaries select a nonprofit that the company will donate to)
Although the number of PBCs in the healthcare arena is increasing
Not many PBCs are in the area of healthcare delivery
Noone is quite sure what the economic model would look like for a healthcare delivery PBC
Some example of hospital PBC include NYC Health + Hospitals and Community First Medical Center in Chicago.
Benefits of moving a hospital to PBC Status
PBCs are held legally accountable to a predefined public benefit. For hospitals this could be delivering cost-effective quality of care and affordable to a local citizenry or an economically disadvantaged population. PBCs must produce at least an annual report on the public benefits it has achieved contrasted against a third party standard. For example a hospital could include data of Medicaid related mortality risks, data neither the C-corp nor the nonprofit 501c would have to report on. Most nonprofits and charities report their taxes on a schedule H or Form 990, which only has to report the officer’s compensation as well as monies given to charitable organizations, or other 501 organizations. The nonprofit would show a balance of zero as the donated money for that year would be allocated out for various purposes. Hospitals, even as nonprofits, are not required to submit all this data. Right now in US the ACA just requires any hospital that receives government or ACA insurance payments to report certain outcome statistics. Although varying state by state, a PBC should have a “benefit officer” to make sure the mandate is being met. In some cases a PBC benefit officer could sue the board for putting shareholder interest over the public benefit mandate.
A PBC can include community stakeholders in the articles of incorporation thus giving a voice to local community members. This would be especially beneficial for a hospital serving, say, a rural community.
PBCs do have advantages of the for-profit companies as they are not limited to non-equity forms of investment. A PBC can raise money in the equity markets or take on debt and finance it. These financial instruments are unavailable to the non-profit. Yet one interesting aspect is that PBCs require a HIGHER voting threshold by shareholders than a traditional for profit company in the ability to change their public benefit or convert their PBC back to a for-profit.
Limitations of the PBC
Little incentive financially for current and future hospitals to incorporate as a PBC. Herein lies a huge roadblock given the state of our reimbursement structure in this country. Although there may be an incentive with regard to hiring and retention of staff drawn to the organization’s social purpose. There have been, in the past, suggestions to allow hospitals that incorporate at PBC to receive some tax benefit, but this legislation has not gone through either at state or federal level. (put link to tax article).
In order for there to be value to constituents (patients) there must be strong accountability measures. This will require the utmost in ethical behavior by a board and executives. We have witnessed, through M&A by large health groups, anticompetitive and near monopoly behavior.
There are no federal guidelines but varying guidelines from state to state. There must be some federal recognition of the PBC status when it comes to healthcare, such as that the government is one of the biggest payers of US healthcare.
This is a great interview with ArcHealth, a PBC healthcare system.
Arc Health PBC is a public benefit corporation, a mission-driven for-profit company that utilizes a market-driven approach to achieving our short and long-term social goals. As a public benefit corporation, Arc Health is also a social enterprise working to further our mission of providing healthcare to rural, underserved, and indigenous communities through business practices that improve the recruitment and retention of quality healthcare providers.
What is a Social Enterprise?
While there is no one exact definition, according to the Social Enterprise Alliance, a social enterprise is an “organization that addresses a basic unmet need or solves a social or environmental problem through a market-driven approach.” A social enterprise is not a distinct legal entity, but instead, an “ideological spectrum marrying commercial approaches with social good.” Social enterprises foster a dual-bottom-line – simultaneously seeking profits and social impact. Arc Health, like many social enterprises, seeks to be self–sustainable.
Two primary structures fall under the social enterprise umbrella: nonprofits and for-profit organizations. There are also related entities within both structures that could be considered social enterprises. Any of these listed structures can be regarded as a social enterprise depending on if and how involved they are with socially beneficial programs.
What is a Public Benefit Corporation?
Public Benefit Corporations (PBCs), also known as benefit corporations, are “for-profit companies that balance maximizing value to stakeholders with a legally binding commitment to a social or environmental mission.” PBCs operate as for-profit entities with no tax advantages or exemptions. Still, they must have a “purpose of creating general public benefit,” such as promoting the arts or science, preserving the environment, or providing benefits to underserved communities. PBCs must attain a higher degree of corporate purpose, expanded accountability, and expected transparency.
There are now over 3,000 registered PBCs, comprising approximately 0.1% of American businesses.
As a PBC, Arc Health expects to access capital through individual investors who seek financial returns, rather than through donations. Arc Health’s investors make investments with a clear understanding of the balance the company must strike between financial returns (I.e., profitability) and social purpose. Therefore, investors expect the company to be operationally profitable to ensure a financial return on their investments, while also making clear to all stakeholders and the public that generating social impact is the priority.
What is the difference between a Social Enterprise and PBC?
Social enterprises and PBCs emulate similar ideals that value the importance and need to invoke social change vis-a-vis working in a market-driven industry. Public benefit corporations fall under the social enterprise umbrella. An organization may choose to use a social enterprise model and incorporate itself as either a not-for-profit, C-Corp, PBC, or other corporate structure.
How did Arc Health Become a Public Benefit Corporation?
Arc Health was initially formed as a C-Corp. In 2019, Arc Health’s CEO and Co-Founder, Dave Shaffer, guided the conversion from a C-Corp to a PBC, incorporated in Delaware. Today, Arc Health follows guidelines and expectations for PBCs, including adhering to the State of Delaware’s requirements for PBCs.
Why is Arc Health a Social Enterprise and Public Benefit Corporation?
Arc Health believes it is essential to commit ourselves to our mission and demonstrate our dedication through our actions. We work to adhere to the core values of accountability, transparency, and purpose. As a registered public benefit company and a social enterprise, we execute our drive to achieve health equity in tangible and effective ways that the communities we work with, our stakeholders, and our providers expect of us.
90% of Americans say that companies must not only say a product or service is beneficial, but they also need to prove its benefit.
When we partner with health clinics and hospitals, we aim to provide services that enact lasting change. For example, we work with healthcare providers who desire to contribute both clinical and non-clinical skills. In 2020, Arc Health clinicians developed COVID-19 response protocols and educational materials about the vaccines. They participated in pain management working groups. They identified and followed up with kids in the community who were overdue for a well-child check. Arc Health providers should be driven by a desire to develop a long-term relationship with a healthcare service provider and participate in its successes and challenges.
Paradigm Shift in the 1980’s: Companies Start to Emphasize Shareholders Over Stakeholders
So earlier in this post we had mentioned about a shift in philosophy at the corporate boardroom that affected how comparate thought, value, and responsibility: Companies in the 1980s started to shift their focus and value only the needs of corporate ShAREHOLDERS at the expense of their traditional STAKEHOLDERS (customers, clients). Many movies and books have been written on this and debatable if deliberate or a by-product of M&A, hostile takeovers, and the stock market in general but the effect was that the consumer was relegated as having less value, even though marketing budgets are very high. The fiduciary responsibility of the executive was now defined in terms of satisfying shareholders, who were now big huge and powerful brokerage houses, private equity, and hedge funds. A good explanation by Medium.com Tyler Lasicki is given below.
In a famous 1970 New York Times Article, Milton Friedman postulated that the CEO, as an employee of the shareholder, must strive to provide the highest possible return for all shareholders. Since that article, the United States has embraced this idea as the fundamental philosophy supporting the ultimate purpose of businesses — The Shareholders Come First.
In August of 2019, the Business Roundtable, a group made up of the most influential U.S CEOs, published a letter shifting their stance on the purpose of a corporation. Regardless of whether this piece of paper will actually result in any systematic changes has yet to be seen, however this newly stated purpose of business is a dramatic shift from the position Milton Friedman took in 1970. According to the statement, these corporations will no longer prioritize maximizing profits for shareholders, but instead turn their focus to benefiting all stakeholders — including citizens, customers, suppliers, employees, on par with shareholders.
Now the social responsibility of a company and the CEO was to maxiimize the profits even at the expense of any previous social responsibility they once had.
Small sample of the 181 Signatures attached to the Business Roundtable’s letter
What has happened over the past 50 years that has led to such a fundamental change in ideology? What has happened to make the CEO’s of America’s largest corporations suddenly change their stance on such a foundational principle of what it means to be an American business?
Since diving into this subject, I have come to find that the “American fundamental principle” of putting shareholders first is one that is actually not all that fundamental. In fact, for a large portion of our nation’s history this ideology was actually seen as the unpopular position.
Key ideological shifts in U.S. history
This post dives into a brief history of these two contrasting ideological viewpoints in an attempt to contextualize the forces behind both sides — specifically, the most recent shift (1970–2019). This basic idea of what is most important; the stakeholder or the shareholder, is the underlying reason as to why many things are the way they are today. A corporation’s priority of shareholder or stakeholder ultimately impacts employee salaries, benefits, quality of life within communities, environmental conditions, even the access to education children can receive. It affects our lives in a breadth and depth of ways and now that corporations may be changing positions (yet again) to focus on a model that prioritizes the stakeholder, it is important to understand why.
Looking forward, if stakeholder priority ends up being the popular position among American businesses, how long will it last for? What could lead to its downfall? And what will managers do to ensure a long term stakeholder-friendly business model?
It is clear to me the reasons that have led to these shifts in ideology are rather nuanced, however I want to highlight a few trends that have had a major impact on businesses changing their priorities while also providing context as to why things have shifted.
The Ascendancy of Shareholder Value
Following the 1929 stock market crash and the Great Depression, stakeholder primacy became the popular perspective within corporate America. Stakeholder primacy is the idea that corporations are to consider a wider group of interested parties (not just shareholders) whose positions need to be taken into consideration by corporate governance. According to this point of view, rather than solely being an agent for shareholders, management’s responsibilities were to be dispersed among all of its constituencies, even if it meant a reduction in shareholder value. This ideology lasted as the dominant position for roughly 40 years, in part due to public opinion and strong views on corporate responsibility, but also through state adoption of stakeholder laws.
By the mid-1970s, falling corporate profitability and stagnant share prices had been the norm for a decade. This poor economic performance influenced a growing concern in the U.S. regarding the perceived divergence between manager and shareholder interest. Many held the position that profits and share prices were suffering as a result of corporation’s increased attention on stakeholder groups.
This noticeable divergence in interests sparked many academics to focus their research on corporate management’s motivations in decision making regarding their allocation of resources. This branch of research would later be known as agency theory, which focused on the relationship between principals (shareholders) and their agents (management). Research at the time outlined how over the previous decades corporate management had pursued strategies that were not likely to optimize resources from a shareholder’s perspective. These findings were part of a seismic shift of corporate philosophy, changing priority from the stakeholders of a business to the shareholders.
By 1982, the U.S. economy started to recover from a prolonged period of high inflation and low economic growth. This recovery acted as a catalyst for change in many industries, leaving many corporate management teams to struggle in response to these changes. Their business performance suffered as a result. These distressed businesses became targets for a group of new investors…private equity firms.
Now the paradigm shift had its biggest backer…. private equity! And private equity care about ONE thing….. THEIR OWN SHARE VALUE and subsequently meaning corporate profit, which became the most important directive for the CEO.
So it is all hopeless now? Can there be a shift back to the good ‘ol days?
Well some changes are taking place at top corporate levels which may help the stakeholders to have a voice at the table, as the following IRMagazine article states.
And once again this is being led by the Business Roundtable, the same Business Roundtable that proposed the shift back in the 1970s.
n a major corporate shift, shareholder value is no longer the main objective of the US’ top company CEOs, according to the Business Roundtable, which instead emphasizes the ‘purpose of a corporation’ and a stakeholder-focused model.
The influential body – a group of chief executive officers from major US corporations – has stressed the idea of a corporation dropping the age-old notion that corporations function first and foremost to serve their shareholders and maximize profits.
Rather, the focus should be on investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities as the vanguard of American business, according to a Business Roundtable statement.
‘While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders,’ reads the statement, signed by 181 CEOs. ‘We commit to deliver value to all of them, for the future success of our companies, our communities and our country.’
Gary LaBranche, president and CEO of NIRI, tells IR Magazine that this is part of a wider trend: ‘The redefinition of purpose from shareholder-focused to stakeholder-focused is not new to NIRI members. For example, a 2014 IR Update article by the late Professor Lynn Stout urges a more inclusive way of thinking about corporate purpose.’
NIRI has also addressed this concept at many venues, including the senior roundtable annual meeting and the NIRI Annual Conference, adds LaBranche. This trend was further seen in the NIRI policy statement on ESG disclosure, released in January this year.
Analyzing the meaning of this change in more detail, LaBranche adds: ‘The statement is a revolutionary break with the Business Roundtable’s previous position that the purpose of the corporation is to create value for shareholders, which was a long-held position championed by Milton Friedman.
‘The challenge is that Friedman’s thought leadership helped to inspire the legal and regulatory regime that places wealth creation for shareholders as the ‘prime directive’ for corporate executives.
‘Thus, commentators like Mike Allen of Axios are quick to point out that some shareholders may actually use the new statement to accuse CEOs of worrying about things beyond increasing the value of their shares, which, Allen reminds us, is the CEOs’ fiduciary responsibility.
‘So while the new Business Roundtable statement reflects a much-needed rebalancing and modernization that speaks to the comprehensive responsibilities of corporate citizens, we can expect that some shareholders will push back on this more inclusive view of who should benefit from corporate efforts and the capital that makes it happen. The new statement may not mark the dawn of a new day, but it perhaps signals the twilight of the Friedman era.’
In a similarly reflective way, Jamie Dimon, chairman and CEO of JPMorgan Chase & Co and chairman of the Business Roundtable, says: ‘The American dream is alive, but fraying. Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.’
Note: Mr Dimon has been very vocal for many years on corporate social responsibility, especially since the financial troubles of 2009.
Impact of New Regulatory Trends in M&A Deals
The following podcast from Pricewaterhouse Cooper Health Research Institute (called Next in Health) discusses some of the trends in healthcare M&A and is a great listen. However from 6:30 on the podcast discusses a new trend which is occuring in the healthcare company boardroom, which is this new focus on integrating companies that have proven ESG (or environmental, social, governance) functions within their organzations. As stated, doing an M&A deal with a company with strong ESG is looked favorably among regulators now.
Please click on the following link to hear a Google Podcast Next in Health episode
Heather shows the feasability of this model with multiple biotech and healthtech startups, including one founded by Mark Cuban.
Health tech unicorn Aledade recently announced that it made the strategic decision to become a public benefit corporation (PBC).
The company joins just a handful of others in healthcare that are structured this way.
So what exactly is a PBC, and why does it matter?
PBCs are a type of for-profit corporate entity that has also adopted a public benefit purpose and is currently authorized by 35 states and the District of Columbia. A PBC must consider the nonfinancial interests of its shareholders and other stakeholders when making decisions. As a public benefit corporation, companies have to weigh their social/environmental objectives alongside maximizing value for shareholders.
While PBC and B Corp. are often used interchangeably, they are not the same. A B Corp. is a certification provided to eligible companies by the nonprofit, B Lab. A PBC is an actual legal entity that bakes into its certificate of incorporation a “public benefit,” according to Rubicon Law Group.
“I don’t think that there is a trade-off between either you do things that are good for society or you make profits in your business.” —Farzad Mostashari, M.D.
PBCs also are required to provide a report to shareholders every two years that detail how well the company is achieving its overall public benefit objectives. In some states, the report must be assessed against a third-party standard and be made publicly available. Delaware PBCs are not required to report publicly or against a third-party standard.
Aledade launched in 2014 and uses data analytics to help independent doctors’ offices transition to value-based care models. The company currently partners with more than 1,000 independent primary care practices comprising over 11,000 physicians and has nearly 150 contracts covering more than 1.7 million patients and $17 billion in total healthcare spending. Last June, the company raised $123 million in a series E round, boosting its valuation to $3.1 billion.
In a blog post, Aledade CEO and co-founder Farzad Mostashari, M.D., explained the company’s reasoning behind the move and said the corporate structure of a PBC is “well suited to mission-oriented companies where alignment with stakeholders is a key driver of the business model.”
“Aledade’s public benefit purpose means that we must weigh the interests of our primary care practice partners, their patients, our employees, and those who bear the burden of rising health care costs, alongside those of our shareholders, when we make decisions,” Mostashari said in an interview. This duty extends to all significant board decisions, including decisions on whether to go public, to make acquisitions or to sell the company, he noted.
The PBC structure helps create alignment among stakeholders and build trust, he said. “I don’t think that there is a trade-off between either you do things that are good for society or you make profits in your business. That might be true for fee-for-service businesses. It’s not true for Aledade,” he said.
He added, “For businesses that are built on trust and alignment, not considering stakeholder benefits gets you neither social good nor profits. If you’re in a business like our business where it’s actually really important that everybody have faith and belief that you are doing what’s best for patients, that you are actually in it for the long-term for practices, that’s what makes us successful as a business.”
Mark Cuban Cost Plus Drugs, which launched in January 2022 to offer low-cost rivals to overpriced generic drugs, also is structured as a public benefit corporation. The company’s founder and CEO Alexander Oshmyansky started the company in 2015 as a nonprofit, according to a feature story in D Magazine. Through Y Combinator, investors told Oshmyansky that the nonprofit model wouldn’t be able to raise the needed funds. He then reworked the business model to a PBC and launched Osh’s Affordable Pharmaceuticals in 2018.
Some other companies that are biotech drug development companies that operate under the PBC model include
Even a traditional for-profit C corporation can work toward a public mission without becoming a PBC. But, in an industry like healthcare, too often the duty to maximize financial returns for shareholders or investors can be in conflict with what is best for patients, executives say.
“With a startup, it might limit the ability to sell their business to a larger company in the future because there might be some limitations on what the larger company could do with the organization.”—Jodi Daniel, a partner in Crowell & Moring’s Health Care Group
According to some healthcare experts, PBCs offer a promising alternative as a business model for healthcare companies by providing a “North Star” by which a company can navigate critical business decisions.
“I think it really helps to drive accountability,” Huang, Osmind’s chief executive, said. “I think that’s important, especially in healthcare where it’s easy sometimes to get misaligned with all the different stakeholders that are involved in the industry. We wanted to make sure we had something to be accountable to. Second, it’s ingrained in the culture. The third element of why it was so helpful for us from the beginning is just on focus and alignment. I think we can be much more clear and transparent about what we’re focused on, our values, how we try to use that transparently to influence our decisions and how we can build a business that really ties all of that together.”
In a Health Affairs article, medical researchers at Stanford, including Jimmy Qian, a co-founder of Osmind, laid out the case for why PBCs may simultaneously improve individual patient outcomes and collective benefit without sacrificing institutions’ financial stability.
PBCs are held legally accountable to a predefined public benefit, which, for hospitals, could involve delivering high-quality, affordable care to local populations. PBCs are required to produce annual benefits reports that are assessed against a third-party standard. “These reports could be used by regulatory agencies such as the Centers for Medicare and Medicaid Services (CMS) or local health authorities to evaluate whether the PBC is making progress toward its stated mission and respond accordingly,” the researchers wrote.
But are there any trade-offs?
Having a public benefit obligation could potentially “tie the hands” of board members who can’t just focus on profits and must focus on those dual responsibilities, noted Jodi Daniel, a partner in Crowell & Moring’s Health Care Group.
“Companies that transition to being a public benefit corporation are intentionally trying to ensure that that the company’s mission doesn’t get diminished over time because it’s in their charter. So it helps [the mission] to endure. But there are pros and cons to that. It is somewhat binding the future board members and executives to follow that mission,” she said.
Daniel said she has spoken with several healthcare companies recently that are weighing the possibility of transitioning to a PBC. “Companies often don’t want to necessarily limit their options in their decision-making in the future. With a startup, it might limit the ability to sell their business to a larger company in the future because there might be some limitations on what the larger company could do with the organization,” she said in an interview.
By making decisions based on interests outside of financial ones, organizations may put themselves at a margin disadvantage as compared to pure for-profit players in the space, wrote Hospitalogy founder Blake Madden.
Faddis with Veeva said the company hasn’t seen any financial or performance trade-off as a result of operating as a PBC. He noted that the move has been good for recruiting, spurred more long-term conversations with customers and has been a source of new ideas.
“Prior to the conversion, you had employees who were thinking of new products or new functionality with the mindset of getting to be commercially successful,” Faddis said. “Now, you also have people thinking about it from the angle of, ‘Does it further one of our PBC purposes and then maybe it’s also going to be commercially successful?'”
Converting to a PBC also can be a tactic to build trust, Daniel noted, especially in healthcare, and that holds the potential to drive business.
One factor that isn’t clear is whether there is sufficient oversight to hold these companies accountable to their stated public mission. Who checks to make sure companies are making progress toward their objectives to improve healthcare?
Osmind publishes its benefit corporation report on its website to make it available to the public even though it is not required to do so. “I think that really highlights the accountability piece of you need to tell the world or at least tell your shareholders how you’re really trying to uphold your public benefit,” Huang said.
Other related articles published on this Open Access Online Scientific Journal on Healthcare Issues include the following:
Science Policy Forum: Should we trust healthcare explanations from AI predictive systems?
Some in industry voice their concerns
Curator: Stephen J. Williams, PhD
Post on AI healthcare and explainable AI
In a Policy Forum article in Science “Beware explanations from AI in health care”, Boris Babic, Sara Gerke, Theodoros Evgeniou, and Glenn Cohen discuss the caveats on relying on explainable versus interpretable artificial intelligence (AI) and Machine Learning (ML) algorithms to make complex health decisions. The FDA has already approved some AI/ML algorithms for analysis of medical images for diagnostic purposes. These have been discussed in prior posts on this site, as well as issues arising from multi-center trials. The authors of this perspective article argue that choice of type of algorithm (explainable versus interpretable) algorithms may have far reaching consequences in health care.
Summary
Artificial intelligence and machine learning (AI/ML) algorithms are increasingly developed in health care for diagnosis and treatment of a variety of medical conditions (1). However, despite the technical prowess of such systems, their adoption has been challenging, and whether and how much they will actually improve health care remains to be seen. A central reason for this is that the effectiveness of AI/ML-based medical devices depends largely on the behavioral characteristics of its users, who, for example, are often vulnerable to well-documented biases or algorithmic aversion (2). Many stakeholders increasingly identify the so-called black-box nature of predictive algorithms as the core source of users’ skepticism, lack of trust, and slow uptake (3, 4). As a result, lawmakers have been moving in the direction of requiring the availability of explanations for black-box algorithmic decisions (5). Indeed, a near-consensus is emerging in favor of explainable AI/ML among academics, governments, and civil society groups. Many are drawn to this approach to harness the accuracy benefits of noninterpretable AI/ML such as deep learning or neural nets while also supporting transparency, trust, and adoption. We argue that this consensus, at least as applied to health care, both overstates the benefits and undercounts the drawbacks of requiring black-box algorithms to be explainable.
Types of AI/ML Algorithms: Explainable and Interpretable algorithms
Interpretable AI: A typical AI/ML task requires constructing algorithms from vector inputs and generating an output related to an outcome (like diagnosing a cardiac event from an image). Generally the algorithm has to be trained on past data with known parameters. When an algorithm is called interpretable, this means that the algorithm uses a transparent or “white box” function which is easily understandable. Such example might be a linear function to determine relationships where parameters are simple and not complex. Although they may not be as accurate as the more complex explainable AI/ML algorithms, they are open, transparent, and easily understood by the operators.
Explainable AI/ML: This type of algorithm depends upon multiple complex parameters and takes a first round of predictions from a “black box” model then uses a second algorithm from an interpretable function to better approximate outputs of the first model. The first algorithm is trained not with original data but based on predictions resembling multiple iterations of computing. Therefore this method is more accurate or deemed more reliable in prediction however is very complex and is not easily understandable. Many medical devices that use an AI/ML algorithm use this type. An example is deep learning and neural networks.
The purpose of both these methodologies is to deal with problems of opacity, or that AI predictions based from a black box undermines trust in the AI.
For a deeper understanding of these two types of algorithms see here:
How interpretability is different from explainability
Why a model might need to be interpretable and/or explainable
Who is working to solve the black box problem—and how
What is interpretability?
Does Chipotle make your stomach hurt? Does loud noise accelerate hearing loss? Are women less aggressive than men? If a machine learning model can create a definition around these relationships, it is interpretable.
All models must start with a hypothesis. Human curiosity propels a being to intuit that one thing relates to another. “Hmm…multiple black people shot by policemen…seemingly out of proportion to other races…something might be systemic?” Explore.
People create internal models to interpret their surroundings. In the field of machine learning, these models can be tested and verified as either accurate or inaccurate representations of the world.
Interpretability means that the cause and effect can be determined.
What is explainability?
ML models are often called black-box models because they allow a pre-set number of empty parameters, or nodes, to be assigned values by the machine learning algorithm. Specifically, the back-propagation step is responsible for updating the weights based on its error function.
To predict when a person might die—the fun gamble one might play when calculating a life insurance premium, and the strange bet a person makes against their own life when purchasing a life insurance package—a model will take in its inputs, and output a percent chance the given person has at living to age 80.
Below is an image of a neural network. The inputs are the yellow; the outputs are the orange. Like a rubric to an overall grade, explainability shows how significant each of the parameters, all the blue nodes, contribute to the final decision.
In this neural network, the hidden layers (the two columns of blue dots) would be the black box.
For example, we have these data inputs:
Age
BMI score
Number of years spent smoking
Career category
If this model had high explainability, we’d be able to say, for instance:
The career category is about 40% important
The number of years spent smoking weighs in at 35% important
The age is 15% important
The BMI score is 10% important
Explainability: important, not always necessary
Explainability becomes significant in the field of machine learning because, often, it is not apparent. Explainability is often unnecessary. A machine learning engineer can build a model without ever having considered the model’s explainability. It is an extra step in the building process—like wearing a seat belt while driving a car. It is unnecessary for the car to perform, but offers insurance when things crash.
The benefit a deep neural net offers to engineers is it creates a black box of parameters, like fake additional data points, that allow a model to base its decisions against. These fake data points go unknown to the engineer. The black box, or hidden layers, allow a model to make associations among the given data points to predict better results. For example, if we are deciding how long someone might have to live, and we use career data as an input, it is possible the model sorts the careers into high- and low-risk career options all on its own.
Perhaps we inspect a node and see it relates oil rig workers, underwater welders, and boat cooks to each other. It is possible the neural net makes connections between the lifespan of these individuals and puts a placeholder in the deep net to associate these. If we were to examine the individual nodes in the black box, we could note this clustering interprets water careers to be a high-risk job.
In the previous chart, each one of the lines connecting from the yellow dot to the blue dot can represent a signal, weighing the importance of that node in determining the overall score of the output.
If that signal is high, that node is significant to the model’s overall performance.
If that signal is low, the node is insignificant.
With this understanding, we can define explainability as:
Knowledge of what one node represents and how important it is to the model’s performance.
So how does choice of these two different algorithms make a difference with respect to health care and medical decision making?
The authors argue:
“Regulators like the FDA should focus on those aspects of the AI/ML system that directly bear on its safety and effectiveness – in particular, how does it perform in the hands of its intended users?”
A suggestion for
Enhanced more involved clinical trials
Provide individuals added flexibility when interacting with a model, for example inputting their own test data
More interaction between user and model generators
Determining in which situations call for interpretable AI versus explainable (for instance predicting which patients will require dialysis after kidney damage)
Other articles on AI/ML in medicine and healthcare on this Open Access Journal include
2012pharmaceutical
Amandeep Kaur
Aashir Awan, Phd
Abhisar Anand
Adina Hazan
Alan F. Kaul, PharmD., MS, MBA, FCCP
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anamikasarkar
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aptubman
Arav Gandhi
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David Orchard-Webb, PhD
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Demet Sag, Ph.D., CRA, GCP
Dror Nir
dsmolyar
Ethan Coomber
evelinacohn
FrasonKalapurackal
Gail S Thornton
Irina Robu
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Ed Kislauskis
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Madison Davis
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Rick Mandahl
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Dr. Sudipta Saha
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