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Archive for the ‘Health Law Policy’ Category

Can the Public Benefit Company Structure Save US Healthcare?

Curator: Stephen J. Williams, Ph.D.

According to Centers for Medicare and Medicare Services (CMS.gov) healthcare spending per capita has reached 17.7 percent 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 Affairs Blog in a post entitled

Public Benefit Corporations: A Third Option For Health Care Delivery?

By Soleil Shah, Jimmy J. Qian, Amol S. Navathe, Nirav R. Shah

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, a phenomenon 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)

https://www.nationalgeographic.com/history/article/appalachian-hospitals-are-disappearing

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

Aug 10, 2020

By Rich Daly, HFMA Senior Writer and Editor

News | Coronavirus

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

Source: https://www.hfma.org/topics/news/2020/08/more-hospital-consolidation-is-expected-post-pandemic.html

From Harvard Medical School

Hospital Mergers and Quality of Care

A new study looks at the quality of care at hospitals acquired in a recent wave of consolidations

By JAKE MILLER January 16, 2020 Research

Two train tracks merge in a blurry sunset.

Image: NirutiStock / iStock / Getty Images Plus       

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.

Source: https://hms.harvard.edu/news/hospital-mergers-quality-care

Public Benefit Corporations (PBC)

     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 

  1. Pursue a general or specific public benefit
  2. Consider the non-financial interests of its shareholders and other STAKEHOLDERS when making decision
  3. report how well it is achieving its overall public benefit objectives
  4. 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

  1. Ben and Jerry’s Ice Cream
  2. American Red Cross
  3. Susan B. Komen Foundation
  4. Allbirds (a shoe startup valued at $1.7 billion when made switch)
  5. Bombas (the sock company that donates extra socks when you buy a pair)
  6. 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

  1. Not many PBCs are in the area of healthcare delivery 
  2. 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

  1. 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.
  2. 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.
  3. 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

  1. 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).  
  2. 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.
  3. 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.

Source: https://www.archealthjustice.com/arc-health-as-public-benefit-company-and-social-enterprise-what-is-the-difference/

Arc Health as a Public Benefit Company and Social Enterprise – What is the difference?

Mar 3, 2021 | Healthcare

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.

From the Medium.com

Source: https://medium.com/swlh/the-shareholder-v-stakeholder-contrast-a-brief-history-c5a6cfcaa111

The Shareholder V. Stakeholder Contrast, a Brief History

Tyler Lasicki

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May 26, 2020 · 14 min read

Introduction

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.

Andrew Holt

Andrew Holt

REPORTER

  •  
  •  

SHAREHOLDER VALUE

CORPORATE GOVERNANCE

Shift from shareholder value to stakeholder-focused model for top US firms

AUG 23, 2019

Business Roundtable reveals corporations to drop idea they function to serve shareholders only

Source: https://www.irmagazine.com/esg/shift-shareholder-value-stakeholder-focused-model-top-us-firms

Andrew Holt

Andrew Holt

REPORTER

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.

Other related articles published on this Open Access Online Scientific Journal on Healthcare Issues include the following:

Opportunity Mapping of the E-Health Sector prior to COVID19 Outbreak
mHealth market growth in America, Europe, & APAC
Ethics Behind Genetic Testing in Breast Cancer: A Webinar by Laura Carfang of survivingbreastcancer.org
The Inequality and Health Disparity seen with the COVID-19 Pandemic Is Similar to Past Pandemics
Live Notes from @HarvardMed Bioethics: Authors Jerome Groopman, MD & Pamela Hartzband, MD, discuss Your Medical Mind
COVID-related financial losses at Mass General Brigham
Personalized Medicine, Omics, and Health Disparities in Cancer:  Can Personalized Medicine Help Reduce the Disparity Problem?

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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 ScienceBeware 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.

Source: https://science.sciencemag.org/content/373/6552/284?_ga=2.166262518.995809660.1627762475-1953442883.1627762475

Types of AI/ML Algorithms: Explainable and Interpretable algorithms

  1.  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.
  2. 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:

https://www.kdnuggets.com/2018/12/machine-learning-explainability-interpretability-ai.html

or https://www.bmc.com/blogs/machine-learning-interpretability-vs-explainability/

(a longer read but great explanation)

From the above blog post of Jonathan Johnson

  • 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

Applying AI to Improve Interpretation of Medical Imaging

Real Time Coverage @BIOConvention #BIO2019: Machine Learning and Artificial Intelligence #AI: Realizing Precision Medicine One Patient at a Time

LIVE Day Three – World Medical Innovation Forum ARTIFICIAL INTELLIGENCE, Boston, MA USA, Monday, April 10, 2019

Cardiac MRI Imaging Breakthrough: The First AI-assisted Cardiac MRI Scan Solution, HeartVista Receives FDA 510(k) Clearance for One Click™ Cardiac MRI Package

 

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Reporter: Stephen J. Williams, PhD

In an announcement televised on C-Span, President Elect Joseph Biden announced his new Science Team to advise on science policy matters, as part of the White House Advisory Committee on Science and Technology. Below is a video clip and the transcript, also available at

https://www.c-span.org/video/?508044-1/president-elect-biden-introduces-white-house-science-team

 

 

COMING UP TONIGHT ON C-SPAN, NEXT, PRESIDENT-ELECT JOE BIDEN AND VICE PRESIDENT-ELECT KAMALA HARRIS ANNOUNCE SEVERAL MEMBERS OF THEIR WHITE HOUSE SCIENCE TEAM. AND THEN SENATE MINORITY LEADER CHUCK SCHUMER TALKS ABOUT THE IMPEACHMENT OF PRESIDENT TRUMP IN THE WEEKLY DEMOCRATIC ADDRESS. AND AFTER THAT, TODAY’S SPEECH BY VICE PRESIDENT MIKE PENCE TO SAILORS AT NAVAL AIR STATION LAMORE IN CALIFORNIA. NEXT, PRESIDENT-ELECT JOE BIDEN AND VICE PRESIDENT-ELECT KAMALA HARRIS ANNOUNCE SEVERAL MEMBERS OF THEIR WHITE HOUSE SCIENCE TEAM. FROM WILMINGTON, DELAWARE, THIS IS ABOUT 40 MINUTES. PRESIDENT-ELECT BIDEN: GOOD AFTERNOON, FOLKS. I WAS TELLING THESE FOUR BRILLIANT SCIENTISTS AS I STOOD IN THE BACK, IN A WAY, THEY — THIS IS THE MOST EXCITING ANNOUNCEMENT THAT I’VE GOTTEN TO MAKE IN THE ENTIRE CABINET RAISED TO A CABINET LEVEL POSITION IN ONE CASE. THESE ARE AMONG THE BRIGHTEST MOST DEDICATED PEOPLE NOT ONLY IN THE COUNTRY BUT THE WORLD. THEY’RE COMPOSED OF SOME OF THE MOST SCIENTIFIC BRILLIANT MINDS IN THE WORLD. WHEN I WAS VICE PRESIDENT AS — I I HAD INTENSE INTEREST IN EVERYTHING THEY WERE DOING AND I PAID ENORMOUS ATTENTION. AND I WOULD — LIKE A KID GOING BACK TO SCHOOL. SIT DOWN AND CAN YOU EXPLAIN TO ME AND THEY WERE — VERY PATIENT WITH ME. AND — BUT AS PRESIDENT, I WANTED YOU TO KNOW I’M GOING TO PAY A GREAT DEAL OF ATTENTION. WHEN I TRAVEL THE WORLD AS VICE PRESIDENT, I WAS OFTEN ASKED TO EXPLAIN TO WORLD LEADERS, THEY ASKED ME THINGS LIKE DEFINE AMERICA. TELL ME HOW CAN YOU DEFINE AMERICA? WHAT’S AMERICA? AND I WAS ON A TIBETAN PLATEAU WITH AT THE TIME WITH XI ZIN PING AND WE HAD AN INTERPRETER CAN I DEFINE AMERICA FOR HIM? I SAID YES, I CAN. IN ONE WORD. POSSIBILITIES. POSSIBILITIES. I THINK IT’S ONE OF THE REASONS WHY WE’VE OCCASIONALLY BEEN REFERRED TO AS UGLY AMERICANS. WE THINK ANYTHING’S POSSIBLE GIVEN THE CHANCE, WE CAN DO ANYTHING. AND THAT’S PART OF I THINK THE AMERICAN SPIRIT. AND WHAT THE PEOPLE ON THIS STAGE AND THE DEPARTMENTS THEY WILL LEAD REPRESENT ENORMOUS POSSIBILITIES. THEY’RE THE ONES ASKING THE MOST AMERICAN OF QUESTIONS, WHAT NEXT? WHAT NEXT? NEVER SATISFIED, WHAT’S NEXT? AND WHAT’S NEXT IS BIG AND BREATHTAKING. HOW CAN — HOW CAN WE MAKE THE IMPOSSIBLE POSSIBLE? AND THEY WERE JUST ASKING QUESTIONS FOR THE SAKE OF QUESTIONS, THEY’RE ASKING THESE QUESTIONS AS CALL TO ACTION. , TO INSPIRE, TO HELP US IMAGINE THE FUTURE AND FIGURE OUT HOW TO MAKE IT REAL AND IMPROVE THE LIVES OF THE AMERICAN PEOPLE AND PEOPLE AROUND THE WORLD. THIS IS A TEAM THAT ASKED US TO IMAGINE EVERY HOME IN AMERICA BEING POWERED BY RENEWABLE ENERGY WITHIN THE NEXT 10 YEARS. OR 3-D IMAGE PRINTERS RESTORING TISSUE AFTER TRAUMATIC INJURIES AND HOSPITALS PRINTING ORGANS FOR ORGAN TRANSPLANTS. IMAGINE, IMAGINE. AND THEY REALLY — AND, YOU KNOW, THEN RALLY, THE SCIENTIFIC COMMUNITY TO GO ABOUT DOING WHAT WE’RE IMAGINING. YOU NEED SCIENCE, DATA AND DISCOVERY WAS A GOVERNING PHILOSOPHY IN THE OBAMA-BIDEN ADMINISTRATION. AND EVERYTHING FROM THE ECONOMY TO THE ENVIRONMENT TO CRIMINAL JUSTICE REFORM AND TO NATIONAL SECURITY. AND ON HEALTH CARE. FOR EXAMPLE, A BELIEF IN SCIENCE LED OUR EFFORTS TO MAP THE HUMAN BRAIN AND TO DEVELOP MORE PRECISE INDIVIDUALIZED MEDICINES. IT LED TO OUR ONGOING MISSION TO END CANCER AS WE KNOW IT, SOMETHING THAT IS DEEPLY PERSONAL TO BOTH MY FAMILY AND KAMALA’S FAMILY AND COUNTLESS FAMILIES IN AMERICA. WHEN PRESIDENT OBAMA ASKED ME TO LEAD THE CANCER MOON SHOT, I KNEW WE HAD TO INJECT A SENSE OF URGENCY INTO THE FIGHT. WE BELIEVED WE COULD DOUBLE THE RATE OF PROGRESS AND DO IN FIVE YEARS WHAT OTHERWISE WOULD TAKE 10. MY WIFE, JILL, AND I TRAVELED AROUND THE COUNTRY AND THE WORLD MEETING WITH THOUSANDS OF CANCER PATIENTS AND THEIR FAMILIES, PHYSICIANS, RESEARCHERS, PHILANTHROPISTS, TECHNOLOGY LEADERS AND HEADS OF STATE. WE SOUGHT TO BETTER UNDERSTAND AND BREAK DOWN THE SILOS AND STOVE PIPES THAT PREVENT THE SHARING OF INFORMATION AND IMPEDE ADVANCES IN CANCER RESEARCH AND TREATMENT WHILE BUILDING A FOCUSED AND COORDINATED EFFORT HERE AT HOME AND ABROAD. WE MADE PROGRESS. BUT THERE’S SO MUCH MORE THAT WE CAN DO. WHEN I ANNOUNCED THAT I WOULD NOT RUN IN 2015 AT THE TIME, I SAID I ONLY HAD ONE REGRET IN THE ROSE GARDEN AND IF I HAD ANY REGRETS THAT I HAD WON, THAT I WOULDN’T GET TO BE THE PRESIDENT TO PRESIDE OVER CANCER AS WE KNOW IT. WELL, AS GOD WILLING, AND ON THE 20TH OF THIS MONTH IN A COUPLE OF DAYS AS PRESIDENT I’M GOING TO DO EVERYTHING I CAN TO GET THAT DONE. I’M GOING TO — GOING TO BE A PRIORITY FOR ME AND FOR KAMALA AND IT’S A SIGNATURE ISSUE FOR JILL AS FIRST LADY. WE KNOW THE SCIENCE IS DISCOVERY AND NOT FICTION. AND IT’S ALSO ABOUT HOPE. AND THAT’S AMERICA. IT’S IN THE D.N.A. OF THIS COUNTRY, HOPE. WE’RE ON THE CUSP OF SOME OF THE MOST REMARKABLE BREAKTHROUGHS THAT WILL FUNDAMENTALLY CHANGE THE WAY OF LIFE FOR ALL LIFE ON THIS PLANET. WE CAN MAKE MORE PROGRESS IN THE NEXT 10 YEARS, I PREDICT, THAN WE’VE MADE IN THE LAST 50 YEARS. AND EXPONENTIAL MOVEMENT. WE CAN ALSO FACE SOME OF THE MOST DIRE CRISES IN A GENERATION WHERE SCIENCE IS CRITICAL TO WHETHER OR NOT WE MEET THE MOMENT OF PERIL AND PROMISE THAT WE KNOW IS WITHIN OUR REACH. IN 1944, FRANKLIN ROOSEVELT ASKED HIS SCIENCE ADVISOR HOW COULD THE UNITED STATES FURTHER ADVANCE SCIENTIFIC RESEARCH IN THE CRITICAL YEARS FOLLOWING THE SECOND WORLD WAR? THE RESPONSE LED TO SOME OF THE MOST GROUND BREAKING DISCOVERIES IN THE LAST 75 YEARS. AND WE CAN DO THAT AGAIN. AND WE CAN DO MORE. SO TODAY, I’M PROUD TO ANNOUNCE A TEAM OF SOME OF THE COUNTRY’S MOST BRILLIANT AND ACCOMPLISHED SCIENTISTS TO LEAD THE WAY. AND I’M ASKING THEM TO FOCUS ON FIVE KEY AREAS. FIRST THE PANDEMIC AND WHAT WE CAN LEARN ABOUT WHAT IS POSSIBLE OR WHAT SHOULD BE POSSIBLE TO ADDRESS THE WIDEST RANGE OF PUBLIC HEALTH NEEDS. SECONDLY, THE ECONOMY, HOW CAN WE BUILD BACK BETTER TO ENSURE PROSPERITY IS FULLY SHARED ALL ACROSS AMERICA? AMONG ALL AMERICANS? AND THIRDLY, HOW SCIENCE HELPS US CONFRONT THIS CLIMATE CRISIS WE FACE IN AMERICA AND THE WORLD BUT IN AMERICA HOW IT HELPS US CONFRONT THE CLIMATE CRISIS WITH AMERICAN JOBS AND INGENUITY. AND FOURTH, HOW CAN WE ENSURE THE UNITED STATES LEADS THE WORLD IN TECHNOLOGIES AND THE INDUSTRIES THAT THE FUTURE THAT WILL BE CRITICAL FOR OUR ECONOMIC PROSPERITY AND NATIONAL SECURITY? ESPECIALLY WITH THE INTENSE INCREASED COMPETITION AROUND THE WORLD FROM CHINA ON? AND FIFTH, HOW CAN WE ASSURE THE LONG-TERM HEALTH AND TRUST IN SCIENCE AND TECHNOLOGY IN OUR NATION? YOU KNOW, THESE ARE EACH QUESTIONS THAT CALL FOR ACTION. AND I’M HONORED TO ANNOUNCE A TEAM THAT IS ANSWERING THE CALL TO SERVE. AS THE PRESIDENTIAL SCIENCE ADVISOR AND DIRECTOR OF THE OFFICE OF SCIENCE AND TECHNOLOGY POLICY, I NOMINATE ONE OF THE MOST BRILLIANT GUYS I KNOW, PERSONS I KNOW, DR. ERIC LANDER. AND THANK YOU, DOC, FOR COMING BACK. THE PIONEER — HE’S A PIONEER IN THE STIFFING COMMUNITY. PRINCIPAL LEADER IN THE HUMAN GENOME PROJECT. AND NOT HYPERBOLE TO SUGGEST THAT DR. LANDER’S WORK HAS CHANGED THE COURSE OF HUMAN HISTORY. HIS ROLE IN HELPING US MAP THE GENOME PULLED BACK THE CURTAIN ON HUMAN DISEASE, ALLOWING SCIENTISTS, EVER SINCE, AND FOR GENERATIONS TO COME TO EXPLORE THE MOLECULAR BASIS FOR SOME OF THE MOST DEVASTATING ILLNESSES AFFECTING OUR WORLD. AND THE APPLICATION OF HIS PIONEERING WORK AS — ARE POISED TO LEAD TO INCREDIBLE CURES AND BREAKTHROUGHS IN THE YEARS TO COME. DR. LANDER NOW SERVES AS THE PRESIDENT AND FOUNDING DIRECTOR OF THE BRODE INSTITUTE AT M.I.T. AND HARVARD, THE WORLD’S FOREMOST NONPROFIT GENETIC RESEARCH ORGANIZATION. AND I CAME TO APPRECIATE DR. LANDER’S EXTRAORDINARY MIND WHEN HE SERVED AS THE CO-CHAIR OF THE PRESIDENT’S COUNCIL ON ADVISORS AND SCIENCE AND TECHNOLOGY DURING THE OBAMA-BIDEN ADMINISTRATION. AND I’M GRATEFUL, I’M GRATEFUL THAT WE CAN WORK TOGETHER AGAIN. I’VE ALWAYS SAID THAT BIDEN-HARRIS ADMINISTRATION WILL ALSO LEAD AND WE’RE GOING TO LEAD WITH SCIENCE AND TRUTH. WE BELIEVE IN BOTH. [LAUGHTER] GOD WILLING OVERCOME THE PANDEMIC AND BUILD OUR COUNTRY BETTER THAN IT WAS BEFORE. AND THAT’S WHY FOR THE FIRST TIME IN HISTORY, I’M GOING TO BE ELEVATING THE PRESIDENTIAL SCIENCE ADVISOR TO A CABINET RANK BECAUSE WE THINK IT’S THAT IMPORTANT. AS DEPUTY DIRECTOR OF THE OFFICE OF SCIENCE AND TECHNOLOGY POLICY AND SCIENCE AND — SCIENCE AND SOCIETY, I APPOINT DR. NELSON. SHE’S A PROFESSOR AT THE INSTITUTE OF ADVANCED STUDIES AT PRINCETON UNIVERSITY. THE PRESIDENT OF THE SOCIAL SCIENCE RESEARCH COUNCIL. AND ONE OF AMERICA’S LEADING SCHOLARS IN THE — AN AWARD-WINNING AUTHOR AND RESEARCHER AND EXPLORING THE CONNECTIONS BETWEEN SCIENCE AND OUR SOCIETY. THE DAUGHTER OF A MILITARY FAMILY, HER DAD SERVED IN THE UNITED STATES NAVY AND HER MOM WAS AN ARMY CRIPPING TO RAFFER. DR. NELSON DEVELOPED A LOVE OF TECHNOLOGY AT A VERY YOUNG AGE PARTICULARLY WITH THE EARLY COMPUTER PRODUCTS. COMPUTING PRODUCTS AND CODE-BREAKING EQUIPMENT THAT EVERY KID HAS AROUND THEIR HOUSE. AND SHE GREW UP WITHIN HER HOME. WHEN I WROTE THAT DOWN, I THOUGHT TO MYSELF, I MEAN, HOW MANY KIDS — ANY WAY, THAT PASSION WAS A PASSION FORGED A LIFELONG CURIOSITY ABOUT THE INEQUITIES AND THE POWER DIAMONDICS THAT SIT BENEATH THE SURFACE OF SCIENTIFIC RESEARCH AND THE TECHNOLOGY WE BUILD. DR. NELSON IS FOCUSED ON THOSE INSIGHTS. AND THE SCIENCE, TECHNOLOGY AND SOCIETY, LIKE FEW BEFORE HER EVER HAVE IN AMERICAN HISTORY. BREAKING NEW GROUND ON OUR UNDERSTANDING OF THE ROLE SCIENCE PLAYS IN AMERICAN LIFE AND OPENING THE DOOR TO — TO A FUTURE WHICH SCIENCE BETTER SERVES ALL PEOPLE. AS CO-CHAIR OF THE PRESIDENT’S COUNCIL ON ADVISORS OF SCIENCE AND TECHNOLOGY,APPOINT DR. FRANCIS ARNOLD, DIRECTOR OF THE ROSE BIOENGINEERING CENTER AT CALTECH AND ONE OF THE WORLD’S LEADING EXPERTS IN PROTEIN ENGINEERING, A LIFE-LONG CHAMPION OF RENEWABLE ENERGY SOLUTIONS WHO HAS BEEN INDUCTED INTO THE NATIONAL INVENTORS’ HALL OF FAME. THAT AIN’T A BAD PLACE TO BE. NOT ONLY IS SHE THE FIRST WOMAN TO BE ELECTED TO ALL THREE NATIONAL ACADEMIES OF SCIENCE, MEDICINE AND ENGINEERING AND ALSO THE FIRST WOMAN, AMERICAN WOMAN, TO WIN A NOBEL PRIZE IN CHEMISTRY. A VERY SLOW LEARNER, SLOW STARTER, THE DAUGHTER OF PITTSBURGH, SHE WORKED AS A CAB DRIVER, A JAZZ CLUB SERVER, BEFORE MAKING HER WAY TO BERKELEY AND A CAREER ON THE LEADING EDGE OF HUMAN DISCOVERY. AND I WANT TO MAKE THAT POINT AGAIN. I WANT — IF ANY OF YOUR CHILDREN ARE WATCHING, LET THEM KNOW YOU CAN DO ANYTHING. THIS COUNTRY CAN DO ANYTHING. ANYTHING AT ALL. AND SO SHE SURVIVED BREAST CANCER, OVERCAME A TRAGIC LOSS IN HER FAMILY WHILE RISING TO THE TOP OF HER FIELD, STILL OVERWHELMINGLY DOMINATED BY MEN. HER PASSION HAS BEEN A STEADFAST COMMITMENT TO RENEWABLE ENERGY FOR THE BETTERMENT OF OUR PLANET AND HUMANKIND. SHE IS AN INSPIRING FIGURE TO SCIENTISTS ACROSS THE FIELD AND ACROSS NATIONS. AND I WANT TO THANK DR. ARNOLD FOR AGREEING TO CO-CHAIR A FIRST ALL WOMAN TEAM TO LEAD THE PRESIDENT’S COUNCIL OF ADVISORS ON SCIENCE AND TECHNOLOGY WHICH LEADS ME TO THE NEXT MEMBER OF THE TEAM. AS CO-CHAIR, THE PRESIDENT’S COUNCIL OF ADVISORS ON SCIENCE AND TECHNOLOGY, I APPOINT DR. MARIE ZUBER. A TRAIL BLAZER BRAISING GEO PHYSICIST AND PLANETARY SCIENTIST A. FORMER CHAIR OF THE NATIONAL SCIENCE BOARD. FIRST WOMAN TO LEAD THE SCIENCE DEPARTMENT AT M.I.T. AND THE FIRST WOMAN TO LEAD NASA’S ROBOTIC PLANETARY MISSION. GROWING UP IN COLE COUNTRY NOT FAR FROM HEAVEN, SCRANTON, PENNSYLVANIA, IN CARBON COUNTY, PENNSYLVANIA, ABOUT 50 MILES SOUTH OF WHERE I WAS A KID, SHE DREAMED OF EXPLORING OUTER SPACE. COULD HAVE TOLD HER SHE WOULD JUST GO TO GREEN REACH IN SCRANTON AND FIND WHERE IT WAS. AND I SHOULDN’T BE SO FLIPPANT. BUT I’M SO EXCITED ABOUT THESE FOLKS. YOU KNOW, READING EVERY BOOK SHE COULD FIND AND LISTENING TO HER MOM’S STORIES ABOUT WATCHING THE EARLIEST ROCKET LAUNCH ON TELEVISION, MARIE BECAME THE FIRST PERSON IN HER FAMILY TO GO TO COLLEGE AND NEVER LET GO OF HER DREAM. TODAY SHE OVERSEES THE LINCOLN LABORATORY AT M.I.T. AND LEADS THE INSTITUTION’S CLIMATE ACTION PLAN. GROWING UP IN COLD COUNTRY, NOT AND FINALLY, COULD NOT BE HERE TODAY, BUT I’M PLEASED TO ANNOUNCE THAT I’VE HAD A LONG CONVERSATION WITH DR. FRANCIS COLLINS AND COULD NOT BE HERE TODAY. AND I’VE ASKED THEM TO STAY ON AS DIRECTOR OF THE INSTITUTE OF HEALTH AND — AT THIS CRITICAL MOMENT. I’VE KNOWN DR. COLLINS FOR MANY YEARS. I WORKED WITH HIM CLOSELY. HE’S BRILLIANT. A PIONEER. A TRUE LEADER. AND ABOVE ALL, HE’S A MODEL OF PUBLIC SERVICE AND I’M HONORED TO BE WORKING WITH HIM AGAIN. AND IT IS — IN HIS ABSENCE I WANT TO THANK HIM AGAIN FOR BEING WILLING TO STAY ON. I KNOW THAT WASN’T HIS ORIGINAL PLAN. BUT WE WORKED AN AWFUL LOT ON THE MOON SHOT AND DEALING WITH CANCER AND I JUST WANT TO THANK HIM AGAIN. AND TO EACH OF YOU AND YOUR FAMILIES, AND I SAY YOUR FAMILIES, THANK YOU FOR THE WILLINGNESS TO SERVE. AND NOT THAT YOU HAVEN’T BEEN SERVING ALREADY BUT TO SERVE IN THE ADMINISTRATION. AND THE AMERICAN PEOPLE, TO ALL THE AMERICAN PEOPLE, THIS IS A TEAM THAT’S GOING TO HELP RESTORE YOUR FAITH IN AMERICA’S PLACE IN THE FRONTIER OF SCIENCE AND DISCOVER AND HOPE. I’M NOW GOING TO TURN THIS OVER STARTING WITH DR. LANDER, TO EACH OF OUR NOMINEES AND THEN WITH — HEAR FROM THE VICE PRESIDENT. BUT AGAIN, JUST CAN’T THANK YOU ENOUGH AND I REALLY MEAN IT. THANK YOU, THANK YOU, THANK YOU FOR WILLING TO DO THIS. DOCTOR, IT’S ALL YOURS. I BETTER PUT MY MASK ON OR I’M GOING TO GET IN TROUBLE.

 

Director’s Page

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US Responses to Coronavirus Outbreak Expose Many Flaws in Our Medical System

US Responses to Coronavirus Outbreak Expose Many Flaws in Our Medical System

Curator: Stephen J. Williams, Ph.D.

The  coronavirus pandemic has affected almost every country in every continent however, after months of the novel advent of novel COVID-19 cases, it has become apparent that the varied clinical responses in this epidemic (and outcomes) have laid bare some of the strong and weak aspects in, both our worldwide capabilities to respond to infectious outbreaks in a global coordinated response and in individual countries’ response to their localized epidemics.

 

Some nations, like Israel, have initiated a coordinated government-private-health system wide action plan and have shown success in limiting both new cases and COVID-19 related deaths.  After the initial Wuhan China outbreak, China closed borders and the government initiated health related procedures including the building of new hospitals. As of writing today, Wuhan has experienced no new cases of COVID-19 for two straight days.

 

However, the response in the US has been perplexing and has highlighted some glaring problems that have been augmented in this crisis, in the view of this writer.    In my view, which has been formulated after social discussion with members in the field ,these issues can be centered on three major areas of deficiencies in the United States that have hindered a rapid and successful response to this current crisis and potential future crises of this nature.

 

 

  1. The mistrust or misunderstanding of science in the United States
  2. Lack of communication and connection between patients and those involved in the healthcare industry
  3. Socio-geographical inequalities within the US healthcare system

 

1. The mistrust or misunderstanding of science in the United States

 

For the past decade, anyone involved in science, whether directly as active bench scientists, regulatory scientists, scientists involved in science and health policy, or environmental scientists can attest to the constant pressure to not only defend their profession but also to defend the entire scientific process and community from an onslaught of misinformation, mistrust and anxiety toward the field of science.  This can be seen in many of the editorials in scientific publications including the journal Science and Scientific American (as shown below)

 

Stepping Away from Microscopes, Thousands Protest War on Science

Boston rally coincides with annual American Association for the Advancement of Science (AAAS) conference and is a precursor to the March for Science in Washington, D.C.

byLauren McCauley, staff writer

Responding to the troubling suppression of science under the Trump administration, thousands of scientists, allies, and frontline communities are holding a rally in Boston’s Copley Square on Sunday.

#standupforscience Tweets

 

“Science serves the common good,” reads the call to action. “It protects the health of our communities, the safety of our families, the education of our children, the foundation of our economy and jobs, and the future we all want to live in and preserve for coming generations.”

It continues: 

But it’s under attack—both science itself, and the unalienable rights that scientists help uphold and protect. 

From the muzzling of scientists and government agencies, to the immigration ban, the deletion of scientific data, and the de-funding of public science, the erosion of our institutions of science is a dangerous direction for our country. Real people and communities bear the brunt of these actions.

The rally was planned to coincide with the annual American Association for the Advancement of Science (AAAS) conference, which draws thousands of science professionals, and is a precursor to the March for Science in Washington, D.C. and in cities around the world on April 22.

 

Source: https://www.commondreams.org/news/2017/02/19/stepping-away-microscopes-thousands-protest-war-science

https://images.app.goo.gl/UXizCsX4g5wZjVtz9

 

https://www.washingtonpost.com/video/c/embed/85438fbe-278d-11e7-928e-3624539060e8

 

 

The American Association for Cancer Research (AACR) also had marches for public awareness of science and meaningful science policy at their annual conference in Washington, D.C. in 2017 (see here for free recordings of some talks including Joe Biden’s announcement of the Cancer Moonshot program) and also sponsored events such as the Rally for Medical Research.  This patient advocacy effort is led by the cancer clinicians and scientific researchers to rally public support for cancer research for the benefit of those affected by the disease.

Source: https://leadingdiscoveries.aacr.org/cancer-patients-front-and-center/

 

 

     However, some feel that scientists are being too sensitive and that science policy and science-based decision making may not be under that much of a threat in this country. Yet even as some people think that there is no actual war on science and on scientists they realize that the public is not engaged in science and may not be sympathetic to the scientific process or trust scientists’ opinions. 

 

   

From Scientific American: Is There Really a War on Science? People who oppose vaccines, GMOs and climate change evidence may be more anxious than antagonistic

 

Certainly, opponents of genetically modified crops, vaccinations that are required for children and climate science have become louder and more organized in recent times. But opponents typically live in separate camps and protest single issues, not science as a whole, said science historian and philosopher Roberta Millstein of the University of California, Davis. She spoke at a standing-room only panel session at the American Association for the Advancement of Science’s annual meeting, held in Washington, D.C. All the speakers advocated for a scientifically informed citizenry and public policy, and most discouraged broadly applied battle-themed rhetoric.

 

Source: https://www.scientificamerican.com/article/is-there-really-a-war-on-science/

 

      In general, it appears to be a major misunderstanding by the public of the scientific process, and principles of scientific discovery, which may be the fault of miscommunication by scientists or agendas which have the goals of subverting or misdirecting public policy decisions from scientific discourse and investigation.

 

This can lead to an information vacuum, which, in this age of rapid social media communication,

can quickly perpetuate misinformation.

 

This perpetuation of misinformation was very evident in a Twitter feed discussion with Dr. Eric Topol, M.D. (cardiologist and Founder and Director of the Scripps Research Translational  Institute) on the US President’s tweet on the use of the antimalarial drug hydroxychloroquine based on President Trump referencing a single study in the International Journal of Antimicrobial Agents.  The Twitter thread became a sort of “scientific journal club” with input from international scientists discussing and critiquing the results in the paper.  

 

Please note that when we scientists CRITIQUE a paper it does not mean CRITICIZE it.  A critique is merely an in depth analysis of the results and conclusions with an open discussion on the paper.  This is part of the normal peer review process.

 

Below is the original Tweet by Dr. Eric Topol as well as the ensuing tweet thread

 

https://twitter.com/EricTopol/status/1241442247133900801?s=20

 

Within the tweet thread it was discussed some of the limitations or study design flaws of the referenced paper leading the scientists in this impromptu discussion that the study could not reasonably conclude that hydroxychloroquine was not a reliable therapeutic for this coronavirus strain.

 

The lesson: The public has to realize CRITIQUE does not mean CRITICISM.

 

Scientific discourse has to occur to allow for the proper critique of results.  When this is allowed science becomes better, more robust, and we protect ourselves from maybe heading down an incorrect path, which may have major impacts on a clinical outcome, in this case.

 

 

2.  Lack of communication and connection between patients and those involved in the healthcare industry

 

In normal times, it is imperative for the patient-physician relationship to be intact in order for the physician to be able to communicate proper information to their patient during and after therapy/care.  In these critical times, this relationship and good communication skills becomes even more important.

 

Recently, I have had multiple communications, either through Twitter, Facebook, and other social media outlets with cancer patients, cancer advocacy groups, and cancer survivorship forums concerning their risks of getting infected with the coronavirus and how they should handle various aspects of their therapy, whether they were currently undergoing therapy or just about to start chemotherapy.  This made me realize that there were a huge subset of patients who were not receiving all the information and support they needed; namely patients who are immunocompromised.

 

These are patients represent

  1. cancer patient undergoing/or about to start chemotherapy
  2. Patients taking immunosuppressive drugs: organ transplant recipients, patients with autoimmune diseases, multiple sclerosis patients
  3. Patients with immunodeficiency disorders

 

These concerns prompted me to write a posting curating the guidance from National Cancer Institute (NCI) designated cancer centers to cancer patients concerning their risk to COVID19 (which can be found here).

 

Surprisingly, there were only 14 of the 51 US NCI Cancer Centers which had posted guidance (either there own or from organizations like NCI or the National Cancer Coalition Network (NCCN).  Most of the guidance to patients had stemmed from a paper written by Dr. Markham of the Fred Hutchinson Cancer Center in Seattle Washington, the first major US city which was impacted by COVID19.

 

Also I was surprised at the reactions to this posting, with patients and oncologists enthusiastic to discuss concerns around the coronavirus problem.  This led to having additional contact with patients and oncologists who, as I was surprised, are not having these conversations with each other or are totally confused on courses of action during this pandemic.  There was a true need for each party, both patients/caregivers and physicians/oncologists to be able to communicate with each other and disseminate good information.

 

Last night there was a Tweet conversation on Twitter #OTChat sponsored by @OncologyTimes.  A few tweets are included below

https://twitter.com/OncologyTimes/status/1242611841613864960?s=20

https://twitter.com/OncologyTimes/status/1242616756658753538?s=20

https://twitter.com/OncologyTimes/status/1242615906846547978?s=20

 

The Lesson:  Rapid Communication of Vital Information in times of stress is crucial in maintaining a good patient/physician relationship and preventing Misinformation.

 

3.  Socio-geographical Inequalities in the US Healthcare System

It has become very clear that the US healthcare system is fractioned and multiple inequalities (based on race, sex, geography, socio-economic status, age) exist across the whole healthcare system.  These inequalities are exacerbated in times of stress, especially when access to care is limited.

 

An example:

 

On May 12, 2015, an Amtrak Northeast Regional train from Washington, D.C. bound for New York City derailed and wrecked on the Northeast Corridor in the Port Richmond neighborhood of Philadelphia, Pennsylvania. Of 238 passengers and 5 crew on board, 8 were killed and over 200 injured, 11 critically. The train was traveling at 102 mph (164 km/h) in a 50 mph (80 km/h) zone of curved tracks when it derailed.[3]

Some of the passengers had to be extricated from the wrecked cars. Many of the passengers and local residents helped first responders during the rescue operation. Five local hospitals treated the injured. The derailment disrupted train service for several days. 

(Source Wikipedia https://en.wikipedia.org/wiki/2015_Philadelphia_train_derailment)

What was not reported was the difficulties that first responders, namely paramedics had in finding an emergency room capable of taking on the massive load of patients.  In the years prior to this accident, several hospitals, due to monetary reasons, had to close their emergency rooms or reduce them in size. In addition only two in Philadelphia were capable of accepting gun shot victims (Temple University Hospital was the closest to the derailment but one of the emergency rooms which would accept gun shot victims. This was important as Temple University ER, being in North Philadelphia, is usually very busy on any given night.  The stress to the local health system revealed how one disaster could easily overburden many hospitals.

 

Over the past decade many hospitals, especially rural hospitals, have been shuttered or consolidated into bigger health systems.  The graphic below shows this

From Bloomberg: US Hospital Closings Leave Patients with Nowhere to go

 

 

https://images.app.goo.gl/JdZ6UtaG3Ra3EA3J8

 

Note the huge swath of hospital closures in the midwest, especially in rural areas.  This has become an ongoing problem as the health care system deals with rising costs.

 

Lesson:  Epidemic Stresses an already stressed out US healthcare system

 

Please see our Coronavirus Portal at

https://pharmaceuticalintelligence.com/coronavirus-portal/

 

for more up-to-date scientific, clinical information as well as persona stories, videos, interviews and economic impact analyses

and @pharma_BI

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Real Time Coverage @BIOConvention #BIO2019: Genome Editing and Regulatory Harmonization: Progress and Challenges

Reporter: Stephen J Williams, PhD @StephenJWillia2

 

Genome editing offers the potential of new and effective treatments for genetic diseases. As companies work to develop these treatments, regulators are focused on ensuring that any such products meet applicable safety and efficacy requirements. This panel will discuss how European Union and United States regulators are approaching therapeutic use of genome editing, issues in harmonization between these two – and other – jurisdictions, challenges faced by industry as regulatory positions evolve, and steps that organizations and companies can take to facilitate approval and continued efforts at harmonization.

 

CBER:  because of the nature of these gene therapies, which are mainly orphan, there is expedited review.  Since they started this division in 2015, they have received over 1500 applications.

Spark: Most of the issues were issues with the primary disease not the gene therapy so they had to make new endpoint tests so had talks with FDA before they entered phase III.   There has been great collaboration with FDA,  now they partnered with Novartis to get approval outside US.  You should be willing to partner with EU pharmas to expedite the regulatory process outside US.  In China the process is new and Brazil is behind on their gene therapy guidance.  However there is the new issue of repeat testing of your manufacturing process, as manufacturing of gene therapies had been small scale before. However he notes that problems with expedited review is tough because you don’t have alot of time to get data together.  They were lucky that they had already done a randomized trial.

Sidley Austin:  EU regulatory you make application with advance therapy you don’t have a national option, the regulation body assesses a committee to see if has applicability. Then it goes to a safety committee.  EU has been quicker to approve these advance therapies. Twenty five percent of their applications are gene therapies.  Companies having issues with manufacturing.  There can be issues when the final application is formalized after discussions as problems may arise between discussions, preliminary applications, and final applications.

Sarepta: They have a robust gene therapy program.  Their lead is a therapy for DMD (Duchenne’s Muscular Dystrophy) where affected males die by 25. Japan and EU have different regulatory applications and although they are similar and data can be transferred there is more paperwork required by EU.  The US uses an IND for application. Global feedback is very challenging, they have had multiple meetings around the world and takes a long time preparing a briefing package….. putting a strain on the small biotechs.  No company wants to be either just EU centric or US centric they just want to get out to market as fast as possible.

 

Please follow LIVE on TWITTER using the following @ handles and # hashtags:

@Handles

@pharma_BI

@AVIVA1950

@BIOConvention

# Hashtags

#BIO2019 (official meeting hashtag)

 

 

 

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Real Time Coverage @BIOConvention #BIO2019: After Trump’s Drug Pricing Blueprint: What Happens Next? A View from Washington; June 3 2019 1:00 PM Philadelphia PA

Reporter: Stephen J. Williams, PhD @StephenJWillia2

 

Speaker: Dan Todd, JD

Dan Todd is the Principal of Todd Strategy, LLC, a consulting firm founded in 2014 and based in Washington, DC. He provides legislative and regulatory strategic guidance and advocacy for healthcare stakeholders impacted by federal healthcare programs.

Prior to Todd Strategy, Mr. Todd was a Senior Healthcare Counsel for the Republican staff of the Senate Finance Committee, the Committee of jurisdiction for the Medicare and Medicaid programs. His areas of responsibility for the committee included the Medicare Part B and Part D programs, which includes physician, medical device, diagnostic and biopharmaceutical issues.

Before joining the Finance Committee, Mr. Todd spent several years in the biotechnology industry, where he led policy development and government affairs strategy. He also represented his companies’ interests with major trade associations such as PhRMA and BIO before federal and state representatives, as well as with key stakeholders such as physician and patient advocacy organizations.

Dan also served as a Special Assistant in the Office of the Administrator at the Centers for Medicare & Medicaid Services (CMS), the federal agency charged with the operation of the Medicare and Medicaid programs. While at CMS, Dan worked on Medicare Part B and Part D issues during the implementation of the Medicare Modernization Act from 2003 to 2005.

Cost efficiencies were never measured.

Removing drug rebates would cost 180 billion over 10 years. CBO came up with similar estimate.  Not sure what Congress will do. It appears they will keep the rebates in.

  • House  Dems are really going after PBMs; anytime the Administration makes a proposal goes right into CBO baseline estimates;  negotiations appear to be in very early stages and estimates are up in the air
  • WH close to meet a budget cap but then broke down in next day; total confusion in DC on budget; healthcare is now held up, especially the REBATE rule; : is a shame as panel agrees cost savings would be huge
  • they had initiated a study to tie the costs of PartB to international drug prices; meant to get at disparity on international drug prices; they currently are only mulling the international price index; other option is to reform Part B;  the proposed models were brought out near 2016 elections so not much done; unified agenda;
  • most of the response of Congress relatively publicly muted; a flat fee program on biologics will have big effect on how physicians and health systems paid; very cat and mouse game in DC around drug pricing
  • administration is thinking of a PartB “inflation cap”;  committees are looking at it seriously; not a rebate;  discussion of tiering of physician payments
  • Ways and Means Cmmtte:  proposing in budget to alleve some stresses on PartB deductable amounts;
  • PartD: looking at ways to shore it up; insurers 80% taxpayers 20% responsible; insurers think it will increase premiums but others think will reduce catastrophic costs; big part of shift in spending in Part D has been this increase in catastrophic costs
  • this week they may actually move through committees on this issue; Administration trying to use the budgetary process to drive this bargain;  however there will have to be offsets so there may be delays in process

Follow or Tweet on Twitter using the following @ and # (hashtags)

@pharma_BI

@AVIVA1950

@BIOConvention

@PCPCC

#BIO2019

#patientcost

#PrimaryCare

 

Other articles on this Open Access Journal on Healthcare Costs, Payers, and Patient Care Include:

The Arnold Relman Challenge: US HealthCare Costs vs US HealthCare Outcomes

Centers for Medicare & Medicaid Services announced that the federal healthcare program will cover the costs of cancer gene tests that have been approved by the Food and Drug Administration

Trends in HealthCare Economics: Average Out-of-Pocket Costs, non-Generics and Value-Based Pricing, Amgen’s Repatha and AstraZeneca’s Access to Healthcare Policies

Can Blockchain Technology and Artificial Intelligence Cure What Ails Biomedical Research and Healthcare

Live Conference Coverage @Medcity Converge 2018 Philadelphia: Oncology Value Based Care and Patient Management

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LIVE 2019 Petrie-Flom Center Annual Conference: Consuming Genetics: Ethical and Legal Considerations of New Technologies, Friday, May 17, 2019 from 8:00 AM to 5:00 PM EDT

 

Wasserstein Hall, Milstein West (2019)

Petrie-Flom Center

23 Everett St., Rm. 327

Cambridge, MA 02138

https://petrieflom.law.harvard.edu/events/details/2019-petrie-flom-center-annual-conference

This year’s conference is organized in collaboration with Nita A. Farahany, Duke Law School, and Henry T. Greely, Stanford Law School.

REAL TIME Press Coverage for http://pharmaceuticalintelligence.com 

by Aviva Lev-Ari, PhD, RN

Director & Founder, Leaders in Pharmaceutical Business Intelligence (LPBI) Group, Boston

Editor-in-Chief, Open Access Online Scientific Journal, http://pharmaceuticalintelligence.com

Editor-in-Chief, BioMed e-Series, 16 Volumes in Medicine, https://pharmaceuticalintelligence.com/biomed-e-books/

 

@pharma_Bi

@AVIVA1950

 

Logo, Leaders in Pharmaceutical Business Intelligence (LPBI) Group, Boston

Our BioMed e-series

WE ARE ON AMAZON.COM

https://lnkd.in/ekWGNqA

  • Cardiovascular Diseases, Volume Three: Etiologies of Cardiovascular Diseases: Epigenetics, Genetics and Genomics. On Amazon.com since 11/29/2015

http://www.amazon.com/dp/B018PNHJ84

  • VOLUME 1: Genomics Orientations for Personalized Medicine. On Amazon.com since 11/23/2015

http://www.amazon.com/dp/B018DHBUO6

  • VOLUME 2: Latest in Genomics Methodologies for Therapeutics: Gene Editing, NGS & BioInformatics, Simulations and the Genome Ontology – Work-in-Progress

https://pharmaceuticalintelligence.com/biomed-e-books/genomics-orientations-for-personalized-medicine/volume-two-genomics-methodologies-ngs-bioinformatics-simulations-and-the-genome-ontology/

 

 

2019 Petrie-Flom Center Annual Conference: Consuming Genetics:

Ethical and Legal Considerations of New Technologies

AGENDA NOW AVAILABLE! 2019 Petrie-Flom Center Annual Conference image

 May 17, 2019 8:30 AM – 5:15 PM
 Conferences
 2018-2019
Harvard Law School, Wasserstein Hall, Milstein West (2019)
1585 Massachusetts Ave., Cambridge, MA

Register for this event

The Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School is pleased to announce plans for our 2019 annual conference: “Consuming Genetics: The Ethical and Legal Considerations of Consumer Genetic Technologies.” This year’s conference is organized in collaboration with Nita A. Farahany, Duke Law School, and Henry T. Greely, Stanford Law School.

 

Description

Breakthroughs in genetics have often raised complex ethical and legal questions, which loom ever larger as genetic testing is becoming more commonplace, affordable, and comprehensive and genetic editing becomes poised to be a consumer technology. As genetic technologies become more accessible to individuals, the ethical and legal questions around the consumer use of these technologies become more pressing.

Already the global genetic testing and consumer/wellness genomics market was valued at $2.24 billion in 2015 and is expected to double by 2025 to nearly $5 billion. The rise of direct-to-consumer genetic testing and DIY kits raise questions about the appropriate setting for these activities, including a concern that delivering health-related results directly to consumers might cause individuals to draw the wrong medical conclusions. At the same time, advances in CRISPR and other related technologies raise anxieties about the implications of editing our own DNA, especially as access to these technologies explode in the coming years.

In an age where serial killers are caught because their relatives chose to submit DNA to a consumer genealogy database, is genetic privacy for individuals possible? Does the aggregation of data from genetic testing turn people into products by commercializing their data? How might this data reduce or exacerbate already significant health care disparities? How can we prepare for widespread access to genetic editing tools?

As these questions become more pressing, now is the time to re-consider what ethical and regulatory safeguards should be implemented and discuss the many questions raised by advancements in consumer genetics.

This event is free and open to the public, but space is limited and registration is required. Register now!

#DTCgenome

@PetrieFlom

@pharma_BI

@AVIVA1950

Agenda

8:30 – 9:00am, Registration

A continental breakfast will be available.

9:00 – 9:10am, Welcome Remarks

9:10 – 10:10am, Consumer Genetic Technologies: Rights, Liabilities, and Other Obligations

  • Gary Marchant, Regent’s Professor, Sandra Day O’Connor College of Law and Director, Center for Law, Science, and Innovation, Arizona State University (with Mark Barnes, Ellen W. Clayton, and Susan M. Wolf) – Liability Implications of Direct-to-Consumer Genetic Testing
  1. Insurance may not cover BRCA genetic testing even for Patients with diagnosis of Breast cancer
  • Anya Prince, Associate Professor of Law, University of Iowa College of Law and Member of the University of Iowa Genetics Cluster – Consuming Genetics as an Insurance Consumer
  1. Life insurance company initiated genetic testing: (a) Gatekeeping policy underwriting new comer applicants (b) Wellness Employer wellness programs incentivize healthy behavior Incorporate genetic testing into wellness Programs Test for preventing genetic conditions Like BRCA, Lynch syndrome, preventable – win/win proposition –>>> Healthier employees. Studies show shift of cost from employer to employee and employer have access to genetic information of employees.
  • Life Insurance – JH Vitality program, get Apple watch if meet goals, premium is lower – incentive
  • DTC companies beginning to market to Insurance
  • Employment Legal Landscape:
  1. legal regulations
  • Jessica RobertsProfessor, Alumnae College Professor in Law, and Director of the Health Law & Policy Institute, University of Houston Law Center – In Favor of Genetic Conversion: An Argument for Genetic Property Rights
  1. Ownership right to Genetic Property rights of the Information, consented to transfer or abandonment
  2. Conversion – Informed consent
  3. Family not in treatment relationship with the Researcher – Court rejected the claim family donated to research unfair benefir of the Hospital from the data and tissue donated
  4. Claim of conversion – Common Law
  5. Gene by Gene Family Tree DNA
  6. Courts shows a newfound openness to claims for genetic conversion
  7. claims for genetic conversion will not stifle reaserch or create moral harms
  8. consumers genetics, claims for genetic conversion are actually necessary to adequately protect people’s interests in their DNA
  • Moderator: I. Glenn CohenFaculty Director and James A. Attwood and Leslie Williams Professor of Law

10:10 – 10:20am, Break

10:20 – 11:40am, Privacy in the Age of Consumer Genetics

  • Jorge Contreras, Professor, College Of Law and Adjunct Professor, Human Genetics, University of Utah – Direct to Consumer Genetics and Data Ownership
  • Seema MohapatraAssociate Professor of Law, Indiana University Robert H. McKinney School of Law – Abolishing the Myth of “Anonymous” Gamete Donation in the Age of Direct-to-Consumer Genetic Testing
  • Kayte Spector-Bagdady, Assistant Professor, Department of Obstetrics and Gynecology and Chief, Research Ethics Service, Center for Bioethics and Social Sciences in Medicine (CBSSM), University of Michigan Medical School – Improving Commercial Health Data Sharing Policy: Transparency, Accountability, and Ethics for Academic Use of Private Health Data Resources
  • Liza VertinskyAssociate Professor of Law, Emory University School of Law and Emory Global Health Institute Faculty Fellow (with Yaniv Heled) – Genetic Privacy and Public Figures
  • Moderator: Nita FarahanyProfessor of Law and Professor of Philosophy, Duke Law School

11:40am – 12:40pm, Tinkering with Ourselves: The Law and Ethics of DIY Genomics

  • Barbara J. EvansMary Ann & Lawrence E. Faust Professor of Law and Director, Center on Biotechnology & Law, University of Houston Law Center; Professor, Electrical and Computer Engineering, Cullen College of Engineering, University of Houston – Programming Our Genomes, Programming Ourselves: The Moral and Regulatory Limits of Self-Harm When Consumers Wield Genomic Technologies
  • Maxwell J. MehlmanDistinguished University Professor, Arthur E. Petersilge Professor of Law, and Director of the Law-Medicine Center, Case Western Reserve University School of Law, and Professor of Biomedical Ethics, Case Western Reserve University School of Medicine (with Ronald A. Conlon) – Governing Non-Traditional Biology
  • Patricia J. ZettlerAssociate Professor, Center for Law Health and Society, Georgia State University College of Law (with Christi Guerrini and Jacob S. Sherkow) – Finding a Regulatory Balance for Genetic Biohacking
  • Moderator: Henry T. Greely, Director, Center for Law and the Biosciences; Professor (by courtesy) of Genetics, Stanford School of Medicine; Chair, Steering Committee of the Center for Biomedical Ethics; and Director, Stanford Program in Neuroscience and Society, Stanford University

12:40 – 1:20pm, Lunch

Lunch will be provided.

1:20 – 2:20pm, Regulating Consumer Genetic Technologies

  • James Hazelpostdoctoral fellow, Center for Genetic Privacy and Identity in Community Settings (GetPreCiSe), Vanderbilt University Medical Center – Privacy Best Practices for Consumer Genetic Testing Services: Are Industry Efforts at Self-Regulation Sufficient?
  • Scott SchweikartSenior Research Associate, Council on Ethical and Judicial Affairs, American Medical Association and Legal Editor, AMA Journal of Ethics – Human Gene Editing: An Ethical Analysis and Arguments for Regulatory Guidance at Both the National and Global Levels
  • Catherine M. SharkeyCrystal Eastman Professor of Law, NYU School of Law (with Kenneth Offit) – Regulatory Aspects of Direct-to-Consumer Genetic Testing: The Emerging Role of the FDA
  1. Genetic predisposition – BRCA I & II – approved Testing
  2. Pharmaco-genetic Test authorization – incorrect interpretation, incorrect action based on results
  3. Regulatory model, pathway
  4. False positive and False negative BRCA I & II
  5. 23&Me – huge DB, big data who controls the data
  6. Across regulatory – liability issues on who own big data
  • Moderator: Rina Spence, President of SpenceCare International LLC

2:20 – 2:30pm, Break

2:30 – 3:50pm, Consumer Genetics and Identity

  • Kif Augustine-AdamsIvan Meitus Chair and Professor of Law, BYU Law School – Generational Failures of Law and Ethics: Rape, Mormon Orthodoxy, and the Revelatory Power of Ancestry DNA
  1. Complex Sorrows: Anscestry DNA – 20 Millions records. Complete anonymity and privacy collapsed
  • Jonathan KahnJames E. Kelley Chair in Tort Law and Professor of Law, Mitchell-Hamline School of Law – Precision Medicine and the Resurgence of Race in Genomic Medicine
  1. precision medicine – classification of individuals into subpopulations that differ in their susceptability to a particular disease
  2. Blurring DIversity and Genetic Variation, Empirical and Normative Inclusion
  3. NHGRI – underrepresented of diversity in the community of genomics research professional is a socioeconomics issue not a genetics one – underrepresentation in DBs
  4. What does Diversity mean?
  5. Underrepresentation not race: Scientific workforce, recruitment sites recruitment cohort, Ancestry, Genetic variation, responsibilities for disparities
  6. Genetic Diversity rare alleles ->> actionable alleles
  • Emily LargentAssistant Professor, Department of Medical Ethics and Health Policy and Senior Fellow, Leonard Davis Institute of Health Economics, University of Pennsylvania – Losing Our Minds? Direct-to-Consumer Genetic Testing and Alzheimer’s Disease
  1. Protect people and knowledge about one’s disease
  2. AD & APo-E Gene, e-2, e-3, e-4 – Carriers increase risk to AD too 40%
  • Natalie RamAssistant Professor of Law, University of Baltimore School of Law – Genetic Genealogy and the Problem of Familial Forensic Identification
  1. Opt in to share genetic data on the platforms opt in national DB
  2. Genetic relatedness is stickier than social relations
  3. Voluntary sharing of genetic information – no other party can protect genetic information of any person, thu, if shared voluntarily
  4. Geneology is involuntarily disclosure of genetic information
  5. Familial Forensic Identification – Privacy for information held by Telephone companies
  6. Involuntarily Identification by genomic and genetic data genetic markers
  • Moderator: Carmel Shachar, Executive Director, the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics and Lecturer at Law, Harvard Law School
  1. Genetic relatedness

3:50 – 4:00pm, Break

4:00 – 5:00pm, The Impact of Genetic Information

  • Leila Jamal, Genetic Counselor, Division of Intramural Research and Co-Investigator, Centralized Sequencing Initiative, National Institute of Allergy and Infectious Diseases and Affiliated Scholar, Department of Bioethics, National Institutes of Health (with Benjamin Berkman and Will Schupmann) – An Ethical Framework for Genetic Counseling Practice in the Genomic Era
  1. Genetic Counseling – to benefit the patient, positive autonomy, benefiecence – how potentially impactful is the Test Information
  2. Nondirectiveness – Why?
  3. distance from eugenics + abortion politics
  4. persons ans patient autonomy – non-interference
  5. Genetic and Genomics Testing: Prenata, Pediatric, Vancer, other: Cardiology, Neurology, Hematology, Infectious diseases, pharmaco genomics, DTC, Ancestry
  6. Pre- Test Genetic Counseling – information and testing need, indication for testing
  7. Post-Test
  8. Informational Burden low vs high: Likely pathogenic, Pathogenic vs benign – natural history data
  9. potentially high impact – Testing that can reveal an action to be taken
  10. Relation with Patient close vs distant – recommendation based on best evidence +guidelines available
  11. Institutional role of Counselor
  • Emily Qian, Genetic Counselor, Veritas Genetics (with Magalie Leduc, Rebecca Hodges, Bryan Cosca, Ryan Durigan, Laurie McCright, Doug Flood, and Birgit Funke) – Physician-Mediated Elective Whole Genome Sequencing Tests: Impacts on Informed Consent
  1. DTC
  2. Physician-initiated Genetic Testing
  3. Physician-initiated DTC
  4. Informed consent is a process: Topics covered – possible results & consequences
  5. Health Care Provider (HCP) Demographics: Neurology
  6. Analysis: Family Name
  7. Informed consent – who is responsible
  8. Consumers
  • Vardit Ravitsky,@VarditRavitsky  Associate Professor, Bioethics Programs, Department of Social and Preventive Medicine, School of Public Health, University of Montreal; Director, Ethics and Health Branch, Center for Research on Ethics – Non-Invasive Prenatal Whole Genome Sequencing: Ethical and Regulatory Implications for Post-Birth Access to Information
  • Moderator: Melissa UvegesPostdoctoral Fellow, Harvard Medical School Center for Bioethics
  1. Clear conceptual approach
  2. Prioritize privacy/open future banning NIPW vs right to know unrestricted NIPW, prioritizing parental autonomy ->> allowing restrictions to be built in

5:00 – 5:15pm, Closing Remarks

 

Sponsored by the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School with support from the Center for Bioethics at Harvard Medical School and the Oswald DeN. Cammann Fund at Harvard University.

SOURCE

http://petrieflom.law.harvard.edu/events/details/2019-petrie-flom-center-annual-conference

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