August 27, 2020 Blog Post
This post is courtesy of MedTech Intelligence
The Future of MedTech and Healthcare: No Boundary on Uniting Forces
The healthcare and life sciences industry are becoming much more tight knit as a result of the COVID-19 pandemic. In a Q&A with MedTech Intelligence, Stephen W. Bernstein, partner in the health industry advisory practice group at McDermott Will & Emery and co-leads the Firm’s Digital Health and Life Sciences Practices , explains the important issues that the industry will face in light of this year’s U.S. presidential election, along with how the “collaborative transformation” of healthcare, life sciences, technology investment will be the way of the future.
MedTech Intelligence: What are the most critical healthcare and medtech issues that the presidential candidates must address in the months leading up to the election?
Stephen Bernstein: At the presidential level, key areas to address are the regulatory issues surrounding the use of telehealth and remote monitoring, including: (i) ensuring that individuals have the economic supports to access necessary technology (i.e., is there a safety net to ensure everyone has a viable Internet connection); (ii) is there adequate third-party payor reimbursement for telehealth and remote monitoring services, and (iii) is there flexibility to permit the cross-border practice of medicine and delivery of allied health services.
Telehealth and remote monitoring have taken off during this pandemic and at the policy level, we need to ensure that consumers have the right technology connections to access healthcare from their homes. Most take for granted that Internet and WiFi connections are available, but that is not always the case. It is an equity and infrastructure matter to ensure that all Americans have technology access that ensures they can receive necessary healthcare services as delivery migrates to remote care—the availability of a secure Internet connection should be treated like any other public utility and needs to be an important part of the candidate dialogue.
Another consideration is associated coverage and payment for remote care. The federal government is beginning to evaluate and will need to implement quick, appropriate payment and coverage policies for remote care. It remains unclear whether there will be a conclusion that remote care is just as effective as in-person care for particular situations, although one can anticipate greater flexibility than was the case historically. As with most payment and coverage decisions, what CMS concludes is likely to be mirrored by commercial payors.
A third issue centers on cross-border licensure or multi-state licensure compacts. With technology, the ability to obtain care on a remote basis can and does cross state lines. During the pandemic we saw this to be a confounding issue where CMS would announce the ability to receive care across state lines only to cause confusion as various states articulated more nuanced flexibility, with some states imposing certain registration requirements. We can expect to see similar confusion when the declarations of emergency expire at the federal and state levels. There needs to be an effort to learn from difficulties of a patchwork regulatory regime. Because this issue and many others associated with healthcare delivery revolve around federalism and states’ rights, the candidates should be held to articulate their positions on how federal and state governments should work together when it comes to healthcare delivery to avoid the confusion and tension we saw during the COVID response.
MTI: As a whole, what are some of the challenges
that the life sciences and healthcare
industries are facing
Stephen W. Bernstein, partner in the health industry
advisory practice group at McDermott Will & Emery, also co-leads the firm’s digital health
and life sciences practices.
Bernstein: A critical challenge is how to ensure that the workforce has the equipment it needs to work safely. Access to tools and equipment will vary based on job type. For certain types of research and administration—remote tools are often fine, but for a good deal of healthcare services there is no substitute for in-person care delivery where personal protective equipment (PPE) is critical. Key policy questions that must be addressed include: What is the most practical way to stockpile PPE and who should handle it? Is this a federal, a state, a regional, an individual hospital responsibility and solution? As we saw during the early days of the pandemic and it continues is that there is a fundamental lack of clarity on how equipment should be procured, stored and made available.
Similarly, how can the supply chain be best managed? During a pandemic or in anticipation of one, can or should the U.S. rely on a supply chain that starts outside its borders? Should certain equipment be treated like oil reserves where there is a mix of international procurement while maintaining a safety net of stockpiles locally?
Almost all western, industrialized countries have shown supply chain vulnerabilities during this current pandemic. Most are planning for the next surge of COVID as well as planning for the next pandemic. We saw many state governments over the last few months stepping up to build field hospitals and other service components; having those at the ready to support existing hospitals will be critical in the future. The ability to deploy key resources is a critical role states can play but will be more effective if done in coordination and with the support of the Federal government.
Most importantly, we have seen the federal government spend significant money bailing out many industries over the last few decades. The question is what will be done to bail out hospitals that are critical for care, but also are and often the largest employer in the local community? For many hospitals and health systems, part of their economic survival is dependent on “elective” procedures—almost all of which were postponed during COVID surges. The industry, and probably with government supports, needs to find a balance whereby there is proper economic support to hospitals to work through and survive complicated times when they’re overloaded with certain types of patients and underutilized with others.
The life sciences community is clearly working at breakneck speed to develop innovations around COVID testing and vaccines. This community is also simultaneously continuing its existing clinical trials for non-COVID drugs and devices. We saw many clinical trials slow down or shut down, with an impact on drug discovery and deployment that will be felt for some time to come. Nevertheless, we saw ingenuity and innovation by pharmaceutical companies along with favorable support by the FDA to look to real world evidence and to provide greater flexibility to ensure continuing activity in this critical aspect of the life sciences economy. There is more work to be done, however. Similarly, with Operation Warp Speed, we have seen the government implement some flexibility when it comes to vaccine development, but time will tell whether the right balance is struck among the pillars of drug/vaccine development: Safety, efficacy and speed to market.
MTI: In what areas has the life sciences industry excelled in 2020? What are the technology standouts?
Bernstein: The life sciences industry has excelled in gathering data and converting it to useful measurement and monitoring systems. Similarly, the industry has been astute in identifying ways to pivot with respect to continuing their research and innovations pipelines. Likewise, the life sciences industry, particularly biotech, has supercharged its articulation of its value propositions and the immediate need for capital as evidenced by the accelerated and lightning pace of biotech IPOs.
On the technology front, companies with existing telehealth and remote monitoring services have similarly been able to supercharge their offerings; many have said that the pandemic accelerated the pace of telehealth adoption by 10 years. So far, these companies seem to have demonstrated that they can deliver care on a remote basis while doing so safely and effectively—which one would expect to help fuel a continuation of the regulatory flexibility offered during COVID. Overall, I think we are seeing a sentiment that it’s okay to let up a little bit on some of the regulations in order to speed innovation and technological availability. Obviously, there is a balance here, but it has fostered a clearer discussion that I expect will continue for the next 18 months and yield some significant changes in the landscape.
MTI: How are the healthcare, technology, life sciences and investment industries coming together during this turbulent time?
Bernstein: There are so many different and unusual partnerships. At McDermott, we have been calling these Collaborative Transformations for several years. We have seen health systems team with big and small tech companies to collaborate on development and implementation of remote monitoring and telehealth solutions. We have seen life sciences companies pairing with digital health companies and academic medical centers to speed clinical trials and test new treatment regimens. We have seen large and small physician practices looking to pivot to a mostly remote care model but with flexibility to see patients in person. We have seen large retailers begin to become the local provider of choice, and we have seen large insurers become providers, while providers have begun to take on insurance risk. There is no boundary on the combining of forces in healthcare—and we should be embracing this activity because healthcare is too complicated for any single category of player to master it and bring to consumers all that we need and demand.
From the investors’ perspective, many have significant “dry powder” and are looking for ways to deploy capital effectively and quickly. As a result we have seen the diligence processes speed up. Despite the time pressure surrounding investments in unique health care assets, private equity and venture capital funds have been excellent in pressing healthcare technology and life sciences companies to ensure that what’s being built works, that it’s safe, and that it can bring the science and the technology to the “bedside” – whether that’s in people’s homes or at a hospital or in an ambulatory setting.
Investors bring an additional practicality check to the picture. All of the players involved in the health care ecosystem are working together because they know that the community needs the innovation. They also need to know that someone’s going to pay for the service, whether that’s commercial carriers or government payers, and they are appropriately pressure testing these angles.
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