Five Questions for E&Y’s David DeMarco on the Future of Health IT

Xconomy New York — 

In March, global consulting firm Ernst & Young released an annual report for its life sciences clients called “The Third Place: Healthcare Everywhere.” It discusses a range of topics, from apps designed to improve patient adherence to medical treatments, to games that encourage healthy habits.

Today Ernst & Young is holding a summit in Princeton, NJ, which will bring together players across the healthcare system to discuss opportunities for using technology to get closer to patients—and to change their behavior for the better. In advance of the event, Xconomy spoke with David DeMarco, Ernst & Young’s northeast pharmaceutical and medical device leader, on how the changing technology landscape is affecting the life sciences industry.

Xconomy: Ernst & Young’s report refers to “the third place” in healthcare. Explain.
Dave DeMarco: The idea came from Starbucks, which talked about wanting to be the third place where you enjoyed a cup of coffee—after your home or your work. And they didn’t just want you to enjoy a cup of coffee, they wanted you to enjoy a social experience. Traditionally healthcare is provided in two places—the hospital and the doctor’s office. But in the future world, the third place is wherever the patient is, i.e. everywhere. In the third place, you have the potential for continuous monitoring. You have the potential for real-time data that helps drive behavior. The system is more transparent, and patients have a lot more control.

X: Have you seen any good examples of healthcare providers going into the third place and influencing patient behavior effectively?
DD: There was a study done at the University of Pennsylvania and Carnegie Mellon University involving [the blood thinner] warfarin, which is given to patients who are at risk of suffering pulmonary embolisms or other serious events. You would think the compliance to that drug would be pretty darn high, but it’s only 67 percent. So in this study, they gave patients electronic pill boxes that were hooked up through the Internet to their providers. They knew if you took your pill or not. Then, through either a text or e-mail, they gave each patient a two-digit number every day and held a lottery. If a patient matched both digits, which only happened with a 1 percent probability, he or she won $100. What I loved was the catch: You could only win the money if you took your pill.

The last thing they did, which was clever, was if you had a day where you weren’t compliant, they sent you a text or an e-mail saying, “You know, if you had taken your pill today you could have won $100.” Compliance went from 67 percent to 97 percent.

Is this going to save the industry? No. But we’ve been working on disease management for a long time, with mixed results. We really believe that behavioral change is the next frontier. Understanding the biases around behavioral economics is key—for pharma and biotech companies, too.

X: You also write about making medical compliance fun for consumers. How can life sciences companies—and even consumer companies—do that effectively?
DD: One of the things that we believe is going to be part of this healthcare-everywhere future world is the medicalization of consumer devices and the consumerization of medical devices.

An interesting example of the medicalization of a consumer device is Nike’s development of embedded sensors in their products to give real-time feedback on exercise. It’s called Nike+. This is just an early example of sensor technology blending with devices to be able to give some credence to the fact that yes, healthcare in the future can be delivered in other settings than the doctor’s office and the hospital.

An example of the consumerization of a medical device is a pilot that Bayer Healthcare and Nintendo did where they partnered to create a game for children with diabetes that centered around proper glucose control.

Life science companies have to figure out how to collaborate with organizations that they’re really not used to dealing with, so they can bring a net outcome advantage to the market.

X: How is the use of social media evolving, and how important will it be for life science companies to understand it and participate in it?
DD: I think that represents a real challenge. Most of our clients know that it’s going to be important. Yet there are regulatory issues that are unclear. So they’re all taking a cautious approach to do what they can. One of our large pharma clients has people online every day. They’re not pushing their products, but rather trying to advance awareness and education of disease states.

X: And what about apps? How can health-related companies best use them?
DD: The whole idea of apps is something that really harkens back to the theme of the consumer being the center. In a patient-centric world, where healthcare is everywhere, apps should enable and empower consumers.

Some of our clients believe that creating clinical decision tools for healthcare professionals is a very important strategy to wrap value around their molecules. Their thinking is now evolving, and they’re beginning to wonder about the power of consumer-based clinical decision tools. They’re recognizing that the consumer is really going to shape things in the future. I think the more life sciences companies can get information into the hands of consumers, the more they’re going to be able to extract value.