A Different Way to Look at Healthcare - 7investing
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A Different Way to Look at Healthcare

August 18, 2021

Americans like easy fixes. Taking a pill to lower your blood pressure, for example, takes a lot less effort than exercising move and improving your diet. Both solutions work, but the harder one also has the benefit of potentially stopping other issues from going wrong.

There are a number of companies — everything from startups to major technology giants — making an effort to change how we view our own health. That can mean earlier detection of problems to more advanced monitoring using wearables.

It’s not a simple problem, but it’s one that’s being tackled from a variety of angles. Dana Abramovitz and Simon Erickson joined Dan Kline on the August 16 edition of “7investing Now” to take a deep dive into the problem and some potential solutions.

A full transcript follows the video.

 

Dan Kline: And not every solution is a pill. And I think that’s important to remember. And it’s something I’ve talked about with Dana and Max a lot. And I’m going a little off script here, but I’m gonna throw it to Dana, I could get back and drop ability. I know that I went to the doctor, and my blood pressure was edgy, it was sort of right at the edge of, of where you want it to be. And the prescription was more akin to your thoughts here on sort of non-medical treatments. Apologies if I jump up for a second there, I’m in Las Vegas for all of you who don’t know and the internet connection is designed to send you to the casino and it’s clearly not designed for broadcasting Dana, your thoughts on sort of like our quickness to give people a pill and to not say, hey, if you made these lifestyle changes, and I’ve made a lot of them, much less red meat, much more walking. Simon has sort of dared me to be here for the next 50 years. I’m trying to do that. Dana, that’s fighting against sort of an establishment, right?

Dana Abramovitz: Yeah, yeah. No, it’s it’s interesting. There’s, there was a cartoon that I saw, and it’s all these people waiting in line for that quick fix, right? And so we, as a society, you’ll have been kind of taught, how do you get that, that immediate results. And a lot of times you like taking a pill he will eat, even if you’re watching a late night commercial, and there’s an ad for a supplement that’s just gonna melt fast and fat away. A minute, right? And you think, oh, that that sounds great. Sure, it’s, connect 1099, for three months, in order to get that one month of dosage. But like, I’m gonna do that, because that’s easier.

Taking that pill is easier than changing my diet, changing my lifestyle, exercising a little bit more, meditating, sleeping more, just all the things that we know, can improve your wellness and Simon had said earlier about you moving towards prevention, right. So, you’re like moving more upstream, such that we’re not getting sick, it’s such that we’re identifying illness early, early, before it becomes expensive and difficult to treat. So if we can kind of move to that point I think that will like that in and of itself is disruption but that is disrupting us as a society and not necessarily the industry, or getting the industry to kind of help us as a society. But we got to work together on that one.

Dan Kline: It’s taking the long-term investing approach to healthcare, rather than the day trading approach. And Simon, this might be a good time for you to talk a little bit about our long-term approach at 7Investing and how people might become a member. And then, of course, we will get right back to disruption and healthcare.

Simon Erickson: Yeah, absolutely. I love that analogy. The long-term investing approach to healthcare is just changing things for the good of the outcomes. First and foremost, if you go to our website 7investing.com you get free access to Dana’s report on whether or not technology can fix American healthcare. I think it’s fantastic. Dana, like she said, has been spent three decades in the healthcare industry consulting with CEOs and she also has a PhD in biochemistry. So she’s very knowledgeable about this subject. And we’re offering her report for free on 7Investing.com. Right now, it’s only going to be available for the next week.

So I recommend anyone who’s not already a subscriber to check it out for free. If you are a subscriber 7Investing, you’ll get it. As long as you’d like this, we’re posting it to the research tab of our website. And so please continue to check it out there. But to answer your question, Dan, or you can sign up at 7investing.com/subscribe. Not only do you get access to great premium content, like reports on health care, but also our team’s seven best ideas in the stock market each and every month. I’m pretty excited. We just locked in our picks for next month, Dan, we’ve got again, a really nice slate of options, some of them being companies that a lot of us had never even heard of before. So it’s very exciting.

Dan Kline : It’s all what three or four I’ve never heard of $49 or $399 a year 7investing.com/subscribe, we’d love to have you as a member we have our new member call. Our members only call all this Friday. That is the best day of the month. It’s a busy day. It’s a it’s a multiple coffee type of day. It is a it is a marathon, but it is a ton of fun because we get to interact with our members, we get to talk about things we don’t talk about on the show. We would love more of your question, questions and comments. Luciano, I promise we will get to yours before the show is over. Dana, I want to talk about interoperability. You mentioned this word, why don’t you explain what it means and sort of how it can be disruptive in the healthcare space?

Dana Abramovitz : Yeah I mentioned electronic health records multiple times in this call. So just basically data and who has it, right. So if you go to for one doctor, you’ll see your primary care physician, and you have all your bloodwork and all of your data is in that physician system. And then see, you have a endocrinologist that you’re working with. All of you go and you have different tests, and all that now is in that doctor’s system, right? Your data does not talk amongst the different doctors, even if they’re in the same network that they may not have that. So that that is the interoperability of your sharing data, healthcare data.

My car gets better service, because I’ve always taken my car to the dealership. So when I was living in California, it was there. Now that I’m in Texas its here. And my dealership here knows exactly how my car has been treated throughout its entire lifetime. That doesn’t happen in the healthcare system, which is really unfortunate. Right? And a lot of it is who owns the data? Right? Is it your physician? Or is it the patient and a lot of times the physicians don’t want the patient to own it, because then they can go to different physicians, right?

But it ultimately is the patient’s data. So there’s a lot of discussion on who owns the data, the interoperability as a patient, you have your right to your data. So if your physician isn’t complying giving you results, you can tell them that they should. I’m a big advocate for making sure that that patients have their own data.

Dan Kline: And of course, there’s a technology aspect of that, because we have to move our data around privately. I don’t care if somebody knows that my car needed an oil change, there might be health issues that you don’t necessarily want to be public shared. Simon, you think we should actually change how some of healthcare is incentivized? Do you want to explain that one? Because I found it really interesting.

Simon Erickson: It’s a really interesting one for sure. Dan. Dana talks a lot about value based care. And we’ve we just kind of discussed already the Physician Fee Schedule, how we’re rewarding for reimbursements for procedures rather than outcomes. If you want to change the system, you kind of start with what you define success says right right now success as you complete it in test, we’re going to reimburse you for the test. Let’s move on and doctors saying hey, we’re going to cover ourselves. We don’t want a malpractice suit on us out there. So let’s run as many tests as it takes to show that we did. We’re supposed to do.

What if you can move that proactively to say, hey, really what’s most important to me is making sure that this patient is okay. And the medical outcomes are the very, very most important things. And so that’s why we’ve seen a CMS kind of pushing for value-based care value-based care, right. Insurers have picked up on this. United Healthcare largest insurer in America said, Yes, we want to transition where we’re rewarding the outcomes and we want to keep people healthy.

And a gentleman, I have chatted with for several years named Donald Brown used to be CEO of a publicly-traded company called Interactive Intelligence that was running a new running a new company called LifeOmic which is trying to encourage exactly what Dana mentioned earlier in the program. Keep people healthy. 50% of health is just your, are you staying physical? Are you taking care of yourself? What are the activities that you’re doing, but it’s really, really challenging to change lifestyles for people.

And even he who started a company to try to encourage some of these behaviors has said to me, Hey, this is a really, really challenging problem. It’s very personal, you can tell people eat healthy and go jogging every morning, but it’s still up to them to do that. Now, the interesting part is going to be if you start rewarding financially, the people who are insured, if you give them rewards for staying healthy, or doing things that they want to nudge you to live a healthier lifestyle, I think that’s one thing that might change the equation a little bit when it comes to the insurers and payers of this.

Dan Kline: So Dana, one of the things I do is I share my Fitbit app, or whatever data with my trainer, and he sort of makes suggestions and tells me things to do, are there ways we can sort of incorporate health in that type of monitoring in a non privacy violating way, with our healthcare providers, where maybe I actually lower rates because I have lost 20 pounds, and I do walk 10,000 steps a day, and, and all things I’m doing not, so I look better, but so I actually live longer? Like, that’s my goal.

Dana Abramovitz : Absolutely, yeah. So we have wearables, and there are insurance programs, where they’ll give you your insurance company or your company will give you a health fitness tracking device whatever it is, and incentivize you to do different activities, there are also different wearables that will share reports to your physician, so that you’re collecting data and that’s not just your steps in your physical activity, but now there are wearables that can monitor blood pressure, heart rates like a whole suite of, of bio life biomarkers that you can share with your physician to help you track your health.

And like we did talking about the data interoperability, there is that the data protection, right, so there’s HIPAA laws, which is the portability of data, right, and there is a privacy component of that, right, so you can share data, but you can’t, your personal medical information has to be separate, right. So an anonymized heart rate, or blood pressure doesn’t necessarily mean anything, but that it belongs to me and where I live and what my phone number is, and that obviously, that’s more personal. And so that’s, that’s the, the PMI that you might hear, when people are talking about the complaints.

Simon Erickson: If I might add to that, too, Dan, we have seen as investors a lot of flops, when it comes to consumer-facing healthcare, especially for medical devices. And if it was not a good investment, right 23andme kind of got exposed that it wasn’t medically actionable, right, Under Armour tried to do Map My Fitness and have, devices you put on, that was a big flop and a waste of money for them.

We’ve seen a lot of failures in this, because it was all just kind of this fun need to have data that was you can go out and you can track how many steps you were doing every day or what your heart rate is. But it wasn’t something that was really tied into your doctor that was being reimbursed by the insurance. And I think that the necessary step to kind of make this more personal make this more tied in with your insurer, with your employer, I’m starting to see those happen, where we didn’t see those maybe five, seven years ago, when a lot of these companies were trying to frontward run where this industry should have been heading.

Dan Kline: And it has to get better. Dana, I’ll go to you in a second. My Fitbit needs to know that I’m walking, not moving my arm a lot during a show, which it doesn’t know. So like that is absolutely an issue. Dana, I stepped on you there. My apologies. It’s fine.

Dana Abramovitz: So a lot of times with these devices, and this is the problem is that it’s a shiny object,  it’s new, and so you want to use it, but then after a while, you stop using it and then ends up in your drawer, right. So and this is why a lot of these businesses weren’t great investments because they were great and new at the beginning but not great for the long term because people weren’t using it for the long term because there wasn’t that long-term lifestyle changing. So back to Dan’s comment on, like, how do we get healthcare to be more of a long term investment, rather than, just a day trade or, just like a short term a couple of weeks until we get bored, and something else new pops up, and we want to try that.

Dan Kline: 10,000 steps a day is better than walking 200,000 steps once a month, there’s a lot of benefit to that I want to make a comment from Bill Pilock, because it speaks to something Simon wants to talk about. We don’t need talk about the specific companies. But he says screening companies seem to be the most disruptive Simon, you want to talk about how identifying things really early on, you’ve alluded to it earlier. But this could be I don’t want to say the holy grail, but a major part if we catch cancer on day one instead of day 200. That makes it easier to treat.

Simon Erickson: Yeah, sure. And so that speaks exactly to one of them that Bill brought up here, right, EXAS is EXACT Sciences Corporation (NASDAQ: $EXAS) which is doing an at home diagnostic for colorectal cancer, I mean, that’s something that’s a lot different than having to go into the hospital wait for results. And so you can basically just send by mail, a diagnostic test like that. Nano-X Imaging Ltd (NASDAQ: $NNOX), same thing, trying to trying to do things that are more disruptive to the system. Right now, the system itself wants to move slowly, you’ve got to show progress, we still need to look at the right metrics as investors to show that these companies are executing well, but I think that they’re heading in the right direction. I mean, if we really are going to have consumer-facing health care, let’s have consumer-facing companies who are innovating that field,