Former Apple CEO John Sculley on the 'transformative opportunity' in ACOs, analytics and machine learning
While the future of the Affordable Care Act, popularly known as Obamacare, is quite uncertain, parts of the famous healthcare reform act likely will have a lasting impact.
“The transformative opportunity here is all about the reimbursement shift from fee-for-service to the accountable care model, with the Centers for Medicare and Medicaid Services the major driver behind it,” said John Sculley, chairman of the board and chief marketing officer at RxAdvance who previously served as CEO of Apple and PepsiCo. “And as we know there are hundreds of accountable care organizations out there, some operating under one definition and some under others. This is an evolving thing.”
Sculley is looking at this transformative opportunity in healthcare through the lens of his company RxAdvance, a vendor of a cloud-based pharmacy benefit management platform.
“RxAdvance goes in and enables the insurance industry to be able to make that pivot to accountable care in a way beyond anything that is being proposed or deployed by ACOs today,” he claimed. “It’s all because of this fundamental shift that is going on toward accountable care and risk-based services focusing on measuring outcomes. MACRA will start to phase in in 2017 and be fully deployed by 2019, and all of the measurements that go along with it.”
The RxAdvance cloud-based platform uses machine learning to analyze health plans’ transaction cycle data – the claims, clinical, prescription, lab and other data.
“We are particularly focused on the Rx ecosystem because that is where so much money is really tied up, so we have the ability to go in and look at the chronically ill patients who may be taking up to 16 medications and may have six or seven chronic diseases because of high comorbidities,” Sculley said. “The doctors writing those prescriptions don’t necessarily know what other doctors are writing, and these patients are getting over-medicated, not intentionally, but the system does not have the information in a useful form.”
Traditional pharmacy benefit managers have been set up to obtain health plan transaction cycle data and use it to manage the benefits side of pharmaceuticals; the PBMS make their money on the spread, Sculley said.
“RxAdvance takes that same data and is able to integrate it across the entire health system,” he explained. “We go from working with primary care physicians and specialists through the point of care in the hospitals or in the future at home, we tie it back to the care managers and the care plan, and integrate it into the formularies and the pharmacies and their point of sale. It’s not just cool software, it’s deep domain expertise, understanding thousands of different rules involved. The complexity is not the technology, it’s understanding the workflow in the continuum of care throughout the whole healthcare system.”
Sculley added that his company can save the healthcare system $10,000 per patient, and that the company then takes some of that money for itself and shares the rest with physicians, health plans and CMS.
“It’s a fundamental change in how health insurance can be looked at in the future,” Sculley said. “It’s not about solving the healthcare exchanges. In our case, it’s all about how do you take accountable care and move it beyond the traditional approaches used by ACOs today and take it up to a whole new level.”
Leading RxAdvance, with his background at Apple and PepsiCo, Sculley explained that he has three main areas of expertise.
“I come to healthcare with three vectors of experience,” he said. “I am a consumer marketer, and I’ve been involved with that for a long time. I am a high-tech guy with particular domain expertise in machine learning, artificial intelligence and structured data analytics. And I have spent 10 years in healthcare, learning the often illogical rules and regulations of healthcare because it is largely shaped by special interests and government decisions that make it not necessarily logical.”
And with his expertise in machine learning and structured analytics, Big Data is playing a part in his work at RxAdvance.
“We’re looking at a lot of data the health plans get – lots and lots of data,” Sculley said. “For example, looking at the side effects of when a combination of different drugs are prescribed for chronic care patients, looking at the profile of that patient. And the more of that data is available for us to apply our machine learning to, the better types of customized information we can give back to the health plans or the pharmacists.”