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Brainstorm Health Daily: February 13, 2017

Good morning, readers. This is Sy filling in today. Cliff is closing the March issue of Fortune, so he’s out of pocket. He’ll be back tomorrow.

Paying for performance is a growing trend across the health care industry. Insurers have been striking deals with pharma companies that will land them discounts on pricey drugs if those treatments don’t demonstrably improve patients’ health outcomes; hospitals are penalized if they have high rates of patient readmissions.

But this model is also making its way to the C-suite, Modern Healthcare reports. Executives at Trinity Health, which operates 93 hospitals, have their pay tied to the system’s overall effectiveness in keeping patients out of the hospital, lowering smoking and obesity rates, and other population health metrics.

“Ten percent or more of each eligible executive’s total pay is put at risk,” according to Modern Healthcare. “Of that amount, 20% is tied to reducing hospital-acquired infections and decreasing readmissions; 20% to smoking and pediatric obesity rates; 20% to patient satisfaction; and 20% to workforce engagement.” Even Trinity’s CEO is affected by this incentive structure.

Talk about having a personal stake in your work.

Read on for the day’s news.

Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

DIGITAL HEALTH

A new implant method could give amputees direct control over artificial limbs. In what could become a technological breakthrough for patients who have lost a limb, researchers have successfully created a method of sensing individual neuron signals sent from the brain to the rest of the body. That could make for far more precise control of prosthetic limbs, according to the scientists, since control over these artificial limbs currently need to be amplified via connecting muscles (and therefore aren’t as accurate). The research is in the very early stages (the neuron signals were isolated, mapped, and then tested out on a virtual prosthetic) but produced 97% signal accuracy – a far cry from 70%-85% accuracy of current prosthetics. (Fortune)

Lyft strikes another partnership to deliver medical transportation. Ride sharing giant Lyft has struck a three-year partnership with LogistiCare to deliver non-emergency medical transportation to elderly Americans on Medicare, Medicaid, or private insurance. The collaboration is specifically meant to address trips that need to be scheduled on a short notice. LogistiCare, which specializes in arranging this type of transport, arranges nearly 70 million non-emergency trips every year. And Lyft isn’t the only ride sharing firm getting into the health care space – primary competitor Uber also has a number of partnerships with health services organization to get patients from underserved regions to the hospital. (MobiHealthNews)

Gilead enlists social media, dating apps in push to promote HIV prevention drug. Truvada, the Gilead treatment which has shown stunning efficacy in pre-exposure prophylaxis (PrEP) to prevent HIV infection, will be getting a digital media boost as the biotech giant hawks it on platforms like Tumblr, Snapchat, and various online dating sites. The thinking here is that those kinds of media channels are more likely to reach the younger, urban populations which could most benefit from using Truvada. For instance, Gilead says that it’s specifically targeting major cities like Washington, D.C., Newark, New Orleans, Baltimore, and others. (MM&M)

INDICATIONS

The biopharma industry’s penchant for non-standard financial reporting is under the spotlight. The Securities and Exchange Commission (SEC) is scrutinizing drug makers’ use of non-Generally accepted accounting practices (GAAP) which may be distorting their financials. In a letter to pharma giant Allergan, the agency said it wasn’t a big fan of the company using non-GAAP techniques to evaluate earnings-per-share. “[I]n light of our discussions about this matter, we will evaluate the industry practices you described to us and consider whether additional comprehensive non-GAAP staff guidance is appropriate,” wrote the SEC. While the embattled Valeant has drawn the most fire for its accounting practices, the use of non-GAAP has been exploding across the biopharma sector. In fact, as FiercePharma notes, a recent analysis of seven large-cap pharmaceutical companies revealed that the gulf between GAAP earnings and non-GAAP earnings has been growing, with about a 40% higher net income reported using non-GAAP measures. (FiercePharma)

THE BIG PICTURE

President Trump’s election probably didn’t help Obamacare enrollment. The Associated Press is out with an unofficial tally of the final Obamacare enrollment number – and they fall shy of initial government expectations. More than 12.2 million Americans enrolled in individual health plans through Healthcare.gov and other state-based Obamacare marketplaces, which represents a 4% drop in initial enrollment compared to last year. But the lower numbers may have political roots: President Donald Trump’s administration shut off advertising and outreach efforts in the final days of open enrollment last month, a period when signups tend to spike (especially among the younger Americans who are critical to the marketplaces’ stability). (Fortune)

REQUIRED READING

Google Is Studying How Robots Will Collaborate, by David Z. Morris

Trial Set for Bitcoin Exchange Linked to J.P. Morgan Hack Probeby Reuters 

This Is What Scares Ford’s CEO About Self-Driving Carsby Tara John

Chris Rock Draws Laughs, Controversy at Salesforce Sales Meetingby Barb Darrow

Produced by Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

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