With incubators, hospital systems tread ethical boundaries

With help from Arthur Allen ( @arthurallen202) and Darius Tahir ( @dariustahir)

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WITH INCUBATORS, HOSPITAL SYSTEMS TREAD ETHICAL BOUNDARIES: A growing number of health systems are putting their own money behind early-stage tech companies, hoping the products they fund will cut costs, help patients — and, in some cases, earn them money.

Their managers say the programs are accelerating the arrival of helpful technology to hospitals, which no longer have to wait for the products to be commercialized. Working with startups directly means clinicians and administrators can customize the technology.

In some cases, the deals might bring in a lot of cash to financially pinched health corporations. Early-stage companies benefit, meanwhile, from testing their technology on patients with limited investment and before deploying them widely.

Health care systems have wide latitude to set up their venture funds, subject to limitations on the kinds of investments and partnerships for-profit and nonprofit organizations can legally form and what they must disclose, says The Wharton School’s Mark Pauly.

But critics warn of conflicts of interest: Investors of any kind have an incentive to help a company succeed even if its product is subpar. Recently, Memorial Sloan Kettering came under attack for an arrangement with a precision medicine company that potentially undercut the hospital’s objectivity about its product, bioethicists said.

Managers of the innovation programs argue that they help hospitals rapidly adopt cutting-edge technology that could benefit patients.

And equity or licensing of successful technology could offset losses from taking care of patients, Pauly said. Many health care systems are “badly scrambling to find some other line of business, whether it’s outpatient care, insurance ... or some kind of innovative technology.”

Pros can read the rest of the story here.

IS FACEBOOK ACTIVITY A SOCIAL DETERMINANT?: Facebook’s health care research head Freddy Abnousi co-authored a JAMA viewpoint arguing that the data found on social networks could be useful in addressing the social determinants of health.

Abnousi was behind an effort to share patient data with hospitals and medical groups that wanted to build more detailed patient profiles, CNBC reported in April. The proposal was halted after news broke that political consulting firm Cambridge Analytica got access to information about millions of Facebook users for the purpose of influencing their behavior.

Still, Abnousi and co-authors are doubling down on social media data’s value to health researchers. The way users of Facebook and other social media platforms interact with each other could help researchers “identify novel targets” that could “meaningfully influence health outcomes,” especially when combined with EHR data, write Abnousi, the American College of Cardiology,’s John Rumsfeld, and Yale’s Harlan Krumholz.

The authors argue that patients’ social network data might offer more important signals than social determinants of health like housing and income. They offer no evidence this is true, however.

eHealth Tweet of the day: Mahek A. Shah, M.D. @Mahek_MD How doctors act in response to The Apple Watch + other digital health tools, will be the difference between a good doctor and a great doctor. Maybe not peer-to-peer. But in their patients’ eyes. HCP underestimate the power of convenience!

It’s FRIDAY at Morning eHealth and we’re off for the next week. Health tech long-reads, news tips and festive cocktail recipes go to [email protected]. Reach the rest of the team at @arthurallen202, @dariustahir, @ravindranize, @POLITICOPro and @Morning_eHealth.

GOVERNMENT SHUTDOWN LOOMING: Senate leaders are expected today to call up the stopgap funding bill the House passed Thursday, which includes $5 billion for President Donald Trump’s border wall. A passage vote could happen quickly if they agree to a fast-tracked process, but if they don’t, it could be delayed until the weekend. Funding expires at midnight, and there’s no guarantee that Trump will sign the bill, even if Congress can clear it.

— HHS is funded. But FDA is not. The Food & Drug Administration wasn’t covered in emergency funding passed by Congress earlier this year. The agency might have to furlough as much as 40 percent of its staff.

SENATE LIKELY TO CONFIRM TELEMEDICINE PROPONENT BRENDAN CARR: A trio of senators is expected to drop their holds on Republican Commissioner Brendan Carr, POLITICO’s John Hendel reports. As the tech team had reported, Democrat Sen. Joe Manchin (D-W. Va.), was protesting the FCC’s decision to halt rural broadband subsidies from the $4.5 billion Mobility Fund; Sens. Dan Sullivan (R-Alaska)and Lisa Murkowski (R-Alaska) held up Carr’s confirmation because they felt an Alaskan telecom company wasn’t given adequate rural health subsidies. Carr has been leading an effort to establish a $100 million fund for telehealth and remote monitoring pilot projects, especially those targeting low income and rural Americans.

GRASSLEY NAMES HEALTH POLICY STAFF: Incoming Senate Finance Chairman Chuck Grassley has announced his permanent health policy staff for the next Congress, a mix of personal aides and committee veterans expected to help the Iowa Republican pursue such priorities as hearings into drug pricing, Obamacare, health costs and government oversight, our colleague Dan Diamonds reports.

— Grassley tapped Karen Summar, a physician who currently serves as health policy director in Grassley’s personal office, as the committee’s health policy director. Evelyn Fortier, chief counsel for justice programs on the Senate Judiciary Committee, will become Finance’s general counsel for health policy and special projects director.

— Four current Finance Committee staffers — deputy health policy director Erin Dempsey, senior adviser Brett Baker, human services policy adviser Ryan Martin and health policy adviser Stuart Portman -- will continue in their roles.

SYNTHETIC DATA—MEDICAL RESEARCHERS CRAVE IT: And now the Regenstrief Institute is getting access to the stuff through a partnership with Israeli data company MDClone, whose approach will be applied to data from millions of Indiana patients that Regenstrief manages for health system partners.

— The technology works like this: users run a query on a given data set that identifies a collection of individuals of interest. Then it organizes the data into groupings that are statistically similar across all variables of interest. The engine then uses the statistics to create a new data set of “fake” individuals with similar features to the originals. The synthetic dataset can be analyzed like any other, but it doesn’t contain information from real people, so it protects privacy.

3M has agreed to buy M*Modal’s technology business for about $1 billion. M*Modal sells speech recognition technology for transcribing clinicians’ notes and was spun out of Carnegie Mellon University. 3M’s health IT business sells software practices can use for clinical documentation or analyzing patient information.

Cigna has closedits $67 billion merger with pharmacy benefit manager Express Scripts. According to MarketWatch, specialty pharmaceuticals and mental health will be among the combined entities’ priorities next year.

Smithsonian Institution secretary David Skorton has been named the next president and CEO of the Association of American Medical Colleges. The cardiologist and former president of Cornell starts in his new role July 15.

Stephen Katz, the director of NIH’s National Institute of Arthritis and Musculoskeletal and Skin Diseases, died Thursday. He had led NIAMS since 1995, according to NIH, which tweeted a link to Katz’s oral history.

— Top health and medicine stories this year from the New York Times

— ICYMI: CNBC’s Christina Farr and Christine Wang report on Walgreen’s plan to deploy Verily technology at pharmacies