Silicon Valley Investor Pronounces Imaging the Future of Medicine
First Phase III Clinical Study Outsourced to India
PACS Vendor Offers Volume-Based Pricing

Silicon Valley Investor Pronounces Imaging the Future of Medicine

“We pump ourselves with cholesterol-lowering drugs as if that was the magic elixir. Not so simple. Instead, our skin is getting peeled back for a quick look inside.”
—Andy Kessler

Andy Kessler is not a medical professional; in fact, within the first 10 pages of his new book, The End of Medicine: How Silicon Valley (And Naked Mice) Will Reboot Your Doctor, he finds himself confessing to his physician that it has been 15 years since his last check-up. But that fateful visit—during which Kessler, who once leveraged $100 million into $1 billion investing in technology, learns that his unusually high cholesterol level puts him in a high-risk category for cardiac arrest—launches him on a quest to find the next big trend in health care.

An in-depth look at the escalating cost of basic preventive medicine ($408 for his 8-minute physical) leads Kessler to ask, “Where in health care might one begin to see scale at the level that fueled the silicon boom?” As he explains it, investors and money managers look for products like microchips, which become smaller and cheaper at an exponential rate. At the point where business and technology converge, Kessler discovers imaging.

As he investigates the possibilities of imaging, Kessler begins to wonder why so little emphasis is currently placed on preventive care. If he has a high cholesterol level, why not get a 64-slice CT scan to learn immediately whether there is anything blocking his arteries?

Written from the perspective of both a businessman and an ordinary guy who likes his red meat and liquor, Kessler’s conclusion will be music to the ears of radiologists: “We pump ourselves with cholesterol-lowering drugs as if that was the magic elixir. Not so simple. Instead, our skin is getting peeled back for a quick look inside. This is the end of medicine as we know it. Don’t guess that I might have hardening of the arteries. Open me up and take a look. … Maybe NBC’s Today Show will quit celebrating centennial birthdays because they can’t fit them all in. Is 100 the new 80?”

Andy Kessler’s The End of Medicine: How Silicon Valley (And Naked Mice) Will Reboot Your Doctor hit store shelves in July and is available from HarperCollins Publishers. Visit for more information.

Having discovered what he sees as the imminent demise of medicine, however, Kessler also is forced to examine potential obstacles to the rise of imaging. Big pharma, which takes on a vaguely Mephistophelean air as the book progresses, has plenty of money—15% of the industry, according to Kessler—and a vested interest in making sure that heart attacks are staved off with drugs instead of increased access to better information. And the up-front price of the technology is staggering by anyone’s estimation; how can a vast, complex system of patients, physicians, and providers be convinced that the benefits will outweigh the costs?

That’s where Silicon Valley, Kessler’s home and personal money tree, comes into play. Advanced imaging technology, dependent on computer power and processing speed for its very existence, will scale, Kessler believes, much like the microchip did. Imaging will become simultaneously cheaper and more powerful as time goes on. And, he discovers, the FDA has effectively left open a back door where molecular imaging can piggyback into the market using oncology drugs—riding into the mainstream on the back of big pharma, which Kessler sees as imaging’s greatest foe.

The best part? Kessler envisions all of these changes happening within a relatively short time frame. “Five grand is spent on health care per person every year in the United States,” he writes. “It’s not hard to imagine early detection, imaging, chips, and a new style of personalized medicine making up half or more of that in the next 20 years. That’s Scale with a capital S and Return on capital with a capital R.

First Phase III Clinical Study Outsourced to India

The first outsourced review of phase III clinical scans was easy from a human perspective, reports Ketan Desai, MD, PhD, of International Medical Consultants (IMC), Philadelphia. The firm, which offers consulting services to biotechnology and pharmaceutical companies regarding design and operation of clinical trials, arranged the first Internet-based review of radiology films outsourced to India. The study assessed the safety and efficacy of chemotherapy when used in conjunction with a biotechnology company’s experimental drug.

“The biggest problem for me would be convincing US companies that this was a worthwhile endeavor, and I didn’t have to face that challenge with this particular project.”
—Ketan Desai, MD, PhD
International Medical Consultants

Indian radiologists read more than 2,000 scans from 1,026 cases, including 643 mammograms; 945 chest x-rays; 1,402 chest, abdomen, and pelvis CTs; 67 brain MRIs; 28 bone scans; and 114 skin photographs of skin lesions. Tumor size was evaluated by the product of the maximum diameter of the tumor in two perpendicular measurements; tumors were designated as progressive, stable, or regressive (partial or complete).

“I was fortunate enough that the biotech company actually was open-minded and willing to consider this as a possibility,” Desai says. “The biggest problem for me would be convincing US companies that this was a worthwhile endeavor, and I didn’t have to face that challenge with this particular project. I happened to know enough radiologists in India who could do all of this, so that wasn’t a challenge.”

The FDA had no objection to using the Indian radiologists for the reads; each reviewer was board-certified in India, though not in the United States. For the reviewers, the incentive to participate was strong: good pay and the opportunity to gain experience on a phase III oncology study, the likes of which are rarely seen in India. “It was the technical aspect that was a challenge, not the human aspect,” Desai says.

The technical challenge: transmit, via secure broadband connection, more than 2,000 scans at a speed and resolution sufficient to maximize productivity without compromising image quality. “How could we transfer the images? How could we get proper resolution of the images?” Desai asks. “We had to buy [medical-grade displays] for India so that we could get the correct number of megapixels and the resolution to make sure the images were of good quality and could be seen properly.”

Server speed was another issue. “We had to make sure that the loading speed here would match the uploading speed there, because if one was mismatched, then the image would take a long time to load,” he explains. “The average time was actually 5 or 10 minutes to load a single set of images. So, we had to optimize the uploading speed there; here, we had to make sure that the server was of sufficient speed.”

Desai notes that the advantages of an outsourcing project like this one make dealing with the drawbacks well worth it. Not surprisingly, he says that the biggest advantage was cost. “It was done at approximately half the cost of doing it here, if you don’t include the broadband cost. If you include the broadband cost, it was approximately 60%,” he explains. “The other big advantage was that it saved about a day per read. For example, when you loaded the images by 6 pm Eastern Standard Time here, it was about 4 am there, so the images were there for them to load by the time they came in at 8 am. Then, they finish reading at night [their time] so that when we came into work here, the exams were already done, read, and finished, and we could address any issues and load the next set.”

PACS Vendor Offers Volume-Based Pricing

Dynamic Imaging, Allendale, NJ, has implemented volume-based PACS pricing for customers of its IntegradWeb PACS solution. All proposals made by the company since July 1 have incorporated this new pricing plan, which retains the scalability of Dynamic Imaging’s previous pricing model but bases pricing on the annual number of radiology examinations sent to the PACS.

All of Dynamic Imaging’s volume-based PACS software licenses now include unlimited diagnostic user licenses for the PACS workstation; unlimited embedded MIP/MPR licenses for all viewers; unlimited enterprise viewing user licenses; unlimited clinical user licenses; unlimited technologist quality control licenses; unlimited DICOM print, query/retrieve, push, and nodes; unlimited document scanning; unlimited CD Personal, which allows users to burn DICOM- and IHE PDI-compliant CDs from any PC with a CD burner; IntegradWeb PACS database license; and customized marketing materials.

One customer using this pricing model is Bruce Marcolongo, clinical technology manager at Universal Health Services Inc (UHS), King of Prussia, Pa. “Basically, volume pricing is exam-volume–based,” Marcolongo explains. “So up front, we pay a particular fee, per transaction per exam; based on that, we can instantly calculate our current volume and projected volumes to figure out what we’re going to pay for a given year. Then we allow for growth. Depending on the particular area, we might see a 5% or 10% growth rate, and then we pay the delta going forward. We know what our maintenance cost is going to be, so we really are always able to calculate our current outlay and our future operating expenses.”

UHS currently has three facilities live on the volume-based pricing structure, with three more slated to come online by the end of the year. Marcolongo cites the unlimited licensing as a major advantage. “With this model,” he says, “the licensing is unlimited. So, not only is the price point basically sealed, there’s incentive for me to get as many people as I can on this product. It’s going to drive my business, increase my referral base, and increase my exam volume—it’s kind of a win-win.”

Dynamic is currently planning to give all existing customers the option of converting to the volume-based model.