California Healthcare Policy Forum Spotlight: Assemblyman Nathan Fletcher

Nathan Fletcher is the State Assemblyman representing California's 75th District and will be addressing attendees of CHI’s California Healthcare Policy Forum in San Francisco at the Mark Hopkins InterContinental on Nov. 5. Assemblyman Fletcher serves as vice chair of the Assembly Health Committee and the Select Committee on Biotechnology. He is a member of the Accountability & Administrative Review, Water, Parks, & Wildlife and Utilities and Commerce Standing Committees. In addition, he sits on the Select Committees on Foster Care, Child/Adolescent Health and Safety, Healthcare Workforce Access, Safety and Protection of At-Risk California Communities and Government Reform.

Q: As a freshman lawmaker, you are vice-chair of both the Assembly Health Committee and the Select Committee on Biotechnology. What sparked your interest in healthcare policy and the biotechnology sector in particular?
A: If you look at my district, I have one of the world’s largest concentrations of biotech, including UCSD, Burnham, Scripps, Salk, all these various institutes and groups like CHI that help to bridge that and the 500 biotech companies that reside here. Also, if you look at the changing dynamics of economics, these are the jobs of the future. Information technology, biotech, clean tech, high tech, agricultural biotech—these are the industries and jobs of the future. If we don’t figure out in America and in California how to innovate and create new ideas, we’re not going to compete in the global marketplace. Whoever figures out how to cure diabetes, Alzheimer’s, cancer from a medical perspective; or to grow drought resistant crops; whoever makes a faster, smaller computer processor or figures out how to transport people faster with less of an impact on the environment; whoever figures out how to create sustainable power. Not only do they get to make the world a better place, but they also will get to sell that to the 95 percent of the world population that lives outside America and I want that place to be California. I’m very interested in this cluster effect and creating centers of innovation and working to get the brightest minds to come here and be part of it.

Q: What do you believe is the state’s role in healthcare reform?
A: The states play a tremendous role in healthcare. So much is administered by the states, even federal programs are run by states and counties, but aside from administering programs and making them work better, the states can be great incubators of new ideas. California is known for being at the cutting edge. It’s a great way to see what works and what doesn’t and California itself provides a very challenging environment. I believe in universal healthcare coverage—I think everyone should have healthcare and that we can design a system where everyone can participate, it’s just a question of how we get there. I also think California should lead on utilizing new technologies like electronic medical records.

Q:You have said that you believe healthcare begins with healthy living and that we should find constructive and creative ways to promote health and wellness. Can you tell me what some of your ideas are for the promotion of health and wellness in California?
A: I think when we talk about healthcare, we skip to the idea of healthcare for sick people and bypass the fact that healthcare should start with healthy living. I’m interested in incentivizing healthy living. I think financial motivators are great. There’s a remarkable difference in the healthcare costs of a healthy non-smoker who exercises and maintains healthy weight and at a certain point, people need to be held accountable.

I think people should be able to buy their own insurance, rather than relying on an employer-based system like we have now. It just doesn’t make sense anymore, now that people switch jobs and healthcare plans so often. We could then give individuals the tax breaks that employers now get and the consumer would get to choose and keep the plan that makes the most sense for them.

Immunizations are another area I’m interested in. I’ve lived in Africa, Asia, third world countries, and one of the saddest things I’ve ever seen is people dying of diseases like polio, which is now preventable. We’re seeing rates of unimmunized children jump in the U.S. and I’m worried about that. I respect parents’ rights but I think there’s a lot of awareness and education we can do. And we have to look at reimbursement and how physicians are paid for vaccinations. If physicians aren’t reimbursed for immunizing patients, then parents will have to go elsewhere and adding another hurdle to a busy parent’s schedule is one more hurdle that hurts all our kids.
Q: You’ve also acknowledged the need for technology and innovation to transform our current healthcare system, which is a topic that we’ll be exploring at the California Healthcare Policy Forum, where you’ll be addressing attendees on Nov. 5 at the Mark Hopkins InterContinental in San Francisco. How do you think technology and innovation can contribute meaningfully to reforming the delivery of care in the U.S?
A: Forty years ago we put a man on the moon and we talked to him. I was at Apple recently and they told me the computing power of the iPhone is equivalent to the entire Apollo project. Thinking about how we now use this technology, I can take photos, trade stocks, get information, watch news programs. Yet, I go to my doctor and he writes down information in my medical record and writes a prescription on a pad of paper that I take to my pharmacist. And I think, what are we doing? So, one application is in the medical record keeping area. I do realize the challenges with confidentiality, but certainly we can overcome this to have a system that allows my physician to see, from cradle to grave, what tests have been performed, any known allergies or chemical reactions, etc, there simply has to be a way.

I think it has a role to play in fraud prevention. I think a real-time stream of data and analysis could elucidate patterns of fraud. And the third way is empowering the individuals to make decisions as far as information. If you’re going to have a knee surgery, you should know how many your physician has done, how many of his operations led to infection, etc. The more information you can provide to people in an easy to use format, the more they’ll be empowered to make decisions about their own healthcare. In short, I see a lot of applications for technology and I don’t believe it has to be a cost center. Of course there would be some initial capital investment, but we really need to make that leap.

Q: You mention education as an important issue for you and your constituents. The biomedical industry in California is vested in improving math, science, technology and engineering education to secure a well-educated and prepared future workforce and has funded many programs to educate teachers and students and expose them to new research and technology. What are some of your ideas for improving STEM education in California?
A: The Hart-Rudman Commission did a pre-Sept. 11th study on the top threats to America and one of their top two or three, including foreign terrorism, was our declining prominence in the fields of science, technology, engineering and math. We really need to have a focus in these areas in education and incentivize students to study these topics. In Florida, high school kids can choose a major like we do in college, so having programs where students can specialize in these study areas could help. We need to adequately prepare students for schools like UCSD early on and incentivize them and invest in them.

The UC system used to be 7% of the general fund and is now down to 3%. I certainly understand of how programs get funded, but if we want to maintain our status as innovators, we have to invest in our universities. We also need to change our mindset with K-12 education. We should fast track college-bound kids. Right now, 80% of 9th graders will not go to collage. We need to offer career and technical education, with some math and algebra and other skills to prepare them to enter the workforce where they can get a good job that is high paying, such as in biotech manufacturing and these other high tech and biotech jobs of the future.

I’m looking forward to attending the California Healthcare Policy Forum on Nov. 5 and meeting the folks who are actually innovating new drugs and therapies and employing people and teaching California’s future workforce. I have a lot to learn from the speakers and from the attendees so it should be a great opportunity.

CHI-Advancing California biomedical research and innovation

California Healthcare Policy Forum Spotlight: Dr. Mark Smith

Dr. Mark Smith is president and chief executive officer of the California HealthCare Foundation and will be a part of CHI’s upcoming California Healthcare Policy Forum, to be held in San Francisco at the Mark Hopkins InterContinental, from 11:30 a.m. to 6 p.m. The Foundation is an independent philanthropy with assets of more than $700 million, headquartered in Oakland, Calif., and dedicated to improving the health of the people of California through its three program areas: Better Chronic Disease Care, Innovations for the Underserved, and Market and Policy Monitor.

A board-certified internist, Smith is a member of the clinical faculty at the University of California, San Francisco, and an attending physician at the Positive Health Program for AIDS care at San Francisco General Hospital. He is a member of the Institute of Medicine and serves on the board of the National Business Group on Health.

Prior to joining the California HealthCare Foundation, Smith was executive vice president at the Henry J. Kaiser Family Foundation. He previously served as associate director of the AIDS Services and assistant professor of medicine and of health policy and management at Johns Hopkins University. He has served on the Performance Measurement Committee of the National Committee for Quality Assurance and the editorial board of the Annals of Internal Medicine.

Smith received a bachelor's degree in Afro-American studies from Harvard College, a medical doctorate from the University of North Carolina at Chapel Hill, and an MBA, with a concentration in health care administration, from the Wharton School at the University of Pennsylvania.

Q: What have you witnessed in your interactions in DC with congressional aides, administration officials, policy analysts, and others as the healthcare reform debate continues?

A: The first thing that’s notable is that the terms of the debate have changed subtly from health care reform to health insurance reform. The good news is that realistically, it’s probably all that one can expect to happen at this point in the debate. The bad news is that the fundamental condition of American healthcare, which is that it costs too much, is unlikely to be dramatically changed by any of the things that are on the agenda right now. It remains to be seen how much will survive in the proposed legislation.

Q: Your organization, the California HealthCare Foundation, is dedicated to improving the health of the people of California through three program areas: Better Chronic Disease Care, Innovations for the Underserved, and Market and Policy Monitor. Tell me how these programs play in to healthcare reform.

A: Our sense is that in the long run, healthcare as it is currently configured is unsustainable. All three programs are designed to attack what we see as the basic elements of our cost problem. The system right now is dramatically tilted toward acute disease management and high cost, inpatient hospitalization. We think the real benefits in terms of reducing costs lie in attacking the chronic disease problem. We don’t focus on the development of guidelines on how diabetes, asthma and hypertension should be treated, but rather on narrowing the gap between what experts say should happen with these patients and what actually happens.

Q: How does that work with the current incentive structure in healthcare? Right now physicians get paid and get paid more if patients are in an acute condition and get paid relatively little for preventive care. Are you working on restructuring incentives?

A: To be honest, I think that’s probably not work we can do on our own. The primary physician doesn’t get paid if her patient is in the ICU, but she is at least beginning to be paid for the adequacy of the control of her patients’ blood sugar or blood pressure. So part of why we were active in helping to catalyze the pay for performance model was to start changing the incentives for the physicians who are treating chronic disease. One problem we’ve noticed is that many physicians don’t have good “population management” tools, such as registries, to be able to capture these data, so that’s something we work on.

Q: As the head of a foundation that engages deeply with providers, hospitals, government, insurers, payers, and patients in California, and with particular concern for underserved communities, how do you see California positioned in this debate?

A: It’s interesting. A lot of the leading actors in Congress are from California. We’re certainly ahead of the rest of the country with regard to the existence of large groups who provide care in an organized and systematic way. We’ve always had Kaiser and large, sophisticated medical groups. However, some of our in-state regulatory decisions are lagging in terms of the types of developments that will allow cooperation among small practices that will be necessary to deliver care in a rational, organized way.

Q: You have said in recent statements that measures passed as part of the stimulus package, including health IT financing, comparative effectiveness research, and support for electronic medical records implementation will create much greater reform to healthcare delivery than what is being proposed as part of healthcare reform packages being considered now in Congress. Can you explain some of the implications for this technology?

A: Comparative effectiveness and support for IT adoption by physicians are an essential part of the infrastructure necessary to reform healthcare. Are you familiar with OpenTable? It brings to mom and pop restaurants information technology sophistication, visibility to customers, other benefits of being in a big chain without having to shut down and become a chain restaurant. So modern technology can bring to small physician practices that same kind of sophistication. The promise is that some modern technology and service solutions can help drive the same outcomes as the large practices.

OpenTable has taken away the need for restaurants to have their own server and IT staff. Think about the analogy for a small physician’s office. Most small practices don’t have an IT staff and would never be able to sustain a huge system for tracking patient information. I think this model provides some hint about how we might be able to achieve the group-wide outcomes and sophistication of a huge practice.

CHI represents very technologically advanced companies. Yet the healthcare industry is probably 15 years behind other industries on IT. If the industry is to be focused on increasing both efficiency and quality and being able to measure them, let alone improve them , we can’t rely on one-off, ad hoc, retrospective research projects, which is basically how we know what little we do know about the quality of care.

Every other industry has a data and analysis stream that allows them to analyze quality and efficiency in real-time. Take the example of Walmart. Walmart knows more about its customers than most doctors know about their patients. They know what the customer has bought, what they bought last week, what they’re likely to buy next week, and exactly how long it will take the store to restock the shelves with those items. They don’t hire someone to do all that days later. If we’re ever going to have a shot at being able to afford knowing what we’re doing, let alone improving what we’re doing, we have got to have a robust digital data stream that is a part of how the industry is run.

Q: As a physician who specializes in AIDS, do you see advances being made in the diagnosis, treatment and prevention of AIDS in the next 25 years?
A: I used to run the AIDS clinic at Johns Hopkins and I still see patients at the AIDS clinic at San Francisco General, arguably the two best clinical centers for AIDS in the world. I am living proof of how far we’ve come. Ten years ago, if I had a patient with AIDS and a mildly increased blood pressure, I really wasn’t going to sweat the blood pressure. Now I have to be up on PSA tests, colonoscopies, lipids, because I expect my patients to be alive 20, 30, 40 years from now. In recent weeks there has been some really promising news on the first AIDS vaccine. I continue to believe that we have got to work on behavioral changes to halt the spread of HIV, but in the long run, what we need is an AIDS vaccine.

Dr. Smith will be participating in CHI’s California Healthcare Policy Forum on Nov. 5 from 11:30 a.m. to 6 p.m. Click here to register for the event.

CHI-Advancing California biomedical research and innovation

California Healthcare Policy Forum Spotlight: Ian Morrison

In the run up to CHI’s annual California Healthcare Policy Forum, which this year, will take place on Nov. 5 at the Mark Hopkins InterContinental Hotel in San Francisco, I will be interviewing the various opinion leaders we will bring together to discuss California’s innovation economy, its place in the current healthcare debate, and how healthcare reform promises to change the provision of care in years to come. Ian Morrison, internationally known author, consultant, and futurist specializing in long-term forecasting and planning with particular emphasis on healthcare and the changing business environment, will be the moderator of the event and is the subject of my first interview. He combines research and consulting skills with an incisive Scottish wit to help public and private organizations plan their longer-term future and promises to deliver an impactful, interactive session among industry leaders, policy makers and academicians on the future of healthcare in America.

Registrations are still available for the event. Click here for more information.

Q: What will be the focus of this year’s California Healthcare Policy Forum?
A: It’s going to be a very interesting meeting. The focus is going to be on helping attendees get a handle on what healthcare reform means for CHI’s constituents, its members made up of leading biotechnology, medical device, diagnostics, and pharmaceutical companies, and public and private academic biomedical research organizations. Not just where healthcare reform is headed but what this means to innovators in California. On the one hand, healthcare reform is on the front page the New York Times everyday, but it also affects the day-to-day business of CHI’s members. This collection of leaders of industry is going to be able to give their views and my job as moderator will be to draw out those stories in an interactive setting.

Q: What do you feel participants will gain by attending the event?
A: Participants are going to get a cutting edge view of where we are in the debate from people with interesting perspectives on health policy and issues of innovation. On that first panel, we’ll be able to drive toward the “so what” for those in the innovation industry. Dr. David Gollaher, CHI’s president and CEO, will represent CHI members and what they are talking and thinking about. Dr. Alan Garber is a distinguished health policy expert, an economist and physician who specializes in the evaluation of medical technology. Dr. Sharon Levine is a physician at Kaiser, one of the senior leaders there responsible for thinking about public policy and the deployment of new technology so she’ll bring the perspective of what it’s like to be inside a large organization that makes decisions about the use of technology. And Michael Goldberg a leading venture capitalist, will talk about the effects of healthcare reform on the finance industry and ultimately, on the biomedical industry that relies so heavily on this type of investment. The panel will talk about such issues as the use of comparative effectiveness research, potential changes to reimbursement, the fact that more people will likely be covered at lower pricing and the resulting tremendous cost pressures moving forward. This panel will set up the conversations later in the day, which will feature CEOs from leading companies in the various sectors that make up the biomedical industry, giving them an opportunity to focus on what healthcare reform means to them and the various specifics they are concerned about.

Q: How do you see the provision of healthcare changing in the years to come? What part does innovation play in the new paradigm?
A: I’ve been an ongoing observer of the system for 30 years starting off by doing technology assessment. I think the environment going forward is going to challenge medical technology to deliver on the promise. It’s not just about “more is better” or “anything new is good.” That just won’t do in the future. Anything that is new in the future is going to have to demonstrate dramatically superior performance, meeting an unmet medical need where there really is nothing else available. One of the challenges I’ll pose to the group is why is it that in this industry, innovation means more expensive, where in every other industry, innovation means “better, faster, cheaper”? I think getting at the source of that is going to be an important contribution to this meeting.

Q: How must executives change their thinking in order to grow with the changing needs of the American consumer and/or the changing healthcare system?
A: I think executives need to gain clarity on what the goal is. The goal has been to find something novel that physicians can be persuaded to use. The hurdle is going to be much higher now. It’s going to be about delivering value in a much clearer way, relative to existing therapies in quality, outcomes and cost effectiveness.

Q: You mention in your writing the need for consumer education and the popularization of the concepts of how to improve the system in order to improve access and outcomes. How do you propose this to take place?
A: There’s a lot of misinformation. We are stuck in the notion that more is better and denial of anything is always bad. There is a real misunderstanding of how much healthcare costs and why. The basic problem is the average American household can’t afford the average cost of care. Everyone being subsidized by the richest 2 percent of Americans simply won’t work. So part of the collective education of consumers is the understanding that it’s expensive, costs are going up, the component elements of that are partly because of bad behavior on the part of the consumer, partly because of the high cost of care, partly because of the fragmented system providing care, and medical technology is one contributor to overall cost escalation. More judicious use of technology is a direction we’re likely to head in.

Q: What part of the California Healthcare Policy Forum are you most looking forward to?
A: With this event, we’re going to have an opportunity to interact with some decision makers on the public policy side at the state and federal level that are active in medical technology related issues. This is going to be a tremendous chance for people to learn about the “so what” about healthcare reform for people in the innovation industry and I think it will be a discussion not just cheerleading innovation but really drilling down on the challenges and encouraging them to think about how we can evolve to better meet the needs of the American public.

Register now for the California Healthcare Policy Forum.

CHI-Advancing California biomedical research and innovation

Executive Spotlight: Dr. Jonathon Lord, CEO of Navigenics

Dr. Jonathon “Jack” Lord is the CEO of Navigenics, the premier provider of genetics testing. He’s served in the position for about 100 days and in the interview below discusses what sets Navigenics apart from other genetic testing companies, why and when he thinks genetics testing will become the norm and Navigenics’ growth strategy for the next few years. Dr. Lord came to Navigenics from Louisville, Kentucky-based Humana, Inc., where as chief innovation officer he led the development of new products and services to fundamentally transform the healthcare system and support personal health needs. Dr. Lord also led Humana’s international efforts as chief executive of Humana Europe.

Before Humana, Dr. Lord was president of Health Dialog in Boston, where he helped pioneer e-enabled healthcare and promoted shared decision making between doctors and patients. He previously served as chief operating officer of the American Hospital Association in Washington, D.C., executive vice president of Anne Arundel Medical Center in Annapolis, M.D., and executive vice president of Sun Health in Charlotte, NC.

Dr. Lord is a board-certified forensic pathologist with more than three decades of experience in medical practice and leadership. He launched his medical career with the U.S. Navy, where he spent 11 years on active duty and served in leadership positions for the Navy’s Surgeon General and Secretary of the Navy.

He currently serves on the Advisory Board to the Director of the CDC, the National Biosurveillance Committee, and the World Economic Forum’s Global Agenda Council on Chronic Disease and Malnutrition. He is also a director for Stericycle (SRCL) and DexCom (DXCM).

He received his medical degree from the University of Miami in 1978. Dr. Lord has held multiple academic appointments, including Adjunct Professor of Community Medicine at the Dartmouth Medical School.

Q: Tell me about Navigenics, its products and what’s in the pipeline.
A: Navigenics is the premier provider of personalized genetics testing. We test for a number of health conditions such as breast cancer, colon cancer, type 2 diabetes and heart attack. We are developing a product around pharmacogenomics, which will test people for drugs they may respond to or have an adverse reaction to or metabolize slower or faster than others. Our tests are saliva-based and we are able to provide the testing out of our lab in West Sacramento. We feel we are at a really exciting frontier that will change the way healthcare is delivered.

Q: How many people work at Navigenics and how many locations do you have?
A: We employ about 45 people, mostly at our headquarters in Foster City with 10 at our lab in Sacramento.

Q: Which companies do you view as your main competitors and what are your main competitive advantages?
A: Our main competitors are 23andMe, deCODE and Pathways Genomics. We are conservative in qualifying the science that is used to ensure the quality of our tests. Navigenics is primarily focused around working closely with clinicians, testing for diseases and conditions that are actionable, preventable or treatable. We integrate our reports with the physician’s practice and work to educate physicians about personalized genetics and the application of the results to mapping out treatment options for patients. Our other focus is working with large employers like Microsoft, Cisco, Scripps, and large physician groups, like MDVIP, the largest premier medical practice in the United States.

We’re a subscription service providing genetic testing, access to genetic counselors and we store DNA. As we have additional tests and as science changes, we retest DNA and give you updates regarding new conditions and new insights about your health and how you can take action to be healthy.

Q: What changes can we expect in your industry in the coming years?
A: We really feel this whole field is the harbinger of a new era in medicine. The next wave is really about identifying the potential for illness and being in a position to mitigate or prevent illness before it occurs.

Q: What segment of your business do you see as the primary growth driver this year and next?
A: Navigenics’ relationship with large employers, health plans and governments outside the U.S. that are focused on health and well being and developing a focus on understanding that the prevention of illness enables reform in healthcare. Many large employers are self-funded and invest in health and well-being programs for their employees, such as health risk appraisals, and weight reduction and smoking cessation programs. Large employers see the testing we provide as a way to activate interest in existing programs and motivate their employees to change behavior. We work directly with human resources departments and our tests are qualified for flex spending and health savings accounts. We also have the option for payroll deduction.

Q: What is your greatest hope for the technology?
A: My greatest hope is that personalized genetic testing becomes more accessible. We need to work together to expand access to this technology by increasing awareness and highlighting the need for reimbursement. I hope this testing becomes the norm, rather than the exception. We are just at the beginning.

Q: How long until it does become the norm?
A: Right now we’re seeing uptake especially among the high tech and health industries. We see it as a great opportunity for hospitals to bring their own staffs up to date with this technology.

Q: What keeps you up at night?
A: Not much. I’ve never been a worrier. I think there are lots of challenges and it’s really important to be vigilant as opposed to being worried. We have to be rigorous and stay committed to the vision of how this will transform healthcare and behavior for healthier lifestyles.

Q: What do you do to relax?
A: I love to play golf, drink wine and I’ve been doing a little bit of cooking these days.

Q: What’s your favorite thing to cook?
A: This season it’s been heirloom tomatoes. They’ve been so flavorful!

Q: If your house were on fire, what would you grab?
A: My wife, of course!

Q: When you were young, what did you aspire to be as an adult?
A: I am a physician and I think I aspired to that pretty early on. I had this Marcus Welby vision of what a doctor is. It’s been a great pathway for me to do a lot of things. I love the moment I’m in and I keep moving.

Q: Any regrets?
A: No regrets. My focus is in the moment: don’t look back and don’t worry about the future.

Q: What are you reading?
A: I’ve been here about 100 days so have been focused on my work here and haven’t read anything lately, but I do have a pretty eclectic collection of things I read. I look to Facebook and my network of friends to find interesting articles from around the world.

Q: How do you want people remember you?
A: That I made a difference giving people the information they need to be the best they can be.

***Note to readers: Dr. Lord extended the offer to me to take the Navigenics test so I will be blogging in the near future about my experiences with the technology. Don’t forget to check back on the blog for updates.***

CHI-Advancing California biomedical research and innovation

Executive Spotlight: Mickey Urdea, Ph.D., Chairman, CEO and Founder of Tethys Bioscience

Mickey Urdea, Ph.D., co-founder, chairman and CEO of Tethys Bioscience, is a true Renaissance man, with interests not just in improving medical care through early detection and prevention of chronic diseases, but in raising carnivorous plants and learning about classical music. In the early 1980s Urdea was one of the first employees at Chiron where he directed the nucleic acids chemistry group and began the molecular diagnostics efforts. He led the development of quantitative RNA and DNA assays, including the introduction of the first HIV and HCV viral load tests. He became head of the Nucleic Acid Diagnostics business unit at Chiron. In 1998, he joined Bayer Diagnostics as senior vice president of Nucleic Acid Diagnostics and acting-chief scientific officer of Bayer Diagnostics. He left Bayer in 2000 and co-founded Tethys Bioscience in 2002. Urdea received his doctorate in biochemistry at Washington State University and held a National Institutes of Health postdoctoral fellowship at the University of California San Francisco with William J. Rutter. He has published more than 185 articles and book chapters, and is an inventor on more than 100 issued and pending patents.

Q: Where will your patients be in five years? How many will have diabetes? Tell me about this statement, which appears on Tethys’ homepage.
A: The dilemma that we try to deal with at Tethys is the fact that in chronic diseases, we know there are people that are at risk, but we don’t have a good tool for determining which portion of the population actually has the highest risk. Our belief is that if we look at the biology of the diseases carefully, we’re likely to find that a small portion of the population harbors most of the risk. The doctor’s dilemma is that he has this room of people who are at a somewhat elevated risk, but not a very high risk and what does he do? What we’re doing is taking that large population of individuals and paring it down to three groups—a high-risk group, a moderate-risk group and an low-risk group. In fact, the high-risk group, which is about 10 percent of the population, does harbor most of the risk where we see about a 500 percent increased risk versus the pretest probability. So there are really big differences in risk in different parts of the population. Now, what the doctor can do is focus his efforts on those individuals that have the highest risk.

Q: Tell me about Tethys’ products and what’s in the pipeline. How does the test work?
A: The PreDx Diabetes Risk Score is a simple blood test using blood samples that ship to our laboratory here in Emeryville. The test is performed using standard amino assay analyzers. The turnaround time is about 72 hours. Our whole idea was that if we take a look at proteins and lipids in blood, that should reflect the biological changes that are occurring very early on in chronic disease, making prevention possible. Genetics has not been as useful, at least so far. In some diseases, of course, genetics is useful, but in chronic diseases, we find so many different genetic variants that will lead to basically the same phenotype. So what we’re looking at, I think, is something much closer to the actual phenotype based on the protein and lipid biology. Those changes are occurring early in the disease state.

The other two products we have are still in R&D. One will be used for predicting primary myocardial infarction with a five-year risk score using both proteins and lipids in blood. The other one is for osteroporotic fractures; specifically, we’re looking at hip fractures and vertebral fractures in postmenopausal women. Our major interest there is in the so-called pre-osteoporotic or osteopenic woman where most of the fractures occur. Our initial studies indicate that we’re getting very good predictability in that population.

Q: Why do we need this test? It’s been written about as a “tool to change fate,” which may save upwards of tens of thousands of dollars per patient. How is that?

A: The way we approach the markets in which we work is that we do the health economic studies first to determine whether the test would be cost-effective or preferably cost-saving. Most recently we conducted a diabetes study with Shawn Sullivan at University of Washington and we presented a paper at the American Diabetes Association meeting this past June. We will be publishing the results fairly soon. What we were able to show is that the test is initially cost-effective and with time becomes cost-saving relative to the standards of an approach using fasting glucose alone, where it is not cost-effective. I can’t think of a more potentially cost-saving thing to do than to prevent chronic diseases where we spend most of our healthcare dollars.

Q: How many people work at Tethys and how many locations do you have?

A: We have 85 people working at two major locations; one here in Emeryville and the second in West Sacramento. Last year, we acquired a company called Lipomics Technologies and that was the site of their headquarters. We’ve kept them there.

Q: Which companies do you view as your main competitors and what are your main competitive advantages?
A: Right now I would say probably Metabolon and BG Medicine. They are the ones that have said they’re working on similar tests. We’re much further along than I believe they are at this point. A lot of companies are working on so-called insulin-resistance assays, but what we are doing is quite different. We’ve been working in this for nearly four years now and have generated considerable intellectual property. I think we’ve done a very good job hiring a group of veterans of the diagnostics industry who have created markets before. We’ve done a very thorough job in the clinical studies. We’ve worked with a large number of thought leaders to make sure that we’re doing it right, that this is what people need and that the science is strong.

Q: What types of partnerships do you seek out?
A: Primarily, partners in manufacturing the diagnostic kits that we’re using. We look for partnerships with the large commercial reference laboratories. We look for partnerships with diabetes nurse educators. We look for partnerships with people in integrated healthcare systems, employers, all those people who have a specific interest in the development and delivery of diagnostic tests for prevention.

Q: What changes can we expect in your industry in the coming years?

A: Well, what we want to see happen, and we’re working very hard on it, is that people start recognizing that prevention is so important that they start reimbursing people for education, for the tests, that the FDA approves the products, that prevention becomes the most important thing that we’re doing. Sen. Daschle has been quoted saying, “we need to make prevention hot and wellness cool.” I love it.

Q: What do you hear from customers about your products?
A: That it’s made a big change in their practice. We’ve had a few doctors tell us that they drive home at night feeling better because they’re making a difference with people. They’ve had this dilemma of having all these people at low risk for so long and now being able to tell someone they’re actually at a much higher risk than they realize and they need to do something about it is very helpful. They’re seeing their patients lose weight and asking to get into wellness programs. The patients are being more careful about diet, exercise and blood pressure—all the things that they should be worrying about, but didn’t. People just need to understand that the risk is higher than they realize and there is something they can do about it.

Q: What keeps you up at night?
A: Trying to get into the market as fast as we can. I feel as though we have proven the clinical utility of this product. My biggest concern is having enough money to get to profitability.

Q: What do you do to relax?
A: I work out religiously at least six times a week. I raise carnivorous plants believe it or not. I have two greenhouses at home and I own part of a nursery.

Q: If your house were on fire, what would you grab?
A: Besides my wife and son, probably my computer.

Q: When you were young, what did you aspire to be as an adult?
A: I wanted to be a scientist ever since I was a kid. I took a science course when I was 12 years old, a summer course, and it just totally turned me on. I remember the teacher, Mr. Stark. He took us on nature walks; we did experiments; we talked about astronomy—all the stuff that I had never been exposed to.

Q: What are you reading?
A: I’m reading a book, “1491”, by Charles Mann, about the New World before Columbus. I’m reading “Winesburg, Ohio” by Sherwood Anderson, and then I’m taking a course on “The Chamber Music of Mozart” by Robert Greenberg from The Teaching Company.

Q: How do you want people remember you?
A: That I never made the same mistake twice.

CHI-Advancing California biomedical research and innovation

Executive Spotlight: David Levison, Founder, CEO and Director of CardioDx

CardioDx is a personalized medicine company that develops and commercializes genetic based cardiac diagnostic tests. The company is currently developing several molecular diagnostics that will help physicians determine appropriate treatment for cardiovascular patients. CardioDx is using both genetics and genomics technologies to develop these unique diagnostic products. David Levison, the founder, CEO and director, who was previously a venture capitalist and CEO of a couple of start ups, including XDx and iScribe, talked with me about what it's like to run a start-up, how CardioDx is seeking a competitive edge in the cardiovascular testing market and how he thinks diagnostics might hold the key for more efficiently spending our healthcare dollars.

Q: Tell me about CardioDx, its products and what’s in the pipeline.
A: CardioDx is a four-year old genomic diagnostics company focused exclusively on cardiovascular disease. In June of this year, we launched our first product, Corus CAD, which is a gene expression test to aid in the assessment of obstructive coronary artery disease. This test is designed to help physicians identify which patients with chest pain are likely to have enough plaque in their coronary arteries that it is obstructing blood flow to their heart. This first test is intended for non-diabetics, but we are working on a product version for diabetic patients. We’re also working on prognostic applications of this product—so, say a patient’s score goes up over time, we’re looking at what that may mean in terms of disease progression. Additionally, we’re looking at multiple technology modalities; this first test is based on the expression of certain genes, but there could be applications for proteomics and/or genetics as well. In addition, CardioDx has an ongoing prospective clinical trial in arrhythmia and sudden cardiac arrest risk stratification to identify patients who would be good candidates for receiving implantable cardioverter defibrillators, or ICDs. Right now clinicians have suboptimal diagnostic tools to determine who would be ideal recipients for these sophisticated therapy devices. In fact, studies have indicated that a majority of these devices implanted in patients may never need to deliver therapy, or “fire”.

Q: How does the Corus CAD test work?
A: It’s a gene expression test that measures how the activity of certain genes in peripheral blood reflects the state of disease in the coronary arteries. It’s a central lab test (CLIA), so a blood sample is drawn by a clinician in an office or lab and shipped overnight to our lab in Palo Alto. The results, in the form of a score, which correlates to the probability that the patient has obstructive coronary disease, are sent to the clinician within two days. Clinicians should use the Corus CAD test results in conjunction with other tests in their patient assessment, and our U.S. clinical trial (PREDICT) results indicate that a low patient score reflects a low probability that obstructive coronary disease exists. And finally, Corus CAD provides a safe, noninvasive, and less restrictive means of assessing obstructive coronary disease without patient exposure to radiation or imaging agents, which many patients do not tolerate well—we think that’s pretty important, too.

Q: How is this condition currently diagnosed?
A: Currently, obstructive coronary artery disease is being assessed in numerous and varying ways: clinicians consider a patient’s personal or family history of cardiovascular disease, the type of chest pain they’re having, and numerous other clinical variables that impact the likelihood a given patient has coronary artery disease. Many times noninvasive imaging modalities are utilized, such as echocardiography or myocardial nuclear perfusion. These procedures are not entirely benign for all patients, and they are costly and time-consuming.

Q: How many people work at CardioDx and how many locations do you have?
A: We have about 70 people working in research and development, clinical and regulatory, sales and marketing, our commercial CLIA lab, and operational administration roles. Our primary location is in Palo Alto, but others are spread throughout the country working on our clinical trials and commercializing Corus CAD in our initial sales territories.

Q: Which companies do you view as your main competitors and what are your main competitive advantages?
A: Well, our competitors can also be our greatest collaborators. Certainly we would count the large labs like Quest and LabCorp, both of whom have product menus into which we would strategically fit. We’ve also been monitoring how successful Celera has been in terms of its introduction of the Berkeley HeartLab product line. We are unique in terms of our genomic diagnostics focus on cardiovascular disease, but there are certainly other companies out there that also serve cardiologists. I believe our product development cycle is a key differentiator for CardioDx—because we spend a tremendous amount of time to understand what clinicians need day to day, and we create detailed product specifications before investing heavily on R&D. We’ve also created competitive advantage through a multifaceted team of people from the device, pharmaceutical and diagnostic worlds with extensive experience in cardiovascular product commercialization. Lastly, we have proven our ability to drive multicenter, prospective clinical trials like PREDICT and DISCERN, which is our arrhythmia trial. Developing a product like Corus CAD requires that you rigorously control large, well annotated patient sample collections and the clinical data collection associated with them. It’s an expensive and time-consuming undertaking, but you must have high quality data in order to develop high quality products.

Q: What changes can we expect in your industry in the coming years?
A: The last 20 years have seen tremendous progress in the development of effective new drugs and medical devices to treat a wide variety of diseases. The diagnostics tools that are necessary to determine which patients should receive these new therapies have not kept pace with the new drugs and devices. As an industry, we must now apply the same rigor to the development of diagnostics that can appropriately direct these new technologies to the patients who need them. Right now it seems the diagnostics world is playing catch-up to the therapeutic world, and there appears to be a real disconnect—for example, only 3 percent of healthcare dollars are spent on diagnostics, but that cost drives another 70 percent of the cost of healthcare. There’s a tremendous opportunity to improve diagnostics to more efficiently deploy our therapeutic dollars, and we believe that genomics has given us an incredible tool with which to do this. I expect that the diagnostics industry will be a key component to improving the delivery of healthcare.

Q: What segment of your business do you see as the primary growth driver this year and next?
A: Corus CAD and its follow-on products will be the key drivers for CardioDx over the next couple of years.

Q: What do you hear from your customers about your products?
A: Both cardiologists and primary care physicians tell us that their traditional tools don’t allow them to do as good a job with assessing coronary artery disease as they’d like. Physicians looking for a new way to assess their patients with chest pain are embracing Corus CAD—they understand that the new era of genomics has brought them unique, objective biological insight that adds to their clinical capabilities today. As far as patients are concerned, the idea of a convenient blood-based test that assesses their coronary disease likelihood without radiation exposure strongly resonates. Payers love the idea of more efficiently directing the right patients into the healthcare system to ensure they get the procedures they need.

Q: What keeps you up at night?
A: Besides my five children aged 7 to 17…I ask myself if we are doing all we can to develop these tests and get them to the market as soon as possible. We’ve launched in only nine states. We wanted to be sure we knew how physicians were going to integrate the test into practice and make sure we have all the tools in place for them before launching nationwide.

Q: What do you do to relax?
A: I spend as much time with my wife and kids as possible. Relaxation isn’t always the first word that comes to mind.

Q: If your house were on fire, what would you grab?
A: The hard drive with all the family photos.

Q: When you were young, what did you aspire to be as an adult?
A: I always thought that being involved in small companies would be fun. My early career experience is actually more in information technology, but I’m delighted that I’ve moved to the healthcare side. It’s so gratifying to do well and do good at the same time.

Q: Do you have any regrets?
A: Not as relates to CardioDx. One of the real advantages is learning from those who’ve come before us. We’ve been able to learn from the mistakes and successes of other molecular diagnostic companies. We’ve certainly made our own mistakes, but we try to learn from them and not make the same mistakes over again.

Q: How do you want people to remember you?
A: I think I’m most proud of meeting the challenges of building companies that improve the lives of patients every day.

CHI-Advancing California biomedical research and innovation

Executive Spotlight: Ed Manicka, President, CEO of Corventis

Executive Spotlight: Ed Manicka, President, CEO of Corventis
Corventis launched its AVIVO Mobile Patient Management System in April of this year. CEO Ed Manicka was brought on at Corventis after working at Guidant Corp. and Boston Scientific Corp. and believes its cardiac monitor, the size of a bandage, has the potential to reduce treatment and hospitalization costs in combating one of the nation’s most expensive ailments—heart disease.

Q: How do you feel wireless technologies such as yours will contribute to improving healthcare?
A: Even though Corventis is in the genre of wireless healthcare, there’s a lot more to this company than just that. I view wireless technology as an enabler of something much bigger going on in medicine right now. If you think about how medicine is practiced now, a physician calls upon knowledge gained in medical school and in his years of practicing medicine and makes a judgment call. A lot of that can actually be automated.

What we are trying to do is allow a physician to manage the routine care of patients through computers, which can do what no physician can do, and that’s watch a patient 24/7. This technology allows the physician to focus on those patients who truly do need that care. The patient ultimately gets better care and the physician is more efficient at no cost to the system.

We have engineered a solution for heart failure first, the number one most expensive problem for Americans, a huge burden on taxpayer dollars. This paradigm shift in patient management offers physicians a way to focus on those few patients who need immediate care and to detect those whose status may be degrading and need some preventive care to avoid readmission.

The device, called PiiX, looks like a bandage and measures various cardiac parameters–it’s completely waterproof and lasts for a week. It easily blends into the lifestyle of the patient and transfers data back to the caregiver in real time, 24/7. The product received FDA approval four months ago and should be available widely in the U.S. starting in October.

Q: What is the largest hurdle this new technology faces?
A: Everyone wants better care at a lower cost—to do more with less. The only way to do that is with new technology—a technology shock to the system. As long as you follow the logic of how physicians adopt new technology, and that’s with sound proof, like what we are doing with Dr. Topol at the West Wireless Health Institute, there shouldn’t be a barrier to adoption. We are setting out to prove a hypothesis that we can change the way patients are managed.

Q: Are there other applications for the technology?
A: Within cardiology I think there are a lot of potential applications, with heart attack, or acute myocardial infarction (AMI), for instance. This is a very expensive and complex problem for society. The use of this technology may enable physicians to understand when a heart attack is going to come and either prepare the patient or prepare the medical facility to provide proper care. This technology could also have applications for cardiac arrest and stroke.

Q: What keeps you up at night?
A: As with any startup, Corventis keeps me up at night! We’re trying to get a lot of work done with limited resources. The environment for funding right now is risk-averse so when we’re out there trying to get funding there’s a lot of work to get someone to write a check. We have to make sure this technology gets backing.

Q: What do you do to relax?
A: I work out a lot, I also play chess and read.

Q: If your house were on fire, what would you grab?
A: Videos of my kids when they were babies – they’re eight and seven now.

Q: When you were young, what did you aspire to be as an adult?
A: I always thought that I would be an engineer/scientist and that’s where I started my career. I thought it might be better for me to be a physician, but I know enough about cardiology where I can hold conversations with leading cardiologists. I learned all that in the course of my career, though. I’ve been able to marry my engineering and scientific background with business and that is a good outcome for me.

Q: How do you want people remember you?
A: If I can help create this shift in medical care to computational medicine, that would be a very nice legacy for me.

CHI-Advancing California biomedical research and innovation

Executive Spotlight: Melinda Richter, Executive Director, San Jose BioCenter

Recently I had the chance to meet Melinda Richter, the executive director of the San Jose BioCenter, co-founder and director of the University of California at Berkeley’s BioExec Program, co-founded and director of InnovateMD. Richter currently sits on the governing board of the National Business Incubation Association and the boards of University of California Berkeley’s Haas School of Business BioExecutive Institute and San Jose State University’s Masters of Biotechnology Program. Read below to learn more about her work at the San Jose BioCenter and why their model of innovation should be replicated to bring cures and therapies to the patients who need them most.

Q: What does the San Jose BioCenter offer?
A: The BioCenter was created in 2004 to fill a need—small companies provided opportunities to fill the gap in large companies’ pipelines, but these small companies were failing because they didn’t have the resources like large companies had to prove out their technologies. The BioCenter model provides big company infrastructure, such as specialized facilities, capital, equipment, laboratory and business staff, for small companies. The BioCenter is a 40,000 sq. ft. facility with half of that space devoted to common research and business areas that we manage for our clients. The other half is comprised of self-contained individual wet-lab suites ranging from 300 to 5,000 sq. ft. From the time a company comes in to the BioCenter, we set up and manage the day-to-day operations of a typical biotech company, from managing hazmat handling/training, permits and regulatory support to providing bulk discounts, legal advice and other support services. We’ve created a very efficient model of innovation that allows small companies to prove out their science quickly and efficiently, cutting down on up-front capital costs and minimizing the risk of operations.

Q: Do you believe your model could be replicated in other regions?
A: Absolutely. Venture capital firms like to work with us because the first half of their investment usually goes to setting up the infrastructure, buying up equipment, signing leases and ramping up the operations. In our model, the venture capitalist can either choose to put all that money directly toward research or limit their up front investment until the company reaches critical milestones that increases their probability of success.

Q: What has been the greatest achievement of the center to date?
A: We have recently won two international awards for the BioCenter as a novel yet efficient, common sense model for innovation. We were able to create the model by listening to our market: the small companies, the big companies, the VCs. Because of that, we were able to create the type of infrastructure to help our companies fulfill their potential. For example, Tacere Therapeutics came in with very little money and a year after entering the BioCenter, they signed a $145 million deal with Pfizer and a $60 million deal with Oncolyst. Many innovators come in with little and suddenly they become mature, stable biotechs focused on the research. In fact, we’ve been 100 percent occupied with a wait list for the past three years.

Q: Which types of collaborations do you seek?
A: The number one collaboration for the BioCenter is with what I call the “buyer.” In this market there is no such thing as an IPO. There are only mergers and acquisitions, partnerships, and licensing or development deals coming from big biopharma. The big companies ultimately are going to benefit from the research being done here so we spend a lot of time getting to know them, finding out what their strategic needs are, what they need to fill their pipeline, etc. Collaborations in other areas include service providers and industry organizations. We are very focused on establishing the right partnerships to help our member companies succeed.

Q: What do you see as the biggest threat or challenge to biomedical innovation?
A: Lack of early-stage capital. Many great companies with exciting technology will be paralyzed without capital. That being said, I think better companies will rise to the top, but many with potential will disappear. We may see the effects of this in a few years, when we won’t see as much innovation being commercialized.

Q: What keeps you up at night?
A: I think we’ve hit upon a model that changes the probability of success of innovation but I don’t think we’re replicating it enough. It’s the only way to make the process of innovation faster, less expensive, less risky, and more likely to succeed. This model allows for more innovations in the pipeline; for companies to prove out their technology faster and to bet on the things that win.

Q: As a child, what did you aspire to be as an adult?
A: I actually wanted to be a foreign correspondent. I wanted to live around the world and report the “real stories,” the politics behind the story. My dad and my grandparents escaped from Prague during World War II. As a kid, my dad always said to us, “I don’t blame Hitler. I blame everyone else who sat around and watched…who didn’t take the time to get educated on what was going on. So your job in life is to be educated on what’s going on in the world.” So I started in journalism in college and loved the intellectual cultivation, but I also grew up in a very poor family and so I wanted to make money as well…I learned that wasn’t in the cards for a foreign correspondent, so I transferred to business and lived all over the world with Corporate America.

Q: Any regrets?
A: I have lived in many countries and I’m glad I experienced so many different cultures. Then, I nearly died when I lived in China…and that changed my life. I loved that I had the courage to explore and to live life. But after that experience, I knew it was time to give back…to bring my talents to the field of life sciences to help people who may not be as lucky as I was to walk out alive. I know I could be more effective in the field if I had a science background. I work with “street science” right now…kind of fun but I wish I had more to bring to the table.

Q: How do you want people to remember you?
A: In the first part of my life, I had a motto: Live always, always. And I did that. I explored life. Now in the second half of my life, I want to take the things I have learned and did well and put them to good use. I want to make a difference in this industry. I want to say that because we created this new model, more companies have brought technologies and cures to market so more people have access to life-saving technologies.

Q: What are you currently reading?
A: Well, this is going to sound odd. I’m reading a book called Flyte because I have a book club with my nine-year old godson. He gives me books to read and then we get together and talk about them…I’m trying to keep him interested in reading. It certainly isn’t War and Peace, but it certainly is meaningful for the two of us.

CHI-Advancing California biomedical research and innovation

Executive Spotlight: Pierre Cassigneul, President & CEO, XDx

Pierre Cassigneul has been the CEO of new CHI member, XDx, since 2003. Prior to this he was a partner with the consulting firm, Stone Bridge. Formerly he was at BD as vice president diabetes management, where he led the company's efforts in entering the blood glucose monitoring market. Cassigneul also worked at Bayer where he was senior vice president and general manager of the diabetes business unit, at Ortho (J&J) where he was vice president and general manager of the AIDS and hepatitis business unit, and at Abbott where he held several U.S. and European general management and marketing positions. Cassigneul has a management degree from the ESC Reims.

Q: What changes can we expect in your industry in the coming years?
A: I think the biggest change is the advent of personalized medicine—finding the right medication for the right patient at the right time. Diagnostics companies in particular will take a prominent role in making that happen. The innovations on the horizon are promising to improve quality and lower cost of healthcare. Personalized medicine is helping physicians intervene earlier, keep patients healthier, rather than waiting until they are really sick to prevent and treat illnesses.

Q: What segment of your business do you see as the primary growth driver this year and next?
A: We focus exclusively on the autoimmune diseases and conditions, which include rheumatoid arthritis, Crohn’s disease, lupus, and organ transplantation. Cancer is what attracts a lot of attention as far as personalized medicine, but immune system related conditions will continue to attract focus. If you look at the prevalence, The Lupus Foundation of America announced recently that 1.5 million people are affected by lupus, but unfortunately, no new drugs have been approved for that in 50 years.

We currently have one product on the market—Allomap. This is a blood test designed to aid in the assessment of rejection in heart transplant patients. This testing is currently adopted by about half the transplant centers in the U.S.

Q: Tell us about your latest research.
A: Lupus is our main area of research currently. The first program we have is a test we are developing on our own, a flare predictor, which will tell patients and physicians when the patient is about to flare. This is important because once a patient experiences a severe flare the person is subjected to constant doses of immunosuppressant therapy in hopes of avoiding future flares. This medication has a lot of dangerous side effects. So having a flare predictor will have two benefits: it will allow physicians to lower the dosage of therapy or eliminate it altogether when it’s not necessary, and increase it when they know there is an impending flare, to either eliminate the flare, or enable a less severe flare. In the most severe cases of lupus, which affect the patient’s kidney, the drugs used to treat that actually cause kidney toxicity, so allowing patients and physicians to manage that much more efficiently will result in better outcomes.

The second program we are working on is a collaboration with Bristol-Myers Squibb. They have a drug for rheumatoid arthritis called Orencia. They are trying to develop it now for lupus and we are developing biomarkers to target lupus patients who will be good responders for Orencia.

Q: Which companies do you view as your main competitors and what are your main competitive advantages?
A: No other company has a test like this on the market. The competitive advantages of AlloMap include providing transplant facilities with a non-invasive tool that provides personalized molecular information to aid the physician in the overall management of acute cellular rejection.
To date, all other procedures in use by physicians in assessing rejection are invasive and have side effects. An example of this is endomyocardial biopsy. Endomyocardial biopsy is invasive, provides only a histological assessment of rejection and has documented side effects.

What we now offer is a new piece of information for the physician that adds to their existing arsenal of tools. Providing a noninvasive blood test, which is highly accurate and provides the physician with new molecular information in the management of their patients moves medicine closer to a truly personalized nature.

Q: What do you hear from your customers about your products?
A: Patients love us because they can get a highly-accurate blood test that provides physician with unique information. Physicians, once they get used to using the test and see that this gives them very high certainty of absence of rejection, really like us. Payers like us because our test is much more cost-efficient than biopsy—our test costs $3,000.

Q: What keeps you up at night?
A: As a small business owner (XDx has 87 employees), a lot of things keep me up at night! The first thing is to make sure we become viable, the race to start making profits. The second is our studies that are ongoing—will they go the right way?

Q: What do you do to relax?
A: I’m a private pilot so I like to fly single engine aircraft.

Q: If your house were on fire, what would you grab?
A: You know, I have friend who was working at Abbott at the time and he had been on assignment in Tokyo—he came back and had all his belongings in a storage container that was stolen from the harbor in Miami. The one thing he said he missed most was the family photos. So I’ve taken all our photos and saved them to a portable hard drive that can fit in a shirt pocket and that’s the one thing, assuming my family is safe, that I would grab. Furniture you can replace but photos are irreplaceable.

Q: When you were young, what did you aspire to be as an adult?
A: I wanted to be a pilot—I was hoping to be a fighter pilot! I kept that in my heart and when we finished raising our kids, I became the pilot I am now.

Q: What are you reading?
A: I’m reading For Liberty and Glory: Washington, Lafayette, and Their Revolutions by James Gaines. The author is an American journalist who lives in Paris and he’s writing about their unlikely friendship and their roles in the revolutions in their respective nations.

Q: How do you want people remember you?
A: I want everyone to remember me as a gentleman.

Policy Spotlight: Commission on the 21st Century Economy

The Commission on the 21^st Century Economy met on Tuesday, June 16 at the University of California, Los Angeles to review a handful of proposals for revamping California’s tax structure. The Commission, established by an executive order of Gov. Arnold Schwarzenegger last year, has several objectives tasked to it for reforming California's budgeting and revenue structure, including:

• Establishing a 21^st century tax structure that fits with the state's 21^st century economy;
• Stabilizing state revenues and reduce volatility;
• Promoting the long-term economic prosperity of the state and its citizens;
• Improving California's ability to successfully compete with other states and nations for jobs and investments;
• Reflecting principles of sound tax policy including simplicity, competitiveness, efficiency, predictability, stability, and ease of compliance and administration;
• Ensuring that tax structure is fair and equitable.

Comprised of business leaders, former legislators, and other public officials, the Commission is required to submit a proposal to the governor and the Legislature no later than July 31, 2009. I attended the hearing in Los Angeles and composed a detailed report for CHI’s membership, which you can view here. The Commission has one final meeting on July 16, in San Francisco, before their proposal is due.

At the meeting in Los Angeles, the discussion focused on replacing more volatile parts of California's revenue stream (progressive personal income taxes, capital gains taxes, and sales taxes) with a business receipts tax. Such a tax would envelope services provided in the state, which currently are not taxed, and would lead to a tax structure that while more stable would be inherently more regressive. States such as Ohio, Texas, Michigan, and New Hampshire have all implemented this type of system with varying levels of success. The regressive nature of the proposal, however, may prove to be the Commission's Achilles' Heel—budget proposals are unable to reach the 2/3 vote required for passage, and the Commission's proposal will face a Sisyphean task of surmounting the 2/3 requirement to establish a more regressive tax structure during the largest recession since the 1930's with a Democratic Legislature.

CHI will be attending the final meeting of the Commission next month at the University of California, San Francisco. If you have thoughts about the Commission or its proposals that you would like to share, please contact me at 916-233-3490 or engelhardt@chi.org.

CHI-Advancing California biomedical research and innovation