[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]


 
                   21ST CENTURY TECHNOLOGY FOR 21ST CENTURY 
                              CURES

=======================================================================

                             JOINT HEARING

                               BEFORE THE

             SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                AND THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 17, 2014

                               __________

                           Serial No. 113-162
                           
                           
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky               FRANK PALLONE, Jr., New Jersey
JOHN SHIMKUS, Illinois               BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania        ANNA G. ESHOO, California
GREG WALDEN, Oregon                  ELIOT L. ENGEL, New York
LEE TERRY, Nebraska                  GENE GREEN, Texas
MIKE ROGERS, Michigan                DIANA DeGETTE, Colorado
TIM MURPHY, Pennsylvania             LOIS CAPPS, California
MICHAEL C. BURGESS, Texas            MICHAEL F. DOYLE, Pennsylvania
MARSHA BLACKBURN, Tennessee          JANICE D. SCHAKOWSKY, Illinois
  Vice Chairman                      JIM MATHESON, Utah
PHIL GINGREY, Georgia                G.K. BUTTERFIELD, North Carolina
STEVE SCALISE, Louisiana             JOHN BARROW, Georgia
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   DONNA M. CHRISTENSEN, Virgin 
GREGG HARPER, Mississippi            Islands
LEONARD LANCE, New Jersey            KATHY CASTOR, Florida
BILL CASSIDY, Louisiana              JOHN P. SARBANES, Maryland
BRETT GUTHRIE, Kentucky              JERRY McNERNEY, California
PETE OLSON, Texas                    BRUCE L. BRALEY, Iowa
DAVID B. McKINLEY, West Virginia     PETER WELCH, Vermont
CORY GARDNER, Colorado               BEN RAY LUJAN, New Mexico
MIKE POMPEO, Kansas                  PAUL TONKO, New York
ADAM KINZINGER, Illinois             JOHN A. YARMUTH, Kentucky
H. MORGAN GRIFFITH, Virginia
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Ohio
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina

                                  (ii)
             Subcommittee on Communications and Technology

                          GREG WALDEN, Oregon
                                 Chairman
ROBERT E. LATTA, Ohio                ANNA G. ESHOO, California
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               MICHAEL F. DOYLE, Pennsylvania
LEE TERRY, Nebraska                  DORIS O. MATSUI, California
MIKE ROGERS, Michigan                BRUCE L. BRALEY, Iowa
MARSHA BLACKBURN, Tennessee          PETER WELCH, Vermont
STEVE SCALISE, Louisiana             BEN RAY LUJAN, New Mexico
LEONARD LANCE, New Jersey            JOHN D. DINGELL, Michigan
BRETT GUTHRIE, Kentucky              FRANK PALLONE, Jr., New Jersey
CORY GARDNER, Colorado               BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas                  DIANA DeGETTE, Colorado
ADAM KINZINGER, Illinois             JIM MATHESON, Utah
BILLY LONG, Missouri                 G.K. BUTTERFIELD, North Carolina
RENEE L. ELLMERS, North Carolina     HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)
                                 ------                                

                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          JIM MATHESON, Utah
PHIL GINGREY, Georgia                GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey            JOHN BARROW, Georgia
BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin 
BRETT GUTHRIE, Kentucky                  Islands
H. MORGAN GRIFFITH, Virginia         KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida            JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina     HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     1
    Prepared statement...........................................     3
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     3
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     5
    Prepared statement...........................................     5
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     9
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................    10
    Prepared statement...........................................    11
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................    11

                               Witnesses

Dave Vockell, Chief Executive Officer, Lyfechannel, Inc..........    12
    Prepared statement...........................................    15
    Answers to submitted questions \1\...........................    94
Dan Riskin, Founder, Health Fidelity.............................    21
    Prepared statement...........................................    23
    Answers to submitted questions...............................    95
Paul Misener, Vice President, Global Public Policy, Amazon.......    29
    Prepared statement...........................................    31
    Answers to submitted questions...............................   109
Robert Jarrin, Senior Director, Government Affairs, Qualcomm 
  Incorporated...................................................    40
    Prepared statement...........................................    42
    Answers to submitted questions...............................   114
Jonathan M. Niloff, Vice President and Chief Medical Officer, 
  McKesson Connected Care & Analytics............................    56
    Prepared statement...........................................    58
    Answers to submitted questions...............................   120

                           Submitted Material

Letter of July 16, 2014, from Grant Seiffert, President, 
  Telecommunications Industry Association, to subcommittee 
  leadership, submitted by Mr. Pitts.............................     7
Article of June 17, 2014, ``Coalition Calls for Action Against 
  EHRs That Block Interoperability,'' iHealthBeat, submitted by 
  Mr. Gingrey....................................................    78

----------
\1\ Mr. Vockell did not answer submitted questions for the record by 
the time of printing.


             21ST CENTURY TECHNOLOGY FOR 21ST CENTURY CURES

                              ----------                              


                        THURSDAY, JULY 17, 2014

                  House of Representatives,
     Subcommittee on Communications and Technology,
                             joint with the
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittees met, pursuant to notice, at 9:33 a.m., in 
room 2123, Rayburn House Office Building, Hon. Greg Walden 
(chairman of the subcommittee of Communications and Technology) 
presiding.
    Members present: Representatives Walden, Upton, Barton, 
Shimkus, Pitts, Terry, Burgess, Blackburn, Gingrey, Scalise, 
Latta, Lance, Cassidy, Guthrie, Gardner, Kinzinger, Griffith, 
Bilirakis, Long, Ellmers, Waxman, Pallone, Eshoo, Green, 
DeGette, Butterfield, Barrow, Matsui, and Braley.
    Staff present: Clay Alspach, Chief Counsel, Health; Gary 
Andres, Staff Director; Ray Baum, Senior Policy Advisor/
Director of Coalitions; Sean Bonyun, Communications Director; 
Matt Bravo, Professional Staff Member; Leighton Brown, Press 
Assistant; Noelle Clemente, Press Secretary; Andy Duberstein, 
Deputy Press Secretary; Paul Edattel, Professional Staff 
Member, Health; Gene Fullano, FCC Detailee; Kelsey Guyselman, 
Counsel, Communications and Technology; Sydne Harwick, 
Legislative Clerk; Robert Horne, Professional Staff Member, 
Health; Grace Koh, Counsel, Communications and Technology; 
Carly McWilliams, Professional Staff Member, Health; David 
Redl, Chief Counsel, Communications and Technology; Charlotte 
Savercool, Executive Assistant, Legislative Clerk; Heidi 
Stirrup, Policy Coordinator, Health; John Stone, Counsel, 
Health; Jean Woodrow, Director of Information Technology; Ziky 
Ababiya, Democratic Staff Assistant; Eric Flamm, Democratic FDA 
Detailee; Karen Lightfoot, Democratic Communications Director 
and Senior Policy Advisor; Margaret McCarthy, Democratic 
Professional Staff Member; Rachel Sher, Democratic Senior 
Counsel; Matt Siegler, Democratic Counsel; and Ryan Skukowski, 
Democratic Policy Analyst.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. We are going to call the hearing to order. 
Thank you all for being here this morning. Good morning and 
welcome. Today, the Subcommittee on Communications and 
Technology and Subcommittee on Health joint hearing on the 
``21st Century Technologies for 21st Century Cures.'' I would 
like to thank all of our witnesses for testifying today. Your 
testimony is extraordinary and most helpful in our endeavors.
    When Chairman Upton and I announced that we would begin the 
process in updating the Communications Act, we knew it would be 
a difficult but much-needed process. So I am pleased today to 
be joining the Communications Act update with another important 
Energy and Commerce Committee initiative, 21st century cures, 
the communications and technology sectors that are an enormous 
boost to our Nation's struggling economy due in part to the 
high investment and innovation in wireless technology and other 
devices.
    As we craft the legislation to update our laws, it is 
essential to hear from a wide variety of people who are on the 
front lines of developing and using these types of technologies 
in all spaces. Their unique viewpoints and expertise will help 
inform our consideration as we move forward, as well as 
underscore exactly why we have undertaken these challenging 
efforts to revamp existing laws.
    It makes sense to unite these two initiatives, as they are 
both critically important not only to industries that are 
crucial to the economy, but also for every person here. This is 
an opportunity to recognize the benefits wireless smartphones 
and devices can provide to improve an individual's health and 
the healthcare community.
    We have seen examples of this intersection already from 
wearable devices that track activity, to the use of mobile apps 
reminding users of their individual health needs, to a 
patient's ability to easily and remotely communicate with their 
doctor through a telehealth device. The growth in this area has 
been remarkable. There is a technological revolution happening 
in the healthcare space.
    In the communications and technology world, there has been 
a good deal of focus on the so-called virtuous cycle of 
technology; that is, the investment in devices and networks 
creates opportunities for app developers to create new and 
innovative uses for these devices, driving demand for 
consumers, which then spurs further investment. The healthcare 
technology field the perfect setting for this engine of 
invention and development.
    As healthcare technologies proliferate, patients, doctors 
and researchers will realize the potential for the technology, 
and as a result, demand will increase. Increased demand means 
even greater incentive for investors to place their bets on the 
technology, which, in turn, spurs the cycle even further.
    In reading the testimony submitted by our witnesses in 
advance of today's hearing, I was impressed by what they can 
already do in the healthcare field using technology that exists 
and what the potential is as we develop. In Mr. Misener's 
written testimony, he describes how leveraging cloud technology 
allowed scientists to conduct an experiment at a cost that was 
orders of magnitude less than it would have been using 
traditional data center and infrastructure. And I believe it 
was 39 years compressed into 9 hours. This is exactly what we 
are hoping to learn about today in more detail and how we can 
take advantage of these opportunities.
    With that, again, thank you for being here.
    [The prepared statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    Good morning and welcome to today's Subcommittee on 
Communications and Technology and Subcommittee on Health joint 
hearing, ``21st Century Technology for 21st Century Cures.'' I 
would like to thank all of our witnesses for testifying today 
on this timely topic.
    When Chairman Upton and I announced that we would begin the 
process of updating the Communications Act, we knew it would be 
a difficult, but much-needed, process. I am pleased today to be 
joining the Communications Act Update with another important 
Energy and Commerce Committee initiative, 21st Century Cures. 
The communications and technology sector has been an enormous 
boost to our Nation's struggling economy, due in part to the 
high investment and innovation in wireless technology and other 
devices. As we craft the legislation to update our laws, it is 
essential to hear from a wide variety of people who are on the 
front lines of developing and using these types of technologies 
in all spaces. Their unique viewpoints and expertise will help 
inform our consideration as we move forward, as well as 
underscore exactly why we have undertaken these challenging 
efforts to revamp existing laws.
    It makes sense to unite these two initiatives, as they are 
both critically important not only to industries that are 
crucial to the economy, but also for every person here. This is 
an opportunity to recognize the benefits wireless smartphones 
and devices can provide to improve an individual's health and 
the health care community. We have seen examples of this 
intersection already, from wearable devices that track 
activity, to the use of mobile apps reminding users of their 
individual health needs, to a patient's ability to easily and 
remotely communicate with their doctor through a telehealth 
device. The growth in this area has been remarkable; there is a 
technological revolution happening in the health space.
    In the communications and technology world, there has been 
a good deal of focus on the so-called virtuous cycle of 
technology; investment in devices and networks creates 
opportunities for app developers to create new and innovative 
uses for those services, driving demand from consumers, which 
then spurs further investment. The health technology field is 
the perfect setting for this engine of invention and 
development. As health care technologies proliferate, patients, 
doctors, and researchers will realize the potential for the 
technology, and as a result, demand will increase. Increased 
demand means even greater incentive for investors to place 
their bets on the technology, which in turn spurs the cycle 
even further.
    In reading the testimony submitted by our witnesses in 
advance of today's hearing, I was impressed by what can already 
be done in the healthcare field using the technology that 
exists, and what the potential is as we developed. In Mr. 
Misener's written testimony, he describes how leveraging cloud 
technology allowed scientists to conduct an experiment at a 
cost that was orders of magnitude less than it would have been 
using traditional datacenters and infrastructure. This is 
exactly what we are hoping to learn more about today--how we 
can take advantage of what these companies are already experts 
at doing, be it technology or healthcare, and benefit everyone.
    I hope that our diverse panel of witnesses today will take 
this opportunity to expand on the specific ways in which their 
particular organizations are contributing to this space and 
what opportunities they see for the future. While there are 
undoubtedly obstacles that remain before some of these 
technologies come to bear, this conversation is a good starting 
point and a way to highlight why it's worth working through the 
issues that arise. I would like to thank you all for being here 
today and I look forward to your testimony.

    Mr. Walden. And I now recognize Mr. Pallone for 3 minutes.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you. Thank you, Chairman Pitts and 
Chairman Walden.
    We are here today to discuss the ways in which promising 
new technologies may be harnessed by the healthcare industry to 
provide better quality care, inform healthcare research, and 
empower Americans to better maintain their own health. The 
Subcommittee on Health has explored this issue in a number of 
different hearings this Congress, most recently in April, when 
we examined how 21st century technology can benefit patients. 
And what we have learned today and what I hope we will hear 
more about today is that these technologies may not just 
improve patient outcomes, but also have the potential to bring 
down the cost of care for everyday Americans and for the 
Nation.
    Many health systems are responding to the Affordable Care 
Act's call to reduce costs and improve quality by adopting the 
use of technologies like electronic health records, health 
analytics, telemedicine and mobile health applications. By 
monitoring patient progress in real time, providers will limit 
costly readmissions and prevent the onset of advanced stages of 
disease. In fact, declining readmission rates played a 
significant role in slowing the growth of our Nation's health 
spending in the years following passage of the ACA, and in the 
long-term budget outlook published Tuesday, the CBO found that 
the decline in our health spending will allow the Medicare 
trust fund to remain solvent for an additional 6 years.
    And this testifies to how the law is pushing providers to 
improve the quality of care, but also to the potential of 
health technology like telemedicine and patient tracking 
systems to relieve the financial burden of preventable 
conditions on the entire healthcare system.
    In keeping with the ACA's embrace of preventive care, many 
of these technologies will help keep people healthy and enable 
patients with chronic disease to better manage their conditions 
on their own. The CDC estimates that 133 million Americans live 
with at least one chronic illness disease like diabetes, heart 
disease and cancer, and the treatment of chronic illness 
accounts for more than 75 percent of all health spending, so it 
should be clear that keeping Americans healthy must be a 
national priority. Additionally, with access to quality data, 
health researchers at the NIH and throughout the country will 
be better able to study the range of conditions which afflict 
Americans, research that can be used to develop more effective 
treatments and inform the practice of evidence-based medicine.
    Meanwhile, health analytics will allow insurers to design 
value-based benefit plans which will reimburse providers for 
the quality and not the quantity of care they render. And with 
this monetary incentive, providers will more often invest in an 
ounce of prevention than wait to deliver a pound of care.
    Many of the technologies discussed today can improve 
Americans' health, yet we must remember that the adoption of 
technology for its own sake does little good and can contribute 
to the escalating cost of medicine. We have to work to ensure 
that advances in health technologies serve to improve all 
Americans' health, stopping the onset of preventable conditions 
while not exacerbating health disparities along socioeconomic 
lines. And further, we must make certain that the transfer of 
these data and doctor-patient communications complies with 
Federal regulations and that Federal law ensures the 
confidentiality of patient data.
    Our witnesses today represent firms developing these 
technologies, and I thank them for their testimony as well as 
their efforts to improve Americans' health.
    And Mr. Chairman, I am looking forward to hearing what is 
now in the field and how this further contributes to the past 
work of our committee. Thank you.
    Mr. Walden. Thank you, Mr. Pallone. Appreciate that.
    Now we go to the chairman of the Health Subcommittee, Mr. 
Pitts, for an opening statement.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Pitts. Thank the chairman for this joint hearing of the 
Subcommittees on Communications and Technology and Health, and 
welcome all of our witnesses here this morning.
    As part of our committee's 21st Century Cures Initiative, 
we are examining the discovery, development and delivery 
process to speed new treatments and cures to patients. One of 
the most promising avenues to facilitate this goal is new 
technology, and we are witnessing the impact of that 
technological innovation that it has played in every aspect of 
our economy. Technology has the potential to transform health 
care as well, and in doing so, address many of the challenges 
that we currently face. The question before us is, How do we 
ensure that our healthcare system can take advantage of the 
innovation going on in the tech world?
    We now have mobile medical apps that can make health care 
more personalized, if we don't over regulate them. We have 
electronic health records that can be shared among various 
providers to help better coordinate the care we receive, if we 
can ensure they are interoperable. These and other technologies 
hold great potential for the future of health care and 
personalized medicine. In order to realize this potential, 
however, we are going to have to address barriers that 
currently make full integration difficult.
    Our witnesses are here today to help us think through these 
technologies and the role they can play in a 21st century 
healthcare system. So I thank all of the witnesses for being 
here today.
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    As part of our committee's 21st Century Cures Initiative, 
we are examining the discovery, development, and delivery 
process to speed new treatments and cures to patients.
    One of the most promising avenues to facilitate this goal 
is new technology. We are witnessing the impact that 
technological innovation has played in every aspect of our 
economy.
    Technology has the potential to transform health care as 
well, and in doing so address many of the challenges that we 
currently face.
    The question before us: How do we ensure that our health 
care system can take advantage of the innovation going on in 
the tech world?
    We now have mobile medical apps that can make health care 
more personalized if we don't overregulate them.
    We have electronic health records that can be shared among 
various providers to help better coordinate the care we 
receive, if we can ensure they are interoperable.
    These and other technologies hold great potential for the 
future of health care and personalized medicine. In order to 
realize this potential, however, we are going to have to 
address barriers that currently make full integration 
difficult.
    Our witnesses are here today to help us think through these 
technologies and the role they can play in a 21st century 
health care system.

    Mr. Pitts. And as I yield back, I ask for unanimous consent 
to submit for the record a letter from the Telecommunications 
Industry Association.
    Mr. Walden. Without objection, so ordered.
    [The letter follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Walden. We now turn to the gentlelady, my friend from 
California, Ms. Eshoo, for opening comments.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Thank you, Mr. Chairman. And welcome to the 
witnesses. And I want to thank the leaders of the two 
subcommittees for having this joint hearing. I think it is a 
terrific idea and an important one, to talk about the 
combination, the intersection of technology and medicine. And I 
think that in both areas, it represents American genius, and 
that is why I find it so exciting.
    My Silicon Valley District is the home of modern-day 
innovation. It really is the innovation capital of our country, 
of the world. It embodies an entrepreneurial spirit, and it 
attracts those who identify challenges and turn them into 
opportunities. They drive new technologies, expand education, 
and find creative ways to build a better world and to improve 
humankind.
    The valley has a long history of pioneering technological 
advancements. After World War II, the development of the 
semiconductor industry, which is really the foundation of 
Silicon Valley, led the way to the desktop computer and then to 
the explosion of the Internet, which continues to flourish. And 
I could tick off a whole list of honor roll names of companies 
that are identified with the Valley.
    What is equally important, in my view, in Silicon Valley, 
and it is not always widely recognized, are the parallel 
advancements in health care. My district is the birthplace of 
biotechnology in our country, and we have more biotechnology 
companies there than any other place in the country and in the 
world. So it is an eloquent statement about the region and what 
takes place.
    There are hundreds of young companies developing the latest 
therapeutics, medical devices, diagnostics, genomic tests and 
wireless healthcare technologies. And the ability for these two 
industries, high technology and health care, to mature side by 
side has really yielded, I think, unparalleled advancements for 
patients and dramatically improved healthcare outcomes. So that 
the whole issue of the power of broadband and wireless 
connectivity, it is the intersection of technology and health 
care, I think is more dynamic than ever.
    In Mountain View in my district, iHealth's blood pressure 
monitor is empowering individuals to take charge of their 
health care by wirelessly connecting this data to a smart 
phone. That used to be for James Bond. Now it is for the 
average person.
    Similarly, Proteus, a Redwood City-based company is 
improving patient health care through an ingestible sensor 
which wirelessly sends information using blue tooth technology. 
I mean, this--it really is--it is not only cutting-edge, it is 
exciting and it is important.
    I am very proud to have Dr. Dan Riskin here today from my 
district testifying. Thank you for coming across the country to 
do so. He is a serial entrepreneur. He is the founder of Health 
Fidelity and consulting faculty at Stanford University School 
of Medicine. So thank you, Dr. Riskin. And he serves on the 
eHealth Initiative Leadership Council and collaborated with the 
Bipartisan Policy Center on their oversight framework for 
assuring patient safety and health information technology. 
Jeez, I thought only in Government did we have long titles like 
this, but I guess it is in academia as well.
    So want to welcome all the distinguished witnesses here 
today. And, again, I thank the leadership of both of the 
subcommittees for putting this important hearing together.
    Mr. Walden. Thank you.
    Ms. Eshoo. And I yield back.
    Mr. Walden. Thank the gentlelady.
    We now turn to the chairman of the full committee, the 
gentleman from Michigan, Mr. Upton, for opening comments.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, Mr. Chairman.
    With this hearing, we are going to continue our commitment 
to modernizing laws and regulations to keep pace with the 
breakneck speed of the innovation era. Two leading initiatives 
have been our Comm Act update, which seeks to update the 80-
year-old laws governing the communications and technology 
sectors, and obviously 21st Century Cures, which aims to 
accelerate the pace of cures in treatments.
    Today we have the unique opportunity to bring together two 
of our subcommittees and look at the intersection of these 
efforts and the ways in which new technology is enabling 
remarkable advances in medical care and treatment and research.
    Our witnesses include established tech companies that are 
hoping to bring their expertise to bear on the challenges of 
modern health care as well as startups that are focused solely 
on tech solutions for patients and clinicians, from electronic 
health records, to cloud storage of genome research and apps 
that identify preventative health strategies, we are looking at 
the future of medicine. Technology is supporting proactive 
solutions, collaborative research, and improved communications 
between patients and their physicians.
    Our committee has gone great lengths to encourage 
investment in innovation in the U.S. Tech sector, and there are 
few applications of that work more important than the health of 
all Americans. We have the opportunity to not only enable new 
cures, but accelerate the pace at which they are realized. By 
taking full advantage of available technology, the 
possibilities for the future of health care indeed gives us 
hope.
    In June we held a round table to explore the opportunities 
and obstacles surrounding digital health care, and I look 
forward to continuing that conversation. It is my hope that 
this hearing, like the round table, will help us identify ways 
in which this committee and the Congress can support the 
adoption of lifesaving technologies in the healthcare sector. I 
thank you all for being here, and I yield back the balance of 
my time.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    With this hearing we continue our commitment to modernizing 
laws and regulations to keep pace with thebreakneck speed of 
the innovation era. Two leading initiatives have been our 
CommActUpdate, which seeks to update the 80-year-old laws 
governing the communications and technology sectors, and 21st 
Century Cures, which aims to accelerate the pace of cures and 
treatments. Today, we have the unique opportunity to bring 
together two of our subcommittees and look at the intersection 
of these efforts and the ways in which new technology is 
enabling remarkable advances in medical care and research.
    Our witnesses include established tech companies that are 
bringing their expertise to bear on the challenges of modern 
health care as well as startups that are focused solely on tech 
solutions for patients and clinicians. From electronic health 
records to cloud storage of genome research and apps that 
identify preventive health strategies, we are looking at the 
future of medicine. Technology is supporting proactive 
solutions, collaborative research, and improved communications 
between patients and their doctors.
    Our committee has gone great lengths to encourage 
investment and innovation in the U.S. technology sector, and 
there are few applications of that work more important than the 
health of all Americans. We have the opportunity to not only 
enable new cures, but accelerate the pace at which they are 
realized. By taking full advantage of available technology, the 
possibilities for the future of health care gives us hope. In 
June, we held a roundtable to explore the opportunities and 
obstacles surrounding digital health care, and I look forward 
to continuing that conversation today. It is my hope that this 
hearing, like the roundtable, will help us identify ways in 
which this committee and Congress can support the adoption of 
life-saving technologies in the health care sector.
    I thank the witnesses for being here with us today and 
sharing their experiences as health tech innovators.

    Mr. Walden. The gentleman yields back the balance of his 
time.
    The Chair now recognizes the distinguished gentleman and 
former chairman of the committee, Mr. Waxman, for 3 minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman.
    This joint subcommittee hearing is a chance for members to 
learn more about the technological innovation taking place in 
our healthcare system. Technology can play an important role in 
expanding access to care, improving the quality of care, 
improving health outcomes, and reducing costs.
    In recent years, we have witnessed incredible innovation in 
our healthcare system, venture capital funding for digital 
health companies is at a record level, new innovators are 
entering the industry every day. And it is not a coincidence 
that all of this innovation has occurred in the years since we 
passed the Affordable Care Act. As a managing director of a 
major startup incubator put it, ``We are seeing a lot of 
tailwinds from the healthcare reform. It has put a lot of 
pressure on existing stakeholders to reduce costs.''
    It is also not a coincidence that this innovation is 
occurring following our unprecedented investment in expanding 
the use of health information technology through the Recovery 
Act. The number of doctors using these technologies has 
quadrupled in just 3 years. The percentage of hospitals using 
them has grown from 16 percent to 94 percent.
    It is not a coincidence that we have seen all of this 
innovation with FDA and the FCC offering important guidance and 
using their enforcement discretion wisely. And it is not a 
coincidence that we have seen this innovation at the same time 
that HHS has opened up vast amounts of data to the public while 
recognizing innovation with awards and grants to help startups 
shake up the health system.
    I mention these important ways the Federal Government has 
helped foster a climate of innovation, because this hearing and 
the committee's 21st century cures initiative should focus on 
these successes.
    I look forward to hearing from today's witnesses about what 
needs to be done to continue these trends that are improving 
our healthcare system every day. We should legislate only where 
appropriate and necessary, otherwise, we risk jeopardizing the 
integrity of a system that is already functioning quite well.
    Thank you, Mr. Chairman. I yield back the balance of my 
time.
    Mr. Walden. Thank the gentleman for his opening comments. 
And now we go directly to the witnesses.
    Thank you all again for submitting your testimony in 
advance. We appreciate that. And we will open up with Mr. Dave 
Vockell. Is that right? Did I say that correctly?
    Mr. Vockell. Close enough.
    Mr. Walden. And turn on that microphone.
    Chief executive officer of Lyfechannel. We are delighted to 
have you here. Please proceed.

     STATEMENTS OF DAVE VOCKELL, CHIEF EXECUTIVE OFFICER, 
 LYFECHANNEL, INC.; DAN RISKIN, FOUNDER, HEALTH FIDELITY; PAUL 
 MISENER, VICE PRESIDENT, GLOBAL PUBLIC POLICY, AMAZON; ROBERT 
     JARRIN, SENIOR DIRECTOR, GOVERNMENT AFFAIRS, QUALCOMM 
INCORPORATED; AND JONATHAN M. NILOFF, VICE PRESIDENT AND CHIEF 
      MEDICAL OFFICER, MCKESSON CONNECTED CARE & ANALYTICS

                   STATEMENT OF DAVE VOCKELL

    Mr. Vockell. Good morning, Chairman Walden and Pitts. I am 
Dave Vockell, the CEO and founder of Lyfechannel, Inc. It is a 
great honor for me to be here today, and I want to thank you 
for the opportunity to testify on this very important topic of 
innovative technology and the current and potential impacts to 
population health.
    I would like to briefly cover three topics today: first, a 
short overview of Lyfechannel to give you some context as to 
the role that startups can play in the rapidly evolving 
healthcare delivery landscape; second. I will cover three 
lessons learned and the ``so what'' that might inform how you 
evaluate health technology opportunities; and third, I am going 
to share a list of large insiders who I think are forward 
thinkers and innovators in working with new technology, and to 
try to discover what is next for healthcare delivery.
    Lyfechannel, Inc., builds mobile patient programs that 
translate physician instruction into patient action, which help 
patients new to diabetes, pre-diabetes, COPD, heart health and 
smoking cessation begin to build basic good habits to support 
their chronic conditions. We also operate a preventive health 
program targeting the chief health officer of a household. We 
create programs that connect the patient and their personal 
support team and their care providers through integration 
across mobile experiences and the provider's electronic health 
record.
    Over the past 3 years, we have worked closely with 
patients, pharma companies, Government agencies, payers, EHR's, 
providers and other technology companies to translate changes 
in technology and consumer behavior into opportunities to 
impact long-term health. We have learned three important 
lessons relevant to consumer facing health. First, if you are 
not integrated into the existing patient flow, whether it would 
be the physician or the provider or payer, it is almost 
impossible to become part of a patient's health journey. 
Consumer health actions are not only the behaviors that new 
technology companies need to engage, but they are also hospital 
procedures, billing protocols, prescribing habits, hundreds of 
habits within the system that we need to be a part of.
    Number two, technology doesn't change behavior, it just 
potentially creates a new access point to things that do change 
patient behavior. A cool app on your phone doesn't make you 
take your meds by reminding you or making a game out of it. You 
don't skip your Lipitor because it wasn't fun or because you 
forgot; you skip it for the basic human behavior that you feel 
great and you are not connecting your current health behavior 
to long-term health. Technology experiences that reinforce the 
drivers of good health behavior create patient-led, not 
technology-led solutions.
    And finally, there remains a strong economic incentive not 
to release the data that will drive patient insights and 
recommendations for the next 10 years. Many payers do not 
release claims data that could fuel incredible insights into 
pinpointing health intervention opportunities, because they 
have a large business selling that data to pharma companies. 
Electronic health record companies don't make it simple to 
exchange data with other EHR's, because it reduces switching 
costs of moving to a different HR for a hospital.
    There are a handful of innovative large institutions that 
unleashed great innovative momentum through aggressive piloting 
and partnership with third parties, and the pattern of their 
innovation is similar. They make public a problem they are 
trying to solve, they make data available to support solving 
that problem, and then they find a pathway to engaging 
technology innovators to solve that problem.
    Here are a couple examples of those leading innovators. The 
Office of Disease Prevention and Health Promotion, under the 
guidance of Linda Harris, Ellen Langhans and Silje Lier of the 
ODPHP are pioneers in co-design of digital experiences 
incorporating health literacy principles. They not only engaged 
third-party technology companies against the goal of the ODPHP, 
but also systematically share their learnings with other 
Government and public sector groups to advance best practices 
and patient literacy around preventive health. Their Myfamily 
mobile program has been a pilot for the past 10 months and is 
about to release version 2, which includes EHR integration and 
connectivity with the new Apple Healthkit platform.
    Boehringer-Ingelheim, under the guidance of Jon Doniger in 
their new business model group, aggressively engages new 
technology companies to help his organization understand the 
role that pharma could play in healthcare delivery in 10 years.
    The Allscripts EHR platform under the leadership of Tina 
Joros has also embraced third-party developers and platform 
openness to tap into the power of technology innovators.
    Johnson & Johnson, Robert J. Wood Hospital System, Box and 
CMS have also been aggressive in identifying problems, making 
data available to entrepreneurs and helping them try to solve 
their hardest problems.
    In summary, we believe that technology companies that 
partner with large insiders and lead with patient behavior 
versus cool technology have the greatest opportunity to impact 
health outcomes in the next 10 years. There are some great 
innovators that should serve as a model, and no shortage of 
technology innovators with limitless energy and caffeine to try 
to impact population health.
    Thank you again to the chairpersons and members of the 
subcommittee for your time today and the opportunity to 
participate in this hearing. I would love to answer any 
questions you have. Thank you.
    [The prepared statement of Mr. Vockell follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
            
    Mr. Walden. Thank you very much, Mr. Vockell. We appreciate 
your testimony as well.
    And now we are going to go to Mr. Riskin. We appreciate 
your being here. And founder of Health Fidelity. Thank you for 
being here, Dan. And turn that microphone on, pull it close. 
And we look forward to your comments.

                    STATEMENT OF DAN RISKIN

    Mr. Riskin. Good morning, Chairman Walden, Chairman Pitts, 
Ranking Member Eshoo, Ranking Member Pallone and members of the 
subcommittees. It is an honor to testify.
    I am a serial entrepreneur, founder of Health Fidelity, a 
leading big data analytics company, and consulting faculty at 
Stanford University School of Medicine. In addition, I am a 
practicing physician, board certified in surgery, critical 
care, palliative care, and clinical informatics. I serve on 
eHealth Initiative Leadership Council and collaborated with 
Bipartisan Policy Center on their efforts toward patient safety 
and healthcare IT.
    I have been fortunate to succeed as an entrepreneur, 
educator and surgeon, and I am grateful to the Federal 
Government for contributing to my success. I have been awarded 
multiple grants from the NIH and National Science Foundation, 
each grant resulting in creation of multiple longstanding, 
long-term, high-paying skilled jobs. Every Federal dollar 
received has resulted in $15 of follow-on private sector 
investment. These efforts have led to companies and products 
used at Harvard, Stanford and other leading institutions to 
benefit patients and enhance medical knowledge. My background 
has afforded me unique insight into healthcare innovation and 
practice.
    21st century technology in health care includes devices, 
data, information-enabled work flow. This newly emerging data-
driven health care not only offers the right information at the 
right time for the right patient, but also provides a needed 
pathway for population health, analytics and patient 
engagement. The goal is a more efficient, effective and 
approachable healthcare system. Collaboration and innovation 
are required, and Government has a critical role to play.
    Today I will focus on three actionable recommendations to 
promote safe and meaningful innovation in health care. These 
include re-defining interoperability to share the information 
that is needed for clinical analytics and population health; 
revising our approach to quality to better align with improved 
outcomes and reduced costs, and research to better understand 
safety and healthcare IT.
    I recently cared for a very nice woman who was failed by 
our healthcare system. A heart murmur had been noted during 
physical exam years earlier. Unfortunately, on changing her 
insurance, the information was buried and lost in medical 
documentation. Her failing heart valve was only discovered 
years later when she presented to the emergency department 
unable to breathe. She required an emergency operation, leading 
to an extended ICU stay and millions of dollars at taxpayer 
expense. If her condition had been recognized early and treated 
electively, the likely costs would have been far lower, and she 
and her family would have been spared a month-long stay in the 
hospital. I will discuss recommendations in the context of her 
case.
    The first actionable recommendation is a better definition 
of interoperability. Current efforts and proposed regulations 
focus on sharing patient's summaries only. Unfortunately, there 
is simply not enough information in these summaries for 
innovative analytics companies like mine to promote data-driven 
health care. In this clinical case, an exam finding was 
documented in the physician narrative, but did not show up on 
the problem list and would not be present in an interoperable 
summary. To support interoperability of summaries only, as is 
proposed in current regulation is to ignore critically 
important information such as home environment, medication 
compliance, exam findings and hospital course. Innovation and 
care improvement will be hobbled for years to come by this 
arbitrary limitation.
    Through the Meaningful Use program, our country has 
subsidized electronic capture of clinical data. Why wouldn't we 
require that all data we paid to capture be available for use 
by innovative companies and technologies to actually improve 
care.
    The second actionable recommendation is an enhanced 
definition of quality. This patient's care met all process 
measures required, she had routine tests, documented 
counseling, weight documented, but did she receive great care? 
Quality measures and increasingly selected for feasibility, 
meaning we often select for what is easy to measure rather than 
what really influences outcomes. In this case, a relevant 
measure of quality would be whether the patient received 
appropriate follow-up for her heart murmur. If quality measures 
are our national target, this is the time to refine our 
approach and require accurate and meaningful quality measures 
in health care.
    Finally, my patient's information was exposed to many 
healthcare software systems. Were these systems safe and 
effective? While the country defines a first-pass approach to 
healthcare IT safety, we must acknowledge these IT systems are 
new, innovative and rapidly evolving. To refine our regulatory 
approach over time, we will need information on how and when 
healthcare software is safe versus potentially dangerous. 
Supportive academic and clinical research in healthcare IT 
benefits and risks would go a long way to help us refine 
regulation over time.
    We are going in the right direction. Health systems, payers 
and vendors are collaborating through new financing models and 
newly available data with new enthusiasm, but there is a great 
deal of work left to do if we are to bridge the gap from 
electronic information to better and more efficient care.
    I look forward to continuing to work with you to leverage 
our national HIT investment to create data-driven health care. 
The U.S. is well poised to revolutionize health care and to 
benefit our people and economy at home while showing global 
leadership in this critical industry.
    [The prepared statement of Mr. Riskin follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
        
    Mr. Walden. Thank you very much, Mr. Riskin. We appreciate 
your testimony.
    We will go now to Mr. Misener, vice president, Global 
Public Policy at Amazon. Paul, please go ahead. Thanks for 
being here.

                   STATEMENT OF PAUL MISENER

    Mr. Misener. Thank you, Chairman. Good morning, Chairman 
Walden, Chairman Pitts, and Ranking Members Eshoo and Pallone. 
My name is Paul Misener, and I am the vice president of Global 
Public Policy at Amazon.com. On behalf of Amazon and our 
customers, thank you for inviting me to testify today on how 
21st century technology enables 21st century cures.
    After briefly describing cloud computing technology, my 
testimony will illustrate how innovative healthcare 
organizations, both large and small, established and startup, 
public and private already use cloud computing to foster the 
innovation cycle of discovery, development and delivery of new 
biomedical treatments and cures. I will conclude by suggesting 
three ways that Congress could help accelerate this cycle by 
adopting policies to facilitate use of cloud computing for 
health care.
    With cloud computing, information technology users, 
including healthcare enterprises now can acquire technology 
resources such as compute power and storage on an as-needed 
basis instead of buying, owning and maintaining their own data 
centers and servers.
    In 2006, Amazon's cloud computing business, Amazon Web 
Services, or AWS, began offering developer customers access to 
in-the-cloud infrastructure services. AWS now has hundreds of 
thousands of customers, including over 3,000 academic 
institutions and 800 Government agencies.
    In the healthcare sector, enterprises of all sizes and 
types are beginning to use cloud computing technology for the 
discovery of new biomedical treatment and cures. As the 
chairman mentioned earlier, in 2013, Novartis scientists 
discovered a large molecule involved in the disease mechanism 
for a particular type of cancer. The scientists wanted to 
virtually screen 10 million compounds against the large 
molecule. Such a large number of screenings is extremely 
computationally intensive. Novartis did not have the capacity 
in their existing data center to do this type of test, and 
building new infrastructure would have cost an estimated $40 
million. Instead, using AWS, they built a virtual high 
performance computing center in the cloud and were able to 
perform the equivalent of 39 years of science in less than half 
a day and for under $5,000.
    Enterprises are also beginning to use cloud computing for 
the development of new biomedical treatments and cures. For 
example, in the summer of 2012, Merck was noticing higher than 
usual discard rates for certain vaccines. The high discard 
rates could result from many factors. Evaluating these factors 
for every vaccine produced was extremely challenging using a 
traditional spreadsheet approach, so instead, Merck worked with 
a partner to implement a cloud-based solution using AWS, and 
over a 3-month period, they were able to combine all of their 
data sources and perform over 15 billion calculations and more 
than 5.5 million vaccine batch-to-batch comparisons, and thus 
they were able to precisely identify how characteristics of 
fermentation had direct impact on vaccine discard rates.
    Lastly, enterprises are beginning to use cloud computing 
for the delivery of new biomedical treatments and cures. For 
example, the USFDA, which receives 900,000 handwritten reports 
of adverse drug effects each year, needed a way to make the 
data entry process more efficient and reduce costs. Using AWS 
cloud computing, the FDA and Captricity quickly turned manual 
reports into machine readable information, reducing costs from 
$29 per page to $0.25 per page.
    Chairman Walden and Chairman Pitts, please allow me to 
suggest three ways that Congress could help accelerate the 
innovation cycle of discovery, development and delivery of new 
biomedical treatments and cures by facilitating the use of 
cloud computing for health care. First, to help accelerate the 
discovery of new biomedical treatments and cures, Congress 
could work with NIH to establish and operate cloud-based data 
management platforms to which federally funded researchers 
could upload their research data along with any relevant 
software resources required to reproduce their analysis of the 
data. Other researchers in the field could then access the data 
in software in order to reproduce the results, re-analyze 
previously collected data in novel ways, or even automate the 
analysis of new data using the same approach as the original 
experiment.
    Second, to accelerate the discovery and development of new 
biomedical treatments and cures, Congress could enact both H.R. 
967 and H.R. 1232. These are bills that would assess and 
facilitate the use of cloud computing by Federal science 
agencies.
    And third, to help accelerate the delivery of new 
biomedical treatments and cures, Congress could work with HHS 
to modernize implementation of HIPAA so that healthcare 
providers could readily employ the benefits of cloud computing. 
By narrowing the application of HIPAA to situations where cloud 
services providers have access to and knowledge of health 
information, time and money won't be wasted on contracts that 
are mostly inapplicable, and cloud services providers can more 
reasonably comply with HIPAA by focusing on areas where they 
actually have access and knowledge of health information.
    Chairman Walden and Chairman Pitts, thank you again for 
holding today's hearing and for inviting me to testify. I look 
forward to your questions.
    [The prepared statement of Mr. Misener follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]    
        
    Mr. Walden. Those are wonderful recommendations. Thanks for 
your testimony. It is always impressive to see what is 
happening out there.
    For the members' benefit, we have about 10 minutes to go in 
the first vote, but we always know that takes a little longer, 
so we will try and get through the witnesses if we can.
    We will go now to Mr. Robert Jarrin, Senior Director, 
Government Affairs, Qualcomm Incorporated. Thank you for being 
here. We look forward to your testimony.

                   STATEMENT OF ROBERT JARRIN

    Mr. Jarrin. Thank you, Chairman. Good morning, Chairman 
Walden and Chairman Pitts, Ranking Members Eshoo and Pallone, 
and members of the subcommittees. On behalf of Qualcomm, an 
American company and the world's largest wireless chipset 
supplier and largest licensor of mobile technology, it is an 
honor to be here again. Thank you for inviting me.
    Mobile technology, Qualcomm's specialty, has become the 
largest communications platform in the history of the world, 
and it continues to grow. Currently, there are 355 million 
connections in the U.S. and over 7 billion globally.
    We forget how quickly mobile technology has proliferated. 
The Android OS and Apple's iPhone were launched in 2007, the 
iPad in 2010. You wouldn't know it, the way consumers rely upon 
these services and devices. Qualcomm can't make this happen by 
itself, which is why we work with many partners. I am pleased 
to be here today with one of them, Amazon.com. Their leading-
edge Kindle Fire HDX tablet, Fire smartphone and Fire TV media 
player all incorporate Qualcomm's innovative Snapdragon 
chipsets.
    Qualcomm's technologies are found in products that touch 
every aspect of society, including health care, which is why in 
2011, we launched Qualcomm Life, a wholly owned subsidiary 
focused on medical device connectivity and management of health 
data. At Qualcomm, we understand that nothing can transform a 
sector like mobile 3G and 4G technologies. Health care is a 
good example, one in which I have personal experience.
    On August 16th, 2006, my mother was diagnosed with Stage 
III-C late term ovarian cancer. She was 65, a widow, with 
limited English proficiency. From the start of her odyssey, I 
discovered that doctors, clinics and hospitals were not sharing 
her healthcare information. I was struck by the lack of 
continuity of care. When she left the care provider or 
facility, there was no mechanism to remotely monitor her basic 
physiological status. This seemed dangerous in light of 
countless doses of chemotherapy, protein inhibitors, and toxic 
serums she endured, which caused horrible side-effects, 
including extreme high blood pressure and edema.
    In the years since my mom's initial diagnosis, mobile 
computing devices have helped personalize health care. Remote 
patient monitoring is now helping drive systemic changes in 
healthcare networks. Platforms, such as Qualcomm Life's 
HealthyCircles, facilitate the management and sharing of 
medical information between stakeholders across the patient's 
healthcare community.
    Qualcomm Life and its partners produce novel commercially 
available 21st century mobile medical solutions, such as mobile 
ECG recorders, wireless telemetry sensors, mobile glucose 
monitors, software systems that deliver live patient data to a 
doctor's smartphone, smart inhalers, and radiological imaging 
viewers for mobile devices, and implantable pulmonary sensors 
that communicate wirelessly with bedside monitors.
    The future is even more exciting. The X PRIZE Foundation 
and Qualcomm developed a $10 million competition, the Qualcomm 
Tricorder X PRIZE, to produce a device that diagnose 15 
distinct diseases in a group of 15 to 30 people within 3 days 
by a consumer, independently of a healthcare worker or 
facility.
    If investments are any sign of the future, the first half 
of this year shows 143 companies having raised $2.3 billion 
year to date, thus eclipsing the 2013 total of $2 billion. 
Those investments include some by the Qualcomm Life Fund, which 
was formed in 2011 and is now considered one of the most 
prolific investors in wireless health.
    However, challenges do persist. Lack of reimbursement is a 
major barrier to telehealth and remote patient monitoring 
technologies. Medicare telehealth provisions in the Social 
Security Act are overly restrictive and exclude the majority of 
these technological innovations, and that needs to be changed. 
Another is the Center for Medicare and Medicaid Services EHR 
incentive payment program, popularly referred to Meaningful Use 
rules, which do not include the ability to upload patient-
generated health data into certified EHRs. Future stages of the 
program should specify the incorporation of patient-generated 
health data from home use medical devices into EHRs.
    Another important issue is spectrum, the lifeblood of our 
wireless networks. Qualcomm commends this committee and 
Congress for all the work it is doing to make additional mobile 
broadband spectrum available. This work is critically 
important.
    In closing, the speed of innovation should never come at 
the expense of patient safety. Health IT software and mobile 
medical apps developers should support data collection and 
quality mechanisms to foster patient safety and create a 
learning environment.
    Nearly 8 years after my mom's diagnosis, I am thankful to 
her healthcare team that she is continuing to live an enjoyable 
life. I am also grateful for the advancements in 21st century 
medical technologies are helping society as a whole. Qualcomm 
has played a significant role in mobilizing health care, to 
improve lives and advance digital medicine, and it will 
continue to do so.
    Thank you. I look forward to your questions.
    [The prepared statement of Mr. Jarrin follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
           
    Mr. Walden. Mr. Jarrin, thank you. And that is good news on 
your mother. Having lost a mother to ovarian cancer, I know how 
awful that----
    Mr. Jarrin. I am sorry to hear that.
    Mr. Walden [continuing]. Diagnosis is and the treatments 
can be. So I am glad to hear your mother is doing well.
    We will now go to Dr. Jonathan Niloff, Chief Medical 
Officer and Vice President, McKesson Connected Care & 
Analytics, McKesson Corporation.
    And for our members, the Whip's office will keep the vote 
open until we get there, so we can conclude with our final 
witness this morning.
    So Mr. Niloff, thank you.

                STATEMENT OF JONATHAN M. NILOFF

    Mr. Niloff. Thank you. Good morning, Chairman Walden and 
Pitts, Ranking Members Pallone and Eshoo, and distinguished 
members of the subcommittees. I appreciate the opportunity to 
appear before you today.
    Throughout my career as a gynecologic oncologist in Boston, 
faculty member at Harvard Medical School, and founder of a 
small health IT company, I have seen firsthand the power of IT 
to improve outcomes, reduce costs, and accelerate the pace of 
change in our healthcare system.
    As the largest health IT company in the world, McKesson is 
focused on the transformation of health care from a system 
burdened by paper to one empowered by interoperable electronic 
solutions.
    There is a significant opportunity to improve our 
healthcare system, but to do so, we must fundamentally 
transform how care is delivered. We need to move from a 
fragmented model of care, where each patient visit is 
disconnected, to a model where care is coordinated across the 
entire continuum. Interoperable health IT is foundational to 
this transformation.
    I would like to share today two recommendations which will 
advance health care in the 21st century. First, we must align 
payment and coordinated care models in order to create an 
environment that fosters interoperability; and second, we need 
a new risk-based regulatory framework that is specific to 
health IT.
    We don't today have an easy, uniform way to move patient 
data between care settings. The interoperability we need 
requires collaboration among all stakeholders to develop 
uniform standards, coordinated policies, and the necessary 
infrastructure to promote interoperability and assure 
coordination of care.
    ONC has provided an important role in providing common 
guardrails for the exchange of health information. It is 
important that we maintain flexibility within those guardrails 
to allow for industry innovation. One example of innovation and 
interoperability is the CommonWell Health Alliance. CommonWell 
was founded by McKesson in partnership with our competitors to 
develop a software solution that will share patients' data, 
with their consent, across multiple settings of care. We have 
made significant progress in endeavor over the last 18 months. 
It is essential that we are able to share the right patient 
data in the right place and the right time. This solution is 
imperative to creating a new model of coordinating care.
    Fostering innovation in the private sector is critical, but 
there is also a role for Congress to play. Policy changes are 
needed to reflect current advances in technology and promote 
ongoing innovation. A 21st century health system demands 21st 
century policies. We support a new regulatory framework that 
would establish three categories of health IT. Oversight of 
each category would vary according to potential risk to 
patients and the role of the clinician.
    The FDA should continue its important role in regulating 
software with the highest potential risk; however, we believe 
Congress should amend the Food, Drug and Cosmetic Act to define 
each of these categories of health IT and provide clarity that 
clinical and administrative software should not be regulated as 
medical devices.
    To realize a true 21st century healthcare system, we need 
fundamental change in our healthcare delivery model. We need to 
replace our fragmented system with patient-centric coordinated 
care. This transformation has begun, but we need to accelerate 
the pace of change, and to do this, we must harness the power 
of technology. Specifically, we must align reimbursement and 
payment models to promote the adoption and also the 
interoperability of health IT, and Congress must update the law 
to codify how health IT is regulated in a way that, while 
assuring patient safety, is predictable and fosters innovation. 
The result will be better outcomes, better access, better cost 
efficiency, and better experiences for patients and their 
families.
    Thank you for the opportunity to testify today.
    [The prepared statement of Mr. Niloff follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    
    Mr. Walden. Dr. Niloff, thank you for your testimony. 
Thanks to all our witnesses.
    We will go vote and then members will come back and ask 
questions. We are probably going to be gone at least a half an 
hour, I would assume, so if you need to take a break, it is a 
good time. We will reconvene immediately after votes. Thank you 
very much.
    We stand in recess.
    [Recess.]
    Mr. Walden. I will call the subcommittee back to order and 
appreciate again the testimony of our extraordinarily 
distinguished panel of witnesses. Thank you very much.
    And don't think you are off the hook because I think what 
you have given us here is very important, and we will be 
following up, I am sure, over the months and years ahead to 
dive deeper with you on how we can all get this right.
    I am going to start off with questions, and the first one 
goes to Mr. Misener. Are there any laws or regulations that 
have impacted the development of the cloud that we should take 
a look at deeply, change that hinder what we are trying to 
accomplish here, what you are trying to accomplish here?
    And obviously we have got to protect data and privacy and 
security and all that, but are there other things we should be 
aware of that would facilitate advancements in the sectors we 
are talking about today?
    Mr. Misener. First of all, thank you for the question, Mr. 
Chairman. There are areas in which Government could lead, 
provide an example to private industry, and one particular 
roadblock we have run up against over the years trying to serve 
Government institutions including the U.S. Federal Government 
and its agencies, is that there is oftentimes money set aside 
for agencies to buy computers, to buy software, to invest 
capital essentially which is highly inefficient when instead 
money could be allocated for purchasing service, making it an 
operational cost rather than a capital investment.
    And the Government could not only be able to be much more 
flexible that way, in other words, only purchase what is needed 
and then discard it if it is not needed, but also it allows 
Government to scale up and scale down as necessary. But we have 
also often run into problems where agencies are only given 
authority to buy specific things like hardware or software when 
actually they should be able to have the freedom to obtain 
services instead.
    Mr. Walden. Got it. So on another issue, and back to you, 
Mr. Misener, and if others want to weigh in on these subjects, 
please feel free to do so. But, how can we modernize HIPAA to 
ensure that patient information is protected but that we can 
still utilize data? There are other countries that have laws 
that protect patients but also facilitate data sharing and 
leveraging the research being done.
    I know in our round table that Chairman Upton convened 
recently, Dr. Brian Druker who heads the Knight Cancer Research 
Center in Oregon, talked about I think it is 65 petabytes--did 
I say that right?--of data, just involving cancer patients that 
could be harnessed to do an analytic work and all and research. 
Are there some issues with HIPAA; are there things we should be 
looking at in that respect?
    Mr. Misener. There are, Mr. Chairman. It is not a huge 
barrier at this point, but what we would like to be able do is 
recognize that there are sometimes when information is stored 
in the cloud where it is known to be health information and it 
is accessible to the cloud service provider. But most of the 
time that is not the case. We don't know what information is 
stored there, and it is also encrypted, so we can't get at it; 
and yet we still have to go through HIPAA hoops as if we had 
access to the information.
    Mr. Walden. So what would that mean in real laymen's terms?
    Mr. Misener. It means the health care enterprise that is 
storing data on our servers, has HIPAA requirements placed upon 
it, but those requirements are also placed on a cloud services 
provider, even though it is entirely unnecessary. We can't see 
that data, and usually we don't even know it is there.
    Mr. Walden. But from a practical standpoint, what does that 
mean in your company you have to do?
    Mr. Misener. I think it means asking NIH not to interpret 
the rules so broadly as to require a cloud services provider to 
comply with HIPAA where it is not necessary. But of course we 
do comply with HIPAA, Amazon Web Services does, when it is 
necessary.
    Mr. Walden. OK.
    Dr. Niloff, what are the technical challenges your company 
is facing as you work to innovate in health care that we might 
need to take a look at, besides what you outlined in your 
testimony?
    Mr. Niloff. Sure. So, I think the major technical 
challenges involve interoperability, and the typical 
environment in the health care system is very heterogeneous 
with multiple different EMRs and multiple different other 
systems that we need to connect to.
    Mr. Walden. EMRs being electronic medical records?
    Mr. Niloff. That is correct, sir. And solving that 
challenge, the technical challenge of connecting such 
heterogeneous environments, is a big barrier today.
    Mr. Walden. All right, anybody else want to weigh in on 
these topics.
    Mr. Vockell. I would say the HIPAA question initially, the 
inability of patients to give up their right to privacy, like 
the HIPAA requirements are kind of universal whether it is I 
have a cold or whether I have HIV. And there are some 
conditions where let's say I had celiac disease, I would love 
to tell everyone on earth that I have it because most likely 
that is how I am going to find out better ways to take care of 
myself. But because of HIPAA, I can't even email my doctor.
    And so I think if there were additionalopportunities, let's 
make it super simple. I want to email my doctor; he wants to 
email me back, but we don't because it is against HIPAA for him 
to send me health information, but both of us would agree that 
it is OK for me to talk about my kid's fever through email. So 
I think what that kind of example we have around regulation is 
that when the FDA kind of took their very vague some mobile 
stuff might be good, some mobile stuff might not be good and 
made it we are all hanging around.
    And they said, all right, you guys can leave the room; you 
guys come in, we want to talk some more, and you guys stay 
close, that changing very gray to more black and white allowed 
a lot of people to innovate and build something and do stuff.
    Mr. Walden. Yes. We did an oversight hearing on that very 
issue about a year ago because nobody was getting clarity 
whether your iPad was a medical device or not, and we got them 
to admit some of those things.
    Mr. Vockell. I would have stood up and applauded. But I 
think similarly with HIPAA, if there could be another layer of, 
this is what is covered, and this is what isn't; it is OK to 
email your doctor about your kid's flu, that would do a lot to 
create innovation points for better care.
    Mr. Walden. All right. Thank you.
    I have overextended my time. I will now turn to the 
gentleman from New Jersey, the ranking member on the Health 
Subcommittee, Mr. Pallone, for 5 minutes.
    Mr. Pallone. Thank you.
    Reading the testimony today, I was impressed by how much 
progress we are making towards a more technologically advanced 
health care system, and one important step the Federal 
Government is taking to encourage this innovation is to open up 
much of the data it collects to the public. That allows 
developers, programmers, and academics to dig into this data 
and develop new tools to help improve our system.
    I wanted to ask Mr. Vockell, can you talk more about how 
you have put this open data to use and the potential benefits 
of this increased transparency over the long-term?
    Mr. Vockell. Yes, thank you very much. Lyfechannel--about 
six months ago, CMS released the big data set around exactly 
what every provider for Medicare charges for every protocol. 
And a couple weeks ago at the Health Datapalooza, which is a 
lovely name that I think Todd Park came up with, that 
Government and public agencies come together to talk about the 
incredibly exciting topic of health data. They had a 
competition to say for this big data set, who can make it into 
something super interesting.
    And Lyfechannel 1, largely based on some research that we 
did at the International House of Pancakes, the good example 
that CMS sets is they release data before it is totally 
perfect. The CMS data was 50 percent actionable. But we said 
early and they give entrepreneurs or any great data analytics 
house a chance to churn through it and pull out what they can 
and then make recommendations on what the next version of the 
data should look like.
    I think the more that holders of that health data are 
encouraged to kind of release it when it is excellent, not when 
it is perfect, will allow entrepreneurs to get up on it like a 
shark and reveal if there is something inside or help identify 
what the next round of it should look like.
    Mr. Pallone. Thank you. I think the steps that CMS and the 
other Federal agencies have taken in this area are really 
important. I wanted to ask Dr. Riskin, in your testimony you 
state that health quality measures are often selected because 
they are easy to track. Could you elaborate on your 
recommendation that we need more accurate and meaningful 
quality measures in health care?
    Mr. Riskin. Yes. Thank you for your question, Mr. Pallone.
    The challenge is whether we try to develop measures for 
what is easy to do today or whether we create a target for what 
we need to do to improve health care. If we create a target for 
what we need to do to improve health care, we won't be able to 
hit it today. The technology doesn't exist. If we don't, if we 
pick what is easy, then we won't actually meaningfully reduce 
costs in health care in a short term.
    So to give an example, an easy quality measure would be, 
are you counseling people for smoking cessation, and a hospital 
might meet that measure by on every discharge summary writing, 
you should not smoke. That doesn't do a lot of good if it is 
buried five pages down and mostly put in for non-smokers 
anyway.
    On the other hand if the measure is, do you smoke and that 
ties to an outcome like reduced costs and improved quality of 
care, that is the kind of measure that is meaningful. We don't 
do a lot of that because it is so hard to measure, but over 
time the really robust analytics companies will figure out a 
way to hit that target if the Government makes that known that 
that is the target to hit.
    Mr. Pallone. Thanks. And, Mr. Jarrin, in September last 
year, FDA issued a final guidance on mobile medical 
applications. It provides a long list of applications that FDA 
does not intend to regulate at all. Basically I just wanted to 
get your views on this guidance. I mean, do you think that the 
FDA struck a proper balance between protecting patients safety 
on the one hand and allowing innovation to flourish on the 
other? And do you see any risks in trying to legislate in this 
area?
    Mr. Jarrin. I think FDA did a good job by issuing the final 
guidance on mobile medical applications. It was definitely very 
different from the original draft. The original draft basically 
just restated the law without any clarity and without any vivid 
example.
    In the final draft guidance, they provided numerous 
examples of what they were putting under enforcement 
discretion, enforcement discretion being the ability for the 
agency to state publicly we are not going to obligate 
regulatory requirements on certain medical devices. Even though 
by definition they are medical devices, we are not going to 
require regulatory obligations. So I think that was very 
helpful to the industry.
    Mr. Pallone. What about the risk though in trying to 
legislate in this area?
    Mr. Jarrin. I am not sure I would say that there is a risk 
in legislating the area. I think that that was the next 
evolution to what Congress had originally intended through 
FDAISA. Through FDAISA they had asked for a risk-based 
regulatory framework. The agencies then came out with that 
through the FDAISA draft report that they are contemplating 
currently. I think it is now the next step for Congress to 
decide whether it would like to go in and make those 
recommendations, you know, codify them. That is a higher pay 
grade than me.
    Mr. Pallone. Thank you.
    Thank you, Mr. Chairman.
    Mr. Pitts. [presiding]. The Chair thanks the gentleman.
    I will recognize myself 5 minutes for questions.
    Mr. Misener, in your testimony you suggest that Congress 
work with NIH to establish and support the cloud-based 
management platforms. Can you expound a little bit more on why 
you think this is so important? What are some of the benefits 
cloud-based platforms might lend to 21st century cures?
    Mr. Misener. Thank you, Chairman Pitts.
    Modern biomedical research is a highly collaborative 
process. All scientific research these days is collaborative. 
The days of a major breakthrough coming from a sole, an 
individual working with a Bunsen burner and a test tube, it is 
over. You only need to look at some of the scientific journals 
and see the lists of authors. It is no longer unusual to see 
hundreds of authors listed in a major scientific paper, even 
over a thousand.
    And so that kind of co-research requires collaboration. And 
if the Federal Government can establish a way for federally 
funded researchers to share their information, even outside 
their normal channels of collaboration, it will become far more 
efficient and more productive.
    Mr. Pitts. And you mentioned one other concrete step that 
you recommended as we decide, if we decide to support this 
endeavor. List some other concrete steps that Congress can 
take. One was clarifying HIPAA. What are others?
    Mr. Misener. Well, there are two bills that the House has 
already addressed--and hopefully they will be addressed in the 
Senate, as well--that actually would assess the Government's 
provision or accommodation of cloud computing for scientific 
agencies, and another would clarify Government agency's ability 
to obtain cloud services in lieu of hardware and software. Both 
of those are important pieces of legislation, not only on their 
own merits or on their own rights of what is going on within 
the U.S. Federal Government, but as setting an example to State 
and local Governments, to private industry, to Governments in 
other countries, that there is a great deal of efficiency that 
can be gleaned from the cloud in dealing with collaboration 
that I mentioned and also just the massive amounts of data that 
now go into any form of scientific research, including 
biomedical research.
    So Government setting an example, I think, is something 
that Congress can be part of right now.
    Mr. Pitts. You mentioned Amazon worked with FDA to turn 
900,000 handwritten reports of adverse drug effects each year 
into machine-readable information with 99.7 percent accuracy, 
reducing the cost from $29 per page to 25 cents per page. This 
Cures Initiative is in part focused on using technology to 
relieve administrative burdens for agencies such as FDA, so 
they can use the resources to invest in more researchers and 
new development methods such as biomarkers. Do you have other 
suggestions for other ways we can increase efficiency at FDA or 
other agencies?
    Mr. Misener. Yes, Mr. Chairman. There is a model of 
scientists doing things that they don't need to be doing.
    One would be for example, I don't know, producing their own 
electricity for their laboratories. You don't want them out in 
the back of the laboratory working on a diesel generator just 
so their labs have lights. Likewise, you don't want them to 
have to be tinkering with computing equipment, either for 
storage or for computation, in a way that that could easily be 
provided like a utility, like electricity. So let's figure out 
ways to allow our scientists to be scientists, our doctors to 
be doctors, and not have to have them be information 
technologists at the same time, even though as part of the 
collaboration and the data-intensive work that they are doing, 
computation is absolutely necessary. It is just that they don't 
need to be the ones doing it.
    Mr. Pitts. Now, we talked a little bit about HIPAA. Are 
there other countries that have laws that protect patients but 
also facilitate data sharing, leveraging the research being 
done? Any of you who would like to----
    Mr. Vockell. Yes, I am not familiar with other countries' 
details.
    Mr. Pitts. Anyone familiar with other models?
    All right, let me just go finally--one common 
recommendation was for fully harnessing the potential of 
interoperable technology. Are we talking about just electronic 
health records, or do you think that medical devices, other 
health care sources of data should be interoperable, if you 
will elaborate on that any of you?
    Dr. Niloff?
    Mr. Niloff. Yes. Thank you. I think that the 
interoperability has to extend beyond just electronic health 
records. There are multiple sources of both clinical and non-
clinical data that are important to aggregate together with the 
clinical data in electronic health records, and that 
interoperability should exist.
    There are also a variety of an analytic solutions which are 
important to improving population health. So solutions that 
identify patients that are likely to be hospitalized, patients 
who have progressing illnesses, and the ability to link 
clinical and claims data with those type of systems to allow 
the early proactive intervention in the care of those patients, 
is a very valuable intervention to driving improved health, 
decreasing hospitalizations, and decreasing emergency room 
visits.
    Mr. Pitts. Chair thanks the gentleman.
    Now recognize the gentlelady from California, Ms. Eshoo, 5 
minutes for questions.
    Ms. Eshoo. Thank you, Mr. Chairman.
    I want to say to each of you, ``Bravo.'' I think every 
single one of you have been terrific witnesses, and you have 
given us--which is so important in a hearing, instead of 
starting with Adam and Eve, you have gone right into the meat 
of the subject matter to make recommendations for us, and that 
really is so helpful. So thank you to you.
    On this issue of interoperability, obviously there is more 
than one part of it, and what I wanted to ask you, Dr. Niloff 
is, is there anything that the Government is doing today that 
stands in the way of interoperability, as you just described 
it; i.e., in patient's record, is a physician prohibited from 
putting in the last line these are the most important things to 
track with this patient? I am not a doctor, so I am probably 
not stating it, you know, as beautifully as I should.
    But I am trying to figure out where we have regulations 
that need to be written, where we have regulations that don't 
make any sense anymore, or what we need to write and put on the 
books, and all of these areas are really important. So can you 
answer my question?
    Mr. Niloff. Sure. Thank you. So, electronic medical records 
typically have a lot of flexibility but we are----
    Ms. Eshoo. Thank you. I helped write the legislation on it, 
so it is nice to hear.
    Mr. Niloff. But, you know, I think that with electronic 
health records and the rest of healthcare technology, we are at 
the beginning of a journey, and it is a journey that is going 
to take us many years to get to both to the level of 
sophistication in the solutions and in the level----
    Ms. Eshoo. But specifically, though, when it comes to 
interoperability and electronic health records, are there 
regulations that you think don't make sense, or are you calling 
for something that will help advance interoperability? We deal 
with interoperability all the time at communications and 
technology relative to the telecommunications industry. This is 
a different deal. That is why I am probing here.
    Mr. Niloff. Sure. I think that the thing that will drive 
interoperability the most and where the Government can have the 
greatest influence, is in making the business case for 
interoperability for those who are going to pay for it and what 
that means is that we need to align the payment models.
    Ms. Eshoo. I think that for the most part now is private 
sector though, because there were initial grants or whatever to 
get the electronic records going. I think that money has been 
spent. So I don't think we are players in it.
    Mr. Niloff. If I may, I am not talking about direct 
incentives. What I am referring to is that----
    Ms. Eshoo. We need to speed it up. I have 1 minute and 20 
seconds left. You have had 4 of my minutes almost.
    Mr. Niloff. OK. I apologize.
    Ms. Eshoo. That is all right. Go ahead.
    Mr. Niloff. How we pay for medicine and what I mean by that 
is if we are doing global payments, if we incent the delivery 
model to do a coordinated care model and the payment is aligned 
with the delivery model----
    Ms. Eshoo. I understand that part of it.
    Mr. Niloff. We will drive the adoption of this type of 
technology.
    Ms. Eshoo. Well, thank you very much.
    To Dr. Riskin, I see you nodding, and I think you want to 
say something.
    Mr. Riskin. So to the same question, there are choices that 
are being made right now that could be better. So the choice 
for interoperability right now is we only share information out 
of the electronic health record that is perfectly structured, 
meaning only information----
    Ms. Eshoo. So how do we make this more robust and 
meaningful so that the right information is extracted because 
that feeds through the whole system?
    Mr. Riskin. Sure. So if a doctor wrote right now what is 
really important here is these three things, that would be 
ignored and never shared. What is needed is----
    Ms. Eshoo. But the Federal Government shouldn't be 
instructing doctors how to write something.
    Mr. Riskin. It doesn't matter how--the doctors will write 
what they write, but the Federal Government is instructing what 
needs to be shared in interoperability format.
    Ms. Eshoo. So share is the operative word?
    Mr. Riskin. That is right. And if we share all of the 
information, then the analytics companies can pick up the 
useful information.
    Ms. Eshoo. I just have so many questions, but my time has 
run out. I think what I will do is to submit questions to you 
both about the cloud, software, hardware; that is another whole 
thing. I am so thrilled that your mother, that you told a 
beautiful story, and it means a lot, I think, to all of us. 
Certainly to you.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentlelady.
    Now recognize the gentleman from Illinois, Mr. Shimkus, for 
5 minutes of questions.
    Mr. Shimkus. Thank you, Mr. Chairman. It is great to have 
you all here, and I am going to try to be quick, too.
    But I am going to just segue right after my colleague 
Congresswoman Eshoo's question, is getting out of order the way 
I wanted to go.
    But, Mr. Riskin, this data information is really the crux, 
and so I am concerned that, or the question is, if you are 
going into the genomics debate and personalized medicine, the 
data, are we in the way because of HIPAA or some other rules 
and regs that we are afraid to put the data available to a 
larger field because of the rules and regs we have in place?
    Mr. Riskin. Yes. Thank you for the question. Yes, certainly 
the privacy and security policies make it tougher to share 
data. With that said, I am one of the biggest proponents of 
keeping data safe. We are asked as a big data company to use 
genomic data and combine that with phenotypic data, the 
clinical information, and figure out what it means. Keeping it 
safe is critically important. That doesn't mean that you 
shouldn't share it safely. So if the private sector can keep it 
safe and follow regulations to do that but there is also a 
requirement that the information come out in certain formats so 
it can actually be used, that is a very powerful setup, so all 
of the data we have paid to collect can be used to do 
meaningful things.
    Mr. Shimkus. So let me move to Mr. Misener on kind of the 
same talk. A lot of folks are afraid to go into this field 
because they have done a business analysis. They don't know if 
there is a return on investment. You guys have decided to try 
and move in this, and so data storage and computation is the 
area that you think obviously can get you a business model plus 
improve.
    You know, I am a market capitalist, so we don't get these 
investments unless there is a return on investment. We don't 
get that unless there is improved health access and the like. 
So is that the model, the business model that you think that 
you all can do is this big data storage and computation while 
keeping that data safe and secure.
    Mr. Misener. Yes, Mr. Shimkus. We very much believe in this 
business. We are very passionate about it as well. We kind of 
backed into it as a retail company online. We figured out at 
one point that, gee, we have a business in keeping data safe 
and organizing it and storing it and being very efficient about 
it. So we started making it just kind of a service available to 
developer customers. We think in the medical field, the medical 
sector, there are many opportunities for the storage and 
sharing of data in a way that is highly secure.
    We not only believe that security is incredibly important 
to our business, but it is actually much easier to do at scale. 
We have the ability to provide security measures in the cloud 
that just aren't available for local storage of information and 
so we are passionate about it, and I think we are an enabler of 
the genius that you see at the table here.
    Mr. Shimkus. Just because I want to get the last two in. In 
the mid 1970's, Congress defined medical devices, which I think 
for the most part people thought at that time was good and 
helpful. The question is, is it time for us to look at 
codifying terminologies to help us through these processes? I 
mean a lot of us talk about FDA and how do we expedite, but 
don't you think it might be time to look at some new words and 
definitions and define them in the law so that we can get some 
application speedily and I just kind of throw that up as a 
comment. Anyone want to jump in real quick? I got one more 
question so if you can be brief.
    Dr. Niloff?
    Mr. Niloff. Yes, so I believe that, that is very important. 
You know, when I went to medical school, we didn't have 
computers. This is all new stuff, and that is the era the law 
was developed, and I think that we need sort of new law that 
conforms with the state of the world as it exists today. I 
think that is really essential to driving investment.
    Mr. Shimkus. Let me follow up because your testimony, you 
really talk about developing a new risk-based regulatory 
framework that is specific to health information technology. 
With my remaining time do you want to talk about that a little 
bit?
    Mr. Niloff. Sure. So you know, I think it is essential. I 
go back to you know, when I started my company. I raised four 
rounds of venture capital, and the process was very similar 
every time. Once you figured out the business model with the 
investors, they wanted to know two things. What's the IP issues 
or the patent problems, and what is the regulatory environment 
and how is that going to affect their investment and the risk 
of their investment, and it happened every time.
    And also predictability, a stable environment where 
everything is codified and predictable is critical, and it has 
to be over the long-term. I thought one round was going to do 
it, and I was all set, but we ended up with four rounds. And it 
is a long process, you need a stable environment for it to 
drive technology and innovation.
    Mr. Shimkus. Thank you.
    Mr. Pitts. The Chair thanks the gentleman.
    Now recognize the gentleman from Texas, Mr. Green. Five 
minutes for questions.
    Mr. Green. Thank you, Mr. Chairman. Again, thank you for 
calling the hearing on joint telecomm and health care.
    In a July 4th article in Forbes the co-founders of Google 
were asked if they would imagine Google becoming a health 
company. Their response was no. To quote Mr. Page, ``generally 
health is so heavily regulated, it is a painful business to be 
in. Even though we do have some health projects, we will be 
doing that in a certain extent, but I think the regulatory 
burden of the U.S. is so high I think it would dissuade a lot 
of entrepreneurs. In my experience this is not an isolated 
sentiment from the tech community.''
    Doctor, now in your experience, is Google's view of 
innovation in the health care sector a common one?
    Mr. Niloff. Yes, sir. You know, I think as I have had you 
know, sort of lots of opportunities over the years when I was 
running my company to meet with other entrepreneurs and largely 
through forums through our investors, and this was a common 
topic of discussion. You know, overregulation is an inhibition 
to investment and an inhibition to innovation.
    So having, as I just stated, a stable environment that is 
predictable and where we are not prohibiting investment and 
therefore innovation is important and I believe widespread.
    Mr. Green. Well, just from what some of us know, and this 
is such a good coordination of these two subcommittees because 
of what we can do with the combination of the high tech and the 
health care, it literally could open up so many avenues for 
folks. I know there are some supporters of the current 
regulatory approach of health care that suggest that the 
regulatory uncertainty under the FDA is a proper approach, 
which I don't obviously agree with that.
    However, my constituents are concerned when leaders in the 
tech space like Google suggest health sector is an unwelcome 
place for innovators. Frankly if that is true, millions of 
patients will be harmed, and this is a huge problem.
    Dr. Niloff, what can we do to attract more tech innovators 
into the health care space, and can Congress play a role in 
helping to create more certainty for innovators in the health 
care space?
    Mr. Niloff. Yes, thank you. So, I think that there are two 
things. I think that the first thing reflects on my previous 
comment, is we need an environment that from a regulatory point 
of view that drives investment, and that is all around 
certainty about the future so that that doesn't become a 
barrier, we don't have, if you will, a risk premium on 
investments related to health IT.
    I think the second area is certainty or greater certainty 
about what the environment is going to be, the delivery 
environment is going to be, and how we are going to pay for 
health care in that environment, so that there is greater 
certainty around what the market is going to be for these 
innovations.
    And specifically I am referring to, from a congressional 
perspective, is that CMS with respect to the various programs 
that it promulgates defines the payment model, and the private 
sector commonly follows what is promulgated by CMS. Providers 
are challenged when they have to work in part fee for service 
world and part accountable care world, and you need to reach a 
tipping point where enough of your business is in the 
accountable care world, and I called it the coordinated care 
world, so it is worth making the investments in the technology 
to support that care model.
    To the extent that collaboratively between the private 
sector and the public sector we can drive past a tipping point, 
where investments in technology make sense and are economically 
sound, we will both help our healthcare delivery systems be 
more viable and successful while at the same time driving 
better access, better quality, better patient safety, and more 
cost effective care.
    Mr. Green. Thank you.
    My colleagues, we have legislation called the Software Act 
to establish a commonsense approach to regulating mobile apps 
and other health information technologies under the FDA and our 
work is a work in progress, and our office has worked with Ms. 
Blackburn, Mr. Butterfield, Chairman Walden and others that 
takes into account the feedback we have received from various 
stakeholders over the last few months.
    And I would commend my colleagues on their leadership but 
also the important issue we could urge the chairman to address 
this in the 21st Century Cures, and that is what you just said 
is something I keep hearing. We need to have a payment system 
that reflects, are we going to go to the outcomes-based, or are 
we just going to continuing with the same pay for procedure, 
and maybe we need to provide leadership from that.
    Mr. Chairman, thank you for having this hearing.
    Mr. Pitts. The Chair thanks the gentleman.
    Now recognizes the gentleman from Georgia, Dr. Gingrey, 5 
minutes for questions.
    Mr. Gingrey. Mr. Chairman, thank you, Chairmen Walden and 
Pitts, and thank you for holding today's joint hearing on an 
important nexus within the jurisdiction of the full committee.
    I would like to focus my line of questioning on a topic 
that has been the focus of the committee for a long time. Ms. 
Eshoo was getting to that point as well. Innovation and health 
information technology, HIT. Dr. Niloff, you state in your 
testimony, and I quote, interoperable health IT is foundational 
to health care transformation. We cannot change the health care 
delivery model without it. Do you believe that we are on the 
path to interoperability, or are there changes to the law that 
we should consider as part of the 21st Century Cures 
Initiative?
    Mr. Niloff. Thank you, sir. I believe that we are on the 
path. I think it is a challenging and long journey. I think we 
can help accelerate that path with some of the suggestions I 
made in the response to my last question.
    I think a good example of that is the work that we have 
accomplished with the Commonwealth Alliance where we have 
brought together essentially competitors to collaborate and 
work together to be able to move patients' health information 
with their consent around a health care system. We have pilots 
in place today. It is working. We have tremendously positive 
feedback from both patients and providers, so I think, sir, 
that we are, indeed, on the path.
    Mr. Gingrey. Well, I agree with what you said, and I hope 
we are, but I am very concerned, the Rand Corporation report 
that was published last month found that the main electronic 
health record vendor, with over half of the stimulus dollars 
paid out to medical providers going to their customers, was 
operating a closed platform which in essence means that they 
cannot be interoperable.
    And Congress has spent, as we all know, something like $24 
billion over the past 6 years buying products to facilitate 
interoperability only to have the main vendor under the 
program, Epic, sell closed platforms. Do you believe that the 
Federal Government and the taxpayers are getting their money's 
worth subsidizing products that are supposed to be 
interoperable but they are not? And I will ask any of the panel 
if they want to weigh in on that. Yes, Mr. Jarrin.
    Mr. Jarrin. If I may Congressman, thank you.
    One of the aspects that we have been pushing for when we 
discuss interoperability is medical device interoperability, 
and I mean very specifically home use medical devices because 
interoperability can be many things. Health information data 
exchange between electronic health records, that is one aspect, 
systems-wide within a hospital, and that would include high 
acute medical devices. That is another kind of 
interoperability.
    But when you leave a care facility, the electric health 
records incentive payment program right now that is run by CMS 
and the ONC which you have quoted, the $24 billion, I believe 
it goes all the way up to $27 billion, not really much of that 
really engages patients and families in their care.
    As part of the meaningful use stages, stage one, stage two, 
and stage three, in stage one they described that they were 
looking at potentially including uploading patient-generated 
health data into the electronic health record. That would be a 
way of interoperability. That happens right now because there 
are many companies that are actually doing that and allowing 
medical device that is are used at home, like wireless 
glucometers for example, wireless sensors on inhalers, et 
cetera. That information can go straight into a portal. It can 
easily go into an electronic health record, but that is not 
something that is happening at all and part of that is because 
the meaningful use stages have not actually stated that very 
directly. They should.
    Mr. Gingrey. Well Mr. Chairman, this committee has primary 
jurisdiction over the Office of the National Coordinator, ONC, 
and the HITECH Act that is responsible for the tens of billions 
of dollars being spent on non-interoperable products, if the 
June 2014 Rand report is true, we have been subsidizing systems 
that block information instead of allowing for information 
transfers, which was never the intent of the statute. It may be 
time that this committee take a closer look at the practices of 
vendor companies in this space, given the possibility that 
fraud may be perpetrated on the American taxpayer.
    Furthermore, Mr. Chairman, as I see my time is elapsed, I 
would like to ask unanimous consent to include in the record an 
article from June 17, 2014, from iHealthBeat entitled, 
``Coalition Calls for Action Against EHRs That Block 
Interoperability.'' That gets, I think, Mr. Chairman, to the 
very point I am talking about. With that I yield back, Mr. 
Chairman.
    Mr. Pitts. Without objection, so ordered.
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    Mr. Gingrey. And with that I yield back. Mr. Chairman, 
thank you.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentlelady from California, Mrs. 
Matsui, for 5 minutes for questions.
    Ms. Matsui. Thank you, Mr. Chairman. Thank you for holding 
today's hearing. It is been very, very interesting listening to 
all of you.
    American innovation is transforming health care, 
integrating science, medicine and technology, to provide 
individuals with real-time access to vital health information, 
much of which was previously unavailable outside of a hospital 
or a doctor's office. Smart phones are really creating pathways 
for virtual interactions between doctors and patients. Texting 
between doctors and patients is becoming more common.
    Now, telehealth is really at a critical juncture and 
increasingly becoming an integral component of the country's 
healthcare system. But one of the challenges of implementing 
telehealth is that there is no consistent standard. What we 
have is an inconsistent and often dated patchwork of State 
laws. States are currently considering passing legislation 
addressing telehealth policies which means there is a wide 
variation in how telehealth is defined and this inconsistency 
hinders the national deployment of telehealth, hurting those 
who need care the most.
    And that is why I along with my colleague here on the 
committee, Representative Bill Johnson, introduced the 
Telehealth Modernization Act to create a workable definition 
for telehealth services. It provides a strong incentive for 
States to adopt consistent standards to remove the regulatory 
barriers to telehealth.
    Now, you know, we move forward with all this, too, I am 
listening to all of this, and I want to ask the question here 
of Mr. Misener. You talked about some of the ways that cloud 
computing is enabling medical research, and I think that cloud 
technologies are useful to foster innovation and research.
    And if we think really broadly, and I think about Amazon 
and all the data you have and all the information that you have 
and what you are doing now in the cloud, how can big data 
impact the healthcare sector and be expansive? And I would like 
to hear comments from the others, too.
    Mr. Misener. Thank you, Ms. Matsui. I think there are a 
dozen or so examples that I offered in my written testimony, 
but generally I think you are right on point that cloud 
services are an enabler of the biomedical field both in 
discovery and development but also in delivery, so I have tried 
to give you examples in each. But one way to think about this 
is a researcher today is typically constrained to thinking 
about questions that he or she may address only with the 
computing power that they have available in their laboratory, 
and so they can't think about big questions because they don't 
have much computing capacity.
    But, if all of a sudden available to them on a temporary 
basis, however much or little they need, is computing power, 
they now can think about questions that are far beyond what 
their laboratory constraints impose upon them today. And so it 
really is an enabler of that discovery side of things, and it 
does again enable researchers, scientists, doctors, to focus on 
what they are best at and not have to worry about the 
technology that enables them.
    Ms. Matsui. OK.
    And Dr. Riskin, I would like your comments, too.
    Mr. Riskin. Sure. We are a big data company, so we see a 
lot of data.
    Ms. Matsui. Right.
    Mr. Riskin. One of our partners, a large health system sent 
us a million longitudinal records at one point recently and 
said we want to understand the association of concepts.
    If you have a disease, diabetes, and you take a drug, is 
there any correlation with an adverse event there. We didn't 
have the processing power locally certainly to do that kind of 
effort. Fortunately we do work with Amazon and we have a good 
relationship with them, and we asked them can you spin up 100 
servers and 20 threads per server, and can we have massive 
processing power, and we crunched away at the numbers for a 
day.
    Ms. Matsui. For a day.
    Mr. Riskin. Cross referencing every concept with every 
other concept. There is a challenge here, it is powerful. You 
get information that you may not want to have, and we work 
closely with the large academic centers to understand what 
information is useful and what information is not and put 
useful information out into the community. But there is a great 
responsibility behind that kind of work.
    Ms. Matsui. Absolutely. And would you be analyzing a lot of 
this data yourself, or are you going to, as you contract out 
with the other institutions, have them take that 
responsibility?
    Mr. Riskin. In terms of what gets published, we think it is 
best for the health systems, the large academic centers, to 
create protocols and publish, so we can crunch numbers and 
support them in their protocol. In terms of internal 
development, we certainly use information to develop the next 
products to influence patient care.
    Ms. Matsui. Do you see big data assisting in as far as the 
implementation as you get into the healthcare practices 
themselves down to the very ground level?
    Mr. Riskin. I hope so. I don't see that happening in the 
short term, a year or two, but I sure hope that happens in the 
long-term. It is one of the best approaches to reduce costs and 
improve outcomes in health care.
    Ms. Matsui. OK. I thank you, and I went over my time.
    Thank you. I yield back.
    Mr. Pitts. The Chair thanks the gentlelady.
    Now recognize the gentleman from Ohio, Mr. Latta, 5 minutes 
for questions.
    Mr. Latta. Well thank you, Mr. Chairman, and thanks so much 
to the panel for being here. It is been a very enlightening 
discussion that you have all given us today.
    And if I could start with Mr. Jarrin, in your written 
testimony, you stated that another important component of any 
21st century technology for 21st century cures is spectrum, 
which is the lifeblood of our wireless networks. Mobile health 
solutions are part and parcel of an enormous surge in wireless 
data usage which is causing the spectrum crunch we are all now 
facing.
    Now in this committee we have had many hearings, we have 
heard about the spectrum side and what is happening out there. 
One was that worldwide, by 2017, there would be 1.4 mobile 
devices per person across the globe. Well, that is not really 
going to happen because we know that in some areas of the globe 
of the technological challenges.
    But I was also in another meeting the other day where they 
thought by 2017 in the United States alone there would be seven 
per person. So when you look at the numbers that are happening 
out there and also what you want to be doing with this whole 
technology, what can Congress be doing to help on this whole 
spectrum crunch to make sure that the technologies can advance 
in the future on your end?
    Mr. Jarrin. Thank you. More spectrum is the lifeblood--
spectrum is the lifeblood of mobile technologies and modern 
communications, modern wireless communications, and this 
committee and Congress in particular have actually shown a lot 
of leadership in trying to make more spectrum available. And 
when I mean spectrum, I mean licensed spectrum, shared 
spectrum, and unlicensed spectrum.
    I believe recently there was a bill introduced to help make 
more sense of the five gigahertz spectrum. We welcome that. M 
health is not unique to any particular band of spectrum. It is 
just going to add to the spectrum crunch. There was a task 
force that was put together by the former chairman of the FCC a 
few years ago which I helped be a part of, and one of the 
findings of the task force was that through radiological 
imaging and videoconferencing, spectrum is going to be really 
even taxed more within the next couple of years because this is 
what is expected out of some of the systems and some of the 
services that we are discussing.
    So the more that we have available spectrum, the better it 
is for the user because we are face a spectrum crunch. The FCC 
has been very honest about that. So it is something that we at 
Qualcomm take very seriously. We actually have an internal 
challenge where we are trying to maximize the use of spectrum 
1,000-fold what we can today. Called the 1,000 X challenge, so 
I believe that Congress is really taking steps to do that, and 
thank you.
    Mr. Latta. Thank you.
    Dr. Niloff, in the 21st Century Cures Initiative, the 
clinical trials process is one of the main focuses for the 
area, and, in my home State of Ohio, I have toured many of the 
premier research institutions across the State, and I have seen 
firsthand the important work that these individuals are doing 
to find cures for many different life-threatening diseases. Can 
you give us some examples of how these new technologies will 
assist with the clinical trial process and make it more 
effective and efficient?
    Mr. Niloff. Sure. So I think that the first thing that is 
sort of the lifeblood of any trial is the identification of 
appropriate patients who would meet the criteria, specifically 
have the disease that is to be studied, and by having patient 
registries, having patients' diseases codified as structured 
data in these electronic systems allows for the easy or more 
facile and rapid identification of the large populations of 
patients that you need as candidates for these trials. So I 
think having that data available will expedite and increase the 
number of patients available for clinical trials.
    The second part in clinical trials, is the ability to 
follow patients longitudinally and have good reliable 
structured data about the course of their disease and the 
different parameters of their disease to understand if the 
treatment under study is effective or not effective and by 
having an electronic source of that data that captures the 
patients clinical status and the response to the treatment 
under study in a repeatable, standard way, is very helpful in 
assessing the outcomes of the study and the conduct of the 
trials.
    Mr. Latta. Well thank you very much.
    And, Mr. Chairman, I see my time is about to expire, and I 
yield back.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentlelady from California, Ms. 
DeGette, 5 minutes for questions.
    Ms. DeGette. Thank you very much, Mr. Chairman.
    I really want to thank the panel for this excellent 
presentation this morning.
    You might know that I am co-chairing this initiative with 
Chairman Upton, and oftentimes we have people come in and sort 
of talk vaguely about how great it would be to have a revision 
of the system, but you really came in with some specific 
suggestions, and we appreciate that as we look later this fall 
towards actually drafting legislation.
    I just want to follow-up with whoever wants to answer this 
on some discussion we have been having about interoperability. 
Everybody agrees interoperability is important, and we are 
striving for that even now under the system that we have. We 
are making some progress, but I frequently meet with smaller 
companies as well as individual physicians who are talking 
about electronic medical records, and the concern that smaller 
companies have is that they really don't have the resources to 
work with patient data and to get that interoperability.
    And I am wondering, Dr. Niloff, Dr. Riskin, and also Mr. 
Vockell, if you can sort of address what we can do to 
incentivize this kind of interoperability throughout the 
system, not just with the larger players who can afford to do 
it?
    Mr. Niloff. So I think that the solution to that is through 
collaboration, and it is not necessary for each individual 
company to reinvent the wheel multiple times, but through for 
instance the Commonwealth Collaboration that I referred to 
earlier is a mechanism where companies who might otherwise 
compete, be they large or small, can collaborate together and 
pool resources to develop technologies for interoperability 
that can then be broadly adopted.
    Ms. DeGette. Do you think there is any governmental role in 
making those things happen, Doctor?
    Mr. Niloff. I think the Government role, again, at the end 
these solutions need to be paid for, and it all harkens back, 
if you will, to creating the economic environment and payment 
environment where the ultimate purchasers of the technology and 
the interoperability have a business case for purchasing it, 
which means aligning around a payment model, where having that 
technology makes the providers successful in the payment model 
or care delivery model that they are operating under.
    Ms. DeGette. Dr. Riskin, do you have a perspective on this?
    Mr. Riskin. Yes. Thank you. The question is a great one. 
There is a boundary between the electronic health record and 
the analytics system.
    Ms. DeGette. Right.
    Mr. Riskin. When I work in the venture community in Silicon 
Valley, we look at opportunities, and there is very little 
coming through of new electronic health records. It is not 
where the new value is. The new value is in analytics and 
population health and patient engagement and we say for those 
companies to be successful, they need the data, so we will see 
company after company come in and say we are just going to have 
the data, and here is what we are going to do and we say that 
is not fundable because you can't get the data. It is too 
expensive.
    So today, very expensive to get the data out. People are 
building custom interfaces into these electronic health records 
that is stifling innovation. There is a Government role here to 
say we paid for the data in the electronic health record, and 
here is the information we want out. Today's approaches have 
very limited information for analytics and population health, 
ignoring the compliance issues and social issues and other 
things, so actually requiring broad data to be brought out 
would be powerful to promoting innovation.
    Ms. DeGette. Thank you. And Mr. Vockell, what about you? Do 
you have a view on this?
    Mr. Vockell. Yes. Earlier Mr. Gingrey talked about Epic and 
their slow path to making their information available and at 
the other end of the spectrum is Allscripts which has made a 
lot of their data available to third-party developers and the 
challenge has been that I believe Allscripts and some of the 
other providers have been told here is the format and the type 
of data you need to make available.
    And they look at their own system and they built it in an 
era that didn't anticipate making that data available and so it 
is hard work for them to build to this outside set standard, 
and it makes them not include stuff that Dr. Riskin would find 
very valuable.
    A different approach could be you have to make your data in 
whatever format you currently have it available, and if you do, 
entrepreneurs will be all over building Rosetta Stones to 
translate it between the services. But since you are telling 
the slowest moving, ingrained, less hungry technology group to 
build to something, it is slow, and you know, Epic started a 
year and a half ago to build a public API, and it is barely out 
the door.
    Ms. DeGette. Thank you.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentlelady.
    And I now recognize the vice chair of the full committee, 
Ms. Blackburn, 5 minutes for questions.
    Mrs. Blackburn. Thank you, Mr. Chairman.
    And thank you all for being here. We do appreciate the 
panel.
    The 21st Century Cures Initiative, the impact of technology 
in that is something that is incredibly important to our 
committee and as you have seen from the questioning, we are 
working in a bipartisan way to address the needs that you all 
have, that patients have, and that the industry also needs.
    And being from Tennessee, we have appreciated the 
convergence and the impact of technology on health care 
delivery and do feel like that some of the answers for not only 
health care delivery, but patient quality of life, are going to 
be achieved through these devices. And I know Mr. Green 
mentioned to you all the software act that he and I are working 
on. Ms. DeGette has joined us in this effort, and we feel is 
part of the backbone and that is necessary.
    We are short on time. Votes are going to come up soon, so 
Dr. Niloff, I want to come to you and just have a couple of 
questions for you. The April 2014 FDAISA health IT report, are 
you familiar with that?
    Mr. Niloff. Yes, I am.
    Mrs. Blackburn. OK. They have a framework that the ONC 
would among other things create a health IT safety working 
center. Are you familiar with that plan for regulating some 
forms of software and health IT?
    Mr. Niloff. Yes, I am.
    Mrs. Blackburn. OK. All right, recently Chairman Upton and 
a couple of our colleagues and I wrote over to ONC to see where 
they think they are going to get this authority. And, have you 
seen that letter? Are you familiar with that?
    Mr. Niloff. I am familiar with it----
    Mrs. Blackburn. We got a response recently, and we felt 
like that they really don't know where they have that 
authority, and like so many times agencies get into mission 
creep, and it concerns us.
    We feel like the FDA wants to regulate our medical app 
products as medical devices, and they are not. And Congress in 
its infinite wisdom decided in 1996 to update the FDA statute 
by creating the definition of a medical device in order to 
differentiate it from drugs. Before that time there was no 
statutory difference between the two. So just like drugs, 
software is not a medical device. Medical devices are not 
drugs, and we think it is necessary to put some clarity in this 
structure.
    So do you believe that Congress needs to get involved in 
the fix? Should we leave it to the FDA? Should we leave it to 
the ONC? Because it is beginning to us to look like a misguided 
system of regulation, and we don't want this to run off the 
rails. So I would like to know what your guidance and your 
thoughts would be on this.
    Mr. Niloff. So, when the Act was last updated, if you will, 
technology as we know it today did not exist, and I think could 
not even have been contemplated, so we live in a completely 
different technology environment today than when that Act was 
written. And I believe that the Act should be updated with the 
framework as described, a risk-based framework, so that we have 
clarity for the community, both today and clarity for the 
development community and the investment community going 
forward so we are in a stable environment that will allow for 
innovation and us to make good progress.
    Ms. Blackburn. I thank you for that.
    Mr. Chairman, I think it is just vitally important that the 
FDA and the ONC work with Congressman Green and I as we work 
with the committee to come up with what a structure is going to 
be so that all of our low and moderate risk items can proceed 
to the marketplace, and things that are invasive and high risk 
have the oversight of the FDA, and that clarity is provided for 
this Nation's innovators.
    With that, I yield back my time.
    Mr. Pitts. The Chair thanks the gentlelady. Now recognizes 
the gentleman from Louisiana, Dr. Cassidy, 5 minutes for 
questions.
    Mr. Cassidy. Dr. Riskin, I have got some weird experiences 
here, man. I go to a banker's office or a lawyer's office, and 
they have fewer clerical workers because of computers. I go to 
a physician's office, and they are hiring a data enterer and 
someone to train the data enterer because of computers. Clearly 
this is socking productivity.
    Now, both of you, Mr. Vockell and Dr. Riskin, suggested 
that there is minimal investment and little incentive on the 
interface side of it, whereas there is a heck of a lot on the 
back side. That is wrong.
    Now, when I speak to people, they wonder if the High Tech 
Act is not the problem; that by defining standards, we have 
stuck in amber certain systems, but as a doc, and I speak to 
docs whose productivity is down 25 percent, some of whom are 
taking the penalty. They are tired of looking at a computer 
screen instead of looking in a patient's eyes.
    Do you agree with that assessment, that how the High Tech 
Act has been implemented is the--so to speak, we have met the 
enemy, it is us?
    Mr. Riskin. Thank you, Dr. Cassidy. I appreciate the 
question. Mixed agreement, in that the----
    Mr. Cassidy. Speak quickly, please, because I have only got 
3 minutes now.
    Mr. Riskin. The High Tech Act was powerful in terms of 
getting initial information in electronically, that is 
definitely needed, but the current processes of requiring 
information in certain ways has been excruciating for doctors.
    Mr. Cassidy. So how do we unravel that?
    Mr. Riskin. Probably the way to unravel is through 
usability.
    Mr. Cassidy. Now, that is a little bit code for me.
    Mr. Riskin. Yes.
    Mr. Cassidy. When you say ``usability,'' what do you mean?
    Mr. Riskin. The challenges, the doctor who is entering data 
right now, or their proxy, finds they are putting in 
information that isn't that useful, or they are being forced to 
put in information around billing that isn't clinically 
relevant. More of a focus on how can the systems be useable and 
how can we get the information----
    Mr. Cassidy. I get that. So there is an incentive 
apparently right now, I spoke of I am told it is stuck in 
amber. Entrepreneurs don't have any incentive to go in this 
space. Mr. Vockell just kind of suggested that. So what I am 
really asking is how do we once more incentivize these 
entrepreneurs to begin to do this as oppose--you know, get rid 
of the amber, so to speak.
    Mr. Riskin. So to solve the data usability problem, the 
data entry problem, the incentive would require that EHR's be 
usable and the EHR's would then need to work with companies to 
create usability. Right now there is----
    Mr. Cassidy. I accept that, but you can't just mandate from 
on high, Washington likes to think it can do so, make it 
useable. There has to be some penalty not doing so and there 
has to be some reward for doing so, not upon the doc, because 
the doc's already being penalized.
    Mr. Riskin. Agreed. And the physician community is less and 
less capable to push for useable systems.
    Mr. Cassidy. So, Mr. Vockell, what would you say to that, 
because you are nodding your head you are in agreement, but I 
am not sure I have understood yet how we get back to the 
entrepreneur in caring about this area.
    Mr. Vockell. I think you have hit on what is the economic 
incentive. And right now there is no way for a doctor to 
translate, I could free up 25 percent of my time and see more 
patients or deliver a higher quality of care. And so if the 
payments that the physician were able to receive or the way 
that they were compensated was linked to the quality outcomes 
like----
    Mr. Cassidy. No. But, see, I am not making my point. The 
doc is willing to do this. The doc has taken the 25 percent 
hit. The doc is hiring the scribe at $12 an hour plus benefits. 
So I actually don't think it is the doc's problem; I think it 
is the vendor, if you will, who is not creating the interface, 
because they are either not required to or there is no reward. 
Why not just foist it off upon the doc as opposed to us taking 
the lumps. I mean, do you see my point?
    Mr. Vockell. Yep. And I think they don't have the 
incentive, because there is such high switching costs to go 
from one system to another that----
    Mr. Cassidy. So how do we create that incentive?
    Mr. Vockell. I think it is--I don't know how you will get 
an EHR to require to make their data interoperable, because 
that is the barrier to switching.
    Mr. Cassidy. Do you agree with the critic that says the way 
that ONR has instituted this program does stick in amber so 
that the companies like Epic can get high market share, but 
they have little incentive in order to create that better user 
interface?
    Mr. Vockell. Yes. It makes them work towards the data 
center, yes.
    Mr. Cassidy. You agree with that?
    Mr. Vockell. Yes.
    Mr. Cassidy. Let me ask one more thing. I read your 
testimony and didn't quite gather. You said there are strong 
economic disincentives for people to share data, but I didn't 
see you amplify that. What are those economic disincentives?
    Mr. Vockell. So if you ask Humana to give you a data set 
around linked co-morbidities or protocols, it will cost you 
$500,000, because that is what they charged Pfizer for it. And 
so if you are a startup, or even a data analytics company who 
is trying to add a relevant data set that only payers have, you 
can only do it if you have got a half a million bucks.
    Mr. Cassidy. Gotcha. Thank you. I am out of time. I 
appreciate it.
    Mr. Pitts. The Chair thanks the gentleman. Now recognizes 
the gentlelady from North Carolina, Mrs. Ellmers, 5 minutes for 
questions.
    Mrs. Ellmers. Thank you, Mr. Chairman. And thank you to our 
panel.
    Dr. Niloff, I am going to direct my question to you in the 
interest of time. We were just discussing--you know, kind of 
following up on some of the discussion, we were talking--I 
certainly see all the benefits to patients on health IT. You 
know, this really is an area that--of obviously much needed 
into the future, but there again, keeping in mind that we know 
that there are all the positives, what are the barriers? And I 
think we were just talking about some cost issues here for 
integrating the systems. Do you see this as an issue too, and 
are there other barriers that we need to be aware of?
    Mr. Niloff. Sure. So I think that the main barrier and the 
main challenge today as we have discussed is interoperability 
and continued innovation. And I think that we need to have the 
right payment model in place to drive the purchase of these 
systems. We need our delivery systems to have sufficient 
alignment of their different contracts that they are operating 
under so they are doing population health, coordinating care on 
a significant portion of their population, that they can make 
the investment both programmatically and technologically in 
these type of things, because that will drive innovation as the 
market grows.
    Mrs. Ellmers. And when you say ``they,'' are you talking 
about the physician themselves or are you talking about----
    Mr. Niloff. I am really talking about at the health system 
level.
    Mrs. Ellmers. OK.
    Mr. Niloff. I think much of this technology, because 
physicians are now working in organized systems of care where 
they are part of an integrated network, and we are really 
driving to coordinate care from the in-patient arena to the 
outpatient arena, to long-term care, that really what we are 
talking about is health systems making purchases of technology, 
and not just electronic medical record technology, but 
enterprise registries to drive preventive care and manage 
patients with chronic illnesses, care management systems, where 
they use technology to identify high-risk patients and then 
have skilled nurses manage those patients, that those are the 
types of technologies and related programs that are ultimately 
really going to drive us to a delivery system which is going to 
drive real improvements in health.
    Mrs. Ellmers. So that would be, too--you know, just 
actually playing into another question, so I am just assuming 
that that is kind of the path that you see us taking as we are 
looking for the 21st century cures, and how we as legislators 
and here how we in Congress can help that effort, obviously you 
see that as an effort, too, when we are moving towards 
advancements in medical technology and curing disease and 
moving forward that way? Is that----
    Mr. Niloff. Yes. You know, I think that it would be helpful 
if, as Congress considers sort of health care for the 21st 
century, that they think about health care in the context of 
not how we are delivering care today, but in a framework that 
thinks about the context of how we are going to deliver care in 
the future in a more optimal model; think about how we are 
going to have systems of care where everybody talks to each 
other, where when a patient moves from the hospital to a 
skilled nursing facility, their record moves with them, and it 
is not, you know--it is not--I am thinking about a family 
instance, but where, you know, an 80-some-year-old mother ends 
up having to be the major coordinator of care for her 93-year-
old husband, because it is not happening electronically and the 
health system can't manage it.
    And I think that what we have to think to is what sort of 
care model system of care that we are going to move to that 
makes it not just better care, but better experience for 
patients and families, and how Congress can modify the law to 
drive that type of system of care, which will benefit all 
Americans.
    Mrs. Ellmers. Thank you, Dr. Niloff.
    And thank you, Mr. Chairman. I yield back the remainder of 
my time.
    Mr. Pitts. The Chair thanks the gentlelady. And now 
recognizes Mr. Butterfield, 5 minutes for questions.
    Mr. Butterfield. Thank you very much, Mr. Chairman. And 
thank all of the witnesses for their testimony today. I want to 
commend you, Mr. Chairman, for the subject for the hearing 
today, 21st century technology for 21st century cures. I like 
that, and I hope that as the session that moves along this 
year, we can continue to develop some ideas.
    To all of the witnesses, and I can't call on each one of 
you, but whoever feels the most comfortable, I would ask that 
you respond. We know that certain population segments, 
including seniors and Americans with disabilities, are less 
likely, less likely to adopt broadband at home. Do the 
broadband enabled innovations that we have discussed today help 
these Americans get online and receive all the benefits of the 
applications we are discussing today?
    That is not fair to you. I guess I should have called on 
one or two, but let's do it this way, and then I will call on 
someone next.
    Mr. Jarrin. Sure. So the answer to big data, you know, when 
we are talking about big data, and I hear the theme coming up 
quite a bit today, part of that is connectivity. Without 
connectivity, there is no real big data, whether it is wired, 
wireless or mobile. Increasingly, it is becoming mobile, and 
that is obviously represented in the figures I gave at the 
beginning, 355 million users in the U.S., 7 billion in the 
world.
    So I believe that through, you know, products like those of 
Amazon, products like the chipsets that Qualcomm produces and 
go into those products, those consumer facing devices, et 
cetera, they are getting out there. I believe the FCC quoted 
that over 95 percent of the country is now covered by at least 
one mobile broadband provider. More needs to be done, both on 
spectrum. Also I know that the FCC is working hard towards 
reaching disparate populations through their rollup broadband 
program, but I believe that we are getting there. We are 
getting there.
    Mr. Butterfield. All right. We have a buzzer to go to the 
floor, so I will just ask one more, Mr. Chairman.
    Telehealth programs are critical to communities in rural 
areas like my district in eastern North Carolina. East Carolina 
University, for example, has set up a telehealth opportunity at 
clinics throughout many rural communities that enable 
constituents to receive specialized medical care without 
traveling long distances. And I know all of you are familiar 
with this and you are looking forward to the next generation of 
technology.
    What are the major challenges, such as broadband access, 
that rural communities face in fully utilizing telehealth 
opportunities? If each one of you could just do a couple of 
sentences, starting with Mr. Vockell.
    Mr. Vockell. Well, I think probably they are more qualified 
down there, but I think mobile devices are beginning to take 
over what that capacity is. It is less, you know, cables into 
the home and it is what used to be wired is now wireless. So as 
the Qualcomm guys continue to do their good work and 1000X the 
bandwidth.
    Mr. Misener. If you wanted me to answer, Mr. Butterfield.
    Mr. Butterfield. Sure.
    Mr. Misener. Mr. Jarrin is exactly right. Connectivity is 
the key. And we have always heard, at least for the past two 
decades, that telehealth was going to be a major driver of the 
need for connectivity in rural areas, and now it is here. So I 
think the concept of ensuring broadband deployment nationwide, 
including in rural areas is extremely important, not just for 
telehealth, but especially for it.
    Mr. Riskin. The answer, from my perspective, I actually 
have an appointment in a safety net hospital. I am very 
familiar with the access issues that occur. And I would say 
connectivity is critical, but patient engagement is just as 
difficult. Whatever modality you are using to reach your 
provider, if the patient isn't engaged in their care, and 
typically rural or safety net communities are more difficult to 
engage, they won't be able to work with that modality.
    Mr. Jarrin. And I know that we are almost out of time, but 
one thing that I would like to mention: So Qualcomm sponsors 
many things. We have a program called Wireless Reach. One of 
our recent projects was delivering care in a Native American 
area near Flagstaff, Arizona. And there were issues with being 
able to get mobile broadband in those areas. There was no 
connectivity whatsoever, but there were--there was one operator 
in particular that actually was able to reach this population. 
And what we did was we provided telephones, mobile, smart 
phones that connected with home use medical devices such as 
medical grade weight scales and blood pressure cuff monitors. 
And what happened was that a person with congestive heart 
failure would use these devices, it would connect with the 
smartphone, go into the hospital, and then a series of nurses 
and other care providers would actually develop a work flow and 
be able to inform the patient of when things were going badly. 
We were able to reduce hospital readmissions through that very 
well.
    Mr. Butterfield. The chairman is tapping on his microphone. 
That is our----
    Mr. Jarrin. Unlimited broadband is a very important thing 
for----
    Mr. Butterfield. I get it. Thank you.
    Mr. Pitts. The gentleman has time expired. We are in the 
middle of a vote. We have got 10 minutes left. We are going to 
try to finish here. Mr. Griffith, you are recognized 5 minutes 
for questions.
    Mr. Griffith. Thank you very much, Mr. Chairman.
    Thank you all. This have been a very educational hearing. 
As you can hear, there is bipartisan support for trying to 
figure out how we go forward. I have heard all kinds of things. 
You know, figuring out the payment model when we are using new 
devices that you may not even have to go in to see the doctor 
on and electronic health records.
    My concerns parallel those of Ms. Blackburn when she talked 
about devices. It was sometime a year, a little over a year 
ago, we had an FDA representative in here, and I asked them 
about this $8 hack that had been used in Africa to send 
photographs to a hospital in the United States. You had a team 
of Canadian and I think Swiss doctors working on it, and they 
were able to identify a parasite out of the stool of children 
and get a diagnostic fix figuring out which parasite it was and 
do the treatment the next day. I said, would this be a medical 
device? And the answer was, yes. If it is diagnostic, it is a 
medical device, even though all they were doing was taking a 
picture on a smartphone with an $8 hack. Because it was being 
used diagnostically, the FDA thinks it is a medical device.
    So I think it is very important that we pass language that 
we can approve in a bipartisan way that clears that up so that, 
as she said in her statement earlier today, if it is a truly--
you know, something that is invasive, we want FDA making sure 
it is safe, if it is just diagnostic, we want to make sure that 
we get it to the market.
    And, Mr. Jarrin, I noticed, and it is in your written 
testimony and in your oral testimony, you mentioned like 15 
devices that you could use that would give you some diagnostic 
capabilities without the healthcare provider being present. Are 
you all finding that FDA's worried about that or spending a lot 
of time on that?
    Mr. Jarrin. Well, actually the X PRIZE included the FDA 
originally, so that way we wouldn't land into those issues and 
lack that clarity, because that was definitely an issue that we 
were considering, whether or not this would be obviously a 
medical device. So the FDA joined the project early on. I 
believe that Dr. Shuran, who may have been the person that you 
were referring to, actually even put a video on the FDA Web 
site about their involvement with the X PRIZE. So I am hoping 
that when everything is said and done, you know, we will all be 
on the same page.
    One thing that I would mention, you have an excellent 
example of the kind of clarity that was needed and still 
needs--there is never enough, right?
    Mr. Griffith. Right.
    Mr. Jarrin. Because that exact example is something that 
they actually ended up putting into the draft--the final 
guidance by saying that those mobile apps that can be used to 
visually augment, you know, whatever a provider is dealing with 
in a diagnosis would not be regulated under their enforcement 
discretion. So, you know, it was very helpful. Again, Congress 
was very helpful, because when you ask those questions, I 
believe the agencies really do pay attention and listen, and 
the FDA in that very specific instance did exactly that. You 
know, they did release the mobile medical apps guidance 
document. I believe that FDASIA tries to deregulate 95 percent 
of what they--what they say very specifically, most CDS 
products and mobile medical apps and health IT software, but 
now it needs to be codified.
    Mr. Griffith. I might need to cut you short, because I have 
got to leave a little bit of time for Mr. Bilirakis to get a 
question or two in.
    I would say that not only is that important, I am glad that 
they were listening, but the telemedicine is going to be very 
important. I represent a rural district, and it is going to be 
extremely important in the rural parts of this country.
    Thank you so much. With that, Mr. Chairman, I yield back.
    Mr. Pitts. The Chair thanks the gentleman. Now recognize 
Mr. Bilirakis. 5 minutes for questions.
    Mr. Bilirakis. Thank you. I appreciate it, Mr. Chairman. 
And thank you, Mr. Griffith, for keeping it short. I really 
appreciate it. I want to go quickly, too.
    With regard to the cloud, unfortunately, 10 percent of the 
agencies who adopt the cloud in the Federal Government, so it 
hasn't really been a success on the Federal level, 
unfortunately, but in the private sector, the private sector 
has rapidly adopted cloud-based solutions. And I know 
Representative Matsui actually touched upon this, but I have a 
couple questions.
    What are some of the barriers to the adoption and expanded 
use of cloud-based computing and cloud-based storage in the 
medical space, and how can we facilitate the expanded use of 
cloud? What are some of the laws that need to be examined, 
because of the way they interact with the cloud computing?
    And anyone on the panel can respond. Doctor?
    Mr. Vockell. The cloud expert to start, probably.
    Mr. Misener. Well, thank you, Mr. Bilirakis. I appreciate 
that. In our experience with Amazon Web Services, the take rate 
isn't as great as we would like it to be with Government 
agencies, but it is changing, and as I mentioned in my 
testimony, we already serve many around the world, but in the 
Federal Government, there are areas where Congress could lead 
by example, either through legislation or working in their 
oversight role over agencies to ensure that agencies do use 
cloud when it makes sense to.
    Right now, sometimes agencies feel constrained to buy only 
traditional hardware and software and pay their own in-house 
people to run it, and that turns out to be highly inefficient, 
and so hopefully Congress, through the two acts that I 
mentioned in my testimony, including FITARA, could encourage 
the Government use of cloud, to the benefit of our taxpayers, 
of course. Thank you.
    Mr. Bilirakis. Anyone else on the panel? OK. I will get on 
to the next question.
    With regard to the medical devices in the dialysis world, 
they have remained largely unchanged, you will agree with that. 
If you were to need kidney dialysis, you would basically be 
using the same devices your parents were using. There have not 
been any large innovations in that space. However, in the world 
of consumer electronics, there have been continued innovations 
in this space. Televisions today are radically different from 
televisions in the 1990s, cell phones today are different than 
they were, the ones in the 1990s, tablet PCs are different than 
the laptops and notebooks from the past decade.
    So my question is, How is it that we can have rapid 
innovation in consumer electronics with lower costs for 
consumers, but slower innovation with higher costs in the 
medical space? Is it the cost of the excessive regulation? Is 
it the higher barrier to entry? How do we encourage shaking up 
the status quo?
    And whoever would like to begin, please.
    Mr. Jarrin. I actually will take it only because I am aware 
of a pilot project that is actually part of the Center for 
Medicare and Medicaid innovation challenge grants which is 
being conducted at the George Washington University Hospital in 
consult with a company named DeLier and a company named Baxter 
and a number of other partners, and it deals with kidney 
dialysis in one way or another. So I believe that that 
community is definitely listening. They are really looking into 
things like remote patient monitoring, et cetera.
    But if I step back for a moment, I think one of the largest 
barriers to adoption for this entire field are the outdated 
rules that we have governing reimbursement for services, 
particularly when we talk about remote patient monitoring, it 
automatically gets lumped into something called telehealth 
reimbursement, and it is not necessarily the same thing. Under 
the telehealth rules, you have to start off from an originating 
set of care that CMS stipulates; it has to be a specific 
disease condition, there is only about 20 or 25 of them; and it 
can't happen in a metropolitan statistical area, it has to 
happen in a health shortage area; it has to be live voice and 
video, which removes automatically all the stuff that we are 
working on. It is incredibly restrictive.
    So according to the American Telemedicine Association, 
doctors are only able to access between 5 and $8 million--with 
an M--worth of reimbursements for telehealth consults. You 
know, the CMS budget is near $800 billion, so I would pause to 
think that some of that could by targeted towards incentivizing 
the uses of these types of equipment and services, because the 
issue is this: If I am a hospital or I am a health plan, if I 
am not being reimbursed by my largest population, which happens 
to be Medicare, I am not going to be incentivized to adopt 
those technologies that I am not being paid to use, or to 
provide services that I am not going to be paid to provide.
    So I think that is a real huge barrier to adoption. And 
then that folds into, of course, the incentive payment program, 
which has done a good job of incentivizing the use of 
electronic health records, but there is no aspect that actually 
allows for patient-generated health data to go into that 
electronic health record, so the patient is really literally 
cut out, except when he walks into the facility, and then you 
have got the situation that your colleague was mentioning where 
we have the scribe, you know, typing stuff in while the doctor 
and the patient discuss their care. So it is a real complex 
issue, but I think that I those are barriers to adoption.
    Mr. Bilirakis. Thank you very much. Thank you, gentlemen, 
for your testimony.
    I yield back, Mr. Chairman.
    Mr. Pitts. Thank you.
    Thank you again to the witnesses for sharing your 
expertise. This has been a very informative hearing. I am sure 
members will have a lot of follow-up questions. We will submit 
those to you in writing. We ask that you please respond 
promptly.
    I remind members that they have 10 business days to submit 
questions for the record. Members should submit their questions 
by the close of business on Thursday, July 31st.
    Another very important, informative hearing. Thank you very 
much. Without objection, this subcommittee is adjourned.
    [Whereupon, at 12:21 p.m., the subcommittee was adjourned.]
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