Power to the People

Power to the PeopleThe uncertainty of the Affordable Care Act has lifted. In all-American fashion, its key objectives--largely being driven by entrepreneurs--have already begun to reboot the system with free market and innovation.  Let’s look at some examples.

For structure, we hark back to the studies that first catalyzed this turmoil: Dr. Jack Wennberg's research at Dartmouth University. His work can be boiled down to three principles:

  • Be informed and involved. Patients who are informed about their care options are more satisfied, spend less and get better outcomes.
  • Base decisions on data. Some diagnostic tools and therapies are better than others. Unbiased data enables patients to assess options and question risky or higher cost procedures. Decisions based on unbiased data leads to fewer unnecessary tests, procedures and visits to the hospital.
  • Integrate healthcare systems. Compared to uncoordinated care, hospitals, specialty groups, primary care doctors and insurers that work together are more efficient.


One major challenge is just in sharing information. As Pulitzer Prize winning author Ron Suskind says on the cover of Tracking Medicine, "placing hard evidence–and the patient's actual well-being–at the center of the health care universe...could literally save millions of lives." But healthcare and Medicare can be complicated to doctors and patients alike. So, how do we get unbiased health information into people’s hands when they need it?

Here are several ways to distribute better care information.

1. Set up a “Khan Academy of Health Care”

Khan AcademyAn online forum like the Khan Academy can “teach” best health practices through courseware and case studies. In a similar fashion, Udacity offers free courses in artificial intelligence to about 160,000 students online. Another model that can be adopted: Session College awards nationally accredited degrees in complex multi-media art and web design to thousands of students using online learning techniques. Why not healthcare?  These mass distribution models should be applied to sharing “what works” data so patients could access objective, continually updated best practice information on any illness. 

2. Harness mobile.

On their phone, people are looking to find basic information with links to richer content for more detail. So why not create an app for every health condition?

The key is giving people the best information in an understandable and digestible format. This is a service that Health Dialog offers to twenty-four million consumers. The Company’s new “Decision Dialog” offering such presents options and outcomes data via mobile phones and the web.


PSA Test1. What doesn't work.

The prostate screening antigen (PSA) fiasco is a perfect example of unnecessary health care. The overtreatment of prostate cancer and its attendant complications is widely recognized as an important public health issue and places an unnecessary financial burden on the health care system.

The ineffectiveness of PSA was originally outlined by Wennberg in a 1997 study. One-third of men who have prostate surgery following elevated PSA results experience severe side effects such as incontinence, impotence or other life-altering consequences.

Recently, a government task force recognized this problem. Five well-controlled clinical trials have confirmed that the PSA test does no good and often leads to unnecessary biopsies and surgery.

If PSA doesn’t work, what can men do?

An informed patient might opt for Myriad Genetics’ prostate test called Prolaris. It can tell if a man has a slow-growing cancer or an aggressive form, which may require immediate attention. Lancet Oncology presented data on the Company’s 46-gene molecular diagnostic test showing it accurately predicts prostate cancer outcomes. It is a strong predictor of prostate cancer death, better than the Gleason score or PSA.

2. Lower cost of drugs.

The Chairman of Teva Pharmaceuticals, the world’s largest generic firm, took a large stake in biotech pioneer Prolor for one reason -- Prolor makes long lasting versions of already approved biotech drugs. This can reduce costs by as much as 80-90%, for example, with a regimen of weekly injections of human growth hormone instead of daily injections. If this mechanism works on other proteins, Prolor could have a sizable impact on the cost of the most expensive class of drugs -- biotech proteins.

3. Saving lives.

As a final example of cost effective innovation, the expense and human toll of a condition called graft-versus-host disease has few equals.  Patients are usually infants, about 80% of whom most often die after spending months in an ICU at enormous costs. Osiris Therapeutics has a stem cell drug for these children.  It demonstrated a 77% remission rate in its Phase III trials, prompting the governments of New Zealand and Canada to approve the drug -- the first stem cell drug approval in the world.

Think about that: a killer 80% of the time, now 77% of those stricken by this are miraculously rescued.  That's life-saving, quality care.

Best practices in effectiveness and cost reduction -- all of them.


Accountable Care 1. Integrate for efficiency.

Accountable Care Organizations (ACOs) achieve regional efficiency in several ways.  In an ACO, doctors experiment with alternatives to the per-procedure compensation model which drives unneeded visits and operations.  Clinics, specialists and the entire supply chain work together more productively as part of an ACO, just like many other industries.  As a result, costs for the whole system drop, benefiting consumers.  Non-profit pioneers like the Mayo Clinic, Dartmouth-Hitchcock and the Geisinger Foundation, and for profit consolidators such as Prospect Medical Group, have shown a path forward.  Prospect organized 8,000 doctors and five hospitals into one of California’s largest coordinated health care groups.

2. Better billing.

Medical billing inefficiencies cost hospitals and providers some $200 billion per year; about 20-25% of this is the responsibility of the patient, according to the Healthcare Financial Management Association. McKinsey estimates that most 'patient pay' -- about $65 billion -- is written off each year due to poor medical records.  Empowering patients to pay what they can afford through systems like Cybersettle offers a way for hospitals to turn these receivables from “no-pay” into real co-pays.

3. Ask everyone for answers.

We can’t know all the answers.  However, we can devise more innovations like this by tapping creative minds around the world through open innovation.  For solutions to large scale problems, the healthcare industry should experiment with platforms such as inno360 or InnoCentive in a way similar to P&G, General Mills and the U.S. Airforce do in their industries.



For starting this chain reaction, Health Dialog can take substantial credit.  Its revelations are turning the U.S. health care system upside-down.  During the last decade, Health Dialog funded more than 50 clinical trials to validate Wennberg’s findings -- research that was enthusiastically adopted by President Obama and his energetic first Budget Director, Peter Orszag.

Tracking MedicineThe esteemed new World Bank President, Dr. Jim Yong Kim, explains the Forward to Wennberg’s master work Tracking Medicine:

“New forms of knowledge with the power to reshape a major field of human practice emerge once in a generation...Wennberg and his colleagues harnessed these initial discoveries to build a scientific field for the study of practice variation and comparative effectiveness in healthcare...This is the only way to engage the levers that truly drive health care costs and share the outcomes patients experience within our health care system.” 

Free-market approaches such as the ones outlined above are accelerating savings with better care outcomes. This is American innovation at work.


Kevin Kimberlin, Chairman

Spencer Trask & Co.

Authors Note: The for-profit companies referred to within this article were launched and nurtured by Spencer Trask & Co.  Each of them plays a pivotal role in transforming medicine and the delivery of health care.



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