We can’t seem to look in any direction without hearing of the crushing costs and burden of the US medical system, the costs of caring for patients, of specialized and not-so-specialized treatments, of high cost health care insurance, or government sponsored plans, or private “Cadillac” plans available to those able to afford them. The fact of the matter is that the current way that health care is provided in the US is based on the simple premise that Physicians are paid to do things “TO” people. We compensate per test, per procedure. Per hospital stay. Ironically, all these things happen AFTER we discover a patient’s condition. Rather than proactively monitor a person’s well being, we offer “sick care”, rather than well care. To go back to our car analogy, it’s a bit like continuously crashing the car and rebuilding it rather than avoiding the collision. It’s ironic that the automotive industry seems to have learned this lesson far sooner than health care has.
From an economic driver perspective, there is no shortage of challenges to the current architecture of healthcare and the myriad industries of which it is comprised. Issues such as the patent cliff in Pharmaceuticals, regulatory changes, the payer behavior changing, the customer changing (from provider to patient), the acceleration of competition via innovation, and more.
The industry design of “selling cure” is simply not going to withstand the test of time. Investments and business model innovations are being made into the business of selling prevention-based, outcome-focused medicine. The industry at large is starting to go from platforms to ecosystems, stocks of data to flows of data, provider at the center to patient at the center of their own ecosystem, and for the most part the final steps of the commercial transformation is beginning to be realized. We are already seeing a number of concierge doctors emerging where you either pay a fixed cost, or pay by outcome.
More and more we are seeing incentive programs come from payers, HMO, and Accountable Care Organizations to patients to be healthier taking Pharmaceutical companies out of the cure-based revenue business. Predictably, pharma is starting to move to a value constellation, away from a value chain, designing and prototyping the types of technologies and processes that will enable the selling of prevention, not cure. Think about a program that measures your likelihood to get cancer, then builds a prevention team around you to ensure that you don’t get it for a cost. If it were possible to know that you were likely target for cancer, why would you not pay for professional grade prevention, instead of cure? (Angelina Jolie anyone?)