Entrepreneurs Will Empty the Hospitals By Personalizing Medicine

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  • 06/19/2012
In an interview with The Guardian,  former CMS administrator Donald Berwick told a reporter:

"When you invite entrepreneurial private sector investors into the delivery of care, under most payment systems, they will be very interested in volume. They will be very interested in doing more things to people and you may find that you lose control of that level of discipline to the disadvantage of patients. When more things are done, more unnecessary things get done and more hazard enters the system – not just cost.

"You want hospitals that seek to be empty, doctors that seek to be idle, machines that are few. In healthcare you want to find the way to help that is the least invasive of the person's life and body. A volume-based system does not have that incentive structure."

Berwick misunderstands of the motivations of entrepreneurs and investors in health care and the role that government plays in skewing incentives.   He also ignores how Moore's Law is remaking medicine, a subject I write about in the just released Scientific American Worldview   (My article begins on page 88.)  The rapid decline in the cost of the even more rapid digitization of health information is being combined with genomic knowledge to create low cost point of care diagnostics,  accelerate the shift to same day surgery,  permit the development of targeted oral therapies for illnesses that once required transplants or infusions,  create treatments tailored to specific groups of individuals so as to avoid miss and hit type medicine.  All the things Berwick claims he believes entrepreneurs are against.  

One obstacle is reimbursement.  That's shaped by government and private insurers who follow the government's lead.   So Medicare will pay more for injectible drugs than oral treatments for MS or cancer and more for treating congestive heart failure than preventing it.    Health plans will pay less for same day surgery for hip replacements if the surgeon is out of network than it will for the traditional form of the procedure even though it costs as much and the recovery time is twice as long.   Both want to use CER to determine whether or not to pay for a product based on cost, not the "least invasive of the person's life and body."    Otherwise, why would have Medicare rejected gene testing for warfarin?  Is it better to keep sending people to hemotologists to have blood drawn? 

Entrepreneurs should have a passion for achieving what Berwick envisions: less intensive and complex care and better health.   But the obstacles to achieving that are not the entrepreneur's vision nor the technology.   They are the design of the products, the resistance of physicians and 'stakeholders' to adoption and a reimbursement system that discourages innovation in favor of stepwise incrementalism.   I bet Berwick would agree on that score...

CMPI pulled together entrepreneurs who have a passionate capacity for change, a record of accomplishment and a commitment to accelerating the commercialization of personalized medicine.   The result was The Personalized Medicine Acceleration Working Group and a report: From Promise to Performance: Commercializing Personalized Medicine.

I think you will find the report and it's recommendations timely.    PPACA is -- whether it's ruled unconstitutional or not -- constructed as if current trends in health and health care delivery will continue for decades with nothing changing.  Nothing will be further from reality.   The design of new products that embody technological progress will create value for millions of people around the world.   The problems of health care seem large because the tools we currently have for solving them are inadequate.   As the tools get better, the tasks will become simpler and perhaps many will disappear.  I's the entrepreneurs and companies who made up our working group -- and the Kauffman Foundation who supported it's efforts -- that is making it possible. 


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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