will be up 25 percent, he predicted. What’s more, the government will have evolved into a key stakeholder and will be funding pilot personalized medicine projects. Meanwhile, he said, we’ll have some kind of new “non-governmental entity determining the value of products.”
According to Harvard Business School professor Christensen, the current healthcare system is a sitting duck staring down the barrel of the type of transformative disruption that reshaped the airline industry when Southwest introduced deep-discount flying. Cheaper, more efficient means of delivering healthcare will arise, he said, it’s just a matter of when and who will do it. The retail clinics and specialty medical centers popping up now are just the beginning of the trend. “It’s impossible to predict where the enabling technologies will come from,” he said. “But the new business models will almost certainly come from outside the current system.”
He also saw big changes for the pharmaceutical industry. “In the past, most of the money was in therapeutics, and diagnostics was a dog,” Christensen said. “I predict it will flip, and diagnostics is where the money will be.”
Probably the biggest take home message from this meeting, however, was the growing importance of “comparative effectiveness.” Dora L. Hughes, health policy advisor to senator Barack Obama, said this new jargon—which refers to figuring out which treatments for a condition work best—is catching on in Washington. Whatever else they might or might not do to change the healthcare system, lawmakers don’t want to keep paying for stuff that doesn’t work, that works only marginally better, or that actually hurts people.
It’s hard to dispute that kind of logic, but Rosenkrans warned that once you start making value decisions in healthcare, you risk becoming fixated on costs. “We need to stay focused on quality, and not just make decisions based on costs,” he said. “I think we can do better than NICE,” he added, referring to the U.K.’s National Institute for Health and Clinical Excellence, which decides which therapies will be covered in Britain’s National Health System. (NICE has made some controversial decisions over the years, and some experts think the group takes too much of a population-centric view, sometimes bypassing drugs that give huge benefits to few patients.)
Hughes, for one, heartily agreed with Rosenkrans. She recounted how she was “excited” to speak to some NICE representatives recently, until she asked them if their system covers interferon therapy for multiple sclerosis, and they said it didn’t. “As an MS sufferer who depends on those shots, I had to wonder what kind of ‘evidence’ they are using to make decisions over there,” she said.
Despite the potential potholes and hurdles ahead, many entrepreneurs and investors are eager to help drive these big changes in the U.S. healthcare system. “We have this fear that if the Beth Israel Hospital disappeared, it would be a terrible thing,” said Anthony Miller, managing director of Lemhi Ventures in Minnesota. “I’m not so sure of that.'”
Miller is putting his money where his mouth is, starting up a company that will offer an insurance policy that covers experimental therapies. Its product is a ‘rider’, or add-on policy, that people will be able to buy to enhance the insurance they already have. Many other entrepreneurs in this field have been waiting for traditional insurance companies to see the value of personalized medicine, and fund the research that will drive the field and push their products onto the market. Miller said that’s a mistake. “Stop looking to the payers to help you,” he said. “Start personalized medicine yourselves, now.”