Constrained Resources in Smarter Healthcare

As we wrap up our 4th blog post and head toward AACC2019 in Anaheim, CA we have a few more thoughts to share with you regarding “smarter healthcare”.  We are looking forward to continuing the conversation at the meeting so please reach out to us at PopperandCo or Key Tech.

“Resource constraint” is euphemistic terminology for the fact that in some geographies the rate of spending (in healthcare) is unsustainable—health spending growth has outpaced the growth of the U.S. economy.  In other countries the cash is simply not available.  The net result is similar, and the consumer is increasingly in control of healthcare spending worldwide.

We are all aware that some stop-gap strategies are employed to work around the global “resource constraint” reality: increasing deductibles here, targeting the “growing middle class” there.

As we stated in our first blog in this series – Healthcare delivery, worldwide, can no longer absorb incremental improvement at increased overall cost.

From our perspective, innovators would be well advised to proactively consider raw cost, cost-effectiveness and payment paradigms from the beginning of ideation, do so in the context of the entire episode of care, and not relegate this activity to the much later “commercialization” phase.   And this consideration needs to integrate both individual and population perspectives.

Other important factors to integrate into this strategic approach:

Pricing paradigms will inevitably change and transparency in pricing will be expected. Further, in spite of protectionist strategies, we need to prepare for global pricing.

In diagnostics and devices we need to watch and learn from the impact of firms like Civica in generic therapeutics, and consider the potential impact of “generic” devices.  A precursor paradigm for generic devices is already underway, with the proliferation of diagnostics derived from the mobile phones patients already own.  When an active device is required, as in-home infusion of biologics, manufacturers are already working with non-exclusive device platform companies as a first line of attack, and customizing only when necessary.

In parallel, we need to put “value” in “value-driven care” by integrating, measuring and quantifying the real value of “precision” across drugs, diagnostics, devices and services.

So-called “precision medicine” mandates an even more precise and nuanced understanding of value, coupled with the development of “precision payment paradigms” commensurate with that value.


Jenny Regan

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