Principles to Guide Discussion of Health Care Innovation: Some Initial Thoughts

As discussion about the health care sector approaches a full howl, here are some thoughts, offered in no particular order, regarding principles I believe should be guiding discussion about health care innovation:

1. Change the reward structure. A major problem with the health care system is that it rewards treating the sick. I believe the system should be re-imagined as a wellness support system. By increasing the baseline wellness level, resources needed to treat illness due to preventable causes, overall cost of health expenditures would reduce freeing up resources that could be directed elsewhere (perhaps to aid those with catastrophic health issues such as your friend). This tool lets you fiddle with wellness ROI. Essential to wellness program success is careful targeting of behaviors to change.

2. Personal responsibility. I believe that health is a personal responsibility. We each have a responsibility to actively pursue a health. System incentives should be aligned with pursuit of healthful life.

Incentives in the form of modest co-pays, and the like, insulate consumers from the cost of health care. Consumers, rationally, are less price sensitive as a result. Consumers need to have incentive to be concerned about the cost of health services. Increasing price sensitivity of consumers will increase pricing pressure on health care providers.

3. Empower innovation. Innovation is the only path to reducing the cost of health services while simultaneously increasing the quality of health care. Encourage entrepreneurs to do what they do so well: create effective solutions to problems. Innovation is needed in myriad areas, including diagnostic and delivery technologies and in business models.  Christensen, in The Innovator's Prescription: A Disruptive Solution for Health Care, provides an outstanding blueprint for how to empower innovation in the health care sector.

A challenge of innovation is that innovation spurs changes in consumer expectations. Expectations re. what the health care system can deliver (e.g., ., what can be treated) are a function of the system's ability to innovate and get rewarded for that innovation. The more the system can deliver, the more consumers expect of the system (i.e., consumer expectations regarding what constitutes 'basic' health care shifts out along the classic path of mature sustaining innovations.

4. Focus on outcomes rather than inputs or specific solutions. A focus on outcomes spurs innovation that can yield better outcomes at lower costs. A focus on outcomes is consumer-centric; it puts the focus on quality of patient care rather than on the caregiver.

5. Health care, is a complex adaptive system. System improvement is a function of the system being able to cycle, adapt, and 'emerge'. This implies identifying and removing barriers that inhibit system innovation and adaptation. Implicit in construing health care as a CAS is the implication that the system is smarter than any individual entity (human or organization). Ergo, the health care system will operate most efficiently -- and be more effective at yielding optimal patient outcomes -- when barriers to system function are systematically identified and removed. Put succinctly, the market will deliver more effective outcomes than can a bureaucracy.

6. Economic prosperity. Issues with the U.S. health care system are meaningfully a function of the state of the U.S. economy. The healthier the U.S. economy, the more wealth there is available in the private sector. Wealth in the private sector reflects job creation, salary and benefits expansion, increased charitable giving to non-profit hospitals and other community support organizations, and greater freedom of individual choice. Greater charitable giving, for example, expands the system's ability to provide those lacking resources access to care. Greater economic prosperity means that more people are employed. Greater economic prosperity means that companies are competing for employees by offering benefits, including health care coverage. Prosperity increases the ability of individuals to attend to their health care needs.

These thoughts are necessarily initial, incomplete and preliminary.

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