1. Making value the central objective

Across sectors of the healthcare industry, increasing value must be the core objective around which all innovation efforts revolve.

A. Aligning competition with value:

To compete on the basis of value, organizations must take a balanced approach, both to reducing costs and to improving quality outcomes. Read more

B. Improving coordination to foster health:

Care coordination is essential for ensuring health and wellness and for achieving the overall goal of increased value. Read more

C. Developing and sharing validated targets:

The industry must develop and share information about disease mechanisms and validated cellular targets to reduce redundant effort and to increase the chances of meaningful innovation. Read more

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A. Aligning competition with value

To compete on the basis of value, organizations must take a balanced approach, both to reducing costs and to improving quality outcomes.

As a body, conference participants concluded that healthcare does not suffer from a lack of innovative skill or expertise. The question, rather, is whether that energy and expertise are being directed to solve the right problems. The prevailing view, also observed in the survey, was that the pursuit of misguided objectives reflects a broader lack of value-based competition in healthcare.

Donald M. Berwick, MD, President Emeritus and Senior Fellow, Institute for Healthcare Improvement, asked his audience to reconsider their basic assumptions regarding healthcare delivery. As a metaphor, Berwick offered the Choluteca River Bridge in Honduras. While its construction was of sufficient strength to endure Hurricane Mitchell in 1998, its design proved irrelevant: Over time, the river shifted away from the structure, leaving it a literal bridge to nowhere. Likewise, Berwick suggested, we are currently invested in maintaining a legacy system of healthcare delivery and financing that no longer “bridges” our needs. Drawing on examples in Alaska, New Mexico, and Sweden, Berwick advocated for innovations that changed the process of distributing care, rather than on making further investments that concentrated expertise in expensive, centralized locations.

Michael E. Porter, Bishop William Lawrence University Professor, Harvard University, placed the challenge within a broader context, observing that, “Competition as it has been historically structured in most healthcare systems around the world has not really been aligned with value. What it takes to be successful for a provider is not tightly connected to what it takes to be successful for the patient.” To align provider and patient interests, Porter proposed a multipoint agenda encouraging providers to create integrated practice units organized around the needs of patients rather than specialized providers, and measure outcomes “over the cycle of care,” applying the lessons learned at specific sites to larger geographic regions.

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B. Improving coordination to foster health

Care coordination is essential for ensuring health and wellness and for achieving the overall goal of increased value.

In a system with so many moving parts, it can be difficult to coordinate the multiple touchpoints of a patient’s experience within a more coherent approach to create or sustain wellness. Christopher A. Viehbacher, CEO, Sanofi, raised the issue of fragmentation as a way of broadening the context for drug and device development. “I think there has to be a rethinking of healthcare,” he said. “If you think about how healthcare is delivered, it’s on an ad hoc basis. Someone comes into a hospital, someone comes into a pharmacy, someone comes into a doctor. But beyond those touchpoints, the patients are on their own. There’s no real continuity of care.”

Lonny Reisman, MD, Senior Vice President and CMO at Aetna, drew attention to a shift in responsibilities that must be met with a shift in focus from discrete activities to overall results. Reisman noted that not only were healthcare costs rising three times faster than the rate of inflation, but that employees also have been absorbing a greater share of the burden. Since 2007, the annual rate of increased costs for employees has risen 50 percent faster than the rate of costs for employers.

Reisman noted that shifting financial responsibility to the consumer, in itself, fails to address the underlying cause of accelerating health costs: incentives that stimulate a growing volume of care without necessarily contributing to value. “What we cope with as an insurer,” said Reisman, “is the notion of people getting paid more for doing more ‘stuff ’ whether or not that actually contributes to better clinical outcomes.”

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C. Developing and sharing validated targets

The industry must develop and share information about disease mechanisms and validated cellular targets to reduce redundant effort and to increase the chances of meaningful innovation.

Reisman’s comments initiated a conversation about the need for comprehensive data about medical outcomes that could inform effective decision making by consumers. Other panelists took the idea further, arguing that high-quality outcome information was a necessity not just for healthcare consumers, but for the creators of new drugs and devices as well. The path to an innovative solution requires an understanding of disease mechanisms and validated targets.

Multiple panelists and participants expressed concern about the time and expense necessary to move promising therapies through the clinical trials process, noting that current U.S. Food and Drug Administration (FDA) regulations impose obstacles that discourage investors and innovators. Eric S. Lander, President and Founding Director, The Eli and Edythe L. Broad Institute of Harvard and MIT, asked conference participants to reconsider the entire context of life sciences development. In his presentation, Lander said, “Really efficacious drugs don’t require huge clinical trials. Why aren’t we able to make drugs that are really efficacious rather than trying to demonstrate just a couple of percent benefit?”

“Really efficacious drugs don’t require huge clinical trials. Why aren’t we able to make drugs that are really efficacious rather than trying to demonstrate just a couple of percent benefit?”

– Eric S. Lander

President and Founding Director, The Eli and Edythe L. Broad Institute of Harvard and MIT

The group noted that basic knowledge, especially of the genome, has exploded over the previous ten years and that gene sequencing has become much cheaper as well. However, further discussion revealed that there are not good systems for developing validated targets and that targets are highly unlikely to be shared across organizations. Some suggested that in order to share targets consortia should be created, similar to what the semiconductor industry created in the 1980s and 1990s. If done correctly, this would create a critical mass of validated targets open to all, while preserving individual molecules as patentable intellectual property. The goal: an infrastructure that makes knowledge easily exchangeable.

Barbara J. McNeil, MD, Ridley Watts Professor at Harvard Medical School, underscored the important role that academic researchers can play in these collaborative efforts. “University investigators can play a key role in fostering innovation in a number of areas,” she said. “These range from developing new targets for drug discovery to working with others to develop disease-specific consortia, and finally to testing innovative products in pivotal clinical trials. Further along in the care pathway, they can use their clinical expertise to design and evaluate new approaches to the financing and delivering of healthcare, particularly coordinated care.”

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