Who Pays for the $1,000 Pill? X2

Who Pays for the $1,000 Pill? x2

In September over 200 healthcare leaders gathered at the beautiful Lake Nona resort outside of Orlando, for the first WPP Stream Health. Stream is famously an (un)conference hosted by Sir Martin Sorrell (CEO, WPP) and Israeli investor Yossi Vardi, which brings WPP clients together with industry leaders to think about our digital future and what that means for communications, creativity, and business. Stream Health brought together individuals representing large and small pharmaceutical companies with healthcare start-ups, digital innovators, and representatives from diverse WPP agencies.

Last week at the GHG office in NYC we held our own mini-Stream, bringing the highlights such as “Ignite Talks” and the Tech Lab, to our colleagues, clients, and partners who couldn’t make it down to Lake Nona. While smaller and decidedly less tropical, this Stream still maintained the same energy and exciting conversations as the first.

As an (un)conference, none of the usual rules apply. There are no keynote speeches or PowerPoint presentations. Instead everyone who is invited is expected to take part. Throughout the day individuals post their own discussion ideas on a massive whiteboard schedule and each individual can plan their day and their Stream experience by choosing which discussions to take part in. During both Stream meetings I posted a topic on the Discussion Wall called “Who Pays for the $1000 Pill.” With so many other brilliant talks and sexy new innovations, I was intentionally provocative so I wouldn’t find myself sitting alone in a circle of folding chairs.

Stream Health discussions are meant to be that, discussions. There’s no agenda and no slides. In both sessions we had a wide range of backgrounds, from pharmaceutical marketers and scientists working in R&D to developers of technological solutions for healthcare. Yet despite the diverse backgrounds of both groups and the free-flowing conversation, both conversations followed a similar flow and came to the same conclusion.

Pharmaceutical prices are astronomically high, but will price caps or efforts to control prices kill innovation?

R&D is expensive and companies need incentives to invest in rare diseases or those which seem to be remote possibilities (i.e Ebola). In areas where there are low cost generics, there’s a disincentive to invest further, as has been the case in antibiotics. It’s in the public health interest for governments to promote investment in drug research and development.

But how can we sustain innovation and afford to keep delivering high quality care?

While trying to manage the growing burden of chronic disease, aging populations, and rising costs payers face difficult decisions on how to manage their limited healthcare budgets. Like it or not, payers in the US are “rationing care” and making choices about allocating healthcare dollars. Wouldn’t it be better if we used a strict criteria for cost-effectiveness decision making like NICE in the UK? This way the choices would be explicit rather than implicit.

Would this lead to the so-called “death panels” policy makers are so quick to warn us of?

Should payers – government or private – put caps on what they’ll pay for cost-effective care? Is this type of quantification and valuation possible? Is it ethical? Every person in the room admitted that they would think differently on legislating cost-effectiveness at a macro level versus when they considered the treatment for a parent or child.

Each group was also quick to point out that while pharmaceuticals garner most of the attention in debates around escalating healthcare costs, they actually form a small part of the overall healthcare budget. Healthcare delivery is expensive and often times inefficient. Any debate around the pricing of pharmaceuticals needs to include a discussion around the delivery of health.

Solutions

Being a group of healthcare problem solvers, each conversation gradually made its way to solutions.

While we all recognize that Technology (with a capital T) is not a magic bullet, it will definitely help us in creating and delivering more cost-effective care.

Vast improvements in computing power and innovations such as IBM Watson will help speed up drug discovery processes, thus reducing the costs of R&D. Personalized medicine and targeted therapies have the potential to decrease wastage and some of the trial and error in patient management. EHR can streamline workflows and the sharing of information. Low cost lab technologies like those produced by Theranos will decrease the costs of diagnostics.

While one could say it’s predictable that at a technology in healthcare conference we’d come to the conclusion that tech is the answer. But hey, two times in a row says something!