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A Pharmaceutical CEO That Gets It!

9/28/2018

 
Well, one pharmaceutical CEO gets it! I was emboldened to read David A. Ricks', CEO of Eli Lilly and Co., editorial. He points out that regardless of Apple, Amazon and other tech companies’ entry into healthcare, there remains one huge barrier: the outdated U.S. health care system.
 
You repeatedly hear me saying how we all made this mess – and we can all fix it.
 
Ricks adds to that by pointing out that the foundation of America’s health care system was designed 50 years ago to treat mostly acute episodes of illness inside brick-and-mortar facilities with lots of people, lots and lots of paper, and very little technology. 
 
This is no longer our objective when, today, Ricks states our primary challenge is to help people live independently with mostly chronic illnesses over a long period. I would add to that our actual goal should be prevention since the majority of those chronic illnesses could be completely alleviated with a proactive wellness model instead of even continuing a “sick” model.  (And how about pharmaceutical cures rather than lifetime drug regimens Mr. Ricks?)
 
And yet, as Ricks, points out, “We continue to pursue this task with the same high-cost, high-touch tools that were built in a different era for a different job.”
 
The result of this mismatch is unsustainable, skyrocketing health care spending. Thirty years from now, Alzheimer’s alone will require more Medicare and Medicaid spending than the entire 2019 U.S. military budget. We will hit a wall.
 
Ricks says that digital technology, when combined with pharmaceutical technology, will be crucial in reducing the massive cost of health care, yet it isn’t enough – we must have an efficient network that can unleash the power of today’s technology.
 
According to Ricks, we must do three things: digitize everything, empower consumers, and pay for value.

Digitize Everything
 
Digital technology already has an information superhighway to act as the foundation of that efficient network. An online retailer can reach people literally worldwide with just a website – compared to the few hundred thousand dollars for a brick-and-mortar store that reaches only one community.
 
We must develop common standards and patient privacy protections – and I would add greatly improve cyber security and enforcement – that allow data to flow through our health care system freely and safely. Medicare can also help by reimbursing at higher rates for products and services that combine digital, medical, and pharmaceutical technologies.
Empower Consumers
 
Ricks agrees with what I said in my book Bill Please: Consumers Driving Health Care, and what Regina Herzlinger, the mother of consumer-driven health care, stated in her book, Who Killed Health Care? America’s $2 Trillion Medical Problem – and the Consumer-Driven Cure, that in nearly every industry, consumers are the catalysts for reducing costs and improving quality. We also all agree that this hasn’t happened yet in health care – because, as I’m always stating, it is opaque and nearly impossible to get meaningful cost and quality information before receiving treatment.
 
Ricks uses the same example as Herzlinger and I – “When you buy a car, you don’t care what the manufacturer paid for each of the 30,000 parts in it. You care what the price of the whole is, and how well it functions, before you drive it off the lot. We need that kind of transparency in health care, to enable consumers to make more informed decisions and to encourage health care companies to meet consumers’ expectations.”
 
Pay for Value
 
Ricks and I diverge a bit here. Just as I believe we must go further than continuing a “sick” model, I believe we must go further than the value-based care model Ricks supports. We must go all the way to a well-being model. I also believe that Concierge Medicine is the payment model that makes the most sense in implementing a well-being model, with health insurers only needing to provide catastrophic insurance. Providers' greatest revenue incentive, then, is to keep their patients healthy from the get-go. This also means, of course, that medical school curriculum needs a complete overhaul to equip providers to accomplish this. Being a doctor would need to be much more than slice and dice, even though we still need them to know these skills as well – assisted by robots, of course. :o)
 
What if every employer contracted directly with Concierge Medicine Programs then offering their employees catastrophic health insurance as well as supplemental gap insurance?
 
Summary
 
I wholeheartedly agree with Ricks that the greatest barrier to the system we want – and deserve – is the system we have, and that, “To realize the transformative potential of the digital revolution in our health care system, we need to change [reinvent] it.”

Source: David A. Ricks, August 27, 2018 “Eli Lilly CEO: Why Consumers Are Key to Bringing Down Health Care Costs” Fortune retrieved 9-28-18 from: http://fortune.com/2018/08/27/eli-lilly-health-care-pharmaceuticals/

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Rylan Klaseen & Associates          Tailored Benefits Delivery          Serving Southern California
316 W 2nd Street, Suite 500, Los Angeles, CA 90012 Cell 909-243-4886