Innovation in Healthcare - When it Pays

In healthcare, we're constantly arguing about whether or notthe  'consumerisation'  (or "Appleisation, Disneyisation" etc) of medicine is a good thing. But that's probably the wrong conversation on which to spend multiple exhalations. Is medicine Art or Science? It doesn't much matter, as long as it's delivered safely and effectively (in a competitive, transparent, market-based environment free of state by state regulated coverage monopolies). And like most dichotomies, this one's artificial...the reality is some aurea mediocritas. Here's the thing - whether you believe medical care planning and delivery is Art or Science or happy middle ground doesn't really matter. Unless we look to increasing consumerism and commercialization healthcare will bankrupt the nation with a speed and velocity only slightly less frightening than the current financial meltdown. "U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.3 TRILLION in 2017, or 20 percent of GDP.1" Take a breath. Reread that. We're talking no moolah (or at least significantly less $ available via really really necromanced budget bending) for school funding, infrastructure maintenance, college loan programs, much less 'entitlement' programs like CMS. There are areas, however, relatively limited in scope, where it pays to think of the healthcare as a consumptive, commercial market with disparate customer segments. Especially when you're talking about brining a new development (good/service) to market. Innovation in applied biotech and health pay off. It's the old science vs. applied science (tech) routine. Science for the sake of research for its own sake is paying less. Health tech development, however, draws a nice chunk of change - certainly more than selecting a second-rate tenure track position. Let's take a look at some specific (and cool) examples of innovation collaboratives and challenges that pay (the concept and feel behind Nexthealth, minus the revenue model). The good news? A few exist. The bad news? Most rampantly underpay for really important stuff. And some innovation challenges are just really, really ugly...(a "Wave Sphere?" Honestly?) Case in point (found while trolling the lastest batch of InnoCentive challenges) - figure out a way to shorten clinical trial time for cancer Rxs? Good for you. "Solvers are encouraged to provide insights into means of accelerating Phase II and Phase III of clinical trials conducted both in the U.S. and abroad." If you can do this, there's a 10k check on the way...(and jump on it, because you've only got until April 11th).  There is, however, some big money in healthcare innovation challenges... "Phreesia, maker of electronic tablets to replace those pesky intake clipboards at doctors’ offices, announced today that it brought in $11.6 million in a round led by BlueCross BlueShield Venture Partners and Sandbox Industrie." (Thanks to @medicalquack for covering the funding round in more detail here). Surprisingly (#sarcasm), these contests are often funded by health insurance companies. Payors paying to find better ways to not pay so much for healthcare? Seems like a good investment to me. It's the industries inside track to funding self-interested 'comparative effectiveness' research. But healthcare VC funding rounds are still oftent transfered via a closed ecosystem of inbred investment dollars cycling through the insiders' healthcare Beltway. I'd like to see some HIT, eHealth, and mHealth startups venture out (pun fully intended) and engage with incubator tech programs like YCombinator and TechStars. The pay for these incubators is generally low (18k for this summer's 20 TechStars teams in Boulder and Boston), but there are happy returns other than sparse funding, including getting the attention of VCs not entrenched in the Health 2.0 space. For success stories, first take a look at Posterous - a YCombinator participant (easy enough if you're reading this via Twitter or Blogger at Health Management Rx, as I published at both places through Posterous with one click - using the service is as simple as typing up this email to myself and hitting the 'send' button). Next check out Foodzie - a TechStars beacon of relative early acheivement that's any gourmands wet dream. So, healthcare IT. Startups. Healthcare incubators (here, here, and here) New blood and all that...only question is, who in our sector (if anyone) is brave enough to donate plasma for the transfusion? It would take one hell of a team to stack up against tech entrants, or one hell of an innovation challenge to attract teams from outside the 'typical' healthcare startup strata. It's going to be a very interesting summer...

Posted via email from Jen's posterous