Newt's Center for Health Transformation

I started writing this post a few months ago, and just found it in the 'unposted drafts' heap. Why not just put it out there?

Newt Gingrich's recent post on the National Review Online's "The Corner" is a mixture of good intention, fundamental ignorance, and conservative dogma. Gringrich, founder of the Center for Health Transformation, reminds his readers that "bureaucrats have tried health-care reform before without much success," and continues with a vapid, uninspired litany of what our health care system should be: mainly, one in which individuals don't get sick, doctors don't make mistakes, and the government does as little as possible. "Our goal," Gingrich writes, "should be to take back our money from the crooks who defraud the system, rather than taking it from the American taxpayers." Of course preventive and predictive medicine should be maximized, medical errors minimized, and fraud eliminated. Of course health care should be universally accessible, of the highest quality, and free for American citizens. But suggesting that these goals can be accomplished by individuals alone, without government support, demonstrates fundamental lack of understanding of the problem's magnitude and complexity, and an unabashed political dishonesty.

To his credit, Gingrich acknowledges that health information technology is an important part of the health system improvement process. Also admirable is his emphasis on the patient's role in the systemic health care process, an often over-looked component of intervention efficiency assessment and prediction/prevention measures that are crucial to sustainable reform. I suppose Gingrich's Center for Health Transformation is an effort to address these needs without involving "bureaucrats" and "big government." The Center's website lists ambitious "metrics" of success, including "prevention of all medical errors" and "elimination of all preventable diabetes." How such sweeping change of this magnitude is achieved without nation-wide determination of and adherence to data-collection and intervention protocols or guidelines is, I guess, left to individuals and their will power. How individuals without medical educations are expected to make informed decisions about their care, without standardized data that attempt to compare available interventions, isn't addressed by the Center's efforts to "cut out the middle man." How the practice of medicine itself is supposed to progress from an intuitive process, in which error is inevitable, to a more precise, data-driven process, in which error is minimized, is ignored. To sum up Newt's message: it's not realistic for government to play a positive role in health care reform, but the Center for Health Transformation can "prevent all medical errors." Obviously, because politicians are human beings but doctors are gods. Right.

As much as I'm frustrated by the off-hand dismissal of any possibility that government can play a positive role in improving America's health care system, I do appreciate the Center for Health Transformation's emphasis on individual action. While I don't agree that "personal responsibility" to live healthier is the solution to any of the most problematic aspects of the broken U.S. health system (see Atul Gawande's recent New Yorker piece), I do believe that it is only by the united action of citizens that any significant social change can happen.

More on the connections between social activism/disobedience and technological innovation coming soon...

Building Another Strawman: The Impact of Taxes on Entrepreneurship

The Massachusetts Institute of Technology and the Kauffman Foundation announced last week the results of a study, "Entrepreneurial Impact: The Role of MIT," according to which MIT entrepreneurs have created companies that "currently generate hundreds of billions of dollars and hundreds of thousands of jobs to regional economies." A less conservative, global estimate of these companies' annual world sales is estimated at $2 trillion, making the MIT "entrepreneurial ecosystem" the equivalent of the world's 11th-largest economy. Following announcement of this study, the belief that reinforced entrepreneurship will have significant positive impact on the American economy, and will play an important role in leading us out of the current recession, has picked up support in recent articles by Thomas Freidman (NY Times) and Reid Hoffman (Washington Post).

Distribution of federal money to a lightly regulated investment industry isn't likely (and for plenty of good reasons), but the general idea of stimulating entrepreneurship is a good one, and deserves serious consideration. Such efforts address immediate needs by providing jobs, but also put the United States in better position to meet the health care and energy challenges that threaten our future economy and overall well-being. Technological innovation, brought to life by entrepreneurs, is critical for health care cost reduction, expansion of quality care to more Americans, and development of sustainable energy alternatives. The recently announced Recovery and Reinvestment Act commits an impressive amount of money to scientific research and technology infrastructure, which is a great start, but we still need additional support, from government or elsewhere, of nascent ventures stuck in the "funding gap" between academic research and high-quality investment. Along these lines, J&J, Lilly, and other pharmas are partnering with universities and venture investors to build early-stage development programs and "accelerators" to capture technologies typically lost in the "valley of death" between initial scientific publications and progress through the early regulatory stages. Partners HealthCare, an integrated health system non-profit founded by Massachusetts General Hospital and Brigham and Women's Hospital, recently spun out the Partners Innovation Fund to address the same need. Even traditional venture firms recognize the need to readjust investment priorities in light of President Obama's commitment to health care reform (see Psilos Group's Albert Waxman recent post on The Health Care Blog, in which he identifies innovation as a key element of health care reform, and calls for increased action among venture investors in the health care space).

Still others have a different perspective of stimulus efforts, health care reform, and their impact on innovation. James Manzi of the City Journal wrote earlier this week that increased national spending is "bad news for American entrepreneurs." He argues that the increased income taxes needed to recover the expenditures will discourage potential entrepreneurs from kicking their start-ups into action. Manzi reasons that the "rational" entrepreneur will have to foresee higher odds of success in order to make up for the lost pay-off going to increased taxes. Unfortunately for those eager to jump on big government spending amidst economic crisis as anti-capitalist, Manzi's argument simply doesn't apply to any self-respecting entrepreneur. The reality is that entrepreneurs face such steep challenges and low probability of success at the outset of venture creation, especially if their ideas are worth anything, that whether they pay 39% instead of 36% in federal income tax, or 20% instead of 15% in capital gains, is hardly a consideration, and never a deal-breaker. Entrepreneurs start companies to build something new and make a meaningful contribution - this is the only way they succeed at any significant level, and the only way they are eventually financially rewarded for years of hard work with little pay and no guarantees. Arguing that concern over these kinds of tax increases will "squelch" entrepreneurship shows a fundamental misunderstanding of the entrepreneur.

Our health care system relies on public servants and entrepreneurs to work together and realign cost-coverage-quality trade-offs. Our country needs entrepreneurs more than ever to create jobs and stimulate local economies. I believe our entrepreneurs will rise to these challenges. The calls of unmet need have driven American entrepreneurship for over two centuries, and I don't see why our current situation should be an exception. Those "entrepreneurs" who opt to sit on the sidelines and wait for better odds of "success" should consider a career change.

NICE Innovation

England's National Institute for Health and Clinical Excellence (NICE) announced last week that it has commissioned Professor Sir Ian Kennedy to conduct a study on 'valuing innovation.' Evidence for the report will consist of written submissions and information gathered from workshops with interested parties. How 'innovation' and 'value' are defined, measured, and related to each other will be the subjects of the study.

What this study reports should be instructive to the progress of U.S. health care policy for a couple reasons. For one, U.S. health reform efforts require systemic cost reduction and comparative effectiveness assessment of medical interventions in order for universal coverage to be affordable. An inevitable part of these processes is the evaluation of new medical technologies. How their 'value' is defined and measured is tricky business, and likely to upset more interest groups than it pleases. The NICE commission gives us a glimpse of what pitfalls lie ahead.

A second point of interest will be the NICE commission's definition of 'innovation' and assessment of its cost. Medical technology innovation is dominated by the United States, where much more money, researchers, and institutions are committed to the discovery and commercial development of novel diagnostics and therapies than anywhere else in the world. This fundamentally changes how the U.K. and the U.S. value innovation in their respective countries, because the U.K. (along with many other countries) eventually benefit from successful innovations without proportional contribution to the costs of necessary failures. It will be interesting to see if and how this is addressed in the NICE report.

In previous posts, I have argued that health technology innovation is essential for maintenance of and universal access to affordable, quality health care. I hope that innovation value studies such as NICE's, and others surely to follow, will be used to improve the efficiency of innovation, and not to fuel efforts that arrest innovation or limit its utility.