Health has a broad definition and the goal of the health care system is to provide health care services to the population. The health care system is not just a hospital or a clinic. It is the sum of all organizations and individuals to PROVIDE services to the Population. Often times the main goal of the health care system is forgotten.
Progress towards them depends on how systems carry out 4 vital functions: Provision of health care services Resource generation Financing Stewardship. Other dimensions for the evaluation of health care systems include: Quality Efficiency Acceptability Equity.
Human beings have always been looking for treatment of illnesses. From the early days of the superstitious approach to exploring the remedy power of nature which contributed to the creation of pharmaceuticals, therapeutics have come a long way. With advances in technology, today we have innovative products that can have a great impact on the cure or management of chronic diseases. I am sure there is still a long way to go with the emergence of nano-technology.
Today Medical Technologies are helping millions of patients achieve a better life. Medical Technologies are becoming a substitute for pharmaceuticals with better outcomes and less unwanted effects. Today we also have a more complex health care system.
Some individuals have tried to develop a sophisticated and complex environment of multiple stake holders around health care systems. But The fact of the matter is, that health care systems are and should be developed around the patients and their needs. Advances in technology, facilitated many innovations in modern medicine.
Innovation is not about making a new device. Innovation is merely a concept Strategic vs. Tactical A scientist or technologist’s “strategic” work will usher a “tactical” opportunity in the industry. Example: Nirenberg's work in the early 70s that won the Nobel prize, provided opportunities for the biotechnology industry. Or integrated circuits caused an information technology revolution
Innovation does not equal invention. Invention is producer driven. Someone says, I want to have some kind of gadget. And they dream it up in their lab or basement or garage. And it may not be of interest to anyone else. That’s invention. Innovation is driven from the user or the consumer side…it’s about improving the experience of the end user or consumer. Roger Martin, Dean of the Rotman School of Management, University of Toronto.
The development of therapies and creation of technology which monitors and regulates the central and peripheral nervous system with site-specific delivery of drugs, biologics and electrical stimulation.
In order to understand the concept of value in the health care system, we should consider three major elements of value in the context of cultural and societal beliefs.
In words of the renowned researcher “Michael Porter” value is:
In words of the renowned researcher “Michael Porter” value is:
Highly paid, High Tech manufacturing jobs will have a significant impact on the national economy.
All of our patients today have another layer of support for added reassurance. Today many of our implanted devices including the pacemaker, defibrillator and even our insulin pump can wirelessly transmit device data and some physiological measures to the health care providers by Remote Monitoring systems through the internet. This will provide easy and timely access to the health care professionals when needed.
Transcript of "Neil Fraser"
Measuring Value of Medical Technology vs. Cost Neil Fraser President, Medtronic of Canada Chair, Ivey Centre for Health Innovation & Leadership Advisory Council
Some Definitions Health Care System Innovation Value
Health and Health Care: WHO definition <ul><li>Health is a state of complete physical, mental, and social well-being and not merely the absence of disease or infirmity. </li></ul><ul><li>Health Care System is the organization of people, institutions, and resources to deliver health care services to meet the health needs of target populations. </li></ul><ul><li>The Goals of the Health Care System , are good health, responsiveness to the expectations of the population and fair financial contribution. </li></ul>World Health Organization. Preamble to the Constitution of the WHO, adopted by the International Health Conference, New York, 19-22 June 1946
Pill-Popping to Bionic Man Condition Example Drugs Used Medical technologies as adjunct or replacement to drugs Ventricular arrhythmias Amiodarone Implantable Cardiac Defibrillator Atrial fibrillation Digoxin, coumadin, ca+ channel blockers Endocardial ablation Obesity Lipase inhibitors, appetite suppressants Bariatric surgery Depression Antidepressants Deep brain stimulation Parkinson’s disease L-Dopa Deep brain stimulation Acute MI Thrombolytic Coronary stents (primary angioplasty) End-stage heart failure Inotropic drugs Bridge to transplantation and destination ventricular assist devices
Government HC Region Purchase groups Professional Groups HC Rx Copycat Feds Med School HTA / F/P/ Local Intl. HTA Orgs. FDA EU / CE Specialist Hospital/ C-suite/ Foundation GP / FHTs Public / community Advocacy Politician Health Care System Patient
Innovation <ul><li>Is a continuous variable </li></ul><ul><li>Innovation ≠ Invention 1 </li></ul><ul><li>With S-shapes logistics curve </li></ul>1- Roger Martin, Dean Rotman School of Management, University of Toronto
Value: A Health Care Perspective <ul><li>Not an abstract ideal or code word for “Cost Reduction” </li></ul><ul><li>Defines framework for performance improvement in health care </li></ul><ul><li>Defined around the “Patient” in a “well-functioning” system </li></ul><ul><li>Creation of value for patients should determine rewards for all other stakeholders </li></ul><ul><li>Since value is defined as outcomes relative to costs, it encompasses efficiency </li></ul>Michael E. Porter, What Is Value in Health Care? NEJM, 2010, 363, (26): 2477
Measuring Value in Health Care System <ul><li>Depends on results, not inputs </li></ul><ul><li>Measured by the Outcomes achieved, not the Volume of services delivered, </li></ul><ul><ul><li>Shifting focus from volume to value is a central challenge </li></ul></ul><ul><li>Not measured by the process of care </li></ul><ul><ul><li>Process measurement & improvement are important “tactics” but no substitutes for measuring outcomes 1 </li></ul></ul><ul><li>Cost reduction without regard to the outcomes achieved is dangerous and self-defeating, leading to false “savings” and potentially limiting effective care 1 </li></ul>Michael E. Porter, What Is Value in Health Care? NEJM, 2010, 363, (26): 2477
Myths and Facts: <ul><li>Myth: </li></ul><ul><ul><li>Technological innovation is deemed to be the root of the cost escalation in health care </li></ul></ul><ul><li>Facts: </li></ul><ul><ul><li>Medical technology makes a substantial difference in patients' quality of life, disability levels and mortality rates (Cardiac Pacemakers) </li></ul></ul><ul><ul><li>A wider group than just patients or health care professionals benefit from technological innovations in health care (Productivity) </li></ul></ul>It is reasonable to assess the contribution of medical innovation to the development of the economy and welfare as a whole
German Example <ul><li>Between 2002 - 08 </li></ul><ul><ul><li>Direct medical costs increased by € 101 Bil. </li></ul></ul><ul><ul><li>Prevented loss of productive years with positive value of € 123 Bil. on GDP </li></ul></ul><ul><ul><ul><li>Net societal gain = € 22 Bil. </li></ul></ul></ul><ul><li>Conclusions: </li></ul><ul><ul><li>“ We must not only regard health care spending as a cost factor, but need the full economic perspective” </li></ul></ul>German Ministry of Economics Affairs report on innovation impulses from health care economy – 09/03/2011
United States Example Direct Impact on U.S. Jobs 422,778 Overall Impact on U.S. Jobs 1.96 million <ul><li>In 2008, the medical technology industry employed 422,778 people; generated $24.6 Bil. Payroll </li></ul><ul><li>Paid salaries 40% more than the national average ($58,000 vs. $42,000) and sold $136.0 Bil. worth of products </li></ul><ul><li>U.S. manufacturing employment decreased by 4.8% between 2007-08 due to the economic recession; medical technology employment decreased by 1.1% </li></ul><ul><li>Each medical technology job generates an additional 1.5 jobs </li></ul><ul><li>The U.S. Labor Department has projected that the biomedical engineer occupation will experience the largest percentage growth (72%) of U.S. occupations through 2018 </li></ul>State Economic Impact of the Medical Technology Industry. Report prepared for AdvaMed by The Lewin Group, Inc. July 7, 2010.
Realities of Medical Technologies <ul><li>Front-end vs. amortized investments </li></ul><ul><li>Infrastructure </li></ul><ul><ul><li>e.g. Cath. Labs </li></ul></ul><ul><li>Hospitals becoming short stay intervention facilities </li></ul><ul><ul><li>e.g. embolization </li></ul></ul><ul><li>Health human resource training </li></ul><ul><li>Increasingly displacing drugs for localized disease control </li></ul><ul><li>Less invasiveness and increased safety and effectiveness will drive demand </li></ul><ul><ul><li>e.g. MAST in Spine surgery </li></ul></ul><ul><li>Narrow time frame for market share </li></ul>
Better Outcomes <ul><li>Advanced MRI and CT scanner for brain and vascular imaging enable more rapid diagnosis and treatment of stroke. </li></ul><ul><li>Increased emphasis on mammograms at an earlier age allows for earlier diagnosis and treatment. </li></ul><ul><li>Patients with insulin pumps and glucose monitors manage diabetes better, with greater adherence to regimens and less daily pain than conventional treatments. </li></ul><ul><li>Technology used to control blood glucose levels reduces diabetes-related complications </li></ul><ul><ul><li>Eye disease by 76% </li></ul></ul><ul><ul><li>Nerve disease by 69%. </li></ul></ul>The Value of Investment in Health Care: Better Care, Better Lives. Report compiled for The Value Group by MedTAP International. 2008.
Facts and Numbers <ul><li>Between 1980-2000, medical technology reduced hospital stays by 56% 1 </li></ul><ul><li>Total knee replacements save an average of $77,000 / patient in lifetime health care costs, due to reduced need for custodial care. 2 </li></ul><ul><li>Insulin pump therapy for diabetics saves approximately $18,300 / year compared with daily insulin injections. 3 </li></ul><ul><li>Medical imaging to diagnose and treat stroke leads to better outcomes, shorter hospital stays, and nearly $800 million / year in savings. 4 </li></ul><ul><li>Chronic pain treated with Spinal Cord Stimulator instead of conventional therapy saves up to $94,000 / patient. 5,6 </li></ul><ul><li>Early detection of infection costs $200-$300, while treating a downstream blood infection can cost $30,000. 7 </li></ul><ul><li>The Value of Investment in Health Care: Better Care, Better Lives, a study by The Value Group, 2004. </li></ul><ul><li>Gottlob, C., Pellissier, J., Chang R., et al. “Long-Term Cost Effectiveness of Total Knee Arthroplasty for the Treatment of Osteoarthritis.” American Academy of Orthopedic Surgeons annual meeting, February 1996. </li></ul><ul><li>CORE (Center for Outcomes Research) Diabetes Model. American Diabetes Association annual meeting; June 2005. </li></ul><ul><li>Johnson, S. C., “Effect of a U.S. National Institute of Health Programme of Clinical Trials in Public Health and Costs,” The Lancet, April 2006. </li></ul><ul><li>Bala MM, Riemsma RP, Nixon J Kleijen J. Systematic review of the (cost-)effectiveness of spinal cord stimulation for people with failed back surgery syndrome. Clin J Pain. 2008 Nov-Dec;24(9):741-56. </li></ul><ul><li>Kemler MA, Furnée CA. Economic evaluation of spinal cord stimulation for chronic reflect sympathetic dystrophy. Neurology. 2002 Oct 22;59(8):1203-9. </li></ul><ul><li>Alice Jacobs develops diagnostics that stand the test of time. Boston Women’s Business. Vol. 11 Issue 1. 2009. </li></ul>
Real faces of Health Care and their perception of the value of innovative technology Delphine Diabetes Insulin Pump Perry Parkinson's Deep Brain Stimulation Christine Long QT Syndrome Implantable Defibrillator Lin Diabetes Insulin Pump
Tele-monitoring and Electronic Medical Records
Conclusions <ul><li>Need to shift perspective from cost to value </li></ul><ul><ul><li>Societal welfare vs. Health Care system perspective </li></ul></ul><ul><li>Performance measures based on Patient Outcomes </li></ul><ul><li>Value to a patient over his/her lifetime </li></ul>