Happy Monday. I finally got a chance to digest a speech Health & Human Services Secretary Alex Azar gave last week--and there was a lot of meat in it. On the surface, the remarks, delivered to a group of hospital executives last Monday, were about the transformation of the U.S. health system from its current fee-for-service model to a so-called "value" paradigm--in short, creating a new system where payments would be based on the health outcomes of patients rather than on the stuff done to them. (Yes, a little harshly worded, I know.)
I recently wrote about a great conversation I had at the World Economic Forum on this value paradigm, which you can read here. Azar had some good things to say on this front, too--as well as a little fire and brimstone:
"Federal spending on our major healthcare programs is projected to rise from 5.5 percent of our economy in 2016 to 8.9 percent of our entire economy 30 years from now. By themselves, these programs will consume almost all of the income taxes collected by the federal government. It would be one thing if this were accompanied by increasing quality ... but it's not the deal we're getting right now."
But the stuff I found most compelling was Azar's emphasis on price transparency. (The Secretary used the word "transparency" or "transparent" six times in his speech.) The fact is, consumers of healthcare in America have virtually no idea ahead of time what they're going to pay for those goods and services. And they often don't know after the fact either. In many cases, the people purchasing such services don't know who delivered said services, whether they were necessary, or whether they were worth anywhere close to what was charged. And judging by the raft of emails I got after my Brainstorm Health essay last Wednesday ("Healthcare Costs Too Much, In Part, Because Hospitals Bill Too Much"), it's clear Americans are plum angry about it.
As with the physician I wrote about in Wednesday's essay, Secretary Azar, a lawyer and former drug exec, reveals a story about his own awakening to the opaque pricing outrage--which happened when he found himself being admitted to the hospital for a routine echocardiogram. The price of the test, at $5,500 (several times the national average), was scandalous enough. But what really frustrated him was that almost no one at the medical center would tell him the price to begin with.
More news below.
|Clifton Leaf, Editor in Chief, FORTUNE|
AI researchers: Bitcoin tech is a pretty good idea for sharing medical data. Nature reports that some AI researchers are looking to the "B"-word--blockchain, that is, the digital ledger technology behind cryptocurrencies like Bitcoin--to secure medical data. UCSF physician and computational biologist Dexter Hadley and his colleagues "are building a [blockchain-based] system that allows people to share their medical data with researchers easily and securely--and retain control over it," writes the publication. "By May, Hadley and his colleagues will launch a study to train their AI algorithm to detect cancer using mammograms that they hope to obtain from between three million and five million US women." (Nature)
Biogen continues its neurology bet with $600 million deal for Pfizer drug. Drug giant Biogen has already pooled massive resources into the risky business of Alzheimer's drug research. Now, the company appears to be continuing its foray into neurological therapies with a $600 million deal (including $75 million in upfront cash) for a Pfizer schizophrenia treatment. (Reuters)
THE BIG PICTURE
Trump administration may soon take more pragmatic tack on health care. The Associated Press is out with a new report on how the Trump administration, led by HHS Secretary Azar, may take a more consumer-centered tack on health care policy in the coming months. That includes possible changes such as passing drug rebate savings onto patients and new standards for electronic medical records to make them talk to each other (these are, of course, easier said than done). (ABC News)
Why Apple Was Graded As the Most Reliable Computer Maker on the Market, by Don Reisinger
Novartis CEO: We Need a Different Approach to Drug Discovery, by Vas Narasimhan
Why the Web Needs More Regulation, Not Less, by David Meyer
A Brief History of Warren Buffett's Million-Dollar NCAA Bracket Challenge, by Hallie Detrick