Peter Neupert
Health Technology Executive

Peter Neupert

Peter Neupert is Microsoft’s corporate vice president for the Health Solutions Group. He led Drugstore.com from 1998 to 2001.

It's Not About Costs, It's About Enabling Transformation

The current conversation still seems to be wrapped around where we'll get the money to pay for what is essentially a system of the past.

Rather than focusing on these financials, we should concentrate on enabling the kind of transformation that's happened in banking, travel and other service industries. In his book "The Innovator's Prescription", Clay Christenson demonstrates that almost every other industry has been transformed -- complex, expensive products and services once only affordable to the wealthy have become accessible to the "masses" and provided by those with far less training.

The rules governing health care haven't allowed this to happen. Change requires:


Figuring out what works (and what doesn't). Today, the opinion of one physician or another -- whose treatment may call into account multiple tests, procedures, and the like -- is what dictates a course of action. More effective than opinions would be data about effective and ineffective treatments, what people call "evidence-based" medicine. McDonalds likely knows more about Big Mac sales nationally than we know about common procedures like hip replacements.


Enabling supply-side innovation. Our current fee-for-service payment model doesn't allow for innovation. We can see the beginnings of transformation -- virtual care from American Well, new delivery channels such as Minute Clinic -- but not widespread change. Today's system is based upon volume, not value. Until the rules change, even the most progressive institutions like the Mayo Clinic will be financially challenged.

Letting consumers do some of the work that expensive health-care professionals shouldn't be doing anymore. Patients complain they're paying too much while doctors complain they're paid too little. They're both right. Ten years ago, we wouldn't have imagined that people would do so many things themselves. Technology and business model innovation removed travel agents, bank tellers, and so on from the middleman position. Patients want to get involved in their health as evidenced by Kaiser Permanente. Online systems have increased satisfaction and allowed the work of expensive professionals to be replaced.

Congress created the rules that have stifled innovation (e.g. Medicare). Now they need to create a new framework that drives value, rewards experimentation and enables innovation. This is what will allow us to realize the policy goals of providing increased access while maintaining some fiscal responsibility.

By Peter Neupert  |  July 21, 2009; 10:39 AM ET  | Category:  Health costs Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
Previous: We Must Threaten the Status Quo | Next: Start with ERs, Medicare and Drug Companies

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