What's Wrong With Healthcare?

Last week I had the awesome opportunity to sit in on a panel in Manhattan that featured 4 innovators and thought leaders in the healthcare/healthtech/medtech space as part of the “What’s Wrong With….” discussion series. Panelist’s included MIT’s MakerHealth co-founder – Jose Gomez-Marquez, Startup Health’s president and co-founder – Unity Stokes, Sherpaa Health’s founder – Dr. Jay Parkinson, and Oscar Health’s VP of Network Contracting & Head of Business Development – Michael Kopko.As is implied by the name of the event: the main topic of conversation was centered around the inefficiencies in the healthcare system, abnormalities in how care is delivered across the system, and the great obstacles we as healthcare consumers face in understanding where our money goes, how it’s used, and how that cost is passed on to the system as a whole (a massive 17.9% of America’s GDP – or approximately $3 trillion per year). We also discussed what can be done to solve these inefficiencies, different things that payers like Oscar Insurance are doing to demystify the healthcare environment, and how new ventures – like those who participate in the Startup Health incubator or labs like those at MIT’s MakerHealth Space – are looking to democratize the global healthcare environment.One of the most publicly prevalent burdens on healthcare – infamously brought to the forefront by the now imprisoned Martin Shkreli (AKA “Pharma Bro”) – is the cost of prescription drugs and personal medical devices (i.e. the $600 life-saving EpiPen manufactured by Mylan, which is something that I personally rely on for my peanut allergy). Circa 2016 when this news started to make national headlines, the public – for the first time – really started to feel like they needed to understand where their money was going in the healthcare system and why it was seemingly impossible to know the true-cost of care. Jose Gomez-Marquez talked about how in his home country of Honduras, you can walk into a medical clinic and see a “menu” (with prices) of what services they provide: Annual Physical…….$100, Dermatology Consultation…….$150, Infant Vaccinations……$300, etc. etc. While the system in Honduras is arguably strained for resources, this level of transparency allows for the public to understand where their money is going and what to expect. This is something that is a foreign concept to us in the United States.

Dr. Parkinson, a pediatrician by training, discussed the costs associated with something as simple as getting an MRI. As a doctor ordering an MRI for your patient, you have the option to send them to anywhere from a premier hospital to a radiology clinic that only performs scans – and the costs are widely variable. What might only cost $750 at a radiology clinic could cost upwards of $4000 at a premier private hospital, and while the patient may pay the same co-pay for any of the options, that full cost ultimately gets passed on to the insurer. The end result is exactly the same: a 3D T1 Axial Volumetric Head MRI w/ Contrast (aka a sliced picture of the inside of your head), but the costs are widely different. While a cost-conscious doctor like Dr. Parkinson uses his company’s telehealth platform to recommend cheaper MRI options to his patients, other doctors don’t – and this is a common theme across the profession.Take the cost of spinal screws, for example. A single screw can cost anywhere from $500 - $5000+. The average case will use at least 4 screws. Those screws need to be linked together by rods (also very expensive pieces of fancy metal). Many spinal patients will require revision surgery 5-10 years post-op (aka replacement of screws/rods/etc.). Over the course of 10 years, a spinal patient may have upwards of $50,000+ in hardware implanted, removed, and re-implanted into their body. That’s not even including the cost of everything else that’s involved in the process: paying the OR staff, anesthesia meds, other medications used throughout the operation, post-op care, ongoing rehab, and the list goes on. The true-cost of a spine surgery could easily reach upwards of $300,000+ over the course of the patient’s life, and that’s a huge burden on the system. Going back to the cost-conscious discussion above: a lot of common spine surgeries have been proven to cause minimal improvements to quality of life and could be replaced with physical therapy and other non-surgical interventions. While this is by no means representative of all surgeons, and 95% of doctors out there genuinely care about the holistic patient experience when diagnosing a pathology and recommending a course of treatment, there are “bad actors” out there that game the system to their benefit. And for those physicians that do genuinely do what they can do minimize cost and maximize care, they are still faced with many “this-or-that” decisions that are difficult to make – often decisions dependent upon the level of insurance that their patients have.One of the awesome things that Oscar Health is doing to demystify the costliness of healthcare is by generating a patient-friendly Explanation of Benefits. They take all of the standard 8pt font paragraphs of medical and financial jargon that’s part of a traditional post-care statement and break it down into easy to understand bullet points. “This costs X because of Y…You have already paid A and will only need to pay B more….This means that you have C left on your deductible” and other things like that. Their business model relies heavily on the healthcare marketplace that was instituted as part of the Affordable Care Act – or more colloquially: Obamacare, which empowers individual consumers to seek-out affordable healthcare. As Oscar says: they are trying to “humanize” the healthcare experience, and have hundreds of thousands of happy customers because of it.We also heard a lot about what it means to “make-it” in healthcare (hint: It’s a longggg road. Longer than most). As Startup Health’s Unity Stokes said when asked about advice for starting a venture that’s related to healthcare (not an exact quote, but something along these lines): “Go put yourself in a dark room and sit there for a long time while thinking about your idea. If you come out of that dark room and are still energized, passionate, and genuinely think that your idea can make a difference, then go at it with your all”. Why did he say this? The healthcare and medical space is saturated, EXTREMELY regulated, but ripe for disruption and change. In trying to make an impact on how health is treated and lives are impacted, there are barriers that no other industry needs to battle. You have the FDA, local/state/federal regulators, Pharma, Healthcare Payers (Aetna, United, Kaiser, etc.), Medical Device companies, and the list goes on and on.To entrench yourself against those massive (and well established) players, you need to be able to stay fully committed to the task at hand, which is changing or improving whatever it is you’re trying to do…and Startup Health is trying to do that. If you go to their homepage, you’re greeted with the following mission statement:[su_quote] Organizing, supporting, and investing in a Global Army of health transformers to achieve 10 health moonshots[/su_quote]Unity defines a “moonshot” as something that can impact over 1 billion people (yes…Billion). If that sounds ambitious, it definitely is. A few examples of the moonshots that Startup Health is tackling are: access to care (for everyone, regardless of location or economic status), longevity (adding 50 years to every human life), cost to zero (bringing the cost of healthcare down by a factor of 1 million), and women’s health (prioritizing research, preventative care, etc.). They partner with companies around the world that are doing work in one of these 10 areas, with the hopes that collective efforts on these moonshots will eventually (figuratively) bring us to the moon – aka impacting the lives of 1bn+ people around the world. And this truly requires a global army.Everything that Startup Health is working on are areas of healthcare that need a ton of work. And if it seems like the 10 moonshots touch every single aspect of healthcare, then you’re onto something. This is why the panel that I listened to and engaged with got together in the first place (and why those in innovative areas of healthcare do what they do): to have a dialogue about what’s wrong with healthcare and discuss how we can play a part in being the change that we’d like to see here.It was really inspiring to hear these four innovators talk about how they think changes will be made, and I’m excited to see where innovations like these will bring us in the next 20-30-50 years.

-Nick

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