Your%20Money%20or%20Your%20Life

1
Your Money or Your Life

• David M. Cutler
• Harvard University

2
One of the following is true

• Money spent on new medical innovations is a major
  drain on the economy
• More RD will lower health spending.
• Elvis is alive and haunting the Boston Red Sox

3
Two types of innovation

• Treatment innovation
• Extremely rapid, very expensive
• Key question is it worth it?
• Process innovation
• Much slower

4
Consequences of treatment innovation

1. As a whole, what we do is worth it.

Source Cutler et al., NEJM, 2006.
5
Consequences of treatment innovation

1. But we significantly overdo it.

Source Baicker and Chandra, Health Affairs
6
If you believe

• The high value as a whole
• Spend more on medical innovation, and convince
  people its good
• We overdo it
• Think about health care cost containment.

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Conceptualizing Medical Advance

• Should Be Done
• Yes No
• Yes
• No

Is Done
8
Conceptualizing Medical Advance

• Should Be Done
• Yes No
• Yes ?
• No ?

Is Done
9
The matching of needs to services is haphazard

• Should Be Done
• Yes No
• Yes ?
• No ?

Acute interventions
Is Done
Chronic disease management
10
Coordination is very important
Source Baicker and Chandra, Health Affairs
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It is possible to

• Cut spending by 20-30 percent (in addition to
  admin)
• Wennberg and colleagues
• Get people better care
• See HEDIS measurement

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How To Do This?

• Demand side Make health care more of a market,
  like other things
• Supply-side Orient payment to quality
• Information technology
• Quality-based rewards

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Examples of Underdeveloped Industries

• The personal health planning industry
• The cousin of financial planning
• The care coordination industry
• Shouldnt we all get concierge medicine?
• The post-trial evaluation industry
• What really works, and how?

14
In Summary

• Elvis may be haunting the Red Sox, but with the
  right medical team, maybe he could beat the
  Yankees.