Friday, April 24, 2009

Burrill Report: The Healthcare X PRIZE as a "Carrot for Good Health"

A great article regarding the Healthcare X PRIZE was published in the Burrill Report on April 22 highlighting some of the unique features of an incentivized prize model.

The United States has put off reforming its ailing healthcare system for decades, but now comes a high-stakes prize that may make the thankless task really worth someone’s while. How does $10 million sound? The foundation that made possible the flight of the world’s first private spaceship plans to offer the sum to the team that comes up with a model that would dramatically improve the delivery of health in America. To become one of five finalists, teams will have to demonstrate that they can improve health value—which takes into account both outcomes and cost—by at least 50 percent.
The competition is being organized by the Playa Vista, California-based X PRIZE Foundation, along with Indianapolis-based insurer WellPoint and its WellPoint Foundation. The goal is to create a health system “that engages and empowers individuals and communities in a way that will dramatically improve health value.” America’s annual $2.4 trillion in healthcare expenditures—17 percent of gross domestic product—currently pays for a system that focuses on short-term disease management rather than the long-term improvement of individuals’ health, the organizers lament. “How do you get really healthy people to come out of all the funds we are putting into healthcare?” says Dr. Vijay Goel, director of prize development at the X PRIZE Foundation. “We see this [the competition] as really a complement to [other reform] efforts.”
The organizers plan to finalize competition design in June, with an anticipated launch of the challenge by the end of 2009. The competition itself involves several stages. To enter, teams will have to show an early concept and be able to cover an initial registration fee, expected to be about $10,000. In the concept phase, teams will have to show that their design can improve health value by at least 50 percent in a predictive model involving 10,000 sample records. Ultimately, the competition sponsors will select five finalists to participate in a real life, three-year trial in five different 10,000-person communities or employer-based test groups. The winner will be picked after the health outcomes and financial results are compared to a control group.
Goel says the competitors will likely have access to WellPoint’s extensive network of providers in order to test their health system models that will care for 10,000 people over the three-year period. Potential patients will have to opt in to the program and will know that they are part of a reform effort. “One of the things we’re saying to these teams is ‘you will have to create a system that people will want to participate in,’’” says Goel. “The problem with existing healthcare is that it isn’t all that engaging.”
The X PRIZE Foundation, which arranged, among others, the $10-million Ansari X PRIZE for suborbital spaceflight, and WellPoint say they expect the competition to result in innovation in a variety of areas. Those include care experience, healthcare financing and payment, comparative effectiveness, coordination of care, electronic health tools and technology, to name a few. An optimal system would eliminate acute care through proactive approaches, include clear information that highlights best performers regardless of their approach, and provide comprehensive solutions where best practices are delivered every time, the organizers say.
The project involves creating a community health index, which would track many components, such as reductions in ER visits and morbidity, as well as total cost—and would do so in a way that could be applied to different approaches and communities. But it will also look at broader metrics that aren’t always included in traditional evaluations, such as whether systems are able to reduce disability and sick days. “It’s really about making the bad clinical events we don’t like go away and making the good, positive events happen more frequently,” Goel says.
The Healthcare X PRIZE comes as the Obama Administration ramps up efforts to reform the U.S. healthcare system, having created the first-ever White House Office of Health Reform. Goel says that he sees the competition’s efforts as being complementary. But he also says that regardless of what happens on a national scale, the most innovative model that emerges from the competition will not just be rewarded with the prize. WellPoint has made a commitment to take the winning concept and expand it across its 35 million members, he says. “There’s a real attraction there,” he says.
Of course, Goel and his colleagues realize that driving vast improvement in healthcare is a highly complex task, perhaps even more challenging than building a suborbital spaceship. For starters, healthcare reform involves many players as well as buy-in from the public, who will need to adopt new approaches to healthcare delivery. “One of the things we are asking in early feedback is ‘are we asking the possible?’” says Goel. “I think one of the great things about being involved with the X PRIZE is that people think it’s crazy until they prove it to be true.” Only one team will win the prize, but the winners could ultimately end up being the American public if the reform that emerges is truly innovative—and actually doable.
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