Friday, May 1, 2009

Health Innovators Series: Esther Dyson on improving "Health"

Esther Dyson shares her perspectives on health, health care, and how the X PRIZE can be an aspiration framework to inject innovation into the health care reform conversation.

As part of the development of the X PRIZE, we have had fascinating conversations with innovators throughout the health industry and health care system. One of the more avante guard thinkers in health (or anywhere for that matter) is the diminutive but indomitable Esther Dyson. Esther is an original, beginning with her industry changing Release 1.0, to her online presence with Release 2.0, to her ongoing investment, commentary, and thought leadership in all things innovative (including her recent stint in Russia training as a cosmonaut). She has recently turned her attention to health, making investments in several Health 2.0 companies like 23andMe, OrganizedWisdom, and ReliefInSite among others. We caught up with Esther for a few minutes early this year as part of the Healthcare X PRIZE development process.

You have such an interesting background, what are you doing now?
I’m just completed a course of study to become a cosmonaut. Its been an absolutely crazy experience but a fulfillment of a lifetime dream. Now that I am back, I am continuing to stay active in the investment space as well as looking at new and interesting trends.

What is your interest in healthcare?
I have been an investor in several innovative health startups - 23andMe, Organized Wisdom, Relief in Site - and I am fascinated by the tragedy of our current health care system. For a profession where the stakes are literally life and death, I am shocked by the lack of safety fanatacism we see. It is tragic to hear how often doctors don’t wash their hands, operate on the wrong body part, or have no safety systems or feedback loops to ensure that patients remain safe in their care. It feels like health care industry has been allowed to operate in this obscure way where people don’t know what they are getting, don’t know how much they are paying, have no outcomes data to tell them how good services are, and as a result there can be no competition stimulus to help improve. I find it a fascinating area to which we can apply many of the lessons we have already learned elsewhere.

What are the lessons learned form other industries that you think apply to healthcare?
A good example for the safety concept I mentioned above is the airline industry. You certainly see a safety fanaticism there (now if we can just get them to have an “on time” fanaticism!). It began with some efforts to regulate the industry in terms of who can and should be flying. It then spread to the systemization of safety, checklists, procedures that were followed every time to remove human errors. Another would be the impact of pricing transparency and how consumers value the service experience. Transparency engines like Travelocity and Expedia have really yielded some competitive rates for travelers. But as the prices have come down, there began to be too much focus on just low price and the flight experience was lost (safe and cheap but unpleasant). They forget that the consumers are willing to pay for experience as well. This is why companies like Jet Blue or Virgin Airlines can be successful because the “experience” they provide is worth a few extra bucks to the people who choose to fly them.

How do you see competition / pricing transparency affecting health care?
The health care sector has almost no true price competition. No one - including hospitals, providers, or patients - seem to have any idea how much things costs. Without this information readily available to all you are never going to be able to have a true marketplace. The type of competition we see now is actually not healthy for the industry - we see the medical arms race in term of all hospitals in a town obtaining the latest MRI scanner, robotic surgery unit, or other technology de jour to be able to compete in the medical arms race. This just translates to more expensive and wasteful care for all the people in that community. We shouldn’t be competing on these things but rather on how successful we are at improving health (not just health care).

Speaking of transparency, can you share your thoughts regarding patients controlling their data?
I am a big believer of what can happen when people have access to the data - particularly their own data. Whether that is in the form of an electronic health record, their own genomic data, or other related information they should absolutely have access to it. We can see the type of good that can come from this in the examples of ePatient Dave and others who are driving changes at multi-billion dollar companies who adjust how they deliver their services based on activated patients who are demanding more and better services.

It also goes to another point that I feel is relevant. People will change their behavior when it is in their self interest to do so. There appears to be an unwarranted “delicacy” about how people use and share their health information. There remains alot of areas where we just don’t talk enough - medical errors, deaths from cancers, and woman’s health issues - we need to know how our bodies work and it should not be impolite to inquire. Without this information readily accessible in a format that I want to view it in, we are not going to see the types of dramatic health improvements that I think are possible.

Where do you think we can see the biggest gains in health improvement?
To be honest, we need to help change peoples behaviors. I think that we could do the greatest good for the greatest number through the elimination of cigarettes, by change our current western diets, dramatically increasing our exercise efforts, and several other relatively straightforward and common sense approaches. The challenge with simplicity of the goal is the complexity of the humans who actually have to do something about it by changing the choices they are making. This is where the rubber hits the road and I am hopeful to see additional innovation that is easy to use, engaging, and fits into the pattern of my everyday life.

You are familiar with the X PRIZE Foundation from the Ansari X PRIZE. What outcome should the Healthcare X PRIZE be seeking to achieve?
I don’t think there can nor probably should be a single health goal. Four to five overarching competitions that tie together is probably a more realistic goal that would help you achieve the dramatic and transformational impact that is part of the X PRIZE mission. Another way to think about this would be to have multiple prizes as part of a single competition - awarding a different prize to the team that creates the most healthy living. Or perhaps, a sub prize to someone who dramatically improves a single disease state, or someone who reforms the payment system in the most effective way, etc

In terms of healthcare, I think we need to take a “systems” approach and figure how we can systematically get more individuals involved with managing their own health as well as become better users of the health care system. We also need to have people become focused on health, not just health care, and seek to improve living spaces, lifestyles, and natural balance. What is missing in all of this is the actual consumer engagement - having people become accountable for the choices they are making.

What type of financial incentives are required to move us toward a system that you are suggesting?
We need to have an insurance system that pays on delta’s rather than on costs. They need to share responsibility for improving my health and get rewarded for doing so as well. This might include a much more analytical framework in place so that we can know how much each person or groups of people are costing and consider differential payments for individuals who are conscientiously making healthier behavioral choices. This obviously highlights how information intense health is, and should be for that matter; we need to know the cost/benefit of each intervention and of each behavioral choice we so can get to an outcomes based premium concept.

Who will take on that role of the health vitality organization? Is that insurance companies or some other organization?
Our current construct for insurance is a joke. Our employer based system creates all kinds of distortions which ultimately require the government to be involved. Health should reasonably considered a societal good, and I believe it is appropriate that as a country we have determined that we are not going to charge the sickest among us what they truly cost the system. Essentially, what our “insurance” system really does is to attempt to spread the risk around. This isn’t really insurance but rather a redistribution of cost. I think if we begin to pay for things in a different way, including adopting a “true” insurance framework which would include more costs born by those using the system (with appropriate subsidies in place based on income), we can begin moving in the right direction.

How would you design a competition to improve the healthcare system?
Good question! How should we define the scope of “healthcare”? What models of care offers the most potential for improving the cost/quality tradeoffs (e.g., provider type, lifestyle, public health)? What elements of delivering care have the most potential (e.g., access, coverage, transparency)?

The very question strikes at something that I feel passionate about - we need to eliminate healthcare and improve health. I would be thinking about ways to dramatically reduce costs in the system while dramatically raising the bar to improve outcomes. I think I would approach this very commercially minded - what commercial outfit can be built that would deliver the type of outputs you are trying to achieve as part of an “optimal health paradigm”.
I would love to see that within 3 years you’d have a population of 1M people who have demonstrated improvement in predicted health outcome. The competition should require that teams have to change the real behavior of real people. I realize that the judging of this is going to be somewhat difficult, but there are many people and teams out there who have a jump on this and are doing real, great work. I would learn from the best organizations out there and create a competition that can replicate that success on a large scale while delivering the outcomes you seek.

Who else should we be speaking to?
One of the people I truly have respect for is Paul O’Neill and what he did at Alcoa. They dramatically reduced the number of hospitalizations they were experiencing as a company which dramatically reduced their costs. They also introduced several novel programs that made a real difference in how their employees thought about health care, how they used health services, and ultimately how healthy they were as a company. Pretty fascinating.
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