Monday, August 10, 2009

Health Innovators Series: Newt Gingrich on Healthcare Reform.

Former Speaker Mr. Gingrich shares his thoughts on health reform and the X PRIZE innovation model

Newt Gingrich is a transformative leader who needs no introduction. As the former Speaker of the House, he led the Republican "Contract with America" efforts in the mid-1990's. Since leaving public service, he has continued to speak, to write, and to engage in the global politics of transformation. He is the founder of the Center for Health Transformation, which is a nationwide collaboration of leaders trying to develop a new, improved, 21st century, personal, intelligent health system designed to deliver the best health and greatest access to a system that results in better quality, better outcomes and lower costs.

His original interview with the Healthcare X PRIZE team is reprinted here:

What are the challenges faced in the health care system as a whole?

I think the system faces two or three really large challenges in addition to access for all of the uninsured to have insurance. I think they face the challenge of moving new ideas rapidly, because today it takes up to seventeen years to get a new best idea to the average doctor. I think they have a challenge of transparency, making sure that we have all the information electronics so that we know what's happening and who's doing well, who's not doing well. I think they have a challenge of how we pay for things, because in many ways we overpay for acute care and we underpay for preventive care and wellness which results in people getting very sick before we take care of them. There are significant improvements that can be made that would lead to better health outcomes with longer, more active lives at lower cost.

What challenges do you think the federal government faces in particularly in health care?
Well, the federal government faces enormous challenges. First, as the largest single payer it is currently paying ~45 percent of the total cost of health care. As the federal budget collapses under the weight of all the various problems we're seeing in Washington, it gets harder and harder to pay for adequate health care. Second, the federal government is a slow, cumbersome, bureaucratic, and paper-based system. This makes it incredibly hard to keep up with fraud, and we see a stunning amount of this in the Medicare and Medicaid prorams in particular.

One estimate in New York State alone estimates that 10 percent of the money spent is on fraud. So instead of the tax dollar going to help the poor, it's going, frankly, to help crooks. The federal government also has a challenge because it inherently is not innovative. It is very, very hard for a big system like the federal government which is designed to be subject to the political process to lead out in making big breakthroughs. As a result, innovation and the big bold ideas almost always come from the private sector. As they prove themselves out, the federal government can then adopt them to great effect.

How would you compare the U.S. health care system versus that of other developed nations?
I think the United States does a much better job on very sophisticated acute care. This is why you see wealthy people from all over the world come to the U.S. when they have a serious illness. But we don't do a very good job of public health. We don't do a very good job of preventive care, and we certainly don't do a very good job of early testing and wellness. You could argue, as some analysts have, that the ideal model would be to have a European approach to taking care of people before they're sick, and then an American approach to taking care of them once they're really sick.

What challenges does your organization face in solving the health care issues?
Well, we actually face three big challenges, and they're all three huge mountains to climb. The first is that the Center for Health Transformation is attempting to reach out to try to find the new best ideas. This means that you have do a lot of scouting and a lot of listening. You have to go all over the country learning about health care and health services innovations. Second, as we try to figure out how to popularize and disseminate these innovations so that the average American can see the case studies to know that is the type of health care system they want. Third, we try to figure out how do you explain these complicated ideas to elected and bureaucratic officials so that they can understand them given the limitations they have of time, interest, and background into these topics. At our best, when we do all three of those, we can achieve very significant change very rapidly. However, if any one of the three breaks down, if we can't find the right idea, if we can't explain it clearly, or if we can't figure out how to implement it, then we struggle to get it done.

Do you think using incentives like prize competitions can help innovation and why?
Well, I think historically incentives are very powerful. As you very well know, Charles Lindberg flew the Atlantic in 1927 in order to win a prize which had been posted since 1919. The purse was approximately $25,000, which translates to about a half million dollars today adjusting for inflation. He was just one of a dozen or so people competing for this. So the original breakthrough in long distance flight was a response to a prize. The original breakthrough in navigation at sea was the response to a prize. And we have since the original breakthrough in personal space flight, as demonstrated by the Ansari X PRIZE, was also a response to a prize.

The power of prizes is two-fold. First, they arouse the imagination. You get young graduate students and young entrepreneurs and people in their basement or their garage, and they go wow, I can win this prize. It is much the same drive that you see in the American Idol phenomenon. People begin to show up and suddenly compete because they could be somebody; they could win something. The other thing that makes prizes very interesting is you don't have to pass through a series of hurdles defined by professionals or current state of the art. If you have the idea and it works, it doesn't matter how much education you have, who approved your approach, or who is your sponsor you can still win. Prizes have the power to arouse creativity and to generate energy that you don’t get in a more structured process of peer-reviewed research.

Why are innovations so important to America?

Innovation is the key to the future of the human race and it always has been. From the perspective of the person who figured out how to take lightning and turn it into the sustainable fire, which the Greeks wrote about in mythology, to the first person who figured out that a wheel was a lot better way to pull something (which never got discovered in the New World by the way), to the person who figured out that if you harness the power of a horse you could plow - our civilization has always benefited from innovation. Every one of these innovations for thousands of years have made us who we are. The countries which innovate the most effectively are the wealthiest, the strongest, the safest, and the healthiest. And innovation in that sense has been the key to the progress of the human race for all of recorded history. It is still the key, and to the degree America is the most innovative country in the world, it has also been the most successful.

So what outcomes do you hope result from this process?

Well, let me say first of all, I was thrilled when we got the phone call and Well Point Anthem announced that they were going to undertake a real prize. I was particularly pleased to see that this was not just a reward for a nice paper, but they were actually were going to finance running the pilot projects in the field to see what happens. And I thought this is one of the boldest breakthroughs in corporate leadership that I've seen in a long time. I think it has the potential, which we will not realize until its done, to really make an transformative impact. But who knows, maybe all five will fail but I believe that you will see two or three that will really lead to some dramatic improvements in care. Regardless of the outcome, we know we are going to generate a whole new generation of next level conversations. I also believe you are going to get thousands of people talking among themselves the potential of the Healthcare X-Prize and Well Point Anthem to lead out in this change by fundamentally rethinking the financing and payment of health care. And that is such a profound application of the prize concept to social public policy that I think it's a terrific breakthrough.

Why should people and companies support the prize model?

Well, I think first of all you have to decide two big facts about your company or if you're a successful, wealthy person, about yourself. The first is, as a citizen, whether a corporate citizen or an individual citizen, do you really want to live in a better country? Do you want to help create the future. If God has been good to you and America's been good to you, do you feel a little bit of a moral obligation to return that, to help the next generation inherit a better world than the one which you lived in?

The second reason would be purely self-interest. From the standpoint of an insurance company, if we could find a dramatically better method of payment and we could align the incentives for health, we Would suddenly have a healthier population that needed less acute care, that lived longer, that had active healthy aging. We might take 20 or 30 percent out of the cost of health care. That makes life dramatically easier for the individual, for the doctor, for the hospital, for the payer, including the government, and for the insurance company that's managing the system. So there's a certain amount of enlightened self-interest as well as a certain amount of good citizenship. And if you can get the two to come together, then you have a real incentive for a prize program.

Anything else you want to add that we did not cover?
I just want to add that the leadership at Well Point Anthem is truly taking a bold, courageous, and intelligent step in this which I hope begins to set a pattern for the entire country. I believe this model has the potential to blossom over the next 20 years and I really hope the Healthcare X PRIZE can be looked upon as the catalyst that got the process going. If one or more of these five community experiments work out in the real world, you're gonna be able to look back and say we helped shape the right incentives for the right health system and therefore we helped shape the future of America and probably by adoption around the world of the entire human race. This is truly one of the best examples of corporate citizenship I've seen in a very long time.
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