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Unlocking Innovationin the United States and Germany:

Coverage, Quality, Cost, and Regulation

Unlocking Innovationin the United States and Germany:

Coverage, Quality, Cost, and Regulation

Glenn S. Forbes, MDCEO, Mayo Clinic Rochester

July 17, 2007

Glenn S. Forbes, MDCEO, Mayo Clinic Rochester

July 17, 2007

The Perspectives of Patients, Doctors, and Pharmacists

The Perspectives of Patients, Doctors, and Pharmacists

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So what did he do next?So what did he do next?

In 1997 at 21, Tiger Woods becamethe youngest player ever to win

the U.S. Masters golf championship with an unprecedented 18 below par

In 1997 at 21, Tiger Woods becamethe youngest player ever to win

the U.S. Masters golf championship with an unprecedented 18 below par

Changed his swing!Changed his swing!

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One of the greatest obstaclesto innovation

is “entrenched success”

One of the greatest obstaclesto innovation

is “entrenched success”

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Ingredients for InnovationIngredients for Innovation

Leadership/vision

Structure/process

Human element

External environment

Leadership/vision

Structure/process

Human element

External environment

1

2

3

4

+/–

+/–

+

–

+/–

+/–

+

–

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There is no clear visionfor a health care system from within

our society, nation, or individuals

There is no clear visionfor a health care system from within

our society, nation, or individuals

1 Leadership/vision

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What do we want?What do we want?

McClure Dilemma…We can have 2 or maybe 3

…Choose

McClure Dilemma…We can have 2 or maybe 3

…Choose

LowCost

HighQuality

AccessAvailability

High TechScience

1 Leadership/vision

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1 Leadership/vision

“What level of careis a right versus privilege?”

“What level of careis a right versus privilege?”

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“What type of needs of individualand society should be prioritized?”“What type of needs of individual

and society should be prioritized?”

1 Leadership/vision

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“What is the responsibility of the individualto society and society to the individual?”

“What is the responsibility of the individualto society and society to the individual?”

1 Leadership/vision

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“What is the appropriate level of resourcesthat should be used for health care?”

“What is the appropriate level of resourcesthat should be used for health care?”

1 Leadership/vision

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No nation has the perfect model…

government–profession–public

...must work together

No nation has the perfect model…

government–profession–public

...must work together

2 Structure/process

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Models VaryModels Vary

USAUSA UKUK CanadaCanada SwedenSweden GermanyGermany

300M300M

60M60M33M33M 9M9M

82M82M

2007 Population2007 Population

2 Structure/process

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2 Structure/process

Challenges in USAChallenges in USA

• Outcomes• Outcomes

• Cost• Cost

• Access/availability• Access/availability

• Perverse incentivesby government/market

• Perverse incentivesby government/market

• Fragmentation• Fragmentation

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Best value does not existin health care as in other service or

commodity areas

Best value does not existin health care as in other service or

commodity areas

• Lack of system engineering

• Inadequate and inefficientmodels

• Perverse incentives

• Lack of system engineering

• Inadequate and inefficientmodels

• Perverse incentives

2 Structure/process

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Suggested DiscussionSuggested Discussion

• Each nation must createthe environment that allows appropriate models to succeedthat achieve society’s goals

• Each nation must align laws, payment, training, incentivesto achieve this goal

• Each nation must createthe environment that allows appropriate models to succeedthat achieve society’s goals

• Each nation must align laws, payment, training, incentivesto achieve this goal

2 Structure/process

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• Culture of innovation

• Professional teamwork

• Communication

• Culture of innovation

• Professional teamwork

• Communication

3 Human element

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Perverse incentivesPerverse incentives

• Focus on processrather than outcomes

• Financial model

• Focus on processrather than outcomes

• Financial model

4 External environment

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Financial ModelIssues in play

Financial ModelIssues in play

End-of-Life End-of-Life

CareCareEnd-of-Life End-of-Life

CareCare

Pay for Pay for

Performance

Performance

Pay for Pay for

Performance

Performance

Cost Cost ShiftingShifting

Cost Cost ShiftingShifting Insurance

Insurance

for Allfor AllInsurance

Insurance

for Allfor All

Integrated Integrated CareCare

Integrated Integrated CareCare

Focus on Focus on

Technology

TechnologyFocus on Focus on

Technology

TechnologyPay for Pay for

ValueValuePay for

Pay for

ValueValue

4 External environment

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ProcessProcess Outcomes(results)

Outcomes(results)

• Focus on compliance to processruns the risk of inhibiting innovationby the best providers

• Only effective way to addressvalue in health care is to rewardends–results–outcomes rather than process

• Focus on compliance to processruns the risk of inhibiting innovationby the best providers

• Only effective way to addressvalue in health care is to rewardends–results–outcomes rather than process

4 External environment

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Is there an innovative solution?Is there an innovative solution?

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Tomorrow’s Health Carethrough Practice Transformation

Tomorrow’s Health Carethrough Practice Transformation

Portion(piece)

Portion(piece)

Comprehensive(1° thru 3°)

Comprehensive(1° thru 3°)

FragmentedFragmented IntegratedIntegrated

EpisodicEpisodic LifetimeLifetime

ArtArt ScienceScience

IllnessIllness WellnessWellness

Reactive(defense)

Reactive(defense)

Proactive(offense)

Proactive(offense)

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It is human nature to grow,improve, innovate…

It is human nature to grow,improve, innovate…

Reach…Reach…

Climb…Climb…

Achievenew heights

Achievenew heights

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Human Genome

IndividualizedMedicine

Population Medicine

Population Medicine

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Individualized MedicineIndividualized Medicine

DiagnosisDiagnosis

TreatmentTreatment

UnderstandingUnderstanding

Prognosis/Palliation

Prognosis/Palliation

PreventionPrevention

PredictionPrediction

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Patient Data

Clinical

Biological

Computational Biology

Enterprise Data Trust

EDT

Dat

a G

over

nanc

e

Outcomes

Cure

Wellness

Qualityof life

Value

Implementation of Individualized MedicineImplementation of Individualized MedicineObjectives

Research

Genetic epidemiology

Etiology

Progression

Clinical

Risk analysis

Prevention

Prognosis

Diagnosis

Treatment

Educational

Patients

Profession

Staff

Public

Informatics/Computation

Dec

isio

n S

uppo

rt

Business

Services

Licensing

• Education• Laboratory• Imaging• Consulting