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Copying what works to reduce healthcare costs

March 21, 2013 By Leave a Comment

If, as a country, we cared about improving the ratio of quality to costs in our healthcare system, why wouldn’t we:

  • Look for examples of things that already “work”, either in the USA or abroad; and
  • copy them?

In a post yesterday that got me thinking, John Goodman makes the point that:

  • there are real examples out there of individuals who have found ways to dramatically change the cost/quality ratio of healthcare (he gives interesting examples); but that
  • we are not doing a good job of systematically looking for such examples and then trying to replicate and scale them.

It is well worth reading the full article.

While depressing, it makes you realize there are probably some exciting opportunities out there that are not being exploited as yet.

Filed Under: Healthcare costs, Healthcare opportunities Tagged With: , ,

Web-based healthtech startups have invention risk. Surprise!

March 19, 2013 By 1 Comment

As readers of this blog know, I am interested in the potential of novel social networking and other internet-age techniques to transform our creaky healthcare system. A particularly intriguing class of startups is using these social techniques to change the behavior of patients in ways that lead to better health. For example, helping people to eat less, or avoid pre-diabetes, or manage their medication better, or avoid hospital readmission by taking better care of their heart disease.

The exciting thing about these web-based startups is that they use Lean startup methodology, have low capital requirements, and are staffed with young, energetic, change-the-world types.

And, putting on my investor hat, they have market risk perhaps, but no invention risk, because all this internet stuff is engineering right?

So, I was quite surprised recently, when I had reason to think more carefully about this class of companies, to realize that I think they do indeed have a pretty substantial invention risk. And interestingly, most of the ones I have looked at don’t realize they have invention risk, and are not managing their businesses as if they have invention risk. That is a worry. [Read more...]

Filed Under: science-based startups, startups Tagged With: , , ,

Invention risk makes lean science startups different

March 12, 2013 By 4 Comments

A hallmark of new ventures that are based on scientific advances in fields like medical devices, health tech, or cleantech is that they often have invention risk. Frequently they also have market risk.

InventionAnd while the standard venture capital reaction to startups with both market and invention risk is “come back when one of the risks has been eliminated”, I find them exciting, have been involved with quite a few of them over the years, and am always looking for ways to optimize the rate of risk reduction per dollar invested.

For the last 18 months I have been trying to apply / modify the principles of lean startup and customer development to a handful of companies I have been helping, each of which has a healthy amount of invention risk as well as a dollop of market risk. I have gained some insights that I have not seen discussed elsewhere, and thought I would share them.

And lest you think invention risk only applies to hardcore science projects, one of the most counter-intuitive things I have come to realize (here) is that many of the new, web-based healthtech startups that aim to change patient behavior, and thereby improve healthcare, have a very high degree of invention risk (as I define the term).  [Read more...]

Filed Under: science-based startups, startups Tagged With: , , , , ,

Disease economics: COPD and Pneumonia

February 19, 2013 By 1 Comment

Following on from my last post on asthma, here are the economic details for the other two big respiratory disease expense categories: COPD and Pneumonia.

Copd_versus_healthy_lung

[Read more...]

Filed Under: Healthcare costs, Healthcare opportunities Tagged With: , , ,

Disease economics: Asthma

February 12, 2013 By 1 Comment

Asthma and COPD (Chronic Obstructive Pulmonary Disease) show up as the the fifth most costly clinical category in US healthcare at $60+ Billion / yr. (see footnotes for source etc). As with prior posts in this series, I wanted to see if a deeper analysis of the economics suggested possible interesting business opportunities.

And I have recently seen several interesting healthtech startups attacking the asthma space and wanted to use these expense numbers to understand better the opportunity they are targeting.

Asthma

[Read more...]

Filed Under: Healthcare costs, Healthcare opportunities Tagged With: , ,

Disease economics: Backpain

February 6, 2013 By 3 Comments

I was interested to see that Back problems are the ninth most costly clinical category in US healthcare at almost $40B / yr. I chose back pain as the second in my series on disease economics.

Back pain

Most ($31B) of the costs falling into the back problem category come from a single clinical condition code #205 (Spondylosis; intervertebral disc disorders; other back problems).

And most of these expenditures go toward hospital in-patient visits/procedures ($11B), and Clinician office visits ($13B).

For the details, read on.

[Read more...]

Filed Under: Healthcare costs, Healthcare opportunities Tagged With: , ,

Disease economics: heart disease

January 24, 2013 By Leave a Comment

I wanted to see what insight I could gain by looking a bit deeper into the economics of specific diseases. I started with heart disease. As in prior posts on disease economics, the data comes from AHRQ (details here and here and at bottom).

Expense color coding

Color code for graphs below

From my post on disease costs, the big heart disease clinical condition codes are Disorders of lipid metabolism, Essential hypertension, Coronary atherosclerosis etc, Acute MI, and CHF. Below are some details of the economics of each of the clinical conditions.

To read what I think it all means, scroll to the bottom of the post.

 
[Read more...]

Filed Under: Healthcare costs, Healthcare opportunities Tagged With: , ,

Disease cost drill down (1)

January 17, 2013 By 4 Comments

To be actionable, I felt it more useful to look at healthcare costs by specific clinical condition, rather than by the general disease groupings of my last post. Here is the graphic I came up with (excluding mental disease categories for now).

The 8 red dots represent clinical condition codes with annual expenditures each in excess of $20 Billion. The green dots represent 14 clinical condition codes with costs in excess of $10 Billion (but less than $20B).

[Read more...]

Filed Under: Healthcare costs, Healthcare opportunities Tagged With: ,

Disease through the eyes of an accountant

January 15, 2013 By 7 Comments

There has been a lot written recently about how some diseases cost the healthcare system more than others, and the fact that some patients (the sick ones and the old ones) cost more than others. I wanted to learn more about which clinical conditions are the big contributors to our national healthcare bill. So, for the purposes of this post I pretended I was an accountant, responsible for thinking about where to save money in the USA’s health budget. Here is what I learned.

dreamstime_5232179
My interest in this topic is part of my quest to identify new opportunities that I believe will arise as a result of turmoil and reshaping of the healthcare landscape over the coming decade (more on this topic here). It’s not that I think there is anything especially surprising or worrying about the fact that healthcare expenditures flow more to some diseases and patients than to others. To me that seems only to be expected. However, I do believe there is going to be increasing pressure to reduce costs, and that the logical places to look for new opportunity are where lots of money is presently being spent.  [Read more...]

Filed Under: Healthcare costs, Healthcare opportunities Tagged With: , ,

How Crowdfunding pushes the bounds of what can be funded

January 8, 2013 By 1 Comment

954c40800427975e22d301351271d611_largeI just backed a new project on Kickstarter that I consider a fascinating experiment. Who knows how well it will work, but if you are interested in how Crowdfunding is changing the landscape of funding early stage ventures, science projects, and projects at the intersection of art and technology, it is worth checking out the Dragon Empire project on Kickstarter, and the companion Lightning Gun project website. [Read more...]

Filed Under: Capital raising, M&A, Strategic partners, Crowdfunding Tagged With: , , , , ,
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