Filter by...

Former Kaiser CEO David Lawrence: Entrepreneurs Can Fix Health Care

Washington Business Journal / October 11, 2011

Entrepreneurs — not the government and surely not established industry players — will be the ones who ultimately fix the deeply flawed American health care system, said Dr. David Lawrence, the retired CEO of Kaiser Permanente.

David M. Lawrence, Venture Partner

Lawrence, a senior venture partner at San Francisco-based Physic Ventures LLC, spoke at an event this week hosted by the RAND Corp. in Arlington. He laid out six major opportunities for entrepreneurs seeking out the next big business in health care, but first told listeners where they shouldn’t look for solutions:

 

“The problem with incumbent medical care systems is, they don’t change,” Lawrence said. “What they tend to do is capture the innovation, the entrepreneurial activity, and either slow it or they transform it to what their needs will be, and they often bastardize what are very, very important innovations.”

 

Lawrence’s opinion might not be shared by some of our region’s major hospital systems, such as MedStar Health, Children’s National Medical Center, Inova Health System or Johns Hopkins Medicine, all of whom would argue they’re innovating constantly.

 

Washington’s other strong suit — government — is about the last entity you should expect help from, Lawrence said. Politicians aren’t willing to tolerate the high failure rate and the long-term investment intrinsitic to truly revolutionary endeavors. And it surely won’t enact policies that funnel resources to just a few, special locales with a critical mass of academics, capital, research needed for disruptive innovation.

 

The major areas of opportunity, according to Lawrence, revolve around solving two major flaws in health care: inefficient systems and uninformed consumers:

 

1.) Triage, or helping consumers determine whether they need to seek medical attention in the first place. Unnecessary medical care is a huge cost driver, and, all too often, consumers simply don’t know enough to make an informed choice and default to a costly doctor’s office visit or emergency room. “We know that people, when given the right information in a timely fashion, will make different decisions about when they need to interact with the medical care system.”

 

2.) Navigation: Directing patients to the right caregivers. Patients “ping pong” throughout the system, with little to no appreciation of which doctors and hospitals provide the best value and will add value rather than contradict. Any company that can fix that has promise, he said.

 

3.) Chronic illness: Everybody talks a good game on managing chronic illnesses, but it still doesn’t happen, Lawrence said. Most of the time, it’s the patient herself who is doing the heavy lifting of managing diabetes. Any tool that makes that job easier could be a winner, he said.

 

4.) Preventative health care: This means safety devices like bike helmets, car seats, airbags and handgun locks and management, but it means high-end medical care too: “There’s a company in Boulder (Col.)that’s two or three years away from a screening chip to be able to look for 30 or 40 different diseases,” Lawrence said.

 

5.) Wellness management

 

6.) End-of-life care care: This is a little less obvious for entrepreneurs, he said. End-of-life care absorbs huge percentages of health care spending. It's more of a moral decision than an economic one, but it remains a segment of health care where huge spending goes in, with unclear results coming out.

 

Lawrence predicted pain as the system evolves.

 

“To do these well is going to require disrupting traditional medical relationships with patients, it’s going to require disrupting sources of income for the traditional medical care system, and it’s going to require disrupting the relationship of the consumer to the medical care system," he said.

 

By Ben Fischer, who covers health care and law.

Article's Link

View all News Articles