U.S. voters in the November 2024 election expressed concerned about economic challenges for the American family. While there was much discussion about inflation and housing prices, healthcare costs also contribute to economic anxiety. The cost of healthcare increases well above the rate of inflation, and health insurance continues to fail to provide access and financial security to covered lives.
If Americans voted for change, how might the healthcare market change? Several of the papers in this issue provide some insights for readers.
One of the greatest areas of concern with the U.S. healthcare market is the administrative costs of our multi-payer system. While this concern has been raised repeatedly, there has been less focus on solutions and how to improve the system. In an exciting application of a powerful new business framework, Precedent Thinking, Istvan and colleagues highlight 82 different firms and markets that have transformed in ways that can be applicable to healthcare. They offer a novel solution of computable contracts and a standard platform to reduce administrative waste and increase innovation.
Another exciting innovation is AI. Jain and colleagues are some of the country’s leading experts in AI in healthcare. Their concern is to ensure that the AI we adopt helps us improve our clinical paradigm and is not a new source of error and waste in the system.
Saba et. al. examine one of the signature initiatives of the Biden administration — drug price negotiation in Medicare. The authors suggest that for all the attention this effort has received, it will likely have little impact on the cost of medications covered by the Medicare program.
Value-based healthcare has been a rallying cry for healthcare reformers since the passage of the Affordable Care Act. However, there is little evidence that this approach has had a meaningful impact on the cost of healthcare. I suggest that this a failed approach as it does not consider the financial incentives driving consolidation of healthcare delivery in this country, incentives that are more powerful than the financial incentives of value-based care.
Ernest Ludy is an entrepreneur who, as the CEO on founder of Medstat, built a career on holding down healthcare costs. Ludy used data to understand variation and costs and apply these insights to improve the quality and efficiency of care. He discusses how his original vision can be applicable in today’s healthcare market.
The United States has seen an explosion of interest in a novel class of anti-obesity medications, the GLP-1 Receptor Antagonists. Information on the medication has spread virally through social media and influencers, transforming the idea of pharmaceutical marketing. Ray and Chatterjee examine marketing and “Direct to Consumer Prescriptions” in their analysis of an emerging trend in the pharmaceutical market.
In a new health management faculty series, we highlight the career of one of our member faculty, Pinar Karaca-Mandic, from the University of Minnesota. She is is both a scholar and now an entrepreneur, and offers her insights into leveraging and managing those roles.
Finally, we highlight some new teaching tools. Tal Gross, faculty member of the Questrom School of Business at Boston University, provides an overview of a book he co-authored that has been described as an “ideal entry point into health economics for everyone from aspiring economists to healthcare professionals.” In addition, a new teaching case examines GoodRx and the U.S. pharmaceutical marketplace.
Kevin Schulman, MD, MBA
BAHM President & HMPI Editor-in-Chief
Professor of Medicine, Stanford University