To preserve quality, costs must be removed
“Most innovations only add to the cost of healthcare – even those that improve health outcomes and reduce the need for prolonged care. That is, unless somebody actively takes the cost saved on paper out of the system. A new treatment will only reduce costs if it both improves upon and quickly and completely replaces a more expensive one. A self-management solution that reduces hospital visits will only be cheaper if (over)capacity is actually removed. We need to stop thinking about innovation without implementation. If we don’t take costs into account, increasing quality will be that much harder and current levels of care will quickly become unsustainable.
There are encouraging signs. The recent covenant between government, hospitals and insurers recognizes that closing down some hospital units and concentrating volumes in others will both increase quality and reduce cost. The topsector plan rightly puts cost containment at the heart of healthcare innovation. The Regiegroep now has the opportunity to improve conditions for cost-efficient innovation over the entire healthcare chain.
The benefits should be obvious. Replacing more expensive methods and removing cost throughout the chain will not only enable us to keep paying for better healthcare. What we can make work at home, we can also export. Costs can save innovation as much as innovation can save costs.
However, it requires a change in mindset. A scientist’s highest aspiration is finding something unique that wins him a Nobel Prize. (Cost) effectiveness runs a distant second, but is prerequisite to scope and quality. The lower the costs, the more you can do. Rather than chase subsidies, industry should think about where the money is being spent and how to make a difference. If there is a case, there is a business – without government money. We are setting up a new fund to invest in entrepreneurs that take this approach to innovation.
It also means that cost-increasing innovations must demonstrate significant benefits. Many only succeed in prolonging life by three to six months. Maybe a year, if really successful. Few focus on increasing productivity over ten to fifteen years by reducing the burden of a chronic disease. Yet that is where the money is – and arguably where energy and money are best spent on innovation.”
Less is more
- Replace the old, and remove overcapacity and cost from the system
- Make cost a starting point for innovation
- Require cost-increasing innovations to demonstrate significant benefits
Jeroen van Breda Vriesman sits on the Executive Board of Eureko, which through its Achmea brand is the largest insurer in the Netherlands. He is responsible for Health, Life and Pensions and Group Information Management and IT. He is also a trustee of the Rotterdam Eye Hospital.