Sunday, May 17, 2009

Want to Win a Healthcare X Prize? Start Here

Back on April 14, while at the World Health Care Congress, the Disease Management Care Blog heard about the 'X Prize' for healthcare. Recall that it was these folks who first offered up a $10 million purse to the team that could fly a 3 passenger vehicle into space twice in two weeks. A private firm pulled it off on October 4, 2004. The X Prize Foundation is also offering similar prizes in human genomics, robotic space exploration and extreme automobile efficiency.

Not satisfied with easy stuff like ultra-rapid genomic sequencing and 100 miles per gallon cars, the X Prize Foundation, along with health insurer WellPoint, has turned its attention to the Final Frontier of improving well-being and lowering the the cost of healthcare. The challenge is to go where no one has gone before: to 'create a paradigm...that will dramatically improve health value.' The actual goal - should you and your team wish to compete - is to 1) achieve at least a 50% improvement in a details-not-yet-determined measured ratio of community health to cost (the threshold) and 2) beat the competition. As the DMCB understands it, contestants need to submit an idea along with a $10,000 fee, develop a plan and pilot it. Five finalists will then be chosen, who will then each launch their interventions in a community of about 10,000 people. There will be comparisons to actuarially similar communities to determine if the 50% threshold was met and which team won.

If the DMCB were involved in the planning (and it's not), it would focus on two things:

1) while one option would be to improve health by 50% while holding costs neutral, the path to victory may also be achieved by reducing costs by 33%. Rather than getting everyone to exercise and eat veggies, the DMCB would focus first on keeping persons away from emergency rooms and specialists. It would probably hope that the communities have high baseline costs, preferably with a limited number of employer-sponsored insurance plans with a rich benefit structure.

2) $10 million spread over a community of 10,000 people is a thousand dollars a person. The DMCB would offer to share the prize with the community individuals via cash or supporting a worthy community resource (a community center for example), educational scholarships or free internet access so persons could read the DMCB and be even smarter about healthcare.

As an aside, an article in the May 8 Wall Street Journal by Robert Lee Hotz notes we may have gone science prize crazy. In addition to the X Prizes, there are a total of $1 billion out there for solving dilemmas that range from HIV to greenhouse gases to plastic piping. It's an attractive business model for any sponsor, since the awareness-building can be significant, the budget is capped and only the winner gets paid. In the meantime, it's up to the competitors to make all the necessary investments which are not capped and which, in toto, can add up to far more than the Prize itself. No wonder New Gringrich likes them.

This 'Prize' approach is an interesting contrast with Medicare's Medical Home Demonstration. Care to guess which effort is more likely to yield up useful and timely information?


Unknown said...

Thanks for your commentary on the healthcare X PRIZE. While days are still early, I wanted to comment on your two suggestions:
1) The current approach (and its an area of debate) focuses on both costs and outcomes. We do see the elimination of high-cost clinical events (through better targeting and coordination) as low hanging fruit
2) Since the prize involves spend already occurring today (10K individuals, slightly sicker than normal would be ~$100M in cost annually), the amount of money available for investment in high-yielding solutions is much higher than the $10M would imply. The results do however need to be real, which few have demonstrated (Safeway and Pitney Bowes are interesting case examples). In any case, incentives are certainly on the of the unique assets of WellPoint and employers being involved and able to shift the flow of money.

Appreciate your comments!

Sr. Director of Healthcare Prize Development at X PRIZE Foundation

Jaan Sidorov said...

It's interesting that, in general, the 'home runs' in quality-cost have been reported from the employer and Medicaid insurance settings. What's left is fee for service Medicare, but.... the X Prize points out that we also need to better understand whether this can be pulled off for all individuals (no 'segmentation') at the community level. If the flow of money of money (or rather, this RIVER of money) can be impacted, that would indeed be paradigm shifting.

Thanks for the comment Vijay.