If you want to understand the structural stalemate in healthcare, look no further than this "framework" on market access for gene therapies, developed by a working group convened by Blue Cross Blue Shield Association and the Aspen Institute (Increasing Access to Affordable, Life-Saving Medicines: Framework Released by Working Group Headed by Former FDA Commissioners).

Cracking the nut of The Problem wasn't even considered as a "future direction":

"[We] did not contemplate a large-scale overhaul of the current reimbursement system for the great majority of approved therapeutics. Indeed, care needs to be taken not to disrupt parts of the market that already maintain a reasonable balance between providing incentives that promote bold investments and preserving access to the results."

So much for strategy to "fix" things.

The American Way of healthcare is protected by many weapons of mass entrenchment; and it is controlled by information asymmetries that sustain the businesses ('control points') invested in the current system; the calcification runs thick, and solutions born with yesterday's economic thinking will always win the war for budget. 

This is one reason why, after nearly 20 years, the 'value-based payment' movement is still mostly a tweak of the edges. Write Kip Sullivan, Ana Malinow and Kay Tillow in a recent piece in STAT (Value-based payment has produced little value. It needs a time-out):

"The value-based payment crusade is now two decades old. But despite the tens of billions of dollars — perhaps hundreds of billions — spent on these programs, they have done little to improve Americans’ health or lower health care costs. It is time for proponents of value-based care to call a halt to these programs until they have an answer to this question: “Why have the vast majority of value-based payment experiments failed to improve value?”

Gene therapy is one of the most compelling concepts in modern medicine -- the ability to provide someone with a single treatment that will alleviate a terrible condition for a decade or more, perhaps even for life.

These are interventions without parallel.

Part of the scale problem is trying to make these innovations work within the context of a $4 trillion economic system organized to serve the underbelly of the actuarial tables, managed to reward the short-term, and fractured into fragments of value and market segments, the 'division of labor' that Adam Smith introduced to the world nearly 250 years ago.

It is hard to avoid the impression that, in confronting the need for "disruption" by the system as a whole, we are enacting a historical pantomime in which, rather than aiming for big ideas and new storylines, the actors perform similar roles with exaggerated gestures and the audience knows ahead of time at which points to boo and when to cheer.

And so we stay kinetically-trapped in a massive feedback loop, trying to fit the future onto the past, conceptually bounded by the Standard Model of thought and inaction.

We have become comfortable with the “organized irresponsibility” of a massive flywheel, one that’s powered by legacy concepts, technical debt and narrative framings, and it incessantly spins around itself as an infinitely recursive problem, the writing being overwritten by the same arrangement of pieces. Healthcare has been stuck for decades in stasis, governed by the veto power of legacy knowledge and culture, moving only in cautious increments. 

The next cycle of evolution in the business and economics of ‘producing health’ flows from a different equation altogether, a view of market innovation through market integration: life sciences + healthcare + government = new industry ecosystems as the locus for competition.

 At stake is a new category of growth and creative leadership from ‘system entrepreneurship’ — the capability to define and align “value” around shared marketspace, to cast outcomes as a narrative frame ahead of inputs, to begin with a market-based view as the voltage for powerful amplification and induction effects to create new economic systems.

What no longer works in healthcare is "monovation" -- depending on a single source of innovation. When it comes to realizing the technical potential of new technology, 'the system' always comes first, not the technical input. 

‘Market access innovation’ is about value that's created above and beyond any one piece in isolation from its environment, or any one market working independently of another, or “the market” viewed separately from “the government.”

Until then, it's the sound of one hand clapping.

🤘

  / jgs

John G. Singer is Executive Director of Blue Spoon Consulting, a global leader in Strategy and Innovation at a System Level. Blue Spoon was the first to apply systems theory to solve complex market access and integration challenges in the pharmaceutical industry.