Value-Based Care: Business Case AGAINST It

Summary

In this healthcare-focused video, Dr. Eric Bricker challenges the concept of value-based care, arguing against its business viability. Drawing on examples like oversized eye drops and single-use chemotherapy bottles, he suggests that the healthcare industry often prioritizes profit over patient value. He uses a spectrum to illustrate the balance between value creation and extraction, advocating skepticism towards businesses claiming interest in value-based care due to its potential conflict with profit maximization.

Takeaways

• 😀 The video discusses a counterintuitive business case against value-based care in healthcare, suggesting it's not as beneficial for businesses as commonly thought.
• 💧 An example is given about eye drops being intentionally oversized, leading to waste, which was addressed by an ophthalmologist's invention of micro drops, but rejected by a major manufacturer for economic reasons.
• 🏥 The healthcare industry, particularly in the U.S., is highlighted as a multi-billion dollar industry, where value-based innovations like micro drops for eye conditions are suppressed due to their potential to reduce profits.
• 💊 The script mentions Herceptin, a chemotherapy drug for breast cancer, as another example where changes in packaging design led to increased waste and costs without improving patient outcomes.
• 📊 It is estimated that about 10% of all chemotherapy medications are wasted due to packaging inefficiencies, costing the healthcare system billions annually.
• 📈 The concept of value-based care is compared to other business practices, suggesting that it aims to improve the value delivered for a certain amount of money, similar to the micro drops and multi-use bottles.
• 📊 A spectrum is introduced to illustrate the balance between value creation and value extraction, with businesses ideally aiming for high value creation and low value extraction.
• 🚗 Examples of products with high value creation and low value extraction are given, such as gasoline and food, which are affordable and essential.
• 🏛 The script argues that businesses, especially publicly traded ones, are incentivized to extract as much value as possible, which often leads to practices that are not value-based.
• 🤔 The video calls for skepticism towards businesses claiming interest in value-based care, suggesting that such claims may not align with their profit-driven goals.
• 📚 The speaker emphasizes the need for honesty in discussing the business aspects of healthcare, advocating for clear understanding of where businesses stand on the value spectrum.

Q & A

What is the main argument presented by Dr. Eric Bricker in the video?

Dr. Eric Bricker argues against the business case for value-based care, suggesting that the healthcare industry, particularly from a business perspective, should aim to extract as much value as possible rather than focusing on creating value through value-based care.

What is the example of eye drops used to illustrate the business case against value-based care?

The example of eye drops is used to show that they are intentionally made too large for the eye's capacity, leading to waste. An ophthalmologist created a micro dropper that could produce smaller drops, but Alcon, a large eye drop manufacturer, rejected the idea because it would mean charging less for their product.

What is the significance of the eye drop industry in the United States?

The eye drop industry for dry eyes and glaucoma is a 3.4 billion dollar a year industry in the United States, highlighting the potential financial impact of the business decisions made within the industry.

What is the issue with the design of chemotherapy drug bottles for Herceptin as described in the script?

The issue is that Genentech, the manufacturer of Herceptin, changed the bottle design to prevent the leftover medication from being used for another patient, leading to waste and additional costs for patients, estimated at about a thousand dollars of waste per Herceptin infusion.

How much waste is estimated to occur due to the bottle design change for Herceptin?

It is estimated that there is about a thousand dollars of waste per Herceptin infusion due to the bottle design change, costing about 1.8 billion dollars a year.

What is the broader implication of the examples given in the script regarding the healthcare industry's approach to value-based care?

The broader implication is that the healthcare industry may prioritize profit over patient care and efficiency, as seen in the examples of eye drops and Herceptin bottle design, which could be indicative of a resistance to adopting value-based care practices.

What does Dr. Bricker suggest is the ideal position for a business in terms of value creation and extraction?

Dr. Bricker suggests that businesses, especially publicly traded ones, ideally want to be as close to the 'theft' side of the spectrum, where there is high value extraction with low value creation, to maximize profits for shareholders.

What is the role of competition and regulation in businesses that are on the 'theft' side of the value spectrum?

Competition and regulation play a crucial role in businesses on the 'theft' side, as they help to prevent excessive value extraction without value creation. Examples include competitive markets for gasoline and food, and regulated utilities to ensure fair pricing.

According to Dr. Bricker, what should one's reaction be if a business claims to be interested in value-based care?

Dr. Bricker advises that one should be highly skeptical if a business claims to be interested in value-based care, as it may not align with the business's goal of maximizing value extraction for shareholders.

What does Dr. Bricker suggest is the career implication for those interested in value-based care?

Dr. Bricker implies that pursuing a career in value-based care may not be financially rewarding or prestigious, as it does not align with the business strategies that are typically favored in the industry.