By Tom Hubbard

NEHI recently convened a meeting on health care innovation policy at which the Harvard economist David Cutler noted that debate over innovation has shifted greatly in the last decade. Not that long-running debates about the FDA, regulatory approvals, and drug and medical device development have gone away: far from it.

But these concerns are now matched or overshadowed by demands for proven value, proven outcomes and, increasingly, the Triple Aim, health care’s analog to the “faster, better, cheaper” goal associated with Moore’s Law.

To paraphrase Cutler, the market is demanding that cost come out of the system, that patient outcomes be held harmless if not improved, and it is demanding innovation that will do all this at once.   Innovation in U.S. health care is no longer just about meeting unmet medical need. It is about improving productivity and efficiency as well.

In this new environment it‘s the science-driven innovators (the pharma, biotech, and medtech people) who seem like the old school players, despite their immersion in truly revolutionary fields such as genomic medicine. It’s the tech-driven innovators (the healthcare IT, predictive analytics, process redesign, practice transformation and mobile health people) who are the cool kids grabbing the attention and a good deal of the new money.

To make matters worse for pharma, biotech and medtech, long-held assumptions about our national commitment to science-driven innovation seem to be dissolving. There’s little hope for reversing significant cuts to the National Institutes of Health. User fee revenues painstakingly negotiated with the FDA just last year have only barely escaped sequestration this year. Bold initiatives like the Human Genome Project seem a distant memory; indeed, President Obama’s recently announced brain mapping project seems to barely register with the public and Congress.

At this point many pharma, biotech and medical device companies have little choice but to enlist in the faster-better-cheaper cause. We can see this in the increasing interest among these companies in fields such as outcomes research and patient engagement technologies.

It’s a case of “if you can’t beat’em, join ‘em” for science-driven innovators, now driven into the arms of tech-driven innovators.

This is a critically important development — and not just for the most obvious reason.

The obvious reason is that tighter collaboration between science-driven and tech-driven innovators may make at least some science-driven innovations cheaper and easier to afford. Consider the Big Data phenomenon: one of the attractions of Big Data is that findings from massive patient databases will provide safety and efficacy signals that can be fed back into clinical research, and allow a redesign of clinical trials that will make them faster, better and cheaper.

The less obvious reason is that if tech-driven innovations succeed in wringing enough cost savings out of health care delivery, then health care payers will be much better positioned to absorb the costs of new science-driven innovations. Payers can offset the cost of these innovations through savings achieved elsewhere.

It’s simply a reality that many new science-driven innovations are likely to remain expensive for some time to come. Manufacturers and purchasers may haggle over price – and they will – but it seems unlikely that cheap, new therapies will enter the market en masse. Even if the techniques for comparative effectiveness research and value-based purchasing improve rapidly – a big if – health care payers and health care providers will still feel compelled to purchase at least some high-cost innovations (such as new cancer therapies) because the public will demand it. For all the cost consciousness that payment reforms like Accountable Care and bundled payments are bringing to the health care system, it’s hard to imagine that providers will compete on the basis of their prowess in shutting off patient access to every new thing available.

In order for us to afford the extra-ordinary things that science can do for medicine in the next many years, we are going to have to make the cost of more ordinary things very, very cheap.  Anyone rooting for new cures, be they patient advocates or pharma companies, should be rooting extra hard for costs to come out of the health care system as a whole. In today’s hyper-polarized health policy environment this is about as close as we are going to come to a new social contract on meeting unmet medical need.

That being the case, we should be looking for ways to make the marriage of science-driven and tech-driven innovators as productive as possible, as fast as possible.  A few thoughts inspired by the same meeting noted above:

Big Data: The rush is on to exploit Big Data, but many stakeholders feel the rush is going off in several directions at once. Efforts to standardize methodologies of analysis, and even to establish some clear priorities for analysis, need to be intensified, if not created from scratch. The public    (and public policymakers) need a much greater understanding of the counter-intuitive notion that Big Data might produce health care that is actually tailored to a patient’s individual characteristics and needs. Privacy concerns need to be addressed in an atmosphere that is now colored by the NSA surveillance controversy.

Clinical Research: Health care is in dire need of safe, effective alternatives to randomized clinical trials (RCTs) that represent a “gold standard” but are so expensive and so dependent on a homogenous group of patients that  (a) they aren’t well matched to the practice of real world medicine among real world patients, and (b) just don’t get funded in the first place. Initiatives such as PCORI’s aim to fill this gap but, here again, the public expects clinical research to yield answers that are either “right” or “wrong” and innovative research is going to give them answers that are neither. This is really a challenge for patient engagement throughout the system and ought to be attacked that way by patient advocates, payers, and providers, as well as pharma, biotech and medical device firms.

Collaboration: If the marriage of science-driven innovators and tech-driven innovators is about anything, it is about feedback loops. Many of the most intriguing new apps and gadgets are patient monitoring or self-care innovations: they are quite literally about feedback loops. But feedback is essential to a wide range of innovations. Drug and device developers cannot design better trials, target patients more accurately, or improve safety and effectiveness unless they get feedback from actual utilization of their products. Healthcare IT and mobile health innovators need early feedback from adopters and payers as they design  products so the  products  won’t be DOA in the marketplace. Creating good feedback loops presumes collaboration among manufacturers, patients, payers, and providers. Many regulators seem open to new forms of collaboration but many of our laws and regulations are still designed to strictly control the relationships among manufacturers, payers and providers in order to protect competition and consumer rights. We need a new look at how to balance the need for competition and consumer protection with the need to innovate in the interest of wringing costs out of the overall health care system and improving patient outcomes.

Value: The health care system is still struggling with critical issues regarding the value of innovations —- how to recognize it and how to allocate its costs and its benefits. The health care system needs to stop paying or reduce payments for innovations of little value. But it also needs to develop new ways to adopt innovations that create significant value for patients and society but fail to match the short time horizons for return on investment that characterize our health care system as well as our entire economy. For example: think about how much cost could be wrung out of the system, not to mention how much human suffering could be alleviated, if the health care system as a whole embraced innovations to treat depression, anxiety, addiction, and serious mental illness —– conditions that the system continues to carve out or otherwise gloss over. Meanwhile the threat posed by ‘super bugs’ and the failure of antibiotics ought to compel action to reward needed innovation. The political system may not be ready to start a bold dialogue on how to reward long-term value, but that shouldn’t stop the stakeholders (patients, providers, payers, life science companies) from acting themselves.

These goals will not be easy to address, but they are pragmatic goals when compared to the goal of ending gridlock in US health policy. Gridlock, technological change and economic necessity have brought us to this point where science-driven innovators must enter into this marriage of convenience with tech-driven innovators. We should all try to make it a happy and productive relationship.

Tom Hubbard is Vice President of Policy Research for NEHI, a national health policy institute.