Author: Kevin Sheehy

Developing high value innovation in health

With New Zealand and many other developed countries concerned about healthcare costs escalating beyond what is sustainable but still expected by their populations to provide high quality health care, there is a tension that needs to be resolved.

Innovation in health care, both in developing new technologies as well as new ways of providing care to patients has the ability to resolve this tension, but only if done right.

The challenge is to get innovators to take the need for cost containment within health systems seriously and reconcile this with the need to make a return on their investment. Developing a nice-to-have device or service that doesn’t improve health outcomes or reduce costs is not going to do anything other than escalate tensions around costs.

High value innovations (and those which funders will gladly purchase) are those that clearly solve an existing problem in the health system. By solving a problem, I mean having an impact on a measurable aspect of people’s health, a simplistic example being a developer of a new wrist split that would have to ensure they provide evidence that the splint caused a person’s wrist injury to heal sooner or more reliably compared to existing versions. A new splint that is simply easier to apply or slightly more comfortable or visually appealing would have a far harder time getting funded even though it had some improvements.

Fortunately for companies, there are still many areas of health that are providing little value for the money spent and developing solutions in these areas is becoming possible due to multi-disciplinary approaches to the R&D cycle.

The past approach of highly specialised product engineers working in isolation on a fixed concept of their next product has been replaced by multiple disciplines sharing input about all aspects of the product’s life cycle, from the clinical input, design thinking, engineering, commercial and marketing experts working together.

With this team approach, more groups (including investors) are recognising the importance of getting health economists involved early on in the development. Health economics brings the perspective of value relative to existing treatments and should not be an afterthought in the process. Measuring the outcomes that funders care about in clinical and field trials is essential to getting funders to pay for the innovation once it is ready for patient use. Health economists should be able to identify these pivotal pieces of information before the money is spent on trials that are designed for regulatory approval only, missing the opportunity to develop funding and regulatory data simultaneously and at lower overall cost.

So, although developing a medical innovation is becoming more complex, the ability to tackle this complexity with the right capability is becoming more advanced and companies in New Zealand are beginning to grapple with doing it the right way.

Kevin is the new Health Lead at Navigator and is always enthusiastic to discuss strategy about bringing health innovation to the patient.

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