This is a summary of the book titled “Why not better and cheaper?” written by  James and Robert Rebitzer for healthcare and innovation and published by Oxford University Press in June 2023. The brothers delve into a study comprising of research, social norms, and market competition on why the results fall short for patients and society. Contrasting with a poster child story for better and cheaper innovations in residential lighting to begin with, the authors take us on a journey through the landscape and history in healthcare and its state of union. The healthcare system is at once profusely innovative and yet remarkably ineffective in discovering ways to deliver increased value at lower cost.

Innovations in treating heart conditions, for example, illustrate the significance and interrelation of these two factors of value addition and cost reduction. Among a large number of nations, this disease is one of the leading contributor for deaths and research in this field increased tremendously in the recent decades rather than earlier, partly because research was traditionally based on indirect markers and indicators. LDL or bad cholesterol could be reduced by newer class of drugs that were recently discovered including evolocumab  and alirocumab and these were approved for a wider audience. The initial list price for these drugs is over fourteen thousand dollars per year and this is excessive cost considering the drug has to be taken for life. This example shows that patients want to improve outcomes in mortality and quality of life, but the innovations and their delivery are determined by the pharmacies, physicians and insurance that influence their purchasing decisions. High-cost innovations can continue to gain market in healthcare and can coexist with low-cost innovations. Low value innovations can gain great market penetration while high value may not. In fact, a campaign called “Choosing Wisely” grew to promote low value options while calling out over five hundred tests that patients should avoid which usually contributes to about a hundred million dollars in waste annually. Cost reduction problem, on the other hand, arises from failure to imbibe processes, technologies, and skills to remove inefficiencies and reduce resources used. Innovators are unable to focus on cost reduction because skilled intervention becomes necessary which has limited the potential for pilot projects to reach mainstream. Taken together, this causes innovations in healthcare to underperform. Financial incentives, norms and competition can articulate these two symptoms.

Patents often fail to provide economic gains for innovators. Patents stimulate innovation by providing time-allotted monopolies, but the innovators can only profit when there is demand for the product. Saving lives by the development of antibiotics and overcoming antibiotic-resistant strains is an example where the patent and other financial incentives have fallen short. Inventing new antibiotics is a money losing endeavor as companies steer towards drugs along predecessor lines which may not have any more benefit than existing. Similarly, vaccine development has different value for those at high and low risks. Price for the vaccine is dependent on the individual and fails to calculate the benefit to others. The economic value of vaccine is miscalculated. Drug makers for a disease can make more money from than the treatment than from the vaccine. The distribution of risk is seldom considered. Another example of bias is indicated by the higher number of treatment options for late-stage cancer rather than earlier stage cancer when in fact the latter has higher value across a broader spectrum. Out of pocket costs to the end users tend to be quite close to the marginal costs of manufacturing the drug.

Previous book summary: 

1. https://1drv.ms/w/s!Ashlm-Nw-wnWhPI80x8PN6ekOh1GlQ?e=B7hJe0

2. SummarizerCodeSnippets.docx

3. https://coursera.org/share/89dd61377bad7e93402c5bb3440414af    

4. https://coursera.org/share/b1e019fd7028b96f54a057db4d11ea85