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Under the Microscope: Are Innovation and Cost Control at Odds in Health Care?

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If you were one of the 2.3 million men in the United States who suffers from prostate cancer, you'd want the most advanced treatment that money could buy, right? Given a choice, you'd probably go for the latest in cancer-blasting radiation technology, the proton beam accelerator.

So would a growing number of doctors.

In the world of medicine, interest in proton-beam technology is growing. In November, for example, the world-renowned Mayo Clinic announced plans to build not one but two, proton-beam facilities at a cost of more $180 million each.

Experts agree the technology, which directs the smallest cancer-killing beam possible to diseased tissue, is incredibly useful for treating patients with cancer of the neck, breast, stomach, lung, spine and prostate. It's especially effective for treating children who suffer from brain cancer.

On a day when millions are taking a moment to remember Elizabeth Edwards, who died Tuesday after a six-year battle with cancer, it's reassuring to know that major medical breakthroughs like the proton beam accelerator are helping to save lives. But are they better than other, less-expensive forms of technology that are more widely available?

The question, and others like it, is at the center of a significant debate that has divided the health care industry. On one side of the discussion are medical researchers, academics and device manufacturers who believe that innovation is the key to better health care and wellness. On the other are professional administrators, insurance providers and government regulators who think cost-containment is the top priority when it comes to health care reform.

Which side is correct? Both are, actually. Consider: Millions of people owe their lives to medical breakthroughs that came about after vast sums of money were sunk into research, trial tests and industry education. And yet, millions suffer from inadequate care due to high costs that are directly impacted by the development and deployment of new treatments. The tension between these seemingly opposing forces has always been significant, but of late it's reached feverishly high levels. Nowhere is that more true than when it comes to big-ticket advances such as proton beam accelerators.

Today, only a handful facilities are up and running in the United States, though at least 10 more are under development, including two in Chicago that are less than 10 miles apart. Most proton beam centers are the size of a WalMart, only with walls that are a dozen feet thick. The machines inside them are some of the most sophisticated devices in the world. As you can imagine, they are major sources of pride for medical institutions.

But there's an exorbitant price to pay for this pride, writes Paul Levy, president and CEO of Beth Israel Deaconess Medical Center in Boston. Increasingly, the proton beam is being used to treat cancers that would ordinarily be treated with other, less expensive technology, he says. This, unfortunately, is contributing to a rise in health care costs. In a recent blog entitled, "Protons Killing Cancer and Our Budget," Levy worries that a shift to more expensive treatments is creating a "medical arms race in America."

"President Eisenhower warned us about the military-industrial complex," writes Levy. "We are have [sic] now entered the era of the health care-finance industry complex."

The numbers suggest he's onto something. Today, health care costs are growing at several times the rate of inflation. And thanks to legal, scientific and other concerns, the cost of new technology has never been higher. Consider the amount it takes to develop new medicines. According to drug maker GlaxoSmithKline, it takes roughly $800 million to bring a new drug to market, and as long as 12-15 years.

So how can we possibly expect to rein in costs and create breakthrough innovation? Several ways. First we need to rethink the ways data is collected, technology is used, and lawsuits are avoided. Without standard ways to analyze data or reach agreement on which technology works best in which situation, reform won't happen. Nor will it take root if there if we don't change the current legal environment that encourages medical practitioners to recommend the most advanced form of treatment, in part, to protect from malpractice lawsuits.

Cutting costs or developing new innovations? In few other fields is doing both so vitally important.

Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco, and the author of Doing Both: How Cisco Captures Today's Profits and Drives Tomorrow's Growth. Follow Inder on Twitter at @indersidhu.