Many of the students at HBS are seeking jobs that provide a good mix of complexity, industry or professional impact, entrepreneurial activity, and rewards. Often, the situations that we will find ourselves in while performing our jobs in the years to come will be two-sided problems. There will be a customer need, a competitor challenge, or a supplier issue that our firms will be trying to address. A hot topic in the second year curriculum is the prevalence and value of two-sided platforms where two customer groups are created through one business model.
I would contend that no other industries can compete with the number of constituencies present in the health care sector, particularly in the US. Trying to count the number of sides in the health care market can make a person’s head spin. Think about it – who doesn’t care about health care? Every one of us will be a patient at some point, so we should each care deeply about this industry. Government is the largest single payer in the system. Employers bear a significant cost in order to meet the expectations of their employees. Academic centers contribute a lot of research and thought leadership. The private sector is ripe with mature suppliers to the industry, while simultaneously there is a robust startup landscape bringing new technologies to market. Throw insurers, doctors, nurses, other caregivers, hospitals, the FDA, and other regulators into the mix and it becomes possibly the most complex combination of government , non-profit, and corporate players that one can imagine. We as a class, and more broadly a generation will be leading these different constituencies in the coming decades, helping them interact more effectively, and ultimately improve health care outcomes and (hopefully) lower costs.
What does the future of health care bring? What earth-shattering technologies are on the horizon? It’s tough to say, but an immense effort is currently underway in the area of personalized medicine. Personalized medicine can be defined as the use of medical information about a particular patient in tailoring the preventative or therapeutic care that the patient receives. There are theories, backed by varying levels of evidence that by understanding the genetic makeup and biological quirks of a person will allow more specific therapies that can be more effective and less toxic. I had the opportunity to spend two days at the 6th annual Personalized Medicine Conference (PMC). The conference is a collection of academics, policy influencers, practicing physicians, business leaders, and the occasional confused Harbus writer. The beauty here is that many of the stakeholders come together and hear the opinions and challenges from every part of the complex landscape and then have the opportunity to connect with these thought leaders to continue and escalate the discussion after the conference ends. The compelling reason for my participation is that HBS has an awful lot of intelligent people that could be excellent contributors to this emerging industry and I’d like to raise awareness within the HBS community about the exciting prospects for this industry.
It would be naïve to assume that a job in the pharmaceutical industry will not be affected by the coming wave of personalized medicine. With the cost to develop drugs going up and the efficacy going down, there is an impending inflexion point where even for the deepest-pocketed behemoths there will be negative expected returns on drug development expenditures. Two ways to avoid this are to decrease regulation of drug approval or to change the way drugs are developed, focusing on therapeutics that work for patients with a particular genotype. The former option, while lowering costs, could have catastrophic health consequences for patients and also ultimately increase the litigation expenses associated with these health consequences, providing a negative return anyway on the drug development investment. The latter option could be a way to decrease the size of the patient pool that will be tested based on genetic markers, which lowers drug trial costs and increases the efficacy for the tested population. Layered on top of this financial assessment is the ongoing debate about the legality of patenting genes (Listen up HLS joint-degrees!). The PMC had a panel debate focused in this area advocating for both sides of the issue, and the nuances of the language used in existing patent law don’t suitably address the scientific complexity involved with these new tests. Judge Robert Sweet recently invalidated patents issued on the DNA sequences related to breast cancer, BRCA1 and BRCA2. Does this limit innovation or help it? Where should the line be drawn for the things that can and cannot be patented in this space? Jennifer Gordon and Christopher Hansen had a lively and entertaining debate but ultimately the future is still up in the air. For more information on Judge Sweet’s decision, check out the NY Times article from 3/29/2010 by Schwartz and Pollack.
A job in the health care delivery sector will involve an ongoing discussion about the inherent tradeoff between privacy, cost, and improved health care. Knowing more about a patient could help achieve a better outcome, and decoding a patient’s genome could provide enough information to help them live longer and avoid debilitating diseases. On the flip side, how will our health care system protect the patient from discrimination based on the information in their genetic code? Should we have everyone sequenced in an enormous fishing expedition trying to find those variants that will cost the system a lot of money and be more proactive in treating those diseases? Even within health care delivery organizations, there are different specialties that have different uses for personalized medicine, which was the topic of a panel discussion at the PMC and included the perspectives of oncologists, geneticists, and pathologists. I started to fit right in once I heard the fifth reference to Clay Christensen’s book The Innovator’s Prescription.
The least-well understood sector of this whole puzzle is the payer side. Health care reform is in its early incarnations in the U.S. and it is unknown if the next decade will leave us with employers, government, or individuals footing the largest portion of health care costs. Without significant cooperation from the payers, new tests and preventative treatments may not be reimbursed, which would stifle innovation and decrease investment in this industry. The value of these new tests and treatments may only be understood and demonstrable once there are enough patients that have been studied to understand the correlations between the genetic information and the value to both the patient and the health care system. For those of you still following, payment for a new treatment will follow value demonstration, which will follow large sample size studies, which will follow treatment development, which will only happen if payment is a reasonable expectation. This becomes a classic chicken-or-the-egg problem, and hopefully there are mechanisms to rationalize this cycle.
Enter the public-private partnerships. Scientific research, particularly targeting a specific disease, can often bridge this funding gap. Entities such as Susan G. Komen for the Cure, the American Cancer Society and the Bill and Melinda Gates Foundation can all provide some financial assistance in narrow areas. Similar to how we have been trained in identifying good entrepreneurial opportunities, the world will need agile minds capable of determining where to allocate money with the hope of having the greatest success in addressing a particular condition that affects the greatest number of people.
Others will be considering jobs in medical devices, diagnostics, policy making, finance, and consulting. All of these areas, along with the aforementioned sectors, will be heavily involved in personalized medicine in the coming years. So, brush up on your high school biology and start considering one of the most complex fields that you could imagine with some of the greatest benefits to humankind– if we can find a balance between the “trilemma” of how to develop the advancing technology, how to use it once it is proven, and how to pay for it to make sure the innovation happens. With 17.3% of the U.S. GDP being committed to health care spending (a number that is growing), you can believe that there will be employment here for years to come and plenty of capacity to pay top minds to solve these problems.