Billionaire Doctor Puts His Money Where His Mind Is

Posted by IQ HSA on October 6, 2009 · Leave a Comment

Published: Monday, 5 Oct 2009 | 12:05 PM ET

By: Jane Wells
CNBC Correspondent

Patrick Soon-Shiong is a very smart guy who’s been told “no” all his life.
Ignoring that, he’s now worth billions. And he wants to turn healthcare on its head.

Oh really? I don’t think you can do that.

“That’s the most exciting time in life, when people tell me I can’t do that,” he says with a laugh. “I don’t know what it is about me, when you say, ‘You can’t do that,’ because then I say, ‘Well, that’s great, because then that’s exactly what I should do.’”

To achieve his goal, Dr. Soon-Shiong is spending $1 billion of a fortune he acquired building and selling drug firm APP Pharmaceuticals. With that money he is hiring the brightest minds in the world to create a smart grid for medical information. He describes it as a “Bell Labs of healthcare”, “a public utility”, and “a medical information superhighway.”

“The idea would be in my mind-and I know it sounds strange-is that the most important advances in medicine would be made not by new knowledge in molecular biology, because that’s exceeding what we can even use,” Dr. Soon-Shiong says. “It’ll be made by mathematicians, physicists, computer scientists, figuring out a way to get all that information together.”

At heart, he wants to use the internet to create a way for all of your medical information to follow you portably, encrypted securely to give you control of access, which can then be combined through the right software with the most up to date medical information relevant to your situation. He points to the way the world responded to the H1N1 virus as a model of how transparency and communication can save lives. “We need to think of chronic disease, hypertension, cancer, like H1N1,” Dr. Soon-Shiong says. “In fact, there’s an epidemic of chronic disease.” Yet currently, if you go to the doctor, who then sends you to a specialist, who maybe sends you to the hospital, “that trail of the patient today is impossible to follow, even by the physicians.” He calls the myriad of proprietary systems of medical record-keeping “medical bridges to nowhere.” The system he wants to build would bring it all together, and you could access it on your iPhone. Oh yeah, he also wants the system to make costs transparent as well. So are the health insurance companies on board with his plan? “Not really.”

The other thing Dr. Soon-Shiong is pushing, which may be even more revolutionary, is to completely change the mindset about healthcare.

He says the industry is currently motivated by treating illness, not by maintaining health.

Doctors and drug companies only make money when you’re sick. There need to be incentives to keep people healthy. Certainly there are incentives for those paying insurance premiums, and some payers are proactively going down this road already. My company, GE [GE 16.26 0.43 (+2.72%) ] , is offering a new health plan starting next year which offers reduced premiums for employees who don’t smoke, as well as 100% coverage for wellness care, i.e., physicals and vaccines. Can we create enough incentives for drug companies and physicians to find profits in preventing illness?

Dr. Soon-Shiong and his wife, actress Michele Chan, recently donated $100 million to St. John’s Hospital in Santa Monica to help that facility become a major hub in his “Bell Labs”. He says his smart grid is already being used by several children’s hospitals, where specialists can immediately weigh in online about the best treatment for a sick child. Dr. Soon-Shiong remains chairman of Abraxis BioScience [ABII 38.18 0.94 (+2.52%) ] , which he founded, and he still plans to spin out subsidiary Abraxis Health at some point. Forbes has him as the third richest man in Los Angeles, at $4 billion (behind Eli Broad and David Geffen), but the Los Angeles Business Journal has him at #1 at $6 billion. I asked him which is right. “I have no idea,” he says with a laugh. “That’s not what I focus on.”

If you want to see how this scientist and surgeon sees a way out of what he calls a “mess”, listen here to a large portion of our interview. I keep trying to find weaknesses in Dr. Soon-Shiong’s plan, but he seems to have an answer for everything. Still, does he have enough money to make it happen? Can he convince the government-which he feels is a necessary partner to make the system work in terms of funding and regulations-sign on? Seems unlikely. But here’s a guy who ignored those who told him “no” when he became a doctor at the age of 23 in apartheid South Africa, where he had to work for half the wages of his white contemporaries. He was told “you can’t do that” when he went outside of the medical community, to places like JPL and NASA, to develop radical therapies-whether it was saving diabetics by transplanting pancreas cells encapsulated in seaweed to avoid rejection, or creating a less toxic treatment for breast cancer using nanoparticles, a technology he thinks can be used in treating melanoma and pancreatic cancer.

But change the entire way medical information is shared? Make costs transparent? Change the profit motive? Is he nuts? “I love doing a lot of things I’m told I can’t do,” he says. “I think that’s what drives me and keeps me awake every day.”

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Filed under Health Care Reform · Tagged with Abraxis BioScience, Arizona, Bell Labs, cnbc, Dr. Soon-Shiong, General Electric, government healthcare, health insurance, health savings account, healthcare, HSA, Jane Wells, prevention, value, wellness

Kneale: Save ObamaCare – By Killing It

Posted by IQ HSA on September 22, 2009 · Leave a Comment

Published: Monday, 21 Sep 2009 | 12:41 PM ET

President Obama’s health-care revolution is dying before it hits the House floor. Now killing Obamacare is key to saving any semblance of health-care reform.

Instead of whipping this dead horse, the Obama Posse should wage a broad retreat and return with a spare, stripped-down, less-is-more plan.

Especially worrisome for the rookie in the White House, this ailing health plan has ignited a far broader and higher-stakes fight over how much government we really want, and what kind.

Do you really want the feds forcing you to buy insurance and taxing your family almost $4,000 a year if you refuse or decide you can’t afford it?

That’s what happens when health coverage–a personal responsibility of each of us–is transformed into an obligation of government, which now supposedly must provide it for all of us.

We simply can’t afford it. Rather than aim at all 300 million of us, an ObamaLite overhaul should narrow the target to two groups:

First: The 15 million or so Americans who are the Truly Uninsured: they want coverage, can’t afford it and don’t qualify for government help. So let’s give them some help.

Second: the 12 million who buy individual freelance policies rather than get coverage on the job. They need easy online access to a newly formed marketplace with interstate competition among the nation’s 1,300 private insurers.

Wait a minute–we have 46 million uninsured, based on the latest U.S. Census data. Why help only that first one-third? Because, among all the uninsured, one-third are people who could afford insurance but elect to take the risk of going bare.

Which is their right–until Bam & Co. take it away as the Baucus bill would do.

Another one-third of the uninsured already qualify for government help a la Medicare (for the aged) or Medicaid (for the poor). They just haven’t signed up because they’re too proud, lazy or clueless–or they are illegal aliens.

This scandalizes Democrats, the notion that two-thirds of the uninsured are partially at fault for their own going-bare status.

The other night, two liberal Democratic congressmen, Anthony Weiner of New York and Robert Andrews of New Jersey, accused me of passing along bogus statistics on this score.

They called the figures “hearsay” and “made-up.” But it turns out the figures come from Congress’s own non-partisan Congressional Research Service. Take a look at how Rep. Andrews responded (in the video); suffice it to say he refused to apologize.

It would be one thing if Obamacare’s universal, mandatory coverage would actually lower health costs. But it won’t. Covering more people will simply result in higher costs for more drugs, more devices, more surgeries and more visits to the doctor and the hospital.

That’s why the less-is-more plan should hold sway.

After narrowing Obamacare at the start to just the Truly Uninsured–the 15 million lower-income folks who want coverage but don’t qualify for government help-we also should make them pay some portion from their own wallets.

For them, Obamacare could cover, free of charge, catastrophic care and chronic care (for five often preventable diseases that pose over half of all costs: cancer, diabetes, heart disease, stroke and pulmonary disease).

That “doughnut” would leave recipients to cover the hole in the middle: regular doctor visits for routine ailments and maintenance.

One big cost problem we already have is a function of too much insurance.

Some 50% of all healthcare costs already are paid by government. Employer health plans cover the other biggest chunk. And only a sliver of the total cost is paid directly out of our own pockets.

If that personal portion went up, only then would we behave as tougher, smarter shoppers and worry more about keeping our own expenses down.
© 2009 CNBC.com

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Filed under Health Care Reform · Tagged with affordable, Arizona, cnbc, consumer, dennis kneale, employee benefits, government healthcare, health care cost, health insurance, health savings account, health-care, healthcare, HSA, Insurance carrier, low cost, Major medical, Medicare, reform, Self employed, value