Writer: Esteban Pages
3 min read September 2023 — Speed is of the essence when it comes to delivering healthcare services and driving innovation to develop new treatments and medicines that ensure long-term health.
In that sense, regulations can act as either an enabler or a barrier to scale new products and technology quickly. Leaders in healthcare and life sciences gathered at the Invest: North & Central Jersey 2022-2023 launch conference to share perspectives on how industry stakeholders and regulators can work together to unlock the full potential of the region’s talent and multi-million R&D investments.
Moderated by Riker Danzig’s healthcare and commercial litigation group partner Kay Klele, the launch event’s second panel “Research and rules: How current regulations are impacting healthcare innovation and what needs to change” gathered the insights of Chris Cozic, executive vice president and chief people officer at Genmab, Andy Anderson, chief medical and quality officer at RWJBarnabas Health and UnitedHealthcare CEO of New Jersey, Pennsylvania & Delaware Paul Marden. How regulations need to adapt to innovation in healthcare, the shift to value-based care and key industry challenges led the panel discussion.
A 2023 KFF survey on consumer experiences with health insurance reported nearly six in 10 insured adults had one or more insurance problems in the last year. The national representative survey of 3,605 people showed 16% of respondents had their “health insurance denied or delayed prior approval for needed care” — signifying one of the key issues leaders in the industry are tying to address.
“Health insurance needs to be more simple, more transparent and more affordable. From a health insurance industry standpoint, you need to hit on all three. From a provider perspective, it boils down to reducing friction and red tape by reducing prior authorizations, making it easier for people to get the care they need,” said Marden.
When it comes to highly dynamic, tech-driven industries such as healthcare, regulators often have difficulty keeping up the pace and filling the gaps — but in some cases have stepped to the plate. “Telemedicine is a testament to that. Within two-to-three weeks, we went from doing zero telemedicine visits to doing 10,000 a week,” said Anderson. Cozic also noted that “regulators showed novel and adaptive regulatory pathways, using real world evidence for approvability, allowing innovation to come to patients in the market even quicker. Hordes of people and billions of dollars in R&D investment driving speed and driving innovation. Regulators trying to keep pace with that level of innovation is a dawning proposition. There have been elements of progress but there’s still a lot of work to do.”
Although approved back in 2010, the Affordable Care Act (ACA) was a stepping stone to the industry’s needs around transparency. “Oftentimes, when [businesses and people] experience the healthcare system, they have no idea what they’re going to end up paying. Originally, what came out has transparency on cost,” explained Marden.
Fast forward to 2023, and there’s an added layer to the way healthcare prices have evolved, making relative costs difficult to grasp. “New Jersey established the Office of Affordability and Transparency, there is going to be more intervention at the state level mandating data be submitted to find out where costs are increasing and understanding why. Regulations will evolve stemming from having the capacity to see where prices are escalating at significant rates and what can be done about it,” Marden said. Anderson highlighted transparency’s role as a motivator for all industry stakeholders to get better, adding “there’s the cost but also the quality transparency for people to make a better choice.”
Regarding the shift toward a value-based healthcare model, the panel agreed on the vital role technology will continue to play. “It is about embracing access to information, the data and analytics we have today, appreciating the criticality of healthcare and benefits in your environment,” said Cozic.
Marden identified the largest value area in shifting from a corrective to a preemptive approach. “There has been so much opportunity to exchange more information real time with our insured population so we can get in front of high risk patients, emerging risk patients or even those patients who’ve never accessed any care earlier to make sure we reach out proactively, before they get acutely ill.” According to the Centers for Disease Control and Prevention, total direct costs for healthcare treatment of chronic diseases were over $1 trillion in 2016 — totalling an estimated $3.7 billion with lost economic productivity factored in. At that time, 8% of U.S. adults over 35 years old “received all recommended, high-priority, appropriate clinical preventive services.”
Affordability and rising costs will remain a challenge for the industry going forward, with New Jersey healthcare expenses for public employees poised to cost taxpayers $4 billion annually by 2024. This means health costs are rising at a faster pace than the state’s budget — and leaders are balancing higher costs with the same level of care. “Within most health systems, we’ve had increases on the cost side of the equation. The cost of labor and supplies have gone up significantly post-pandemic, which has caused financial stressors. The biggest opportunity is labor cost, having a pipeline of future healthcare workers. We’ve had shortages with every type of healthcare worker, nurses in particular,” said Anderson.
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