Jonathan Rauch is a senior writer for National Journal magazine in Washington, a contributing editor for The Atlantic Monthly, and the author of several books and numerous commentaries on public policy, culture, and economics.

He recently published a paper through Brookings that details how entrepreneurial newcomers are making essential contributions in realizing the fee-for-value vision in health care. He discussed his findings with DOTmed News.

DOTmed News: You quote Jonathan Bush's observation that, "The industries we care about least innovate at the highest speeds, while those we hold dearest to our heart innovate hardly at all." What accounts for that?

Jonathan Rauch: Probably because when we care a whole lot about something, and when we believe everyone should have access to it, we tend to regulate it heavily and treat it as an entitlement. That's the case in both education and medicine, both fields where we're justifiably cautious about precipitous changes that might harm people or destabilize settled norms--but where we've paid a price in lagging innovation and productivity.

That's starting to change in both sectors, but gradually.

DOTmed News: Why has value-based medicine proven so difficult to implement?

JR: Patients understandably want the best medicine money can buy; third-party payment reduces incentives to shop for values (after all, someone else is footing the bill); and fee-for-service as the basis for payment encourages overutilization. So incentives were aligned in a way that made value-based models downright unattractive.

DOTmed News: Can you give an example of an entrepreneurial company affecting change in health care?

JR: There are many examples in my paper, but here's a good one: a major source of illness and cost is patients' failure to take their medications. And once people fall off their meds, it's often hard to get them back on. What if a company could make money by predicting which patients are at highest risk of medication noncompliance and then, working with their health-care providers, by preventing noncompliance before the problem begins? That's what RxAnte, a company I profiled, is doing. This can work for two reasons: first, the advent of predictive analytics that can identify risks in advance; second, the advent of population-based payment models that reward health plans for keeping their members healthy. Put those together, add a dash of entrepreneurship and a sprinkling of venture capital, and you have a new business model that wouldn't have been possible just a few years ago.

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