Thought Leader: (Eco)systemic Change

Dr. Wolfgang Klietmann is not an indecisive man. Nor is he willing to compromise his holistic view of healthcare by choosing to side with any one constituency. As a practicing researcher, lecturer, and faculty member at Harvard Medical School, Klietmann has developed overarching views—self-declared heretical thoughts—on how various players within the healthcare system interact.

Wolfgang Klietmann, MD

For six years, Klietmann has been a member of Harvard Business School's Health Industry Alumni Association, and now serves as its vice president. He will co-chair the organization's sixth-annual alumni healthcare conference, "The State of Affairs in Healthcare," to be held in November.

Pharm Exec: In your writings and speaking engagements, there is a theme of change. Where do you see the biggest area of change in the healthcare system today?

Klietmann: I see change on several levels. One part, even looking here at Harvard Medical School, is the openness of medical schools to other forms of treatment and healing, such as studying the Chinese healthcare system, which is completely different from our Western system. Also, recognizing that a larger part of the population looks for alternative treatment methods, such as buying over-the-counter drugs. There certainly is a new openness seen in medical schools, to not disregard these forms of alternative medicine, but investigate them and try to integrate them into our evolving new form of healthcare.

And there are also other forms of changes, such as the political ones underway by the US government to push forward the new healthcare information network, with Dr. David Braylor pioneering this effort. The intention is to use this unique opportunity to improve quality and reduce cost at the same time, and diminish errors.

Do you think that initiative will actually go through?

I am convinced that it will go through. The government has decided to push it. I know that Dr. Braylor has asked the healthcare industry, especially the IT section, to come up with an open standard that would integrate all the different information networks. He even "threatened" that if the industry could not come up with a proposal, there might be a decree from the government to do so.

This initiative is expected to save up to 200 billion dollars annually, by streamlining the information flow, avoiding reduplication of medical testing, and reducing errors that may be fatal to patients—and also cost a lot of money.

What type of solution is expected from industry?

The goal is to digitize all healthcare information, including patient data, patient files, insurance data, X-ray images and—on the threshold—even microscopic pathology images.

The healthcare information will be available in an electronic format, able to be transported nationwide to all the different players in the system. This will avoid reduplications and streamline the flux.

Currently, we waste a tremendous amount of money by reduplicating services. On one side, we have the best medicine in the world in this country—our physicians, nurses, and hospitals. On the other side, we have a system that is antiquated, very bureaucratic, and very slow in processing data.

Ultimately, this slows down the efficiency of our healthcare delivery, because the system is inadequate for the very modern- and high-quality healthcare that was developed in this country.

Are there any other countries, maybe in Europe, that we can look to as examples?

At the moment, the country that could be used as a model is Switzerland. There, you have compulsory health insurance for everybody, and on top of it, you also have private health insurance. There are five universities with medical faculties and university hospitals.

There also are several hospital systems that are well integrated and deliver high quality care. They ensure that a good healthcare-delivery system exists for all patients, even in smaller towns and villages.

Do they have the electronic piece down?

Not yet. But in the United States, the flow of information is going through many impasses and bottlenecks because there is no real system. It's an agglomerate of many small systems, which creates this huge interconnected network where the flow is impeded and not streamlined.

You mention better patient care, higher quality care. For companies that conduct clinical trials, is there a benefit to plugging into this network?

Certainly. The companies that manage clinical trials, like contract research organizations (CROs), are an integral part of the healthcare system because they are the intermediaries between the pharma industry and the clinical centers that actually do the testing of new drugs.

The CROs are managing this very difficult task with their professional know-how and experience. So they need to be integrated and linked by this new healthcare information network to play their role.

I think this is especially important in Phase IV trials, which involve monitoring much larger amounts of data. Without such an electronic network, performing tasks in a timely manner would be impossible.

For companies that are not already collecting Phase IV information this way, do you think they'll change?

The Phase IV data are not yet collected in this efficient way. But if this new healthcare information network is in place, they will get nearly real-time results. This will improve efficiency because companies will become aware, at an earlier point, of adverse reactions.

What's the first step companies can take toward collecting data that way?

All players in the healthcare arena have to make plans. How each player actually connects into this new network is primarily a task for their individual IT departments, to ensure that they have the right open standards for connectivity with the healthcare information network.

You think consumers can afford greater ownership of the healthcare system. Should consumers pay more for care?

I am convinced that the educated consumer can contribute to improving healthcare delivery by demanding quality. Quality and efficiency will be recognized by the consumer, which will result in the healthcare delivery system emphasizing quality over cost. And the provider should be competing to provide the best healthcare—not just compete on a level of service with the least cost.

There are obviously some wrong expectations by the public regarding the action of drugs. This may be partially due to DTC advertising, which leads to the idea that you swallow a pill and you're cured. But no drug is risk-free. And recently, we have seen litigation coming up, and now we have a crisis in the pharma industry due to adverse reactions. We know that therapeutic failures, drug toxicity, and drug interactions exist and have to be monitored.

In the near future, we will be able to deliver better therapies with drugs personalized to cohorts of patients that are much smaller than the ones for blockbuster drugs. But we have to look at genetically defined groups of patients, or even at individuals and their genetic makeup.

Are pharmaceutical developers and researchers buying into that idea?

Yes. It will be necessary to develop this personalized medicine era in conjunction with the diagnostic industry, to develop the tools—so-called genetic tips—to analyze the personal genetic makeup of the individual patients.

There are so-called polymorphisms that contribute to variations in human beings; these variations cause different drug responses and adverse reactions. We know that for an average drug, only between half and two-thirds of the patients react positively. And adverse drug reactions are estimated to cost just short of 180 billion dollars annually in this country. That's an enormous amount of money that can be saved. On the other hand, we will have higher costs for diagnostics and personalized medicine. But the shift will be to the benefit of the patient.

You're involved in so many different areas. What's taking up most of your time, and what's going to be the hardest to figure out?

I have one very interesting project in telepathology, working with the Massachusetts General Hospital Department of Pathology, where I previously served for eight years on staff. I am working with a laboratory in Rio de Janeiro—the Sergio Franco Laboratory—to transmit virtual images of pathology.

We're using instrumentation from Carl Zeiss, the German company, and electronic equipment from IBM. This technology is at the threshold of being able to deliver virtual images of microscopic slides in such high quality that a pathology diagnosis can be established.

To prove this, we have planned a validation study to demonstrate that this new breakthrough technology is able to enter routine pathology. This digital or electronic form of image transmission, archiving, and education with the virtual microscope will revolutionize workflow in pathology. Currently, pathology is still conducted in the same way it was 150 years ago, with the microscope and staining techniques.

Do you have any other thoughts on how this evolving healthcare model will affect the pharma industry?

In the vaccine industry, the question of indemnity has led to a reduction in number; we only have five or six productive vaccine industries in the country, down from about 25 in the seventies. And we noticed the shortages of flu vaccine last year, and the question was, "Why do we have more Viagra in this country than flu vaccine?"

I think indemnity and litigation are two points of concern, and also profitability. We need a vital vaccine industry, but we also need a vital pharmaceutical industry. And our pharmaceutical industry also needs protection. This condemnation of the pharma industry as the bad guy is a danger.

Do you see the pharma and vaccine industries as separate?

I think they are nearly the same. There are firms—for example, Merck—that also are major vaccine manufacturers. Glaxo, in this country, has retreated from it. But they are still present in Europe, because there the litigation and indemnity question is resolved in a different way.

There are also state insurances or guarantees for recommended vaccinations. That insures the payers, producers, and physicians. If a doctor recommends a polio vaccination for the whole nation, you will have some individuals with side effects. And then society has to compensate those individuals, which is done through government payments by the taxpayer.

If you leave the industry vulnerable to these potential effects, and profit is low, they might pull out.

Wolfgang Klietmann, MD is a clinical pathologist and medical microbiologist for infectious diseases. He is an appointed lecturer and faculty member at Harvard Medical School and serves as vice president of the Harvard Business School Health Industry Alumni Association. Until 2001, Klietmann was on staff in the Department of Pathology at Massachusetts General Hospital. For five years, he headed a research group at the Max-Planck-Institute for Virus Research and served on the medical faculty at the University of Tuebingen (Germany). Klietmann was founder and physician-in-chief of a leading German institute of laboratory medicine, which was successfully bought out by the pharmaceutical industry. He is a member of the scientific advisory board of BioCal Technology.

Wolfgang's Heresies

1. The healthcare ecosystem is in disarray. The healthcare industry does not operate in isolation, but is in constant interaction with the world around it. In order to thrive, it must be responsive to changes in the economic, social, and political forces that affect business decisions. Any vision to revive the healthcare ecosystem must consider how changes to one part of the system affect the others and adjacent industries.

2. Consistency is the virtue of fools. The lethargy behind healthcare reform is due in part to a pervasive sense that the system is good enough for most. If nothing else, the healthcare system is at least consistent in its strengths and flaws. The medical discipline is itself deeply rooted in tradition, which gives the industry guidance amid the flows of time and change. However, stability and consistency are only valuable in moderation. In excess, they lead to blind rigidity and a stubborn refusal to recognize the need for change.

3. Outsiders will change the system. Our universities are hotbeds of unconventional thought, where inquisitive thinkers are perhaps more free to raise questions and propose disquieting answers that may not sit well with conventional wisdom. Those who question truth and authority are often seen as threatening; these doubters are often outcast from their societies, and branded heretics. However, now may be the time for heretics, who serve the vital function of preventing the ossification of a business or industry.

4. Disruptive innovations will lead the way to reform. Disruptive innovations are a historically proven mechanism for driving the healthcare system into crisis and toward a system that is higher in quality, more convenient, and lower in cost. More investment in technologies that simplify complex problems—and less investment in high-end, complex technologies—will result in innovations that historically could be performed only by expensive specialists being performed by a larger population of less-skilled people.

5. Reassess spending in research. Medical progress has brought many benefits, but with a financial burden that may be more than societies are able to bear. New technological advances have accounted for the bulk of cost increases. But in spite of the increased spending, R&D productivity is down in the pharma industry. This exodus may have severe consequences in the fight against infectious diseases. The trend should not be to curtail R&D, but to optimize efficiency of healthcare delivery systems and contain operational costs.

For six more heretical thoughts on healthcare from Dr. Klietmann, visit pharmexec.com

Wolfgang Klietmann, MD is a clinical pathologist and medical microbiologist for infectious diseases. He is an appointed lecturer and faculty member at Harvard Medical School and serves as vice president of the Harvard Business School Health Industry Alumni Association. Until 2001, Klietmann was on staff in the Department of Pathology at Massachusetts General Hospital. For five years, he headed a research group at the Max-Planck-Institute for Virus Research and served on the medical faculty at the University of Tuebingen (Germany). Klietmann was founder and physician-in-chief of a leading German institute of laboratory medicine, which was successfully bought out by the pharmaceutical industry. He is a member of the scientific advisory board of BioCal Technology.