With the election in Massachussetts of Scott Brown, aka “GOP 41”, it has been an eventful week for the Healthcare reform bill that has been spotlighted for months as the marquee accomplishment of Team Obama. With Mr. Brown in place in the Senate, we at Spencer Trask are watching for a resurgence of interest in the economic benefits of the proposed healthcare legislation.
In 1999 about 200 Spencer Trask investors contributed 10 million dollars to fund the start-up Health Dialog. That company was formed specifically to profit from an exclusive license to Wennberg’s then obscure “unwarranted variation” research at Dartmouth. Its clients are insurance companies and large employers, and its profits are driven by cost-savings generated by informed patient decision taking. Health Dialog
- became the fastest growing healthcare management company of the decade,
- cut Blue Cross expenses by 30% and improved patient satisfaction rates
- built the world’s most robust data set showing that patient outcomes can be de-linked from patient expenditures.
Health Dialog is a fascinating story of vision, investors, and capitalism. It is also a little-known story of influence: Peter Orszag, the President’s right hand for Health Care Cost Reform is obsessed with Wennberg’s economics of health care delivery, link to May 4 issue of The New Yorker.
The economics of evidence-based care is one of the few points of agreement for both parties, and Spencer Trask Investors made it possible for Health Dialog to prove in the free market that patient-centric health care delivery models are profitable and empowering.
