Why not better and cheaper? : Healthcare and innovation

"Why doesn't healthcare get better and cheaper? The evolution of the cell phones that we carry in our pockets demonstrates that quality can increase while prices fall. Why not in healthcare? Our answer is that the health sector generates the wrong kinds of innovation. It is too easy to profit from low-value innovations and too difficult to profit from innovations that reduce care costs. The result is a healthcare economy that is profusely innovative yet remarkably ineffective in discovering and implementing new technologies and business models that deliver increased value at lower cost. The consequences of this failure to innovate accumulate over time and makes society poorer and less healthy than it ought to be. The root causes of this innovation problem are the incentives, social norms, and competitive environment prevailing in the health sector. We can point innovation in a better direction by improving incentives, mobilizing professional norms and narratives, and altering the regulatory and competitive environment. Our analysis and proposals are of interest to clinicians, educators, managers, and policymakers."