Marketing to redesign health care delivery

When I heard Bill Clinton’s 2007 TED presentation about health care systems, I thought he was seducing me. All the talk about equality, pricing, distribution, clean water, improved government services, sustainability. You can see what that would do to me.

Clinton in this video says he set up his foundation in part to “change the way some public good function was performed.” More sweet talk!

Here’s how Bill, and the Clinton Foundation, summarizes his work in health care: “collaborating with manufacturers on the supply side and governments on the demand side – and transitioning the market to a high-volume, low-cost model – we have reduced the cost of key drugs and enabled millions of people to receive lifesaving treatment.”

As an example, he describes the impact of marketing-driven reforms in health care his foundation has helped implement, starting in the Caribbean. At the time, generic AIDS drugs that normally cost $500 per patient per month were selling for $3,500 in the Bahamas. By changing how the market worked for AIDS drugs in the Caribbean, they drove the price of drugs down to $140 per patient.

They did this mainly by negotiating with the manufacturers to change the business model for AIDS drugs in the Bahamas. The manufacturers were operating on a low volume, high margin, uncertain payment model. The Clinton foundation worked on improving productivity in operations and the supply chain in the country. That helped change the market to the high volume, low margin, certain payment model.

Clinton jokes that the change was like shifting from a jewelry store strategy to a grocery store strategy.

With the price at $140 per patient per month, the Bahamas could treat 25 times more people for the same money, without the need for costly research or ongoing philanthropic contributions.

Because public services operate at a huge scale, marketing-driven improvements in public services can have a big effect. From the Bahamas and Haiti, the Clinton Foundation has taken this type of work to more than 70 countries. The model works for malaria, diarrhea, and tuberculosis as well as AIDS.

It makes me fantasize about taking some of the inefficiency and poor marketing out of our own health care system.

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