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CMS – BIG $…the Future….. of Innovation?

by Louis on January 26, 2012

The big buzz in creating better models of care is the $1,000,000,000 CMS Innovation Center plans to throw into the mix in the next few weeks. A billion dollars should create some buzz. I have spoken to folks from major corporations and venture funds about their applications for the CMS Care Innovations Challenge funding. It seems a great idea for the folks who are charged  to save our money to stimulate innovative models so we can benefit from many imaginations and see what works.  I heard there are over 7,000 letters of intent, finals do this Friday.

Will the money reach the most creative minds? The application process is formidable. Will the legacy of rules and reimbursement models water down the innovation? Are the folks best able to generate new ideas capable of winning through the application process?

Will this volume of money determine what will be the future? Whether they are great ideas or just because they were funded? I have little doubt some neat ideas and savings will be demonstrated. I am excited about the possibilities. Some may become models that are replicated into the future.

One of the criteria (very reasonable) is a sustainable business model. If it is a sustainable business model why don’t the corporations invest their own money? Why do taxpayers have to subsidize huge and wealthy corporations to try new things? To create sustainable and profitable business models? Isn’t that what corporations do? or only what they did?

Is this crony capitalism? Is this another transfer of money from Main Street to Wall Street? Large and already well funded businesses will seize this opportunity to look for and try out new product and service offerings without investing their own money. This challenge allows middle class taxpayers to fund huge corporations to devise new and better ways to care for people and save medicare funds while creating even better opportunities for the corporations to profit. Large business organizations are subsidized to try new things at government expense.

Will we see great ideas and true innovation?   Can we expect truly disruptive innovation – cross disciplinary, drawing outside the lines ..or is mere incrementalism the best we can expect if new, small players are not able to win the awards? Will truly new ideas have the resources to demonstrate the savings and role in improved patient outcomes?

This does not change my hope and expectation that real cross disciplinary, out of the box innovation will come.  I am sure the newest models will come from novel collaborations, thoughtful and comprehensive management techniques and real attention to client desires. I will encourage and support all efforts from large and smaller businesses.

How do startups and entrepreneurs working in their garages and basements find the funds they need? I trust they will find a way…because they always have. That is the miracle of American ingenuity.

{ 3 comments… read them below or add one }

Marc Gunther January 26, 2012 at 8:40 pm

Great post, Louis. You raise a very interesting and difficult question about whether big institutions (government, corporate) can truly drive innovation. Their advantages are obvious–money, resources, people, access to distribution channels and markets. But bureaucracy and entrenched interests are the enemies of new ideas. I hope this $1 billion in taxpayer money (a very small amount, when seen as a fraction of health care spending) is spent well. Some very recent history–the department of energy’s efforts to spur clean energy innovation–aren’t encouraging, but even if one or two great ideas emerge from this competition, it will prove worthwhile.


Stephen January 26, 2012 at 10:58 pm

I was going to apply to the CMS Challenge – i had the LOI in place, but the requirements for putting the application together are just too onerous to get it done by the deadline. However to your point, i think the idea is there is market failure here, and many innovative ideas – whether they come from big businesses or small non-profits, need data-driven validation before they get funded. It’s a way to break the chicken and egg of today’s broken model, and given we’re talking about a $3trillion market, a billion bucks is – crazily – not that much considering.


Louis Tenenbaum January 27, 2012 at 2:47 pm

Stephen, Marc, Thanks for your comments.
It is hard for ME to grasp the idea that $1B is pocket change. But if it is, why not create a channel to get similar amounts into the checking accounts of small businesses where we can expect to see more innovations.


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