Andy Kessler is a finance guy who’s worked on Wall Street and ran a hedge fund. And like a rich-man’s Michael Lewis, he’s written a couple of books about Wall Street and the money world, and, following down the path that Maggie Mahar’s taken, he’s moving onto health care (presumably before he finds something more interesting like baseball! His book is called The End of Medicine: How Silicon Valley (and Naked Mice) Will Reboot Your Doctor. Andy saw my recent talk at PARC and decided that I ought to know about his views, and they’re at the least provocative. So here’s a taster:
What the heck is a tech and finance guy like me doing sniffing around medicine? Well, I think I figured out that the way to save the $2 trillion healthcare industry – it’s for people to not get sick by getting doctors out of medicine. After spending the last few years following doctors and radiologists around, visiting cancer centers and spending time watching mice get poked and prodded, I’ve realized it is time to embed the expertise of doctors in silicon and software. Why have radiologists read mammograms to find 1 in 200 that have breast cancer? Today, a third of mammograms now have their second read done by computer, computer aided detection from companies like R2 and iCad, and for $29, much less than a radiologist, and perhaps more accurate. For me, that’s just a start. But I was astounded to learn that CT scans are on the same learning curve as PCs and iPods and cell phones. One slice per rotation moved to 4 slice, 16 slice, 64 slice and soon 256 slice CT scanners. Instead of film, the output is a high res color 3D model. Beats a blood pressure reading and cholesterol number, which is all that physicians can manage. They are flying blind.So I started running the numbers. State of the art scans are still close to $1000. Say 1% of adults have heart attacks every year. A stent procedure runs about $15,000 just for the stent, with the hospital stay and bandaids, you are in for closer to $20-30,000, let alone lost wages and productivity. Heart scans today are around $1000. So if you screen 100 people, it costs $100,000, certainly more than treating the 1 in 100 heart attack patient. So,…, Blue Cross won’t pay for scans. It is better for them if nature does their screening for them, you or I actually having a heart attack – ding, ding, ding, we found our 1 in 100.They probably still wouldn’t pay if the scans were $500. But they might at $200. And they certainly would pay at $100, because it would be cheaper to screen than to pay for care. Because it is on the silicon learning curve (down 30% every year, 50% every two years), it is pretty easy to see $100 scans within five years, probably less. Heart attacks and stroke may become a thing of the past.And cancer, the third member of the Big Three in healthcare spending? Structural CT scans will transition to molecular imaging to find cancer early. I can see biomarkers on antibody chips that can eventually sell for $1 or maybe even 10 cents can detect unique cancer proteins in blood and flag cancer early enough for much cheaper treatment, beating symptoms by five years.Doctors can’t do that. In the end, I believe that Silicon Valley will do to doctors what ATMs did to tellers.