WellPoint, X Prize Launch $10M Health Care Contest

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INDIANAPOLIS, IN — It may not involve rocket science, but a new X Prize Foundation competition for health care reform could pose the institute’s most daunting challenge yet.

The California-based foundation, which helped launch the first private manned space flight in 2004, is teaming with the insurer WellPoint Inc. to try to fix the U.S. health care system.

The companies have announced an open competition to devise solutions that improve health care cost and quality, and they’re dangling a prize of at least $10 million for the winner.

"Reinventing and rebooting the U.S. health care system is not to be taken lightly," said X-Prize Chief Executive Dr. Peter Diamandis. "Its an audacious task but, we think, very achievable."

X Prize has thrown down several big challenges in recent years. Aside from a contest that led to the space flight, the foundation also has offered $10 million for teams that can produce cars that get 100 miles per gallon or more and $30 million for sending a robot to the moon.

The nonprofit foundation decided to tackle health care after looking at some of the world’s biggest problems that need what Diamandis described as a revolutionary and fundamental breakthrough.

"Health care is by far at the top of the list," he said.

Contest details will be worked out by early next year. But essentially the competition will look for ways to "dramatically improve" cost and quality, said Brad Fluegel, a WellPoint executive vice president.

WellPoint and X Prize officials note that U.S. health care spending is projected to reach $4.2 trillion by 2016, or 20 percent of the country’s gross domestic product. Such spending in other developed countries makes up 11 percent of the GDP or less.

The contest organizers are thinking big picture. Fluegel said they will look for a system of solutions instead of one or two improvements.

Potential solutions might involve ways to streamline insurance reimbursement or the medical claims process that reduce administrative costs. They also might include solutions that help patients better manage chronic conditions like diabetes.

WellPoint will then test the finalist ideas in its state markets. A prize will be awarded only if the solutions prove effective.

"We don’t provide a prize for ideas, we don’t provide a prize for concepts, Diamandis said. "We only pay out a prize when the objectives are met."

Diamandis said the contest will probably take several years to play out. WellPoint and X Prize are asking for help from employers, consumers, health care providers and the government to devise competition guidelines.

X Prize will run the contest, with WellPoint and its nonprofit foundation supplying the prize money.

Health care reform needs collaboration like this, said Robert Zirkelbach of the trade association America’s Health Insurance Plans.

"I think to be able to address all the health care challenges facing the nation, we need to bring all the stakeholders together," he said.

However, the competition smells like a public-relations move to Jerry Flanagan, health care policy director for California-based Consumer Watchdog.

"What the insurance companies are trying to do is define the health care debate in terms that benefit them or at least keep them in the game," he said.

X Prize never would have gotten involved if the contest was a pr push, Diamandis said. WellPoint will provide the funding and some advice, but X Prize will set up the contest, run it and judge winners.

"This is an open-source opportunity for brand new constructs on how to reinvent the health care system," he said.

Consumer Watchdog
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