Published in NJBiz.com

New Jersey Institute of Technology President Joel Bloom welcomed visitors Thursday to hear about technological innovation and value-based health care at the fifth annual Innovation Showcase.

Donald Sebastian, president of the New Jersey Innovation Institute, an NJIT corporation, explained that the evolution of the health care innovation labs connects business with academic research. The Innovation Institute is helping to save $160 million in Medicare, Sebastian said.

“We formed NJII not just to tap into the power of our research but to work together collaboratively,” Sebastian said. “Hospital systems are doing their best to achieve efficiency. Our system is a bucket of bolts that has not been assembled into a chassis and a well-oiled machine. People are the source of innovation and the Innovation Labs provides the framework to connect these people into the business marketplace,” he said.

Linda Schwimmer, president and chief executive officer of the nonprofit New Jersey Health Care Quality Institute which seeks to improve health care in New Jersey, said the institute focuses on quality, safety and affordability.

“We’ve been working with NJII helping them with their practice transformation to work together on alternative payment models,” Schwimmer said. “I am excited today to discuss the themes of using data to drive value innovation. As you know, moving into a values-based system is difficult.”

Meanwhile, former Utah Gov. Michael Leavitt discussed the economics and politics of health care. He said the American health care system is moving toward a system of value-based care. Leavitt is also a former secretary of health in the American federal government.

“If the global economy had a voice, it would say there is no place on the economic leaderboard to spend 25 percent on health care,” Leavitt said. “It pits two essential values against each other. It is our sense of compassion. When people are cared for when they are sick, we want them to have care. It is the reason we have social policy that moves us in that direction. It is the reason we have Medicare and Medicaid,” he stated.

“If we give up our compassion, we give up our leadership,” Leavitt said. “Both are unacceptable. We have to invest a values-based health care system.”

Starting in the middle 1990s, doctors were directed by insurance companies how to treat patients, Leavitt said. “This was a very important lesson in American health care,” Leavitt said. “Anytime an economic sector makes a transition, it takes 40 years.”

The U.S. Congress approved President Barack Obama’s Affordable Care Act in 2010.

“We are at a race in our society to create a uniquely American solution,” Leavitt said.

Leavitt grew up handling cattle. He used this experience to make an analogy with health care.

“It is a dirty, messy, confusing experience,” Leavitt said. “Mother cows and baby cows know there is a time to nurse. They have an instinct. They will turn around and go back to the last place where they nursed. That is called a stampede and you do not want to be there.”

“If you move the health care system too fast, people will move back to the system they know well,” Leavitt said. “We are in a process that has some unevenness in its pace.”

Leavitt specified that he thinks fee-for-service medicine will always exist in part.