Economics of RM
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The Potential for Regenerative Medicine to Help Slow Rising Healthcare Costs
The field of regenerative medicine has the potential to heal people and bend the health cost curve toward a more affordable long-term solution. This trend is already evident by several approved and marketed first generation regenerative medicine products that are demonstrating both clinical and cost
Data from the Centers for Disease Control and National Center for Health Statistics show that annual healthcare expenditures in the U.S. are approximately $2.5 trillion dollars, which represents 17.4 percent of GDP1. Demographic analysis of healthcare expenditures shows that average per capita healthcare expenses increase significantly with age, particularly for individuals beyond the age of 65 who are more susceptible to heart and vascular disease, cancer, acute and chronic neurological conditions, inflammatory and immune diseases, and a range of other conditions.
As a result of these diseases and conditions associated with aging, individuals age 65 and over incur annual healthcare expenditures that are on average three to eight times greater than individuals under the age of 45.
The Healthcare Impact of Baby Boomers (1946-1964)
Increasing healthcare costs combined with staggering population demographic trends create a significant challenge for our society, especially with an aging population expected to nearly double in the next 20 years.
Another major demographic trend in healthcare is the aging of the “baby boom” generation, which is causing a dramatic increase in the number of individuals over the age of 65. According to U.S. Census data and projections, the segment of the population that is over age 65 will increase by more than 80 percent between the years 2010 and 2030, (i.e. from 40.2 million people in 2010, to more than 72 million people in 2030).2 It’s no secret that this unprecedented demographic shift will create enormous pressure on the healthcare system in the years ahead.
The Cost Impact of an Aging Population
As we age, we spend more on healthcare. Two key drivers of cost increases are:
- Increased incidence and impact of chronic disease such as: heart disease, cancer, stroke, pulmonary disease, diabetes, osteoporosis
- Significant burden associated with the seriously ill. 1% of most seriously ill account for more than 25% of total healthcare expenditures
Furthermore, according to an analysis by the Alliance for Aging Research, 83 percent of healthcare spending is associated with treating chronic diseases and conditions.3 These statistics reflect a longstanding emphasis of the healthcare infrastructure on triage and palliative care. Given the unavoidable pressures created by the demographic shift now occurring, we need to rely on innovative solutions and technologies that mitigate chronic healthcare-related costs, lessen chronic care and improve patients’ quality of life.
This challenge is exacerbated by a growing shortage of primary care physicians and clinical specialists, that along with other economic pressures will result in fewer available healthcare resources. Taken together, and if nothing else changes, these factors will unavoidably result in various forms of healthcare rationing.
Potential Economic Impact of Regenerative Medicine
By reducing hospital care, the need for physician, clinical and professional services, nursing and home healthcare we could substantially rduce overall healthcare expenses, since together these categories comprise 62 percent of all healthcare related expenses.
We are confident that meaningful improvements in clinical outcomes and cost reduction can be accomplished through regenerative medicine technologies. To critically evaluate how we can improve care and reduce costs, we can begin by examining the largest categories of healthcare expense, both by category of activity and disease area.
Much of the dialogue around healthcare in recent years has focused on the issues of broadening access (through insurance reforms) and controlling costs through Medicare and Medicaid reimbursement reforms such as payment cuts to health providers. Clearly, reducing expenditures will be helpful, but this alone will not enable us to improve clinical outcomes and achieve enhanced patient quality of life.
We believe emerging regenerative medicine therapies will have the most significant healthcare impact on specific disease indications and chronic conditions that are currently the major drivers of healthcare costs and that represent significant areas of unmet medical need. These indications include: heart and vascular diseases, stroke, diabetes, inflammatory and immune diseases, wound healing and soft tissue regeneration, neurodegenerative diseases such as ALS, Alzheimer’s and Parkinson’s, spinal cord injury, musculoskeletal disorders and ocular disease.
The disease overviews found throughout the next section of this year’s Annual Industry Report are designed to specifically cover not only the economic impact of these diseases but to also provide a thorough overview of current regenerative medicine technologies and the therapeutic pipeline. These technologies and studies reflect a variety of product types and approaches, including the use of autologous cells (i.e. derived from the patient), allogeneic stem cells (i.e. derived from a donor), tissueengineered products (e.g. cells plus a scaffold), gene therapies, biologics, small molecules and combination products: each of which have shown therapeutic promise.
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About Regenerative Medicine
April 26, 2016 – (InVivo) – InVivo Therapeutics Holdings Corp. (NVIV) announced the sixth implanted patient in the INSPIRE study has...