For a number of years now, student clubs have organized trips (“Treks”) to exotic locations over school breaks in search of education, entertainment, and employment. Just recently, the administration decided that they needed to create a formal version of these trips — possibly to regain some control over the process or maybe just to take a good idea and make it their own. Either way, there are now Faculty-lead trips called IXPs (Immersion eXPeriences) to places like Europe, India, and China. (Although, this year the India trip was postponed after the bombing tragedy in Mumbai. Apparently, the hotel where the attacks occurred was the same one reserved for the 90 HBS students traipsing through the country.)
After a quick examination of my rapidly declining investment account, I decided to go with the $150 week-long Boston Healthcare IXP (instead of the $5-$10k total expenditures required for some of the more exciting Treks and IXPs). It wasn’t quite the same as standing on The Great Wall while opining about Chinese trade barriers, but it did have a few interesting moments:
- The “History of Surgery” from the Pres. of the Int’l Transplantation Soc. along with a slew of other Harvard Med. Professors.
- A discussion on Medical Errors with a Chief of Surgery at BWH with an afternoon of touring the BWH Simulation facility.
- A lecture / case with Michael Porter of “Five Forces” fame and recent co-author of Redefining Healthcare.
- Pharma Research from a director at Novartis with an afternoon of touring the R&D facility.
- Regulation with the former Commissioner of the FDA and the former Administrator of Medicare.
- Venture Capital w/ 4 Healthcare VC Partners!
So, a lot of impressive speakers. HBS really has the power to draw in some amazing people when it comes to these sort of things. All-in-all, I think I learned a lot, but it does make me realize how much I love the case method. It’s much more difficult to pay attention for 90-minutes when it’s just one guy talking, no matter how interesting he is. Unless he’s flashing graphics-rich powerpoint slides 4x/minute in a multimedia presentation, it’s just too easy to let your mind wander. My top 5 takeaways from the IXP:
- Healthcare is complex. Delivery is complex. Diseases are complex. There are few elegant or simple mechanisms here, and it’s definitely a quagmire.
- Hostility towards business, profits, and competition is unusually high, from almost ALL of the players. Huge (and highly explanatory) implications here.
- Untapped potential for economies of scale are HUGE! Metrics clearly show that specialized centers with high volume have far better outcomes, but still, even the leading centers only serve <1% of the US market.
- Risk tolerance is virtually nil, and has been declining for years. Many of the key discoveries which have saved many lives wouldn’t have taken place in today’s environment.
- Average industry profitability for Pharma. is 10-15% and has been declining rapidly over the years (as is inevitable as industries mature). It takes 12-15 yrs from patent to market & the FDA success rate is only 11%.
As a side note, it was also interesting to hear the panel of VCs talk about the challenge of presenting the VC-industry in a good light. As their “10 year results” window moves past the biotech boom in 1999, their returns are going to be negative! Shocking and disappointing… so much for becoming a VC!