John Sculley
John Sculley

Health care companies must focus more on innovation and technology if they want to gain control of the unsustainable cost structure in the $2.5 trillion industry, according to former Apple CEO John Sculley.

Sculley, also a former Pepsi Cola president, told IL that he got involved in the health care industry about a decade ago to focus on empowering patients with better information and to use technology to cut costs.

He said health care companies have failed to follow the lead of other industries that have reduced costs through cloud computing — using remote Internet servers for data storage and examination — and big data analytics — looking for patterns and other insights in large sets of data.

Sculley will talk about “disruptive innovations in global health care” at 5:30 p.m. on Thursday, March 24, at the Bomhard Theater in the Kentucky Center for the Performing Arts. Tickets, which are $25 for the presentation and $120 for the presentation and dinner, are still available.

Scully has helped launch several companies in the last few years, including RX Advance, which aims to reduce pharmaceutical costs for chronic care patients.

Chronic care patients account for only about 5 percent of patients, but for about half of the country’s health care costs, Sculley said. By using high-powered computer systems, RX Advance has been able to significantly reduce patients’ prescription drug bills.

Sculley said the savings can be achieved by tracking and analyzing relevant data, including whether patients take their prescribed pills, how many pills they are taking, the potential drug interactions and how many specialists they’re seeing.

The data have been available, Sculley said, but until now health care companies have failed to use them to personalize the medication therapies for chronic care patients.

Health care mergers

humana logoPassage of the Affordable Care Act has prompted more consolidation in the health care industry, including the proposed mergers of four of the five big insurance companies, Sculley said.

While in Louisville, Sculley will have dinner with Bruce Broussard, CEO of Humana, which is in a deal to be acquired by Hartford, Conn.-based Aetna.

According to Sculley, Obamacare is a poorly drafted piece of legislation, and the original projections from the government about the legislation’s cost have turned out to be wrong. Health care companies have incurred much higher costs than expected, he said, and so they are merging to cut costs.

Many young people were expected to sign up for health insurance and offset the higher costs of some of the older and sicker patients, Sculley said, but many young people simply have opted to pay a penalty rather than sign up for insurance.

“The government assumptions were just plain wrong,” Sculley said.

Insurers including Humana have said that medical claims related to Affordable Care Act-compliant plans have exceed the premiums they have collected. Some companies are considering whether to continue to participate in the health care exchanges.

However, Sulley also said he doubts the Affordable Care Act will be repealed. Instead, the legislation will be modified, and it will need innovative approaches from companies including Humana to get costs under control.

Hospitals, too, will continue to consolidate, he predicted, and more health care will be delivered in small clinics rather than giant hospitals. Telemedicine, or getting medical care remotely via phones or tablets, also will continue to grow in popularity.

Sculley, 76, said he remains motivated to make a difference because of his good health, his curiosity and because of lessons he learned in the 1980s from the late Steve Jobs, former CEO of Apple, and Bill Gates, co-founder of Microsoft. The two tech entrepreneurs said at the time that they were focused on the noble cause of empowering knowledge workers with the tools of the mind — personal computers — to improve their productivity and change lives.

Sculley and his wife, Diane, a mathematician and computer scientist, have a home in Palm Beach, Fla., but spend only about 30 percent of their time there. He said he and his wife love the challenge of being part of teams that are trying to fundamentally change health care delivery, which will have an enormous impact on society for many generations.

Sculley was born in New York City, obtained an MBA from the University of Pennsylvania’s Wharton School of Business and, at 37, became Pepsi’s youngest president. Sculley also recently published the book “Moonshot: Game Changing Strategies to Build Billion Dollar Businesses.”

The World Affairs Council of Kentucky and Southern Indiana is hosting the upcoming presentation as part of its World @ Home monthly speaker series.

Boris Ladwig is a reporter with more than 20 years of experience and has won awards from multiple journalism organizations in Indiana and Kentucky for feature series, news, First Amendment/community affairs, nondeadline news, criminal justice, business and investigative reporting. As part of The (Columbus, Indiana) Republic’s staff, he also won the Kent Cooper award, the top honor given by the Associated Press Managing Editors for the best overall news writing in the state. A graduate of Indiana State University, he is a soccer aficionado (Borussia Dortmund and 1. FC Köln), singer and travel enthusiast who has visited countries on five continents. He speaks fluent German, rudimentary French and bits of Spanish, Italian, Khmer and Mandarin.


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