When former Apple CEO John Sculley first joined that seminal company, he was struck by co-founder Steve Jobs’ vision of changing the world through the “noble cause” of personal computing.
Now, he said, he’s “totally excited and passionate about” a new noble cause – using high-level technology to transform health care.
Sculley, 76, of Palm Beach, Fla., will share his vision with Louisville on March 24 during a discussion of “Disruptive Innovations in Global Healthcare,” presented by the World Affairs Council of Kentucky & Southern Indiana,KentuckyOne Health and WFPL News.
Sculley said one big benefit of bringing Apple-level innovation to healthcare is reining in out-of-control costs. U.S. healthcare spending reached $3 trillion in 2014, federal statistics show, accounting for 17.5 percent of Gross Domestic Product. Sculley points out that half of that goes to the 5 percent of the population who are severely chronically ill, often with several diseases. Kentucky is particularly hard-hit, with some of the nation’s highest rates of chronic ailments, from cardiovascular disease to cancer to diabetes.
Sculley is now involved with three technology-based firms taking aim at poor health and high costs: RxAdvance, a pharmacy-benefit-management company; MDLive, a telemedicine company; and SleepMed, a health-tech company offering sleep disorder testing. He also shares lessons he’s learned during his recent years as an investor and entrepreneur through his 2014 book, “Moonshot! Game-Changing Strategies to Build Billion-Dollar Businesses.”
Following are excerpts from his recent conversation with the Courier-Journal:
CJ: When you say “disruptive” innovations, what do you mean?
JS: I think health care missed the (personal computing) revolution. It missed the Internet revolution. And it certainly cannot afford to miss the innovation that is now happening in almost every other industry around big data analytics (examining large amounts of data to uncover patterns and trends), around mobility and new ways of being able to pick out the inefficiencies of industry after industry using cloud computing. And so I’ve been focusing on health care for 10 years.
CJ: How do you think the Affordable Care Act will affect “disruptive innovations”?
JS: …The Affordable Care Act, I think most people would agree, is a terribly drafted piece of legislation. It was largely architected by the special interest lobbyists. It was largely put into draft form by the staffs of the Congress, and very few people actually read very much of it before it got voted on. And it was largely, almost entirely, done by one political party, so that there were many compromises that had to be agreed to, politically, in order to get it passed.
“It missed the Internet revolution.”
John Scully on how health care and technology
Now that it’s here…and we’re in an election year, do we have to repeal it and start all over again? That’s one point of view. And the other point of view is…can we make fixes along the way? And…what role can the private sector have, to adjust for and help adapt the future of health care without having to start all over again with the (ACA)? …We can do workarounds with the (ACA) and we can (make) a huge dent in the unsustainable cost of the health care system without having to repeal it.
If we do repeal the (ACA) and start over, we could probably come up with something much better. But it would take years to get political agreement, and in all likelihood, it would have its defects too…
CJ: Give us an example of health care technology that you’re investing in.
JS: A company I’m vice-chairman of is called RxAdvance, and we are building the first cloud-based, pharmacy-based management company….PBMs are what are used by the $750 billion pharmaceutical ecosystem to manage the entire workflow of looking at clinical data, at claims data, at lab data, managing the workflow of how do drugs get to the patient and are there ways to avoid many of the inefficiencies of the way the system works?
We are building a company which this year will do about $400 million in revenue.
CJ: What about privacy concerns surrounding health technology?
JS: We must comply with HIPPA (Health Insurance Portability and Accountability Act) privacy regulations, and they are extremely specific…We have the technologies to be able to respect privacy…
CJ: Is MDLive, the telehealth company in which you’re investing, active in Kentucky, which faces longstanding doctor shortages?
JS: I believe it is. And MDLive has a nationwide partnership with Walgreens, so we’re working together to provide virtual care….Obviously in the rural areas, telemedicine is starting to become important because many of these areas cannot have access to specialists.
“Noble cause? It wasn’t about making money. It was about making a dent in the universe.”
John Scully on former Apple CEO Steve Jobs’ vision for the company
CJ: Consumers, who are being asked to take more responsibility for their own health care, face a lack of transparency around pricing. Is that being addressed?
JS: …Suddenly customers have, with social media, the ability to see what other customers think about things. There’s transparency.
They can see what the opinions of other people are. They can find out what things really cost. They can look at many different choices. So customers now are paying more attention to the opinions of other customers than they are to the large marketing spend of even the most famous incumbent companies. What that has meant is that we’re living in an era of transparency and an era when opinion and power has shifted to the customer…
CJ: What lessons did you take away from your experience with Apple and how do they inform your approach to business today?
JS: The biggest lesson, I think, that made a bigger impression on me than anything else was when I joined Apple, I was a veteran of the cola wars (as former CEO of PepsiCo)…So I had always thought of business in terms of competition. You know, there are winners and losers. It wasn’t until I met Steve Jobs and (Microsoft co-founder) Bill Gates, and suddenly started to hear them talking about a “noble cause” and how they were creating an entirely new industry around personal computers and the software that would enable those tools…..that they could change the world by empowering knowledge workers with tools for the mind.
I’d never heard anyone talk like this before. Noble cause? It wasn’t about making money. It was about making a dent in the universe. And so as I thought about things…I said, “You know, I think there’s a noble cause in making a dent in the health care system.”
Reporter Laura Ungar, who also covers health for USA TODAY, can be reached at (502)582-7190 or email@example.com.
IF YOU GO:
What: John Sculley, former CEO of Apple and PepsiCo, discusses “Disruptive Innovations in Global Healthcare”
Where: Kentucky Center for the Performing Arts, 501 W. Main St.
When: 6 p.m. Thursday, March 24 (5 p.m. network reception and book sale with John Sculley)
Price: $25 for presentation; $120 for presentation plus dinner.
Tickets; At Kentucky Center Box Office, located in the second-floor main lobby 501 W. Main St. More info: http://www.kentuckycenter.org/all-shows/john-sculley-disruptive-innovations-in-global-healthcare
by Laura Ungar via Courier Journal