Eric Lefkofsky of Tempus, a Cancer Health Tech, is Asking the Right Health Care Cost Questions

Eric Lefkofsky

In 2015, Eric Lefkofsky co-founded Tempus, one of Chicago’s top ten health tech startups, with the aim “to build the world’s largest database of clinical and molecular data and more effectively put that data to work.”

Lefkofsky, an entrepreneur, and philanthropist has focused his giving on causes such as education, human rights, civic causes and medical discoveries. Lately much of his focus has been on medical discoveries. There are several reasons behind this, the main one of which is the hope to lower the Nation’s spending on health care. In one of his blogs he writes that “The time to act is now. Americans spent more than $3.2 trillion on health care in 2015 and The National Institutes of Health projects that by 2020, the total annual cost for cancer treatment in the U.S. will reach $173 billion. Nevertheless, cancer still kills roughly 600,000 people each year in the U.S.; it is the second leading cause of death behind heart disease. And, of course, the toll that cancer takes on individual patients and families is immeasurable.”


Health care in the US has become a lot more expensive over the past two decades, according to a new analysis that was published in JAMA. Americans spent an extra $933 billion on health in 2013 versus 1996 due to higher charges for care as well as patients receiving more intense and expensive care. The next biggest reason behind the increase in spending are population growth and spending, while changes in disease prevalence caused a decrease in annual spending and the frequency of used health care services had no effect on health care expenses.


Even though the findings are not surprising, the new analysis adds value in that it breaks down spending by disease, according to Gerard Anderson of the Bloomberg School of Public Health. According to Joseph Dieleman of the University of Washington’s Institute for Health Metrics and Evaluation, who is also the lead author of the study “When you look at the different diseases, you find that you have different factors that lead to the major increase.” As such, the greatest increase in yearly spending during the study period was diabetes with $64 million, out of which $44 million was spent on pharmaceuticals. It was also found that factors such as US population growth, aging, disease prevalence as well as the utilization and the price of pharmaceuticals contributed to the increase in spending.


At $57 million, the runner up for greatest increase in spending was low back and neck pain. Yet the factors that contributed to the cost increase were different. While the prevalence did not increase, the amount of care that patients sought went up and added up to an 8.5% increase in inpatient care spending per year.


The study also found that the amount of spending per day has increased drastically. Dieleman said that “The amount of spending in one day has gone through the roof. Our best options to reduce spending hasn’t had as big of an impact as people wanted.” Despite the $201 billion spending decrease that was the result of a reduced utilization, inpatient care for all diseases still rose from $258 billion to $697 billion. Hospital stays did become shorter, but patient care was still the same and drove up spending.


According to the analysis, a popular justification for high drug prices was that drugs prevent hospitalizations and thus balance out the spending. However, this justification does not have convincing evidence in the big picture of health care spending. Peter Bach, the director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center states that “We are not getting offsets, period.”


Overall, Joseph Newhouse, director of the Division of Health Policy Research and Education at Harvard, highlights that the analysis lacks an analysis of the value purchased with the spending, despite the detailed breakdown of spending by disease. This makes it difficult to assess whether the cost may have been worth it.


Newhouse further adds that “It’s fine to have this cost broken down, but I don’t really know what to do with it. It’s like having one blade of a scissors.”


However, despite Newhouse’s comments, Dieleman still sees practicality in the analysis as it enables future research on the value of healthcare spending. “This essentially allows people to start asking those questions.”


With Tempus, Lefkofsky is doing exactly that – he is asking questions. Tempus has spent the past two years establishing a series of data pipelines to collect, cleanse and analyze data at scale. With that, it hopes to provide proprietary software applications that would enable clinical decision support and cutting edge academic research. The company enables physicians to deliver personalized cancer care for patients by offering an interactive and analytical machine learning platform. It provides DNA/RNA genomic sequencing services together with analyses of molecular and therapeutic data. The company’s goal is for each patient to benefit from the treatment of others who came before by providing physicians with tools that learn as Tempus gathers more data.


Lefkofsky also states in his blog that “As consumers of health care, we should demand more. We must empower physicians to make real-time, data-driven decisions. Integrating genomic sequencing with clinical data will allow us to learn from the millions of people diagnosed with cancer every year. Knowing how patients were treated and how they responded will improve the care for everyone that comes after them.”


Lefkofsky’s philanthropic engagements include the Lefkofsky Family Foundation and the Giving Pledge. He also serves as the Chairman of the Board of Trustees of the Steppenwolf Theatre Company that is based in Chicago. He is also on the board of trustees of the Lurie’s Children’s Hospital of Chicago, The Art Institute of Chicago, The Museum of Science and Industry and World Business Chicago.


Lefkofsky has held teaching positions at the Kellstadt Graduate School of Business at DePaul University as well as at Northwestern University’s Kellogg School of Management. He is currently an adjunct professor at the University of Chicago’s Booth School of Business. He also authored the book Accelerated Disruption: Understanding the True Speed of Innovation.



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