NEW YORK, NY--(Marketwire - September 24, 2009) - It is time to develop a realistic plan for positive and durable healthcare reform, including shifting the focus of the ongoing debate from "who pays" for reform to "how much" America should pay for healthcare. A by-product of this approach would strengthen the healthcare value proposition by ensuring good value for quality care.

This is a key conclusion of a "policy perspective" white paper by Psilos Group, a healthcare venture capital firm that has been investing in private sector healthcare reform since 1998 by focusing on reducing costs, improving quality and aligning incentives across payers, providers and patients. The paper, published today, is intended to inject fresh thinking and ideas into the U.S. healthcare reform debate.

In the paper, Albert S. Waxman, the CEO and founding partner of Psilos Group, joined by Lisa Suennen, founder and Managing Member and Darlene Collins, Managing Director, lay out eight goals to achieve lasting and positive healthcare reform. They are:

--  Reduce healthcare inflation to less than 3 percent annually within 10
--  Enable health insurance access for all and reduce the number of
    uninsured to less than 2 percent of the U.S. population.
--  End prior condition refusals for insurance and policy cancellations
    for sick people.
--  Extend the solvency of the Medicare Trust Fund well beyond the current
    estimate of insolvency by 2017.
--  Dramatically reduce the number of medical errors and costly "defensive
    medicine," such as redundant procedures and unnecessary hospitalizations.
--  Improve healthcare quality to improve our worldwide quality ranking
    from No. 35 to at least No. 5, correcting the bleak reality that a third of
    the $2.4 trillion spent annually on U.S. healthcare does not contribute to
    improved health.
--  Stimulate a vibrant healthcare economy that invests in the long-term
    health of our citizenry through adoption of new technologies.
--  Ensure that the methodology of reform results in costs equal to or
    less than the current system, not more.  Reform should be, at worst, a zero
    sum game.

Psilos Group urges policymakers to take a series of immediate and long-term steps as they work out evolving healthcare reform details. In addition to shifting the focus to how much America should pay for healthcare and how to strengthen its value proposition, the venture firm advises policy makers to slow down and develop a phased, step-by-step plan with clear and measurable clinical and economic goals. They also urge alignment-building among key stakeholders to make sure a majority are on board with the plan, not merely supportive of enough votes to pass legislation.

The Cost of Healthcare Reform Vexes Most Americans

The issue of how much America should pay for healthcare, rather than "who pays," is ultimately the one that frustrates American families, small businesses, large corporations, healthcare providers and all levels of government, Waxman wrote. "Debating "who pays" is simply a political comfort zone that stokes traditional liberal versus conservative passions and fuels talk show rhetoric," Waxman states in the white paper. "However, it does nothing to actually cover the costs when bills are due. Addressing "how much" is a more complex economic issue that needs to move front and center, especially when healthcare costs are growing at double or triple the general inflation rate and when real value for dollars spent is so elusive."

Some Solutions To These Problems

To help accomplish these goals, the authors propose, among other things, the creation of "Accountable Care Organizations" for chronically ill patients, which includes 15 million Americans with four or more chronic illnesses and currently represents the biggest load on Medicare. These and similar "Virtual Accountable Care Organizations" could save more than $750 billion over 10 years. They also propose the replacement of "fee for service" with performance-based reimbursement, reform of "defensive medicine" practices and heightened use of technology to eliminate hospital-based errors, which result in more than 100,000 deaths annually.

These are some key solutions to problems that will take a decade to fix, Waxman concedes. "This is not an excuse for not starting, but neither is it a reason to be careless or overzealous," he writes. "It is a reason to begin with a well-thought-out plan. Americans are justly concerned about a massive government-engineered change that is done too fast and which may have unintended and negative consequences," Waxman adds.

"Policy Perspective" Authors

In addition to Waxman, the authors of Psilos Group's "Policy Perspective" are Lisa Suennen, a Psilos Group Co-Founder and managing member; and Darlene Collins, a Psilos Group managing director.

Albert S. Waxman, Ph.D., CEO and Founding Partner, Psilos Group

Dr. Waxman has more than 40 years leadership experience as an entrepreneur and investor in the healthcare industry. As the CEO and founding partner of Psilos Group, he and has firm have funded and developed more than 38 innovative companies dedicated to this vision, including ActiveHealth, Click4Care, Definity Health, ExtendHealth, OmniGuide and SeeChange Health.

Lisa Suennen, Co-Founder and Managing Member of Psilos Group

Lisa Suennen has headed Psilos' West Coast office since the firm's founding in 1998 and focuses on the medical device, healthcare information technology and healthcare services sectors.

Darlene Collins, Managing Director of Psilos Group

Darlene Collins, a Managing Director of Psilos, leverages more than twenty years health care experience and a national network of government and industry relationships in support of Psilos' investments.

About Psilos Group

For more information about Psilos Group, visit

Psilos Group has been a successful healthcare venture capital firm since its founding in 1998. With more than $570 million under management, Psilos focuses its investments across the healthcare services, healthcare information technology, and medical technology sectors. Psilos invests nationwide in businesses that are poised to create enduring market value by fundamentally improving the U.S. healthcare system. Its portfolio companies have a demonstrated ability to reduce the costs of healthcare delivery, improve clinical quality, and advance the alignment of payer, patient, and provider incentives. Psilos has offices in New York, the San Francisco Bay Area and Santa Fe, New Mexico.

Contact Information: Contact: Jennifer Jones Jennifer Jones & Partners Phone: 650-529-1416 Dave Reddy Weber Shandwick Phone: (650) 868-4659