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As politicians debate who should pay for America’s declining health and ever-increasing cost of health care, they are overlooking the key to simultaneously improving the health of Americans and cutting costs: innovation.

Innovation can solve many of our most pressing health-care problems by transforming lives, preventing disease, restoring people to full health and making the health-care delivery system more efficient.

To address these long-standing issues, innovation is required in five areas:

  1. Medical technology innovation to restore health to people suffering from chronic disease.
  2. Scientific breakthroughs in drugs that treat and cure the most debilitating diseases.
  3. Delivery of health care outside of the hospital setting, letting hospitals focus on the most seriously ill patients.
  4. Innovative use of information to improve diagnosis, treatment and after-care.
  5. Moving upstream to prevent disease occurrence with innovative approaches that enable people to lead healthy lives.

In the last 30 years, breakthroughs in medical technology have transformed the treatment of cardiovascular disease with implantable defibrillators and drug-coated stents, of Type I diabetes with the sensor-based pumps and the advent of the artificial pancreas, and of spine, hip and knee surgery with implantable prostheses. Now, advancements in medical technology are addressing debilitating neurological diseases like Parkinson’s, incontinence and sleep apnea. With investment and imagination, the future of medical technology to help people seems almost unlimited.

Decades of scientific investment in genetics, genomics and proteomics have led to treating the immune system as the most promising way to cure cancer and other debilitating diseases. Breakthroughs in personalized medicine like immunotherapy and CAR-T therapy hold the potential for genuine cures, not just palliative treatments.

To make these high-priced treatments more affordable, they should be offered on a sliding scale based on ability to pay. Meanwhile, a wider array of generic drugs should be approved for traditional drugs such as statins to lower the overall cost of drug therapy. In addition, the multiple layers of drug distribution should be creatively disintermediated by direct-to-consumer approaches, thus dramatically cutting the overall cost of drug therapy.

In recent years, focus on health-care delivery has been making doctors and hospitals more efficient, leading to shortening appointments to less than 10 minutes — only enough time to issue a prescription without thorough diagnosis — often creating misdiagnosis and excessive drug use. Instead, we need to rethink the entire health-care delivery system by changing the basic model of one-to-one physician-patient interaction in a traditional health care institution by providing health care in community centers, YMCAs and retail centers like MinuteClinic (now owned by CVS), using nurses, allied health professionals and group classes.

Hospitals need to undergo massive consolidation to ensure that severe diseases and complex treatments can be carried out in the highest-volume centers that will lead to improved outcomes at lower costs. This will require clear movement away from fee-for-service to innovative health plans covering total costs with people having a fiscal stake in their health.

Health care’s information technology is woefully inadequate. From inability to match patient records with claims data to inadequate cost accounting data to poor transparency of prices to consumers, health care has been unable to provide even the basics of information. Now, however, opportunities to use the internet to connect patients and their basic information like EKGs to their physicians and health-care teams, along with artificial intelligence and big data married with patient data, offer entirely new fields for innovation, improved diagnosis, treatment and after-care.

This fifth category of innovation – leading healthy lives – holds the greatest promise of all, as self-care becomes the new primary care. It is well known that unhealthy life styles account for 50 to 70 percent of health-care costs. For example, America’s obesity epidemic is the leading cause of Type II diabetes, heart disease, and spine, hip and knee issues. Yet instead of focusing on enabling people to lead healthy lives, we concentrate downstream on those who are sick and extremely ill to the point of nonrecovery.

To enable Americans to lead healthy lives, we should focus on three basic areas: 1) eating healthy, 2) physical fitness, and 3) stress reduction. How can innovation change life styles? Let’s look at some examples:

  1. Eating healthy. Innovative food and beverage companies, such as Boulder Brands and Suja Juice are transforming eating and drinking habits along with products like Earth Balance all-natural spreads, Udi’s gluten-free cereals and baked goods, and organic juices.
  2. Physical fitness. A relatively simple device like Fitbit has become transformative in changing people’s behavior by walking at least 10,000 steps per day or exercising in Lifetime Fitness clubs that focus on healthy living.
  3. Stress reduction. The mindfulness movement is revolutionizing daily behaviors that reduce stress through myriad mindfulness practices. Don’t know how to meditate? Innovative on-line products like Headspace provide guided meditation sessions and mindfulness training.

Today, the usage of these products is heavily concentrated among the middle and upper social-economic classes. The key now is to get them as ubiquitous as mobile phones by offering them in local communities and at lower prices.

For decades, American health-care systems have been mired in trying to become more efficient with essentially the same methods. What is needed to transform health care’s broken system is much more radical transformation that these innovations can bring. Rather than looking for political solutions to a broken system, the focus must shift to innovation to create more radical approaches that create entirely new systems.

Commentary by Bill George, a senior fellow at Harvard Business School, former chairman and CEO of Medtronic, and the author of “Discover Your True North.” He is a CNBC contributor. Follow him on Twitter @Bill_George.

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