Panel
Israel as a Global Health Innovation Beta Site
Milken InstituteYulia Eitan, Chaim Bitterman, Gary Jacobs, Roger Stein, Yaron Nordorfer, Harlan Weissman, Glenn
- Paradigm Shift Consensus: The conference identified a fundamental shift in healthcare from isolated technologies to a new "operating system" focused on systemic efficiency, faster innovation, cost reduction, and global equity.
- Israel's Unique Data Asset: Clalit Healthcare Services (managing 52% of Israel's population) operates a centralized system with 20 years of longitudinal, geocoded, cradle-to-death data covering 4 million citizens, including socioeconomic and educational metrics.
- Chronic Disease Burden: Clalit manages 75% of Israel's 500,000 diabetics and 30% of national hospital beds, exposing the system to higher-than-average rates of chronic conditions and aging populations.
- Predictive Modeling Success: A high-tech algorithm combined with a low-tech nurse intervention reduced hospital readmission rates within 30 days by 5% in less than one year by targeting the top 10% of high-risk patients.
- 2015 Data Initiative: Clalit plans to launch a large-scale enterprise in 2015 to make its de-identified data available to 100–300 entrepreneurs for R&D.
- Education Model Shift: Gary Jacobs emphasizes transitioning education from content delivery to problem-solving facilitation, aiming to teach K-12 and university students to identify problems and use big data as creators rather than consumers.
- The "Valley of Death" in Biotech: Roger Stein identifies that 95% of cancer drug candidates fail, with a success rate of roughly 5% from lab to market, requiring ~$1.5 billion and 10–11 years; traditional VC returns in this sector have been negative 1% to 1% annually over the last decade.
- Structured Financing Proposal: Stein proposes pooling high-risk biomedical assets into a single portfolio to issue debt and equity securities, allowing large institutional investors (not just VCs) to fund the "valley of death" while diversifying risk.
- Government Role as Enabler: The Israeli government views its role as defining local needs, providing regulation/incentives, and acting as a strategic navigator to position Israel as a global beta site for healthcare innovation.
- Social Impact Bonds (SIB) Model: A pilot program with Social Finance Israel and Clalit uses private investment to fund a one-year intensive diabetes prevention program for pre-diabetics, with investor returns tied to cost savings generated across HMOs, national insurance, and the government.
- Financial Innovation Ecosystems: Israel is developing public-private partnership funds (e.g., Israel Life Sciences Fund) where the government takes a "first loss" position to de-risk early-stage biotech investments.
- Incubator Partnership Model: Jacobs notes a specific public-private partnership where investors contribute $120,000 and the government $700,000 for a 50% stake, with government repayment via royalty streams upon success.
- System-Driven vs. Idea-Driven Innovation: Panelists argued for reversing the traditional model: instead of entrepreneurs pitching random ideas, the healthcare system should define specific clinical problems and recruit innovators to solve them.
- Military Model Application: The panel suggested applying the DARPA/IDF model to biomedicine, where the government sets a specific disruptive challenge and funds only those solutions that meet high-impact criteria.
- Future Outlook: Israel aims to launch a major policy program within three months involving universities, health providers, and corporations to solidify its status as a global beta site for testing and scaling healthcare innovations.