The Stew BLOG

How Corporations Are Transforming Health

Laura Landy, President & CEO | 07/21/2017

A few months ago, I wrote a series of blogs exploring the role of philanthropy in helping to drive health system transformation. Yet philanthropists are only one of many powerful players positioned to solve our complex health care puzzle. Corporations are increasingly bringing health and sustainability to the center of their agendas. Their motivations go far beyond altruism or the efforts of their corporate foundations to invest in healthier people and a healthier planet. Corporations are driven by their needs for:

  • healthy employees and greater productivity;
  • thriving communities where employees want to live, work, and play;
  • lower health care costs as a part of their ongoing operations and product pricing equations; and
  • a sustainable economy and an environment that supports consumers and produces the raw materials needed to manufacture what is sold.

Given their global perspectives; abundant resources; powerful relationships; and influence with consumers, policymakers, and competitors, corporate leaders are well positioned to help frame and implement a bold plan for the future of health and care in America–and to create an action agenda to make it a reality.

When we think about the role corporations can play related to improving health, we most often think about providing insurance benefits for employees and their families. Increasingly, we think about corporations’ commitment to providing health services and supports in local communities where they have office or factory locations (after all, a healthy employee pool is a very worthwhile investment). While continued investment and innovation in these two focus areas is important to the future of health, it’s worth drawing more attention to another prevalent way corporations contribute to health–through their products and business lines.  

According to the Wall Street Journal, in 2015, venture capitalists invested a record $16.1 billion in health-related ventures, up 34% from the year before. While the market may have flattened a bit since then, venture capitalists are still exploring new, profitable lines of business: treatments for specific diseases, insurance products, care delivery systems, medical devices, consumer-oriented technologies, and more. Not all will succeed, but enough will to provide a good return to the venture capitalists. Undoubtedly, our systems for health will look fundamentally different as a result.

Powerful Impacts on Health

Yet we needn’t limit ourselves to looking at health investments alone. Some of the most powerful impacts on health will come from the $69 billion investment that venture capitalists made across all industries in 2016 as well as the many billions that corporations are investing in new products and R&D. Looking at these investments being made outside of health may actually tell us more about the future than looking at the investments made directly in health and care. That is, if we are wise enough to remain open to the possibilities.

Consider this historic example from Fortune’s 2014 article, “27 Companies that Changed the World.” Of the McCormick Harvesting Machine Co.–the #3 company just behind Standard Oil and AT&T–the article said:

19th century engraving of a Burgess and Key’s Reaper

Farmers reportedly laughed when they saw Cyrus McCormick’s horse-drawn mechanical reaper in the 1830s. But it instantly raised farm productivity by a factor of six (and much more after later improvements), with profound effects. In America and then globally, superfluous farm hands became an army of industrial workers. Food prices dropped, giving consumers better health and more disposable income.

Today, many corporations are introducing product lines with similar potential. Time’s August 2016 list of  “10 Companies that are Changing the World” highlights many companies currently working to improve conditions for the poorest among us, to improve our environment and sustain health. Seeing clean water as our next global health crisis, IDE Technologies is working in regions where freshwater is hard to find to apply its engineering expertise to convert oceanic salt water for drinking and irrigation.

[The] privately held IDE . . . builds and operates some of the biggest desalination plants in about 40 other countries, including Mexico, Chile, and China. In the U.S., the 51-year-old company recently opened the largest such plant in the Western hemisphere, located in the Southern California city of Carlsbad, near San Diego. The site, a $1 billion undertaking, transforms seawater into potable water in just 45 minutes and provides some 8% of San Diego County’s water. Remarkably, it costs less than 0.5 cents to produce a gallon of drinking water at the Carlsbad plant.

In another example, United Technologies is rethinking jet engines to make commercial aviation less of a threat to the climate–and the human respiratory system. Aircraft emissions cause about 10,000 deaths a year, Time reports, and the toll will only increase as the number of commercial aircraft grows to 46,000 (77% growth) by 2030.

United Technologies, through its Pratt & Whitney division, this year introduced a new commercial jet engine that provides relief on multiple fronts. Compared to the company’s own traditional engine, it cuts fuel burn and carbon dioxide emissions by 16%, slashes the release of particulates in half, and dramatically muffles engine roar. For each plane, that means 3,600 fewer metric tons of carbon dioxide generated annually, $1 million in annual savings on fuel, and 500,000 fewer airport neighbors who will hear each takeoff.

It’s time to acknowledge that many corporations are already impacting health for the better through their products and lines of business–without doing any of the direct activities we usually think about. Let’s think about it: How might corporations lead us to new and different ideas about how we ought to approach health system transformation now and in the future? And can we encourage all organizations to pursue health transformation in ways that are appropriate for their own cultures and capacities, acknowledging that each has unique strengths and important differences? Please share your thoughts in the comments section below.