The math on American healthcare spending and research dollars are hard to swallow. Many academic health systems have seen funding depleted over the last year and are struggling to cover costs for new innovations on the healthcare delivery side.
Alzheimer’s disease alone carries nearly $800 billion in annual costs. Parkinson’s disease adds another $50 billion. Neurodegenerative conditions are among the primary drivers of healthcare costs, and the system has spent decades managing their consequences rather than attacking their causes.
Amy Perry, president and CEO of Phoenix-based Banner Health, does not accept that this is inevitable. Despite the challenges from the HR-1, also known as the One Big Beautiful Bill Act, which cut $1.15 trillion in healthcare funding, and National Institutes of Health research grant cuts, academic systems are finding creative ways to sustain their triple mission of research, education and healthcare delivery.
“When we look at what our solutions are, what is our resilience against OBBBA, how are we going to deal with less money? Well, one of the critical issues is how do we get to the root cause?” Ms. Perry said during a keynote interview at the Becker’s 16th Annual Meeting.
Banner has invested hundreds of millions of dollars in Alzheimer’s research over the past 20 years, producing blood tests capable of detecting abnormal tau protein at early stages — technology that also has applications in concussion diagnosis and sports medicine. The system is currently trialing stem cell implants to replace dopamine-producing proteins in Parkinson’s patients and has developed an endoscope that combines imaging with real-time cell analysis for earlier-stage cancer detection. When ovarian cancer is caught early, Ms. Perry said, the survival rate is 82%.
Kevin Mahoney, CEO of the Philadelphia-based University of Pennsylvania Health System, Penn Medicine, is making the same argument from a different institutional vantage point. His case study is a baby boy known publicly as KJ, born this year unable to remove ammonia from his body. Penn Medicine physicians, working with Children’s Hospital of Philadelphia, obtained emergency FDA approval for a personalized treatment built on messenger RNA and CRISPR technology. The treatment worked.
“307 days later, baby KJ — I used to say, walked out of the hospital and someone corrected me, that’s not possible — was carried out of the hospital, taken home and is living an incredible life,” Mr. Mahoney said.
The case illustrates something Mr. Mahoney is emphatic about: science does not move on a predictable schedule, and the institutions that produce breakthroughs are the ones that fund researchers long enough to find them. Penn Medicine has actively tried to foster advanced research and innovation. One great example is Drew Weissman, MD, a physician and immunologist who spent eight years at Penn without a grant or publication. He eventually walked to the copying machine at the same moment as Katalin Karikó, PhD, a biochemist who was working on the same problem. They struck up a conversation and their relationship snowballed.
“Next thing, 20 years later, they win the Nobel Prize,” Mr. Mahoney said. “It was because they banged into each other by happenstance, by serendipity, not by sitting around a conference room at 8 o’clock in the morning, but in the hallway.”
That insight now shapes how Penn builds its facilities. The newest hospital puts a research MRI on the neuroscience floor, directly beside the neurological ICU, so fragile patients don’t have to travel to radiology and so researchers and clinicians occupy the same physical space. The proton therapy center runs human and animal treatments on the same beam. The deliberate goal is productive collision — the institutional equivalent of the copying machine.
Sixty percent of Penn Medicine’s bottom line flows back into research, a structural commitment that traces to the organization’s identity as part of a research university. Carl June, the physician who pioneered CAR-T cell therapy, showed up in 1999 with an idea to extract cells from a patient’s body, re-engineer them, and instruct them to kill the cancer. He was denied a research grant on the grounds that he had no clinical data.
“He said it’d be hard to get clinical data if you don’t give me a grant,” Mr. Mahoney said. “But we were fortunate that we were able to fund that. And that flywheel, that virtuous cycle has been really important to us.”
The argument that research investment is a financial strategy — not a cost center — is one both leaders apply to the problem of healthcare delivery as well as healthcare science. Nowhere is that tension sharper than in rural America, where hundreds of hospitals are at risk of closure.
Banner Health operates 33 hospitals across six states, including communities as remote as those served along a 120-mile stretch of Arizona that includes the Navajo Nation. While the physicians in rural hospitals typically aren’t conducting large research trials, their innovator’s mindset is critical to caring for patients and could be a valuable unlock for others in resource-strapped situations.
“I would put them up against our sub sub specialists at any one of our academic centers,” she said. “They really have to be equipped. They’re like the MacGyver of medicine because they have to do everything.”
Banner has pursued rural care through a logic of applied learning: if you can solve medicine under genuinely austere conditions, you can solve it anywhere.
“Banner has a secret up their sleeve,” she said. “We are responsible for a lot of airlines in air healthcare. Last year we treated 39,000 medical emergencies on airplanes. We staff this 24/7 and work really hard to make sure patients get from 30,000 feet to the ground alive where we can triage them. This is an incredibly important skill set based on a lot of rural markets where they need to get from not 30,000 feet in the air, but 30,000 feet away from another tertiary care center. We’re learning how to care for people with fewer resources.”
Banner also has a surgery fellowship in partnership with the University of Arizona and SpaceX, with one fellow studying how to provide surgery in an “extremely austere environment.”
“Those are the kinds of skills that we’re developing we hope will be replicated in our rural communities,” she said.
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