Tempus’s Eric Lefkofsky on How Big Data Can Help Save $1 Trillion in Health Care Costs
Tempus, one of Chicago’s most rapidly growing genomics start-ups, aims to facilitate cancer treatment based on patients’ own genetic profiles. It hopes to accomplish its goals by using ‘big data’ while taking advantage of the recent advances in human genome sequencing, science, and technology. Tempus’ founder, Eric Lefkofsky, one of Chicago’s most influential tech figures is also best known for e-commerce companies such as Groupon, Echo Global Logistics, and InnerWorkings.
Lefkofsky co-founded Tempus in 2015. The start-up has since expanded to a 200-person company, and while it was mostly self-funded ever since, it has raised a total of $130 million in venture capital, out of which $70 million was the largest amount of funding obtained in the third quarter of 2017. The young company has recently also been voted among Chicago’s top ten health-tech start-ups.
In 2013, Eric and his wife became members of The Giving Pledge, where they have committed to contribute nearly half their wealth to philanthropic causes. In 2006, the two co-founded the Lefkofsky Family Foundation. While the foundation’s focus is on education, human rights, civic causes and medical discoveries, in his blog, Lefkofsky states that “These days, I have become 100% focused on the last, at my start-up Tempus, and I can’t seem to think about anything else.”
And while he believes that the other Family Foundation focuses are just as important, he states that he “feels the need to explain why I’m so singularly focused.”
The main reason behind his focus on medical discoveries is the fact that out of the $3 trillion a year that is spent on health care in the US, one-third of that is wasted according to sources such as independent government and academic studies and large payor analyses. Lefkofsky goes on to write that “That means we are spending roughly $1 trillion a year that we don’t need to be spending.” He believes we can reduce mortalities by over 50% within the next 25 years by combining health care with Big Data, which includes machine learning and artificial intelligence. Lefkofsky believes “we are standing at the gateway of a new era of technology and medicine, one that is going to completely upend how we treat patients and manage the disease.”
With Tempus, Lefkofsky does exactly what he speculates would save wasted money – he uses Big Data by way of human genome sequencing and clinical data to both advance and optimize the way cancer is treated. The company both collects and analyzes large volumes of molecular and clinical data, and by doing so, it hopes to address the data shortage issue and its use for the development of personalized and optimized treatment solutions. According to Lefkofsky, hospitals were far behind the use of data. He states that “You realize if you’ve been a patient or know someone who’s been a patient that technology has not permeated health care and certainly oncology the way it has permeated other industries.”
So now that the $1 trillion is saved, what can be done with the money? According to Lefkofsky, it can be used to tackle several other causes, such as education as well as crime and poverty reduction. He writes that “We spend $640 billion a year on education in this country. Our education budget has risen 3.5% over the past two years.” Lefkofsky suggests increasing this budget to 20% a year that would improve the nation’s schools.
Out of the calculated $870 billion that is left, Lefkofsky proposes that “We could allocate another $80 billion (doubling the budget) toward working with individuals from disadvantaged communities, as well as providing job training and other opportunities to individuals who are already in the prison system.” After that, with the remaining $790 billion, poverty can be tackled as, according to him “For $150 billion or so we can bring everyone in this country above the poverty line.” With the last $640 that is left, the interest on the national debt can be covered and there would still be $400 billion left to spend.
He finalizes his blog post with “But wait, we forgot to accrue for the positive benefit of (1) an extra 1 million productive Americans who are still alive because they didn't die of cancer, or a heart attack, or a stroke and (2) a more educated society and (3) fewer people in jail and (4) no more poverty to contend with. Even if we assume conservative GDP lifts for the above, you probably pick up $500 billion to $600 billion annually, which means we're left trying to spend the extra $1 trillion we saved by improving our health care system and controlling diseases such as cancer.”
Lefkofsky held several academic positions, such as teaching at the Kellstadt Graduate School of Business at DePaul University as well as at Northwestern University’s Kellogg School of Management. He is currently an adjunct professor at the University of Chicago’s Booth School of Business and also the author of Accelerated Disruption: Understanding the True Speed of Innovation.
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