title: Buying cures versus renting health: Financing health care with consumer loans.
abstract: A crisis is building over the prices of new transformative therapies for cancer, hepatitis C virus infection, and rare diseases. The clinical imperative is to offer these therapies as broadly and rapidly as possible. We propose a practical way to increase drug affordability through health care loans (HCLs)-the equivalent of mortgages for large health care expenses. HCLs allow patients in both multipayer and single-payer markets to access a broader set of therapeutics, including expensive short-duration treatments that are curative. HCLs also link payment to clinical benefit and should help lower per-patient cost while incentivizing the development of transformative therapies rather than those that offer small incremental advances. Moreover, we propose the use of securitization-a well-known financial engineering method-to finance a large diversified pool of HCLs through both debt and equity. Numerical simulations suggest that securitization is viable for a wide range of economic environments and cost parameters, allowing a much broader patient population to access transformative therapies while also aligning the interests of patients, payers, and the pharmaceutical industry.
authors.affiliation: MIT Laboratory for Financial Engineering, Sloan School of Management, Cambridge, MA, USA. MIT Department of Electrical Engineering and Computer Science, Cambridge, MA, USA.
authors.forename: Vahid
authors.initials: V
authors.lastname: Montazerhodjat
authors.affiliation: Department of Medical Oncology, Dana-Farber Cancer Institute and Harvard Medical School, Boston, MA, USA. Broad Institute of Harvard and MIT, Cambridge, MA, USA. alo-admin@mit.edu dweinstock@partners.org.
authors.forename: David M
authors.initials: DM
authors.lastname: Weinstock
authors.affiliation: MIT Laboratory for Financial Engineering, Sloan School of Management, Cambridge, MA, USA. MIT Department of Electrical Engineering and Computer Science, Cambridge, MA, USA. MIT Computer Science and Artificial Intelligence Laboratory, Cambridge, MA, USA. AlphaSimplex Group LLC, Cambridge, MA, USA. alo-admin@mit.edu dweinstock@partners.org.
authors.forename: Andrew W
authors.initials: AW
authors.lastname: Lo
mesh_terms: D003695:Delivery of Health Care / Q000191:economics*; D005376:Financial Management; D006801:Humans; D007348:Insurance, Health / Q000191:economics*; D009042:Motivation