By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    stress management for healthcare workers
    3 Tips For Healthcare Professionals: How To Stay Beautiful, Healthy, and Happy
    November 2, 2021
    importance of relaxing on the weekend for your health
    Importance of Relaxing During the Weekend for Optimal Health
    March 25, 2022
    LASIK Eye Surgery
    What Is LASIK Eye Surgery?
    May 16, 2022
    Latest News
    Beyond Nutrition: Everyday Foods That Support Whole-Body Health
    June 15, 2025
    The Wide-Ranging Benefits of Magnesium Supplements
    June 11, 2025
    The Best Home Remedies for Migraines
    June 5, 2025
    The Hidden Impact Of Stress On Your Body’s Alignment And Balance
    May 22, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    Health Insurers are Feeling the Pressure of Looming PPACA
    August 30, 2012
    Leah Binder
    New Era of Healthcare: Transparency, Candor and Pointed Questions
    May 14, 2014
    A Primer on the Economic Levers CMS Has To Improve Patient Satisfaction
    October 6, 2012
    Latest News
    Preventing Contamination In Healthcare Facilities Starts With Hygiene
    June 15, 2025
    Strengthening Healthcare Systems Through Clinical and Administrative Career Development
    June 13, 2025
    Building Smarter Care Teams: Aligning Roles, Structure, and Clinical Expertise
    May 18, 2025
    The Critical Role of Healthcare in Personal Injury Recovery: A Comprehensive Guide for Victims
    May 14, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Can “Portfolio Theory” Be Applied to NIH Funding Decisions?
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Policy & Law > Global Healthcare > Can “Portfolio Theory” Be Applied to NIH Funding Decisions?
BusinessGlobal HealthcareHealth ReformPublic HealthTechnology

Can “Portfolio Theory” Be Applied to NIH Funding Decisions?

Kenneth Walz
Last updated: May 18, 2012 5:56 am
Kenneth Walz
Share
4 Min Read
SHARE

The National Institutes of Health has faced some critical fire lately: for funding studies that don’t turn into treatments, for not paying enough heed to the “valley of death” (the stage between bench science and clinical trials), and for not funding enough basic research because of budgetary constraints. But few have asked: how could the agency better select prospective projects?

The National Institutes of Health has faced some critical fire lately: for funding studies that don’t turn into treatments, for not paying enough heed to the “valley of death” (the stage between bench science and clinical trials), and for not funding enough basic research because of budgetary constraints. But few have asked: how could the agency better select prospective projects?

Researchers at MIT and Brigham and Woman’s Hospital in Boston published an intriguing theory: base NIH funding similarly to how investment companies handle portfolios, complete with return on investment calculations. But what would a rate of return be in biomedical research? Years of life saved per dollar spent, say Andrew Lo and his colleagues in their paper published in PLoS One.

But as the authors and others admit, “years of life saved” is probably an overly simplistic measure. Perhaps the authors were trying to make a point in the most extreme way possible.

More Read

Google Adwords, Campaign Optimization, SEM Marketing, PPC
Choose Carefully: Keyword Match Type Tips for Medical Search Marketing
Healthcare’s Most Disruptive: Next-Gen Genomics, Memory Implants
Devices Relieve Symptoms, Ignore Disease
Health Care Buzz Today
23andMe Suspends Genetic Testing During Review Process

The paper does illustrate that NIH’s current criteria for funding should be questioned. The agency currently rates projects according to public needs, scientific quality of the proposal, likelihood of scientific progress, need for diversified research, and the need to support people, equipment and facilities. All but the first criteria are not really related directly to improving healthcare, at least not on the individual patient level.

The “portfolio theory” article succeeded in prompting me not only to think about the shortcomings of the current funding formula but also to question the wisdom of the authors’ proposed alternative:

  • Many disease states—rare diseases, and chronic but painful forms of cancer, for example–would suffer after changing to a “portfolio theory” for allocation of funding, either due to the relatively low number of affected patients or as a result of isolating years of life saved to the exclusion of important benefits like pain reduction.
  • Finance theory tries to maximize one thing; profit, free cash flow, or return on investment (ROI), for example. You can choose which metric to maximize, but you do choose just one.
  • To comprehend other outcomes than years of life saved would require a weighted formula, looking at reduced pain and suffering, quality of life, as well as years of life saved. The determination of these weights would require value judgments that would to some extent reduce the benefit of the new quantitative approach to allocating funds.

Nonetheless, the “portfolio theory” discussion is important, and hopefully can lead to an improvement over the status quo of NIH funding.

Does application of the portfolio theory at NIH work for you? Are there other metrics beyond years of life saved? If you wanted to create a weighted formula for matching funding to healthcare outcomes, how would you do it? We’d love to hear your ideas.


This post was originally published on the Popper and Co blog.

TAGGED:national institutes of healthNIHportfolio theory
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

healthcare facilities
Preventing Contamination In Healthcare Facilities Starts With Hygiene
Global Healthcare Infographics
June 15, 2025
from gut to glow
From Plate to Wellness: How Everyday Foods Nourish Your Body Inside and Out
Dental health Infographics Specialties
June 15, 2025
beyond nutrition
Beyond Nutrition: Everyday Foods That Support Whole-Body Health
Health Infographics
June 15, 2025
Transcranial Magnetic Stimulation (TMS) Therapy
How TMS Therapy Helps with Treatment-Resistant Mental Illness
Mental Health Therapies
June 13, 2025

You Might also Like

Healthcare and Health IT in 2015: Seeking Simplicity

January 8, 2015

Swamped: America’s Health Care System Is Drowning in Misery

November 11, 2014

E-patients – Engaged, Empowered, and Enabled : One Patient’s Story

October 8, 2011

Nominate a Young Health Care Leader For a $40,000 Prize

June 2, 2012
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?