If you are in the healthcare industry, or are curious about where it is headed, be sure not to miss WTN’s June 24-25 upcoming Digital Healthcare Conference focused on the industry’s disruption. Mike Klein was one of the early voices predicting dramatic change; once again he brings a stellar set of speakers to help participants anticipate the future.
As a nation we pay more for healthcare than other nations yet achieve worse health outcomes. The three to six extra GDP percentage points we pay in healthcare costs are needed for infrastructure, education, federal R&D investments and our pocketbooks. We pay more because payers exert too little pressure on providers relative to other nations; and we’ve historically paid providers to do procedures versus improve health. In addition, many consumers are sheltered from cost and do not know the relative cost or quality of providers.
Capitalism’s competitive forces disrupt markets that are inefficient or serve customers poorly. Wal-Mart disrupted Main Street retail, Staples disrupted local office supply businesses, Google disrupted Encyclopedia Britannica, and Apple’s iPhone and iPad disrupted Microsoft’s Windows. Disruption creates greater benefits at lower costs for consumers. Products, categories, companies and entire industries can be disrupted. The only barrier from disruption is crony capitalism, of which our nation has too much.
If we can keep people healthier, identify health issues earlier, and treat health issues less expensively while still as expertly, we can move the needle on health care costs. Every other industry is figuring out how to do more for less while enhancing customer well-being. Healthcare, government and higher education, three sectors in need of radical reinvention, are ripe for disruption.
A number of driving forces are weakening the forces of crony capitalism in healthcare, with technology a key one:
• Changes in payment schemes with examples such as case (versus procedure) reimbursement, pay-for-performance and shifting the financial risk of a patient’s overall care from insurers to providers.
• Data transparency enabling us to be better healthcare shoppers.
• Big Data software identifying individual health issues sooner, allowing earlier and less expensive care.
• Biotechnology advances that are surfacing less costly ways to deal with chronic disease.
• Mobile APPS with big data analytics that enable care to move to less expensive settings, offer fresh insights into how to improve care and allow individuals to be better caretakers of their health.
• Artificial intelligence such as IBM’s Watson computer, which can speed up diagnostic work.
• Incentives for insured workers to be smarter shoppers and take better care of their health.
• Reinforcing the above bullet point, a shift in large corporations from defined benefit to defined payment schemes for health benefits, a change much like we saw in pensions when 401K contributions by employers replaced pension checks. Very few companies are making this change right now, but when a few fall, we’ll see a game of dominoes.
• The hospice movement, which encourages a quality end-of-life versus a prohibitively expensive end-of-life.
• Retailers seizing opportunity in providing primary care. Seen signs for a $29 camp exam lately?
• More appreciation for the talents of physician assistants and nurses who should be the front line for day-to-day primary care needs.
I am personally intrigued with mobile health apps (beyond the “fitness” app craze), which are growing rapidly and will disrupt healthcare dramatically. We can increasingly sense, measure, and assess our health outside the doctor’s office. Many of these technologies will create better healthcare in developing nations, but they will also dramatically increase the power of the individual in the health care system and move care into the least costly settings.
Nothing is predictable other than the current system will be reshaped. Industry participants should have one and only one drive: How can we improve outcomes while lowering costs? Here are examples of moving to a new metric:
• Medtronic, leader in chronic care devices, purchased two software companies that monitor heart failure patients outside the hospital, sending important information to providers and caregivers to reduce the cost of care. We will see the same kind of industry boundary shifts in diabetic care and other chronic diseases.
• Cleveland Clinic is developing an extensive network of home-care services.
• Insurers Aetna and United healthcare are investing in mobile health technology.
In summary, the incentives are thankfully changing. Game on!
More articles by Kay Plantes
- Fusion 2014: It’s all about disruption of business models and IT
- Uber: A business model innovation that benefits and exploits
- Business model excellence from Badger Coach Bo Ryan
- Five practices to sail successfully in the unrelenting waves of disruption
The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of WTN Media, LLC. WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.