There is no doubt that major change—and fundamental disruption—is underway in healthcare.
Two main forces are at play:
- Focusing healthcare on value, not volume—Accountable Care Organizations (ACOs), bundles, Centers of Excellence, and other new models are emerging for driving total health management and accountability for quality and cost.
- Rise of consumerism—Consumers have more accountability today for their healthcare costs and more options for how to access healthcare services. They also have much more information to inform their choices and how they track and manage their own health day to day.
The future is not here yet, but we have lots of indicators that it is coming, and that the speed of change is building.
As for the shift to value, there are more than 600+ formal ACOs operating in the US today, and 2/3 of all Americans live within range to receive primary care access from an ACO. Many ACOs today are still struggling to transform and deliver the promised impact, but with pressure from the Centers for Medicare and Medicaid Services (CMS) to have 90 percent of Medicare spend in some form of value or quality-based payments by 2018, the sector will be very focused on accelerating its progress.
Meanwhile, on the consumer side, deductibles are now up to $5,000—even $10,000—for some insurance products to enable greater affordability. Tools like Castlight Health, ZocDoc, and iTriage are readily available to help consumers understand their options, whether for an ER or a local clinic, hospital A or B, or drug 1 or 2. These new services include information on relative costs and quality. Studies have shown when consumers pay a percentage of the cost instead of simply a flat, small co-pay, they are 50 percent more likely to ask for alternatives and choose more efficient solutions. This can amount to 10 percent savings in total costs—simply by being a better, more informed shopper for healthcare services.
In addition to smarter decision making, we are also arming consumers and clinicians with much more information about our health and well-being in between doctor visits. Devices like Fitbits, Apple Watch, and Nike FuelBand track various types of activity, sleep patterns, and increasingly heart rate and other biometrics. Livongo Health’s device and care management programs for diabetes enable convenient glucose monitoring for the consumer, and wireless transmission of data to the clinician to help drive timely interventions that help keep diabetics healthier and out of the hospital. Peer to peer solutions such as PatientsLikeMe, or even Facebook, are becoming the new sources of advice that many consumers turn to.
With Google Maps, we can land anywhere in the world, and easily navigate to unknown locations. It seems crazy by comparison that most of us cannot easily use our phones or iPads to conduct a video chat with a doctor for a basic problem, or routine follow-up. Think of how much more convenient and easy we could make it. With the likes of Teladoc, American Well, and MDLive—and hopefully broader adoption by health plans—these capabilities should begin to have a real impact on convenience and how we access healthcare.
Imagine a future where instead of easily misplaced postcards, you’re alerted to missed appointments and check-ups by a text message with a link. You click through, and it launches an app offering specific appointment options (dates, times, locations). It then synchs to your calendar and checks your availability. You instantly click accept, or hit the button that automatically offers another slot. How much more compliant would we all be? My guess is a whole lot.
The capabilities needed are here. Venture funding to healthcare is exploding—more than $4B in 2014, according to Rock Health. This is almost the equivalent of the past 3 years combined!
The challenge for healthcare companies is to meaningfully utilize and integrate the thousands of possible technologies and solutions that exist. We don’t lack for devices or apps; we lack for purposeful use in our daily lives. Remember, Apple did not invent digital music, or digital books, or the ability to watch videos on a computer device. What they did do was create an integrated ecosystem that eliminated consumer hassles. That integration has led to massive disruption in the music, publishing, and entertainment industries, just to name a few. The question for healthcare is who is going to simplify it all for us, who is going to “make it easy”? That’s the business that I want to invest in.