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Pristine Blog

The Great Re-Bundling of Healthcare

Posted by Lucas Schlager on Dec 5, 2013 8:49:19 PM

This post was originally featured on HIStalk.

Computers break assumptions. By breaking assumptions, computers are re-bundling industries. No industry will be left untouched as computers eat the world.

Computers do everything that humans do, but computers can perform each at effectively infinite scale. Performing each of these functions at infinite scale breaks fundamental business assumptions:

1) Store data. Computers can store historical records of every business interaction or transaction. In an analog world, the overhead of storage and retrieval outweighed the cost, if it was even possible at all. Computers deliver perfect memory.
2) Process data. Computers can process data — historical, in real time, and cross-referencing each — to deliver new business insights.
3) Share data. Computers can share data and insights across geographies instantly.

The media industries — newspapers, magazines, music, videos, and movies — were disrupted by computing because none of these businesses were actually the businesses they claimed to be. They were distribution businesses that called themselves media businesses. Once computers dismantled their distribution channels, they crumbled, and a new wave of technology-centric distribution businesses emerged in their wakes (blogs, Apple, Netflix, PirateBay / torrents, etc.) These technology businesses re-bundled the respective media industries by breaking analog business assumptions.

Healthcare is being re-bundled. All players in the healthcare sector — patients, providers, payers, regulators, and vendors — are realizing that their roles will change in a digital future. That future will be one in which:

1) Store data. There will be human-perfect (as perfectly as humans can record) data for all patients all the time.
2) Process data. Computers will analyze everything that they can based on all available data, both current, historical, and for every patient there ever was.
3) Share data. Information flows between all parties in the healthcare system — patients, providers, and payers — seamlessly across geographies.

In healthcare, these endpoints are currently hamstrung primarily by regulation and interoperability challenges, and to a lesser extent by technical device limitations (primarily at-home diagnostics and treatments). In the next 5-10 years, most of the political and regulatory issues that are obstructing these endpoints will resolve themselves.

When healthcare delivery systems reach these endpoints, how will the re-bundled healthcare system function, and how will providers be controlled and organized?

Store / process data. Computers will use vast volumes of data to diagnose and treat (genomics, years of history, etc. -> Watson). Each patient will help improve outcomes for every patient.

Store / process data. Providers will be presented with contextual data and information on demand.

Process / share data. Providers will be able to communicate whenever and however necessary.

Process / share data. Geography will become almost entirely irrelevant except in high-acuity cases. Telemedicine will be standard, not the exception. Patients will be able to capture data for diagnostics and treat most simple conditions at home. Amazon drones will deliver devices and treatments to patients on demand.

Although technology advocates claim that technology levels the playing field among competitors within a given market, in many cases, technology markets tend towards winner-take-all markets. This has been especially true in markets in which a single technology vendor disrupted a analog legacy players such as Google, Microsoft, and Apple (music).

If geography is irrelevant, data can be seamlessly shared and providers and patients are on an equal playing field in terms of diagnostics and treatments relative to their peers. Provider entities should tend towards one of two extremes: nationwide monopoly* or highly fragmented and distributed. We’re witnessing the former as the prominent clinics, the Cleveland Clinics and Mayo Clinics of the world, open virtual and remote clinics all over the country. Technology is enabling them to extend their reach, promote their brand, and drive high-acuity, high-revenue cases back to the mother ship. They’re using technology to feed the proverbial beast.

The ACA sparked this trend, but that doesn’t mean that the pendulum can’t swing back in the other direction.

If the pendulum were to swing back to support a highly fragmented delivery system, what would cause and support it? Seamless data transferability and abstraction of administrative functions. No one can unseat Google or FaceBook in their respective markets because no one can access their databases. If doctors can access patient data from all other providers on demand and if providers don’t need to rely on a larger administrative entity (perhaps RCM providers such as athenahealth could take over all administrative functions?) then patients would only be bounded by the providers they enjoy interacting with. Nothing would bound patients, providers, or payers to larger provider entities.

One for all, or all for one?

* It’s worth noting that although systemic pressures may tend towards national monopoly, the system would result in an oligopoly given how large many of the established players already are.

Topics: The Pristine Story