Barry LibertCEO of Open Matters and Senior Fellow at Wharton’s SEI Center for Advanced Studies in Management
Barry Libert, CEO, Open Matters and senior fellow at Wharton’s SEI Center for Advanced Studies in Management.
Digital platforms are tools that allow networks of people to come together to connect, share information, and transact with each other. Whether the participants are friends and family, colleagues and mentors, buyers and sellers or doctors and patients, the digital platform allows these networks to interact with each other in ways beyond the physical world to make our lives easier and better. Once established, digital platforms can scale easily. And as they grow, they create increasing value for their participants.
Digital platforms are already disrupting markets broadly. Well-known examples include Airbnb, which is among the most valuable hoteliers but does not own a hotel; Uber, which has become more valuable than Ford and GM but does not manufacture or own a fleet of cars; Facebook, the world’s largest publisher with 1.7 billion writers who also act as editors; and Amazon, which is sailing past Walmart by focusing on e-commerce. These companies focus their investing on digital platforms rather than physical assets, and they use the technology, data and relationships of their networks to create exponentially more value than an analog organization ever could on its own. This “network effect” has led to the emergence of new business and mental models.
The health care industry—specifically medical care—is not impervious to these new business models. It has long been insulated from disruption due to the intricacies of navigating opaque billing systems, the deification of doctors, regulations that suppress competition, and other factors. But now, change is coming about. Silicon Valley has been funding a number of startups that are disrupting parts of the industry—and more are likely to come.
$1 trillion of the money spent annually on health care is wasted: it’s a big opportunity for disruption by startups.
Notwithstanding decades of proposed fixes, the health care system today remains woefully fragmented, physician-centric, siloed, disconnected from the holistic needs of patients and in dire financial condition. Consider the following common grievances about health care and how new digital tools, networks and platforms can address them:
What have we tried? The use of “physician extenders,” such as nurse practitioners, to lighten doctors’ workloads.
What should we do? Enable patients to access validated and shared health care data and information, followed by convenient interaction with a network of available doctors through online platforms or videoconferencing.
What have we tried? It is up to patients to obtain and share their records with multiple physicians, which wastes time and effort.
What should we do? Create tools to input and store integrated health records across the entire cycle of care, easily accessible to practitioners engaged in a patient’s care, but with privacy safeguards.
What have we tried? Doctors attempt to keep up with a burgeoning pile of medical literature and then advise patients to seek multiple opinions.
What should we do? Create machine learning and artificial intelligence systems to improve the accuracy of diagnoses and customize treatment, or even create platforms for doctors to crowdsource insight from more experienced peers for challenging cases.
What have we tried? Advising patients to change their habits, hoping they do, and checking in next year.
What should we do? Create virtual systems for patients and health care providers that can regularly monitor lifestyle habits and health conditions and intervene when needed. Some devices, connected through the Internet of Things, can capture and send data wirelessly to doctors and hospitals.
The technology needed to implement such solutions is here, and has been for some time. While an upfront investment is often required to create the network, ongoing costs should be dramatically reduced. The system would make the interaction between patient and medical professional more efficient and could improve outcomes.
Two hurdles stand in the way of advancements: the recalcitrant mindset of the health care community and the heavy hand of regulations. Despite these limitations, some visionary organizations and startups are making progress.
As the health care crisis worsens while technology advances, new tools and platforms will emerge that will change our traditional notion of how health care can be delivered. But it won’t be without challenges.
An estimated $1 trillion of the $3.3 trillion that the U.S. spends annually on health care is wasted—presenting an opportunity for disruption by tech startups. However, overcoming the protectionist tendencies of industry incumbents is one thing, dealing with outdated federal regulations is another. These laws include the Copeland Anti-kickback Act (1934), the Stark Law (1989), which bans a physician from making referrals in which there is a conflict of interest, and the patient privacy act, HIPAA (1996).
Created with noble intentions, these regulations are widely recognized barriers to aligning health care stakeholder relationships with the essential needs of the patients. They also impede digital-based solutions and stifle innovation, and as such, they need to be replaced with contemporary regulations that protect patient confidentiality while fostering greater flexibility and empowering digital transformation.
An array of additional medical malpractice and litigation concerns fueled by electronic transmissions of health data must also be acknowledged by 21st century regulations. What we cannot do is let these worries halt the adoption of technology that will revolutionize health care.
But who will lead the charge to change the regulatory climate? While health care professionals have deep insight into the implications and practicality of regulation, most prefer not to dive into policy. Unfortunately, this leaves the policymaking to politicians—and probably some entrepreneurs who wish to create space within the regulations for their new enterprises. If established players want to have a role in shaping the future of regulation, the time to step forward is now.
Whoever leads the charge, and we hope they are those with deep health care experience, a new mental model within the health care industry will be essential. Accessible, customer-centric health care networks connected by digital platforms will reinvent the patient-doctor relationship, as well as the traditional role of the physician. Indeed, physicians may operate in virtual-integrated practice units that will use today’s digital platforms to enable patients direct access to the insights they need. They will become “information analysts” and trusted advisors, using machine learning and artificial intelligence systems to improve patient care.
Instead of being the final authority on treatment plans, physicians may provide options and advise patients to consult with a network of similar patients to determine which plans best fit their goals. This shift away from authority and control may be a difficult pill to swallow, so to speak, for many in health care, but every patient deserves ultimate control over their own health care.
This piece first appeared on Knowledge@Wharton, which is the online research and business analysis journal of the Wharton School of the University of Pennsylvania.