Health Care is Undergoing Massive Shocks

It’s no secret. The healthcare industry is going through massive disruption. To some, it’s not fast enough. To others, it’s been too much too fast. Whatever your stance, it’s fair to say healthcare is broken. $3.5 Trillion was spent on healthcare in 2018, roughly 18% of the country’s GDP. Despite this giant investment, the Commonwealth Fund ranked the U.S. dead last in a study of 11 developed nations when ranking the performance of our healthcare system. This article is one more in a series I call Everything Transformed where I’m highlighting the disruptive forces revolutionizing just about every industry on the planet, including packaging, travel and hospitality, industrial safety, and more.

This time it’s healthcare.

I’m drawing insights from my consulting work with some of the largest industry players, as well as my relationship with Plug and Play, one of Silicon Valley’s largest investment firms and startup accelerators. According to Neda Amidi, Global Health Partner within Plug and Play Ventures, “I think we’ll continue to see startups tackling massive datasets using AI and machine learning.

The information gathered from these datasets have the potential to bring up some fascinating predictive insights that will be of tremendous value to insurers, pharmaceutical companies and hospital systems.” Artificial intelligence is just one thing that might help the system. I asked Amidi what she sees as the major drivers transforming the industry – and that represent opportunity areas for startups and healthcare players to innovate. Here are a few:

Consumers now bear more cost for their care, so they expect new tools for comparison shopping and finding ‘value’ as they shop for healthcare.

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They also have expectations from using services in other industries (like mobile banking, ridesharing or Amazon’s one click purchasing) they want healthcare providers to deliver as well. Value-based care ties medical payments to the quality of care provided (like not being readmitted to the hospital within a certain time frame). Providers are incentivized and rewarded for better outcomes and lower spending, instead of what we see currently, which is the traditional fee-for-service reimbursement model.

Population health involves managing the overall health – and health costs – of a total population of people. Keeping people well saves money on expensive care, so if you’re an insurance provider it might make sense to provide added support like healthy food options, exercise plans, transportation, and even education for make healthy decisions. The opioid epidemic has placed tremendous burden and cost on an already stressed system. Insurers, health providers, public health officials, and nonprofit organizations are all continuing to seek solutions, with data analytics leading the way to help identify abuses in the system. The shortage of doctors and nurses have made telemedicine options increasingly attractive, especially for patients that don’t live close to hospitals or specialists.

Videoconferencing technologies along with health insurance providers that are open to exploring remote care models are accelerating the trend. Massive datasets that have been built over the past few years that contain data tied to DNA and medical images, and more are ready to be analyzed. More and more health systems now engage their populations by collecting samples and conducting behavioral research to explore the relationship between biological, environmental and behavior contributors to health and wellness. Plug and Play’s 150,000 square foot facility in Silicon Valley houses both startups and “corporate partners” who join the incubator to rub elbows with the upstarts. Corporate partners include Johnson & Johnson, Roche, Boehringer Ingelheim, Sanofi, Cleveland Clinic and others.

According to Dr. William H. Morris, Associate Chief Information Officer at Cleveland Clinic, “We’re focused on the patient experience, cost, and value of what we deliver. We need to increase the quality of patient care at a lower cost to address our country’s health disparities and inequities. We have a moral, ethical, and fiscal obligation to solve this and we see working with startups a great way to accelerate our goals.” Amidi works to bridge the challenges faced by corporate partners like Cleveland Clinic and the “batches” of startups they help accelerate. “As our program has grown and we’ve added more pharmaceutical and hospital partners, our batches have evolved to focus more towards value-based care models, care delivery, operational efficiency, chronic disease management, specific therapeutic areas, and more,” says Amidi.