Business model experts are predicting massive disruptions in the ways health care is delivered, consumed and paid for in the near future.
With the advent of digital medicine and advancements in mobile technologies, it is now possible to provide real-time medical care to patients without having to pay a visit to a brick-and-mortar clinic.
Wearable sensors and mobile devices that can produce real-time electrocardiograms and other technologies in development make it possible to receive diagnostic data from remote locations. Imagine a doctor visit by Skype.
At Apple Inc.’s recent Worldwide Developers Conference, Craig Federighi, senior vice president of software engineering, unveiled HealthKit, a suite of new tools for developers that will enable them to integrate patients’ health data into new apps (including one from Apple called Health) in iOS 8, which will be launched this fall.
Nike will be one of the first third-party apps supported by Health. Other apps mentioned in the Apple presentation include Fitbit, iHealth and Wahoo Fitness. By pulling data from multiple apps into a single dashboard, the Health app could be a universal medical diagnostic tool.
“Developers have created a vast array of health care devices and accompanying applications, everything from monitoring your activity level, to your heart rate, to your weight and chronic medical conditions, like high blood pressure and diabetes,” Federighi said. “But up until now, the information gathered by those applications lives in silos. You can’t get a single, comprehensive picture of your health situation. But now you can, with HealthKit. HealthKit provides a single place that applications can contribute to a composite profile of your activity and health.”
To start, Apple is partnering with the Mayo Clinic, which is developing an app that integrates with HealthKit and provides patients a convenient dashboard for monitoring metrics such as calories eaten and burned, weight and blood pressure.
Apple also is partnering with Mayo and Verona-based Epic Systems to link real-time personal medical data with health care providers. Imagine getting a text message from your doctor alerting you that your blood pressure has spiked, your glucose level has dropped or your cholesterol levels have changed.
Then imagine how linking all of this technology in an efficient virtual dashboard that can be viewed at once by patients and physicians will create a more efficient and timely delivery of medical care.
Finally, imagine the improved quality of life – and lower costs of medical care – because so many problems will be detected and intervention will occur in the early stages, before diseases have advanced.
“Nothing is predictable other than the current system will be reshaped,” said Kay Plantes, a business model expert and author. “Industry participants should have one and only one drive: How can we improve outcomes while lowering costs? As a nation, we pay more for health care than other nations, yet achieve worse health outcomes.”
Plantes said capitalism’s competitive forces disrupt markets that are inefficient or serve customers poorly.
“Walmart 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,” Plantes said.
“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,” Plantes said. “Every other industry is figuring out how to do more for less while enhancing customer well-being. Health care, government and higher education, three sectors in need of radical reinvention, are ripe for disruption.”
With the disruptions, there will be corporate winners. And there will be corporate losers. Remember what happened to Blockbuster when DVDs, Netflix and Bluetooth technologies converged?
A recent whitepaper titled, “How U.S. Health Care Companies Can Thrive Amid Disruption,” written by McKinsey & Co., a global management consulting firm based in New York, affirmed Plantes’ predictions of change.
The Digital Age, with all of the applications of mobile technology, is combining with the changes required by the Affordable Care Act to accelerate the pace of those disruptions, McKinsey reported.
The report noted that the ACA brought 30 million more insured patients into the health care system.
“The existing payor business model is now being disrupted in several ways,” McKinsey said. “Because the traditional model of employer-sponsored insurance is shifting toward individual offerings in an exchange setting, payors need to build a new set of consumer- and retail-focused capabilities. The coming disruption is likely to significantly reshape the health care industry. Payors have occupied a large and critical – but relatively focused – role in the industry’s value chain. As the full effects of the ACA take hold, disruptive forces will begin to attack payor business models. Winning payors will get in front of these forces by aggressively moving to refocus their portfolios around the most attractive segments, successfully transforming their business models, and/or building significant new businesses. The opportunities are many, but to take advantage of them, senior payor executives must make clear strategy choices and exercise the leadership required to ensure that the necessary organizational changes are made.”
