Technology (preventative apps like Apple Health and HealthKit; EHR, claims and reimbursement analytics; Physician Practice management etc.) will reinvent healthcare as we know it. I expect the healthcare transformation to start incrementally and develop slowly in sophistication. Though the early changes will appear clumsy and underwhelming, by 2030 they will seem obvious, inevitable and well beyond the changes we might envision today.
Why change? Consider this:
- Honeywell, a Fortune 100 technology and manufacturing company, needed to manage the ever-escalating cost of insuring its 130,000 employees and their dependents. Honeywell has reported that health care costs were growing approximately 8-10% per year.
- Self-insured employers like Wal-Mart want to make health care cost and quality information available to their 1.2 Million employees. Useful information that can be used by employees to select physicians based on how their rank, or how much they cost, resulting in savings for both the employee and the employer. Decision support enabler.
- IBM is moving to a private health exchange…Extend Health private exchange will be handling plan options for 110,000 IBM retirees
- Walgreens is moving employees to a Corporate Health Exchange. Of the 180,000 Walgreen employees eligible for healthcare insurance, 120,000 opted for coverage for themselves and 40,000 family members. Another 60,000 employees, many of them working part-time, were not eligible for health insurance.
- Trader Joe’s — decided to send some employees to the new public exchanges. Trader Joe’s has left coverage for three-quarters of its work force untouched but is giving part-time workers a contribution of $500 to buy policies. Because of the employees’ low incomes, the company says it believes many will be eligible for federal subsidies to help them afford coverage.
For the past year I have done strategy and implementation work in the employee Healthcare benefits and Private Exchange area. I wanted to share my insights into the massive structural changes taking place in health insurance. The move to patient-centered, consumer-driven, and value-based models is real.
This posting has been updated and posted on disruptivedigital.wordpress.com
Every firm wants to bring the power of big data and data science to streamline healthcare encounters ~ member/consumer engagement, provider/PCP engagement or clinical/care engagement.
Health expenditures in the United States crossed $3.0 trillion in 2013 which is more than ten times the $256 billion spent in 1980.
Almost 15% of U.S GDP is spent on healthcare…a staggering number. As a mega-vertical, healthcare covers several major segments (the 7 Ps)
- Payers (Health Insurance and Health Plans),
- Providers (Hospital Systems, Labs and IDNs),
- Pharmacy (retail distribution networks), and
- Pharmaceutical and medical equipment manufacturers,
- Prescribers (Physicians, clinics and pharmacy minute clinics)
- Police (Regulators, FDA)
- Patients (consumers)
U.S. healthcare system is a complex beast and difficult to navigate – providers need to make it easier for patients. They are using people resources like care coordinators and patient navigators to help patients navigate the system.
The focus on the payor side is in digitizing health today is to reduce the amount of waste in the health care system via implementation of new forms of health IT and Analytics… that reduces inefficiencies, redundancies and administrative costs.
According the CEO of Aetna…”the health care system wastes more than $765 billion each year – that’s 30 percent of our health care spending.”
While spending on health care is dominating headlines, the health care industry (7Ps) is in a state of flux. Stakeholders across the health care sector are running hard to reduce costs. The drivers impacting cost of healthcare include:
- Aging population – Patient history and patterns of care impacting patient readmission rates
- Rise in Chronic Disease – 75% of cost – Prevention not reactive medicine
- Drug cost – escalating for certain therapies (Generics exchanged for biological drugs)
The healthcare ecosystem is being reshaped by two powerful counter economic forces at work: (1) Improve quality of care and (2) drive the cost of care down. Basically spend less and get more.
As a result, the entire healthcare ecosystem is changing into a “information-driven”, “evidence-based” and “outcome-driven” model.
The target healthcare transformation goals are:
- align economic incentives between payers and providers,
- digital engagement…create a simpler, more transparent consumer experience, and
- connected health….technologies that seamlessly connect our healthcare system.
In this posting we look at Digital Health Care use cases and how data and analytics are being slowly but sure being adopted in the form of informatics. All this change is being driven under the guise of Health Reform.