One man’s disruption is another man’s inexorable evolution
The AHA’s criticism of tech giants misses the point that the industry needs to evolve—and quickly—to improve patient experience and cut overall costs.
No doubt, this has been a disrupted decade for American healthcare. It seems like 2010 came in like a lion and as of this point in 2019, it will leave the decade like a den of hungry lions (I’m allowed to mix and mangle metaphors because it’s a Friday).
It’s clear that the industry is under significant pressure to make progress toward the triple aim, particularly reducing the cost, improving the health of populations and improving the patient experience of care. That’s propelling the move toward value-based care.
And the role of technology—and technological change agents—in the industry is inexorable. The implementation of electronic health records systems and other digital capabilities have moved the delivery of healthcare into a new sphere, where data, analytics, artificial intelligence and other advanced technologies can be used to improve care. And it’s no surprise that large technology companies, such as Amazon, Google, Apple, Microsoft, CVS-Aetna and others, will seek to take a fresh look at how care is delivered.
Frankly, there’s no going back here. And so, I was surprised by the harsh comments coming out of an American Hospital Association forum in Washington, in which big-tech companies were tagged as the enemy.
The large technology companies were termed to be “disruptors” that will end up competing with hospitals—or rather, will skim off easy dollars, while provider organizations are left with the task of treating “everyone that walks through our doors,” said Rick Pollack, president and CEO of the AHA.
No one disputes that federal laws leave hospitals with the responsibility of treating patients that come to emergency rooms, and that hospitals in some situations are under tremendous financial pressure, serving as the safety net while reimbursement mechanisms don’t match the responsibility they carry.
But one can also read the AHA’s concerns as a “circle the wagons” clarion call, suggesting that hospitals need to grow their integrated delivery systems and enter strategic partnerships in order to protect themselves “and compete more equally with highly capitalized corporate giants that often lack roots in, or obligations to, the communities they propose to serve,” says AHA’s General Counsel Melinda Hatton.
I don’t think that’s a fair role to assign to Google, Amazon or any tech company—that’s just casting them as the bad boogie man that’s come to pillage the healthcare bastion. This perception doesn’t seem to accept the notion that healthcare is pivoting away from what has been traditional care to a newer consumer-friendly, value-based care system.
The site of care is changing, partly because of consumer preference and partly because of economic reasons. Consumers no longer expect to be passive recipients of care, but want to be involved in their health. Increasingly, they understand basic tenets of health—take care of your physical body, take ownership in your care, get to medical professionals sooner rather than later—and it’s going to be your dime, so call the shots.
Meanwhile, lost in the discussion is the massive spending on healthcare in this country, and the growing pressures to restrain spending. The President’s budget for FY2020 proposes a 10-year plan to cut Medicare expenditures by $800 billion, with Medicaid funding being diminished by $1.5 trillion over the same period of time. While cuts may not be that extensive, there clearly will be increasing pressure to restrain programmatic costs.
Beyond that, healthcare in a hospital setting—or most traditional settings—is just high, to any consumer’s eye. It’s no surprise, then, that patients want their medical information and the ability to go to care settings that are more affordable.
Disruption in the healthcare industry is inevitable—and it should be welcomed, even by hospitals and integrated delivery systems. Many are hiring chief innovation officers to deal with this—I don’t think their job descriptions say anything about circling wagons, or repaving cow paths. In the old healthcare world, delivery revolved around the hospital. In the future, it’s possible that the hospital will be just one component of a coordinated, cost-effective system of care.
Here’s my personal example—I have a smartphone, and typically, the only time I learn anything new about it is when I ask my millennial daughters to show me how to use it more effectively. Otherwise, it’s only handy for fielding phone calls and the occasional game of Tetris.
It will take the technology and contributions of many to ensure that healthcare survives and thrives in a future world that is cost-constrained and focused on value. Everyone needs to be a disruptor, and being one doesn’t make you the enemy.
It’s clear that the industry is under significant pressure to make progress toward the triple aim, particularly reducing the cost, improving the health of populations and improving the patient experience of care. That’s propelling the move toward value-based care.
And the role of technology—and technological change agents—in the industry is inexorable. The implementation of electronic health records systems and other digital capabilities have moved the delivery of healthcare into a new sphere, where data, analytics, artificial intelligence and other advanced technologies can be used to improve care. And it’s no surprise that large technology companies, such as Amazon, Google, Apple, Microsoft, CVS-Aetna and others, will seek to take a fresh look at how care is delivered.
Frankly, there’s no going back here. And so, I was surprised by the harsh comments coming out of an American Hospital Association forum in Washington, in which big-tech companies were tagged as the enemy.
The large technology companies were termed to be “disruptors” that will end up competing with hospitals—or rather, will skim off easy dollars, while provider organizations are left with the task of treating “everyone that walks through our doors,” said Rick Pollack, president and CEO of the AHA.No one disputes that federal laws leave hospitals with the responsibility of treating patients that come to emergency rooms, and that hospitals in some situations are under tremendous financial pressure, serving as the safety net while reimbursement mechanisms don’t match the responsibility they carry.
But one can also read the AHA’s concerns as a “circle the wagons” clarion call, suggesting that hospitals need to grow their integrated delivery systems and enter strategic partnerships in order to protect themselves “and compete more equally with highly capitalized corporate giants that often lack roots in, or obligations to, the communities they propose to serve,” says AHA’s General Counsel Melinda Hatton.
I don’t think that’s a fair role to assign to Google, Amazon or any tech company—that’s just casting them as the bad boogie man that’s come to pillage the healthcare bastion. This perception doesn’t seem to accept the notion that healthcare is pivoting away from what has been traditional care to a newer consumer-friendly, value-based care system.
The site of care is changing, partly because of consumer preference and partly because of economic reasons. Consumers no longer expect to be passive recipients of care, but want to be involved in their health. Increasingly, they understand basic tenets of health—take care of your physical body, take ownership in your care, get to medical professionals sooner rather than later—and it’s going to be your dime, so call the shots.
Meanwhile, lost in the discussion is the massive spending on healthcare in this country, and the growing pressures to restrain spending. The President’s budget for FY2020 proposes a 10-year plan to cut Medicare expenditures by $800 billion, with Medicaid funding being diminished by $1.5 trillion over the same period of time. While cuts may not be that extensive, there clearly will be increasing pressure to restrain programmatic costs.
Beyond that, healthcare in a hospital setting—or most traditional settings—is just high, to any consumer’s eye. It’s no surprise, then, that patients want their medical information and the ability to go to care settings that are more affordable.
Disruption in the healthcare industry is inevitable—and it should be welcomed, even by hospitals and integrated delivery systems. Many are hiring chief innovation officers to deal with this—I don’t think their job descriptions say anything about circling wagons, or repaving cow paths. In the old healthcare world, delivery revolved around the hospital. In the future, it’s possible that the hospital will be just one component of a coordinated, cost-effective system of care.
Here’s my personal example—I have a smartphone, and typically, the only time I learn anything new about it is when I ask my millennial daughters to show me how to use it more effectively. Otherwise, it’s only handy for fielding phone calls and the occasional game of Tetris.
It will take the technology and contributions of many to ensure that healthcare survives and thrives in a future world that is cost-constrained and focused on value. Everyone needs to be a disruptor, and being one doesn’t make you the enemy.
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