Problem: Last week, I was reading the MIT Technology Review and came across an article about “The Costly Paradox of Health Care Technology.” In the United States health care system, even though there are technology advances, economists agree that costs are still increasing. As written by Jonathan S. Skinner,
In research with Amitabh Chandra at Harvard’s Kennedy School of Government, funded by the National Institute on Aging, I have been puzzling over why advances in medical technology lead the U.S. to spend more per person on health care than any other country in the world (see “We Need a Moore’s Law for Medicine”). We came up with two basic causes. The first is a dizzying array of different treatments, some that provide enormous health value per dollar spent and some that provide little or no value. The second is a generous system of insurance (both private and public) that pays for any treatment that doesn’t obviously harm the patient, regardless of how effective it is.
Broadly, the problem can be attributed to consumers in America paying for unnecessary treatments that are fueled by insurance companies’ generosity to pay for everything and anything. As Skinnner continues in his article, “Unlike many countries, the U.S. pays for nearly any technology (and at nearly any price) without regard to economic value. This is why, since 1980, health-care spending as a percentage of gross domestic product has grown nearly three times as rapidly in the United States as it has in other developed countries, while the nation has lagged behind in life-expectancy gains.”
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Solution: Towards the end of his piece, Skinner provides a solution to the problem he identified.
For this reason, the best way technology can save costs is if it is used to better organize the health-care system. While the U.S. may lead the world in developing costly new orthopedic prostheses, we’re far behind in figuring out how to get treatments to patients who want and could actually benefit from them. Doing so requires a greater emphasis on organizational change, innovations in the science of health-care delivery, and transparent prices to provide the right encouragement. This means smartphone diagnostics, technology to help physicians and nurses deliver the highest-quality care, or even drug container caps with motion detectors that let a nurse know when the patient hasn’t taken the daily dose. The overall benefits from innovation in health-care delivery could far exceed those arising from dozens of shiny new medical devices.
This business would work to create more optimized, organized, and focused healthcare rather than the “spend more for less” mentality the permeates healthcare systems today. Some of these solutions would include what Skinner mentioned (smartphone diagnostics, IoT drug containers, and data-informed care). But the business would also invest in other innovative healthcare delivery solutions including data-informed medical interventions (e.g. Amazon could recommend treatments based on your medical habits), AI care options (patients could use Alexa or Siri to diagnose if they need to see a doctor), or streamlined healthcare systems (bringing in optimization consultants to make hospital processes even more successful).
Deloitte briefly wrote about how to achieve this hyper-organized healthcare in their report of the top 10 health care innovations that could transform the FFS model (fee for service) to a VBC model (value-based care). As they describe, these innovations are as follows:
Next-generation sequencing: Applications of genetic sequencing to identify at-risk populations or target therapies to patients who are likely to respond
3D-printed devices: Lower-cost and highly customized medical technology products that can be tailored to suit the physiological needs of individual patients
Immunotherapy: Treatments with the potential to significantly extend survival for cancer patients, without the negative side effects and related health care costs of traditional chemotherapy
Artificial intelligence: The ability of computers to think like and complete tasks currently performed by humans with greater speed, accuracy, and lower resource utilization
Point-of-care diagnostics: Allow for convenient, timely testing at the point of care (e.g., physician office, ambulance, home, or hospital), resulting in faster, more cohesive patient care
Virtual reality: Simulated environments that could accelerate behavior change in patients in a way that is safer, more convenient, and more accessible
Leveraging social media to improve patient experience: Tapping data from social media and online communities to give health care organizations the ability to track consumer experience and population health trends in real-time
Biosensors and trackers: Technology-enabled activity trackers, monitors, and sensors incorporated into clothing, accessories, and devices that allow consumers and clinicians to easily monitor health
Convenient care: Retail clinics and urgent care centers that provide more convenient and lower-cost care to patients for a number of health issues
Telehealth: A more convenient way for consumers to access and increase self-care while potentially reducing office visits and travel time; may also prevent complications and emergency room visits
Broadly, healthcare is a huge industry. As reported by PolicyAdvice, in 2018, this sector was worth $8.45 trillion, with an annual growth rate of 7.3% since 2014. "“It’s expected that the healthcare industry will continue to grow. In the US alone, the market size will increase by $808 billion by 2021, according to the latest estimates. The thriving health insurance industry and rising healthcare expenses are the key contributing factors.”
This business to organize existing systems will only yield higher returns as more and more players enter the market in an attempt to provide value.
Monetization: Payments for this service
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)