Business model disruption is spreading like a carnivorous computer virus, and health care is one of the many industries it’s turning upside down. That has implications not only for health care providers scrambling to be among the industry survivors, but also for newly empowered health care consumers.
| “Health care needs more visionaries, fewer egos, and more creative physician and administrative management.” — Kay Plantes, principal, Plantes Co. |
These implications will be explored during the 2014 Digital Healthcare Conference produced by WTN Media. The two-day conference, which gets underway June 24 at the Fluno Center at UW-Madison, was organized around the theme “Preparing for Healthcare Business Model Disruption.”
And there’s still plenty of prep work ahead, especially as the Affordable Care Act conspires with the digital revolution to reshape an entire industry. DHC sessions will examine how the resulting disruptive care models will benefit consumers and will address the likely impact on the provider landscape.
Super models
For additional insights into DHC content, we contacted former Madison resident Kay Plantes, now principal of the California-based Plantes Co., and conference speaker Ken Kleinberg, managing director of research and insights for The Advisory Board Co.
Plantes believes a variety of health care business models will emerge as health systems continue to consolidate in reaction to the provisions of the ACA. “With any disruptive market change, there is a lot of innovation around business models,” Plantes noted. “It’s hard to predict what model will win out, and it will likely be more than one.”
Plantes, author of the Business Innovation Blog, added that we’re seeing an “Oklahoma land grab” for attractive pieces of the puzzle. She believes the winners will be organizations that remove gaps in care that add time and cost, or that deter from health. In general, these gaps arise through unaligned processes, perverse incentives, and the lack of real-time information.
“My advice for any health care organization is to view collaboration and partnering as vital to its strategies,” she counseled. “No one can be good at all things.”
Scale will be important on some fronts, she added, so it’s wise for providers to figure out where they can uniquely add value and build their business model around that.
Unfortunately, she opined, two warring providers in Madison missed a golden opportunity to collaborate and shape the future. “From a Madison perspective, I remain saddened that UW and Meriter could not find a collaborative solution to become the national model for best-in-class community health care,” she stated. “Both institutions face far more threats in the new environment as a result, and Madison lost an awesome opportunity.
“Health care needs more visionaries, fewer egos, and more creative physician and administrative management.”
Consumer retorts
The emerging models will benefit consumers, especially ones that accept more accountability for consumerism. One of the reasons the United States pays more for health care yet has worse health outcomes is that payers have exerted little pressure on providers, and providers historically have been paid to do procedures, whether or not they actually lead to good outcomes. In addition, consumers have been sheltered from cost and, as a result, they don’t know the relative cost or quality of providers.
Health IT is poised to change all this. Plantes says information technology will be the most disruptive force in health care in the near term, and we currently are in the early-adopter phase of market transformation. That might not be clear from Wisconsin’s vantage point, but elsewhere it’s already in focus. Plantes noted the following:
- The San Diego-based superconductor company Qualcomm has been a visible and effective catalyst to moving the community toward connected care. It’s the kind of care that uses IT and innovative sensors to identify problems earlier and to move care out of the most expensive settings (i.e., hospitals and their emergency rooms).
- Companies like Illumina and Thermo Fisher are also disrupting care with their genomic platform products, which enable more personalized medicine. (Plantes cited Eric Topol’s book The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care, which forecasts that 5 million human genomes will be fully sequenced by the end of 2014.)
- New databases are being created, including those with real-time information about diabetics, and they will provide fresh insights into the causes and onset mechanisms of diabetes, which is one of the nation’s most costly chronic diseases.
(Continued)
Citing various human components of the innovative process — early adopters, early majority, late majority, and laggards — Plantes predicted we’ll transition from the early-adopter stage to the early-majority stage when consumer interfaces become friendly, the tools become more comprehensive, and physicians and insurers change their practices.
“As incentives move from doing procedures to keeping people healthy at a lower cost, these [last] two players will be on board,” she stated. “As consumers become more financially responsible for their health, they’ll be on board as well.
“Apple’s move into medical IT is a billboard that disruptive health care will become mainstream.”
From Welby to wellness
The emerging consumer-dominated model is in stark contrast to what’s being left behind. At the DHC, Kleinberg will discuss what the future holds in an opening keynote titled “Goodbye Marcus Welby, Hello Retail Clinics and Empowered Consumers.”
The changes we’re about to witness will come as quite a surprise to medical professionals who complain that retail clinics are not staffed by doctors, or that drugs will be sold where they are prescribed. He likened these attitudes to dinosaurs complaining about the mammalian takeover and recounted an episode that summed up the lack of transparency that helped undermine the previous health care model.
“I once asked a woman at the check-in desk at a provider’s office if I could see a list of their prices for various treatments,” Kleinberg recalled. “She said that I didn’t have to worry about that. I said, ‘No, why is that?’ And she said, ‘We’ll bill you.’”
The 2014 edition of the Digital Healthcare Conference will help explain why consumers are about to get top billing.
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