August 5, 2015 | Innovation Leadership
R “Ray” Wang chatted with Travis about the digital transformation of healthcare. Many of Ray’s insights were pulled from his new book Disrupting Digital Business: Creating an Authentic Experience in the Peer-to-Peer Economy which published May 5th. We were impressed by his varied background, and engaged in a conversation about business models, culture, and EHRs.
Catalyze: Ray, thanks for joining us today, despite the time change challenges across the world. We intend to talk to you about digital transformation, and specifically thinking about how that applies in the context of the industry that we’re focused on, which is healthcare. We work with a growing list of healthcare entities, and many of them leverage our platform as they’re building new digital solutions for what’s coming to healthcare.
Your book is obviously written for business leaders, and it’s industry agnostic, right? It addresses different ways they can transform their business strategies and create new opportunities in this new digital age. Starting out with a healthcare bent, do you think that your book could be read by anybody, or somebody in any industry, or is more suited to, or better suited to, certain industries?
R. Wang: You know, it doesn’t matter the industry. We see 52% of the Fortune 500 have been merged, acquired, gone bankrupt, fallen off the list, since 2000. And what we’re really seeing is a business model shift. You think about payer side, provider side, even just what’s happening overall in general with the healthcare organizations, that shift is already happening. That shift is actually changing, not just because of the payment models, not just because of ACA or ObamaCare, it’s happening because the way we want to access healthcare services is changing. And so that’s part of that disruption.
Catalyze: Interesting. Taking that, do you see the digital transformation that’s coming into healthcare as being caused by a mash up of things? You mentioned the ACA and HITECH and ObamaCare, whatever kind of umbrella you want to put it under, but then you also mention consumers or patients or members, or whatever we’re calling them now, as being a driving force behind these shifts?
R. Wang: On March 9th, when Apple announced ResearchKit, that was a very interesting thing. Every sensor, every sensor on one of these devices is now being activated with your own privacy, at your own will, to go out to diabetes care, or go out for cardiovascular research. That in itself is pretty impressive, because we now have all these sensors collecting information.
Think about the way we access healthcare today. Every pharmacy now has the ability, if like at Walgreens and CVS, they are now delivering the first line of provider care by allowing people, not just immunizations, but to do quick check-ups and well visits, right? We used to laugh about this in the ’80s: you might be able to go see a doctor in the mall, right? It’s more interesting. Drive-thru clinics are now possible.
It’s a confluence of consumer technologies entering the healthcare world, entering on the enterprise side. Traditionally these digital technologies were anything from social and mobile and cloud and big data and Internet of things. But it’s a lot more than that when we think about what’s happening. Really these new sets of business models are changing the way we deliver care.
Catalyze: You mentioned Walgreens and CVS. They are examples, but everybody is shifting, whether it’s pharmaceuticals or whatever, as you mentioned. Do you see real transformation happening within those? Walgreens and CVS are slightly outside of the sort of typical healthcare delivery organizations, right, so the typical enterprise payers and providers, pharmaceutical companies. Do you see the same type of transformation on their end? Obviously, they’re feeling the pressure to make that transformation, but do you see real transformation in those organizations?
R. Wang: When we talk about digital, it’s not about just enabling that technology. The main thing is it’s a business model shift. In healthcare, the question really is, how are we changing the way we deliver healthcare to people? Is there a different way? For example, just take these Google Hangouts. Think about the way, if I had a Google Glass, and I was able to diagnose someone out in the field to see what they have, even just being able to take a picture and say, hey look, what is that, what does that look like to you? Or the ability to walk through another physician. I mean, telemedicine, the way we imagine it, is like big standalone facilities where people are walking through, and it might not even be that, it might just be off a mobile phone.
So those kind of changes in terms of how we deliver care, and then the business models that come on behind it. For example, if you’re on the equipment side, what’s interesting is you take an MRI or a CAT scan. In the old days, they would sell these for $1 million each. They would then try to sell you a financing plan. They would then try to sell you a whole bunch of stuff around support and maintenance around these kind of machines. If you’re a surgery center, basically what you’re trying to do is run this thing as much as you can. I want to get as many scans per patient. So how much can you make per scan per patient, and how long can you keep these machines up and running? Well, the equipment manufacturers got smart. They’re like, oh, what you’re really buying is up time. So let me sell you 80% up time for $3 million over the next three years, and if you want 95% up time, we’ll do it for $4.5 million, right? That’s a brand new set of business models.
Catalyze: Everybody is vying to figure out where they fit in that new business model. People who are delivering care, the participation from pharmaceutical companies now in terms of care management of patients who are taking their medications, providers or payers are partnering with healthcare delivery organizations to care collaboratively for patients. It will be interesting to see where things fall out. You’re right, it’s not just about digital enablement or this digital age, it’s really about the fundamental shift in business model.
R. Wang: Right, and especially in healthcare, it’s not just a business model, it’s your mission. What is that mission, especially on the provider side? The payer side that’s a little different, and that’s about access and making sure you manage your funds and you answer to your shareholders. But on the provider side it’s my mission. You take any of them like a CHI or a CHW or any of the religious-affiliated healthcare organizations, it’s how many members’ lives are covered. That’s a very different kind of model.
Now you might be wondering why I know all this healthcare stuff. I actually have an MPH and a health finance management, health policy management degree from Johns Hopkins.
Catalyze: Oh, wow. I have a couple friends who have MPHs from Hopkins. It’s a fantastic program. Totally off topic, but I had a background in computer science, and then I went to medical school then had a strange, varied background, and now I’m where I am. How did you go from MPH to writing books that are published by the Harvard Business Review or Harvard Journal?
R. Wang: You know, I don’t know. No, I’m just kidding. Because I started out at Hopkins Hospitals on the management engineering team, I got to work on one of the earliest re-engineering projects at Johns Hopkins in all the ancillary areas. Anything on radiology, anything around pharmacy, anything around BMT, all those areas we got a chance to look at. How do you redesign that business? And then I did an administrative fellowship at Detroit Medical Center, one of the big inner city medical centers. I got to work at Harper Hospital, and worked with the CEO of both Harper Hospital and Detroit Medical Center. You got to see what you needed to do to deliver this kind of urgent care, especially in an inner city environment.
After that, I was at Deloitte doing mergers and acquisitions and healthcare consulting in San Francisco. Then I did the same at Ernst and Young, and then somehow I ended up doing SAP implementations. Along the way, I got into software, and then from there I became an analyst at Forrester. And I don’t know, it all ended up somewhere over here, so talking about change, transformation, and then what’s happening in business.
Catalyze: It probably provided you with a broad swath background that enables you to see macro trends and then talk about how to apply them. It’s certainly a diverse background though. Not one you hear about every day.
R. Wang: I got into medical school, actually, a six-year med program at Penn State, except I could not figure out anything gory or bloody. It was definitely not for me. My brother ended up at the other U of M, given where you are, University of Michigan, so he’s up there in Ann Arbor doing that.
Catalyze: I have to assume that you probably work with a lot of big businesses, business leaders as they are starting to think through trends for their organization. In healthcare there may be specific missions, especially on the religious and non-profit side of healthcare, which are maybe a little bit unique. Are you working with healthcare organizations and leaders within healthcare as they are starting to think through this process?
R. Wang: We have. The way to look at this is—and we try not to reveal client names—but let’s put it this way: I think the important things for them to realize is how the future of care is going to be delivered. Is the inpatient model going to stay that way? Is it still an outpatient delivery? Is it a home health model? And the answer is, we’ve been seeing, you know, people do an experiment through all three. But the reality is, can I deliver care at a personal, individual level, and do that all on my own, with remote monitoring, with the technologies that are out there?
Now, if that’s the business model, does that drive down the cost of care, or does that increase the cost of care? And then, of course, what are the patient outcomes? Are we getting better quality of care? What does morbidity and mortality look like? That becomes important.
All right. Now, on the other end, on the delivery of care in terms of coming from the physician side of the world, what do you need to do to allow physicians to be physicians? This whole wrath of EMRs is a debacle. Honestly, I’m going to get killed here, but whether you’re on Epic, whether you’re on Cerner, it doesn’t matter what it is, it’s been a pain in the butt. It doesn’t work the way the physicians want it to. If you look at your H&Ps and you look at what’s going on in their notes, it sucks. I’m just going to say it. It sucks. People are just checking the boxes. They’re not even putting the detailed notes like they used to. And that has been a problem.
We’re getting all these notes that look the same. Imagine, how can you really diagnose what happens? The continuum of care is completely being destroyed by EMRs because they don’t match what people are trying to do. If you were to change that, and allow people to use voice, natural language processing, allowed to dictate, create automatic ontologies, now that would be really cool, because then doctors get to being doctors again, instead of being guinea pigs, solving medical EMR implementations for people who should be knowing how to do that in the first place before they put them in. Not that I have a strong stance on that [Laughter].
Catalyze: The industry is increasingly agreeing with what you’re saying. My wife’s a physician and I have lots of friends that are physicians, and they say the same thing, like the amount of copying, pasting, and sort of the lack of value they see in the data that they’re charting is pretty phenomenal. They’ve mandated these digital solutions or digital documentation platforms, which just took an old process and created additional digital documentation around it.
R. Wang: They force fed it. And you took the highest value individual who should be focused on care, and made them the data entry clerk. I mean, what is wrong with that picture?
Catalyze: Agree completely. There are interesting companies, like Augmedix is an example, I don’t know if you’ve heard of them, they’re the Google Glass company that’s doing EMR documentation, or automating a lot of that documentation as the physician speaks, which is certainly an interesting approach. And I think, well, hopefully it will get better. But what’s interesting now is we see all these bolt-on services and tools, whether it be like virtual scribes or true scribes, which now health systems need to start paying.
Catalyze: We’re probably not that far off, our viewpoints on EHRs. How do you envision the future state of the physician, in terms of with all this transformation, with the digital age, and all these new tools and technologies as well as these shifts in business models, what do you see their role being in this new healthcare delivery system?
R. Wang: What we really want to get to is data-driven decisions, but we’re spending all our time collecting the data. Let’s say we get past that. The natural language processing comes into play, cognitive computing comes in, we have intention-driven systems, we can build automated autologies. At that point then, what becomes exciting is the fact that all that data gets into the system.
Data is the foundation of all these digital businesses. We see emerging patterns, and these patterns say, hey, this is very interesting. We’ve got frequent flyers that are coming in every 30 days and they’re switching between 15 different hospitals, and we can figure out what’s the issue. Now, if you look at it, there’s a penalty on frequent flyers right now, so everyone is focused on making sure they’re taken care of and they don’t come back. Well, how do we prevent that and get to the treatment protocol that makes that work? So if you see someone and you flag them in as a frequent flyer, what can we do to help and make sure that doesn’t happen?
The other thing is basic epidemiology. The whole Disneyland measles thing is fun, right. Not in the sense people are getting hurt, but in the sense that it’s an interesting case of, hey, how did that happen? Well, there are 15 cases of measles being reported in Redding, California. There were 30 cases being reported down in Anaheim. Okay, I get that. There’s like a hundred cases that came from this other area. What is the common cause? You know that right away. This is not going to be like a mystery. It’s like they all were at Disneyworld, or Disneyland, right. Something pops up.
That’s the kind of stuff like we’re starting to get to. This is intention-driven, it’s predicting what’s about to happen. Instead of having to do that all manually, call people in, check in with the public health office—that’s the stuff we’re trying to automate. The part of digital that’s important is it’s getting to that speed, taking that data, converting that information, surfacing up insights, and then saying, what do you want to do with it? How do we democratize that data so that we can democratize the decision process at the front line of the healthcare worker?
Catalyze: You’re exactly right. We’re probably a little ways off, just considering, you know . . .
R. Wang: We are ways off, right. We’re still entering stuff in EMRs with little dots and tablets. I mean, you know, we got a way to go, here.
Catalyze: Exactly. Twenty seven clicks to get through a note, right.
R. Wang: Oh my God, yes, exactly.
Catalyze: These are going to be data-driven platforms and data-driven decisions, which are going to move from reactive to proactive. Shifting to wearables and the recent Watch announcement. The Watch integrates many other wearable systems. Those are generating just tons of new data which before has never been captured. Whether it’s part of ResearchKit, so for clinical trials, or part of HealthKit or some other platform that’s part of care delivery and preventative care management, all those different pieces, or epidemiology, you know, whatever it might be.
How do you see wearables? People who are already in shape who want to make sure they’re taking 11,000 steps instead of 10,000 steps a day—how do you see that shift occurring in the healthcare industry where wearable technology becomes more widespread? How do you see that shift occurring?
R. Wang: Some of it’s through the way that data is being collected. Standardization that’s actually happening. The large data sets that are popping up make the studies more statistically significant. The second part is the fact that we’re adding things like gamification. If you go back, maybe, I think it was like even six, seven years ago, there was this app that helped cancer patients. It was Hope Labs. Remission, the game.
Part of it was about the fact that cancer patients need to know exactly that they have to do their treatment. They have to go through the full course of treatment, otherwise they could go back into remission. And that is one of the things you want to avoid. But if you’re like a 22-year-old male, you know, you do a few treatments, you think you’re doing well, you know, and you come back and then suddenly, you want to be yourself again. Well, you realize that you have to go through the treatments.
They created a video game to allow patients to realize that, Oh, my God, if you don’t go through the treatment, you too will actually get back to remission. And that in itself improved people’s treatment rates, and improved the efficacy of those treatments, especially in the teens, which is where a lot of those issues were. It’s building it so the patient experiences are natural.
I was sitting with the CIO of the University of Southern Nevada Medical Center, or just Southern Nevada Medical Center. The CIO was amazing. He was talking about how they were taking simple things with context aware services. If you had your phone with you, and you’re walking to the gift shop and you had, you were on their network, you’d get a 25% off. If you were in the cardiology wing, he’d show you the 15 articles that you should be reading in case you’re in there, and things to know about as you were waiting around. If you were in the cafeteria, it would tell you about a menu and give you the heart-healthy menu if that’s what you needed.
We’re seeing things like this pop up everywhere in places you wouldn’t expect. And this is a public hospital. I mean, the guy had the foresight to plan this over the last five to ten years to put something like that in there.
Catalyze: That’s amazing. I mean, honestly, you don’t hear those stories frequently.
Catalyze: Apple did a couple interesting things. Between ResearchKit and then them open sourcing it, how do you see ResearchKit being a standard that potentially wins out?
R. Wang: The important thing here is, as part of a digital business, ultimately it’s the platforms that win. You have to build a set of platforms that people build on top, and that’s part of these networked ecosystems. One of the interesting things about healthcare is that, when you get to ResearchKit, it provides a privacy framework that protects the patient’s information or protects you as an individual to submit or to be part of any one of these studies. That in itself, given the proliferation of Apple devices, that’s really the genius behind this. Now I’m collecting data that people have agreed to, that’s anonymized and they’re protected against. Wow.
You’ve got so many more people that are going to be part of these studies. You’re not going to have to wait ten years for a Framingham study like the way we look at the classic studies. These things are just happening right away with massive data sets that people can get really excited about. Now if they were serious about open sourcing, they would then make that data publicly available, completely opened, kind of like some of the Data.gov initiatives that are going on, and allow people to study those and apply different algorithms against that.
The second thing that’s interesting is we’re also seeing a shift in terms of the skills of people that need to be there. We believe there’s a whole class of digital artisans popping up. These folks have the right brain, left brain capability. Smart, science, technology, engineering managers, wonderful medicine folks, pair them up with design thinking folks, philosophers, anthropologists. You see a systems point of view. When you get that and you build on top of a platform, then it becomes interesting. Apple has a shot at this, given the fact that there’s a dominance. I think they can do more by opening up some of that data so that people have those big data sets to work on.
Catalyze: Interesting. This is one of the things I wanted to call out. We just started writing a blog post about this, because I think the patient control, and specifically the ability to consent to a study on your phone, and Apple obviously knows IDs, they know who people are uniquely, is incredibly powerful. And if you’ve ever participated, which probably, you’ve done an MPH, you’ve probably participated in research studies, you’ve seen what a horrible and inefficient process that can be.
R. Wang: When I was doing it, three by five notecards just wasn’t it [Laughter].
Catalyze: Exactly. That’s who you’re competing against. Of all the things in ResearchKit right now, I think the consent aspect is one of the most powerful things in there.
R. Wang: That was very smart on their end, and the fact that they built an affiliate network of really high-powered global universities, right. It wasn’t just they launched it with one university. It was east versus west, new type versus old. They basically did that for each one of those five areas they were going after.
Catalyze: Yeah, and it’s really quite cool, because they’ve targeted academic medicine, and obviously their experience with HealthKit sort of showed them the importance of research, or the power of digital in terms of research, so it’s a very cool extension.
Catalyze: There are a couple more questions, but I would be curious if there are specific topics in healthcare that you would want to cover that we haven’t hit yet, in terms of digital transformation. I mean, we touched on EHRs and wearables and Walgreens and CVS and a lot of the big stuff. But are there areas that you would want to focus on that we haven’t?
R. Wang: I do. I think a lot of this comes back to culture, and we got to remember that at the end of the day, we’re trying to transform the culture as well. Once we think about what the outcomes are, what the business models are, how we reshape the mission, then we have to go back and see how we make that shift internally. That’s not an easy part, because what we’re doing is asking people to change the way they serve. One of the quickest ways to do that is to walk through a patient journey. If you quickly walk through a patient journey, you realize that it’s different for everybody. There is no beginning, end. There is no real funnel. These things will happen in what we call a probabilistic approach. It’s choose your own adventure. You might start on page 3, end up on page 10, you might decide to take a different treatment protocol, end up on page 30. Someone else might end on page 20.
It doesn’t matter. But the point is we have to accommodate for those different types of treatment protocols. And what we’re ultimately getting to is what we call mass personalization at scale. The individualized, personalized medicine pieces are going to come up. Now, we’re not ready for that. We’re not ready for the training of staff to be able to care for that. Right now, we have very rigid protocols for very specific sets of treatment.
That’s going to change over time. We have to teach people to think and make their gut calls. Now we see things like IBM Watson popping up on the healthcare side, which is interesting, where cognitive computing comes in and says, look, we’ve ingested a corpus of the last 50,000 research notes here, and we think that this is X, Y, or Z.
We have, we’re in an area where we’re entering augmented humanity, where we may make suggestions for decisions, and over time, we’re going to test those decisions to see what happens. When we take human judgment and we figure out a way to make it easier for folks to have the data in front of them to make that judgment and make that gut call, I think we’ll be better off. If we try to replace that with a machine, I think we’ve made the mistake. We still have to trust the gut call. I’m not saying making a gut call with no sets of data, but with the best set of information in front of you.
Catalyze: And that, like you said, that information is getting that much more powerful. It’s probably not in the EHR. There’s maybe some you could mine from the EHR, but you’re talking about 23andMe, you’re talking about wearable data, you’re talking about this interesting mashup. It’s never really been used before. But if you’re going to power that decision support, the clinical decision support, the point of care, whatever you want to call it, it’s dependent on this broader bucket. You’ve got to feed that data into Watson, or whatever, if you’re going to make these shifts.
R. Wang: Yes, and I think that’s going to be the exciting part, especially with research. You’re collecting massive amounts of data in ResearchKit. Pump that into Watson to figure out the pattern, or anywhere else where you’re doing algorithms. There are topological data analyses which say Hey, look, these endpoints are closer to these endpoints. Maybe there’s a cancer cell over there. Maybe over here is a pathogen. Maybe this is something else. Those are interesting things. We’re entering a world where the best math wins, and the best design wins. You need that kind of balance.
Catalyze: Yeah, I remember I saw Vinod Khosla speak at a conference a few years ago, and he talked about the physicians of tomorrow are not going to go to medical school, they’re going to go to, well, he said math school, but I don’t disagree. There’s exceptional value in both. Ultimately I think a lot of people are seeing the value in being able to crunch the data and analyze it and come up with meaning.
Catalyze: We’re pretty much out of time. This has been awesome. Honestly, I didn’t know you had such an extensive healthcare background. We don’t have that many people that throw out epidemiology and all the stuff that you’ve thrown out during this call. It’s been really interesting to speak with you, just sort of in the context of those business model shifts with your background. It’s been really interesting, and a lot of cool stuff we covered.
R. Wang: Hey, thanks a lot. You know, this is part of it, right. As we’re disrupting digital business, it happens in every industry. Once you start with the business model or the mission, then you pair it up with the technologies that are enabling this to happen. Once you’ve done that, you can get to those data-driven decisions. But more importantly, what we really want to end up with is an ecosystem. That networked economy is important, because that allows you to build and continue to expand on what you’re doing.
These platforms are emerging, and I think it’s important to figure out, the winners of these platforms are actually going to be the ones where people have an easy way to access that data and information, and have an easy way to manage their own patient, their own care, has an easy way to actually manage simple things like billing, the things that get automated that are very difficult to do. That’s really what we’re trying to get to. In healthcare, the more that we can make and automate some of those complicated tasks, the more that we’re able to get back to decision making and making, and focusing on patient care.
Catalyze: Yep. And not documentation.
R. Wang: And not documentation [Laughter].
Catalyze: All right, well, thank you very much. I really appreciate your time. Enjoy your dinner tonight and enjoy Dubai.
R. Wang: Hey, thanks a lot.