March 4, 2014 | Healthcare Costs Medicare Healthcare News
This is a good thing, and not unique to the healthcare industry. Just as banking and media distribution have been revolutionized, so too healthcare will change. That’s not to say healthcare is banking or media distribution; to the contrary, it’s very different, very intimate, very personal, with its own set of regulatory, compliance, data, and relationship challenges. These differences are the reasons healthcare has taken, and will continue to take, longer to evolve.
Healthcare is expensive, accounting for more than seventeen percent of the United States GDP, or about $8,000 per capita. On a personal level, healthcare and medical spending contributes to the majority of bankruptcies in the United States. Despite the incredibly high financial spend on health services in the United States, the return on investment, in terms of key health indicators, is not very good according to the WHO, which ranks the US health system thirty-eighth in the world. The WHO criteria and findings have been widely criticized but it’s still clear that we’re overspending on healthcare in the United States.
The reasons for this overspending are very complex, and vary significantly from geography to geography, yet there remain several high-level trends that have been identified and are being targeted for improvement/disruption. Driven by billions of dollars of public and private funding, the healthcare industry is undergoing massive changes, many of which are partially or completely enabled by technology.
The rest of this paper is an outline of the ten major trends that are reshaping healthcare. The end highlights some of the specific technology requirements for each trend. These trends are mainly geared towards the United States health system, though commonality in health and wellness make much of it broadly applicable to other systems; the major differences are data access, specific regulatory requirements, and payer structures.
The government is infusing more than $30 billion to increase adoption of electronic medical records (EMRs), e-prescribing, and data portability. Adoption of EMRs is increasing rapidly each year. Once fully realized, this initial step, or data foundation, has the potential to open entirely new and unexplored frontiers of applications based on unified data. The major challenges, once EMR adoption has crossed the tipping point, will be freeing data from vendor silos and exposing it in a secure and well documented way.
Historically, care has been delivered episodically, based predominantly on inperson patient appointments. Enabled by technology, care is no longer limited to inperson encounters. Care is being delivered across geographic boundaries and care settings, mandating that:
Quantified self tracking has spurred an entire industry of connected technologies to help quantify and analyze different types of biometric and personal data. Growth to date has been predominately with the engaged-well, or individuals that are healthy. Currently, wellness tools have not been scaled but pilots have been started, predominately with payers and self-insured employers and to a lesser extent with care providers. This merging of wellness into healthcare is a necessary paradigm shift. Patient-collected activity data, whether passively or actively gathered, is more a part of overall individual health than annual screenings, and will evolve to be a larger part of the formal doctor-patient encounter, whether in person or virtually.
Healthcare is generally reimbursed based on the care delivered and, like other service industries, the more care delivered the more it costs. This is not universally true in healthcare as certain care settings are paid on a capitated basis, but pay for quantity of care has been the predominant form of reimbursement. Accountable care organizations and quality reporting are forcing new priorities in care, driving organizations and providers towards better outcomes, preventative care, and less acute interventions.
In attempts to move away from the paternalistic model of care, personal accountability and patient ownership of individual health are a big push in healthcare. Giving patients access to data is mandated as part of health reform, and this data is seen as enabling patient involvement in care and ownership of health. Additionally, new HIPAA regulations propose granting individuals more granular access controls over their data. As referenced in other parts of this white paper, EMRs will have to support new and emerging standards for data export and import. This data access opens up a new frontier for health technology and services tailored to individual health. Simply building portals doesn’t work, so developers are going to have to work hard to figure out what services patients want built on top of their medical data.
Low-cost sensors can track just about anything, including toothbrushes and kids toys. Tracking devices from companies like Fitbit, BodyMedia, Nike, Withings, and Jawbone can constantly track steps and sleep. Historically “dumb” devices like inhalers are being made smart by low-cost, connected sensors. All of these sensors are collecting massive amounts of personal data, or massive amounts of “little data.” This data can be used to close the feedback loop with patients, helping and encouraging them make healthier decisions.
Shared risk and increased employment of providers, in addition to payments based on quality, mandate better collaboration around the care of patients. This collaboration is not just physician-to-physician but also between nurses, patients, care managers, and caregivers. Email and SMS do not yet meet HIPAA requirements and standards, so many of the collaborative tools used in other industries are not used in healthcare.
If you look around while driving or in high traffic areas like malls, you’ll notice new access points for healthcare. Retail pharmacies are the perfect example. Walgreens recently announced offering diagnosis and treatment of chronic diseases, a new extension of retail medicine demanded. Most in the industry believe other retail clinics will follow suit. At the same time direct primary care and concierge practice are projectedto be offered by ten to twelve percent of physicians in the next two years. Layer on new tools for virtual, or telcare, and the options for accessing care have now grown exponentially over the last several years. Patients increasingly are offered access to these convenient new forms of care, both in person and enabled by technology, and are overwhelmingly willing to pay for it out of pocket.
As we begin to breakdown data silos and normalize the incredibly vast amounts of health data, new opportunities emerge to identify macro level trends, do specific cohort analysis, and inform targeted campaigns. Somewhat similar to the way in marketing does targeted ad campaigns based on data about customers, health- care organizations are starting to learn how to create high impact health campaigns. Population health platforms, such as Phytel and Forward Health Group, are helping enterprises start to integrate this data and make it actionable.
Access to healthcare cost data before or at the time of care has not been possible until recently. New standards and offerings have enabled new cost transparency platforms like Simplee, Cake Health, and Castlight. These platform are built with consumers in mind, to help them better understand the cost of the care as they make decisions about their health. This hypothesis about consumers is based on them being rational buyers and being accountable for some of the costs they incur.
|Trend||Potential Solutions||Potential Technology|
|Digitizing medical record data||EHRs, lab systems, HIEs, PHRs||Response web apps, modern interface engines, mobile apps|
|Shifting care from episodic to continuous||Telemedicine, virtual visits, messaging||Mobile apps, secure video, secure messaging, intelligent / dynamic forms|
|Convergence of health and wellness||Tracking (nutrition, fitness, sleep, weight), journals||Low cost sensors, low battery consumption Bluetooth, NFC, gyroscopes|
|Payment for quality, not quantity||Analytics of claims + clinical data, aggregation and integration tools.||Hadoop, modern interface engines, dashboards and real time scorecards|
|Patient ownership of data and participation in decision making||PHRs, HIPAA secure personal storage, messaging,||Mobile and web, secure cloud tools, secure messaging, secure voice|
|Tracking everything, everywhere||Apps, messaging||Sensors, mobile apps, secure messaging|
|Care Collaboration||Messaging, smart routing systems, video||Secure messaging, secure video|
|Convenience Care||Telemedicine, virtual visits, messaging||Mobile apps, secure video, secure messaging, intelligent / dynamic forms|
|Population health||Aggregation and integration, analytics||Hadoop, modern interface engines, dashboards and real time scorecards|
|Financial transparency and accountability||Claims integration, eligibility||EDI engines, mobile and web apps, secure messaging|
This is by no means an exhaustive list, as areas such as tort reform, medical education and training, pharmaceutical marketing, and medical tourism are also major trends. But the trends chosen for this report are high impact and extremely active areas of change and of technology empowerment.
Many of these trends require changes to workflow as well as new technology tools. The technology tools required by these changes go well beyond electronic medical records, which over time will become one type of data repository, with value-add applications developed on top of EMR data. Additionally, data interoperability is essential, something the healthcare industry and EMRs have not done well up until now; as more data is collected by patients and in new care settings, integrating data into standard data models and exposing it via well established and secure channels, such as web services APIs, will be re- quired.
Increasingly, mobile health, sometimes called mHealth or connected health, is being seen as a key driver for gaining adoption of these tools. Recent data shows that the majority of smartphone owners have looked up health information on their phones, that over two hundred and fifty million health apps were downloaded in 2012, and that the mHealth market is expected to grow by a compound annual growth rate of more than forty-one percent to a market size of $10.2 billion in 2018. With mobile as a key enabler of the future of healthcare, both in the US and abroad, there is a pressing need for technology infrastructure services to help developers and app owners navigate the regulatory and data challenges unique to the industry. These technology infrastructure services, or backend services, will be the focus of our next white paper so please stay tuned.
Datica makes digital health in the cloud a reality by removing the risks that prevent its adoption. We turn HIPAA compliance on public infrastructure providers into a solved problem, and enable secure clinical data exchange between mission-critical digital health applications and EHR systems. Datica serves healthcare’s complete spectrum, from digital health startups and industry leaders to health systems across the nation. Hundreds of customers and partners trust Datica to ensure their clouds are HITRUST certified and data securely interoperable.