‘Healthcare’s Trillion-Dollar Disruption:’ A layperson’s summary

Dave Chase, CEO/Co-founder of Avado, wrote an article a few weeks ago on Forbes that had a lot of patient-centered healthcare entrepreneurs and enthusiasts pretty excited. ‘Healthcare’s Trillion-Dollar Disruption,’ written in Chase’s fast-paced style, is dense with stats and examples of how the healthcare industry will be disrupted.

Chase covers a number of topics with relatively broad strokes in this short article. After I shared this article on Twitter, Brian Scott Edwards (@brianedwardsmd) wrote that it was a bit complex and a layperson’s summary would be nice. Because I happen to like a challenge, and because I appreciate the opportunity to marinate in Chase’s fierce intelligence for a brief while, I present you my bulleted version of his article. Most of the text below is simply copied and pasted from Chase’s article and shuffled around, with some of my additional commentary and paraphrasing.

The Disruption

  • “New patient-centered population health models will cause more than $1 trillion of value to rotate from the old models to the new and create more than a dozen new $10 billion high-growth markets.” (Tom Main and Adrian Slywotzky)
  • Rather than trying to steal share from the big guns, startups should focus on creating the new market space, and the market will move to them…not the other way around.

There will be 3 waves of disruption:

  • Wave 1: Patient-Centered Care (2010-2016)
    “Five percent of Americans account for 45 percent of healthcare spending—$1.2 trillion[…]If we simply mainstreamed today’s best-in-class models of patient-centered, population-health management, the U.S. health system would eliminate nearly $350 billion of low-value-add activity and shift another $600 billion from provider-centered care models to patient-centered care models.” [pages 5 and 7, “The Volume-to-Value Revolution“]
  • Wave 2: Consumer Engagement (2014-2020)
    Chase doesn’t go into detail on this one, but presumably engagement is referring to cost transparency, increased choice, increased ownership over & access to one’s medical information, etc.
  • Wave 3: The Science Of Prevention (2018-2025)
    This is also not covered in any detail, but this could include genome sequencing or implantable devices – ways of providing people with more data about their own bodies to help them and their providers make better choices

The means of and opportunities for disruption

Moving beyond the old legacy systems
Chase uses the word ‘preservatives’ to describe any of the diverse entities in healthcare who are trying to protect the status quo; who are trying to preserve revenues and who don’t have an incentive to make the switch to improving outcomes. Think, for example, about a big, complex, legacy EMR system. He says, “These older systems were optimized for internal workflows and maximizing billing since that is what has been rewarded historically.” But new incentives and rewards based on preventative care, efficiency, and patient engagement mean that these old legacy systems will quickly become inadequate.

In addition, providers are choosing cloud-based systems over on-premise software to drastically reduce the time and money required to implement these legacy systems. Chase says, “we have seen a small clinic get their cloud-based system fully setup and ready to use in 30 minutes without any onsite support.”

Stepping up consumer empowerment
Chase makes a few points throughout the article about consumer empowerment and choice: “Most industries compete on value. U.S. healthcare does not. […] The consumer empowerment and choice that exist in everything from buying cars to planning travel is finally arriving in healthcare, nearly 15 years later than most industries.” He also cites the Introduction of the Volume-to-Value Revolution: “Consumers, long passive, will have a new role. Employer incentives, retail access, and new technology options will encourage them to engage, demand information, and push for value.”

Moving from reactive to proactive care
“Many are predicting half of hospitals will close by 2020. In Denmark, nearly 70 percent of hospitals closed as they made the shift from a reactive, sick-care model to proactive care model. More clinicians than ever will be needed. They’ll simply have a mainframe-to-smartphone like shift.”

From patient portal to Patient Relationship Management
The current patient portal model is outdated and is akin to pre-Google web search; a “sophisticated patient relationship management system (PRM) will become a linchpin of healthcare delivery.” (A point close to my own heart, for sure.)

Compensating doctors based on new metrics
Doctor compensation is changing. How well doctors communicate with their patients is going to be a performance metric; and doctors will demand technology-aided communication for convenience and efficiency.

———

Fin. I think this article was very powerful because it provides justification, rationale, and stats to support the patient-centered work in which so many entrepreneurs and patient advocates are engaged. It is a shout out to the disrupters, encouraging them and giving them a glimpse into a future in which they’ve won; in which patients have become more empowered and central to the health care delivery model; in which doctors and patients optimize technology for collaboration and communication; in which needless spending is eliminated; and in which systems aim to increase patient wellness instead of patient billings.

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