Disruption of healthcare by new players – Not an easy endeavor

Outside players trying to disrupt the healthcare sector are finding that it is not an easy endeavor.

Once they realize the complexities of a sector that focuses on ensuring the health of diverse groups of patients, they are left with having to go back to do more research, or having to back out completely.

As patient care faces slow growth and competition, its leaders have learned to be agile and open to innovation. It’s the only way to survive and come out ahead. In the meanwhile, outsiders are trying to see how their business models, services, technology, and processes can be integrated to make patient care better.

Learning from outsiders
Outside industries that serve customers in other capacities can teach us quite a bit about listening to the customer’s needs. Amazon is a leader in getting to know its customers through algorithms and feedback, then following with customized service and experiences based on the information they’ve gathered on each client on their popular electronic commerce site. With this expertise, they are primed to enter the $3 trillion healthcare space.

What healthcare has learned from Amazon is that customization based on a patient’s needs is important. A one size fits all approach is not the way to go. Each individual has a unique DNA that requires custom treatment for optimal results.

Amazon has actually become somewhat of an insider in healthcare in recent years as they’ve worked with U.S. healthcare distributors to sell medical supplies and equipment to clinics and hospitals. Amazon Web Services (AWS) has also been offering healthcare partners cloud technology and consulting services that are HIPAA compliant with over 1,800 security controls for data exchange, and new analytic capabilities. They are also looking into partnerships that would allow them to lower employee health-benefits costs for their over 1 million workers, and bringing voice technologies into the home, as well as the hospital and clinic to help people manage chronic conditions.

Amazon is said to be exploring what makes sense for their business in primary care, biopharma, and health insurance, and they’ve already learned that the pharmaceutical space is highly regulated and complex, so they’ve backed away.

Retailers use sophisticated techniques to analyze market data to help understand where best to locate their facilities. Healthcare providers are learning how to adopt the same by taking a close look at patient demand, payer mix and physician supply. As the focus of delivery shifts to a more convenient network of locations spread throughout the community, some questions to address are how many, where, which services, how big, and which should take priority? This type of research will help transform how patient care looks in the near future.

My colleague, Craig Beam, president of Petra ICS, a construction and design subsidiary of The Innovation Institute, says the shift to population health where the focus is on deeply engaging the patient in self-care and wellness strategies requires a new kind of healthcare IQ to create facilities that facilitate today’s demand for quick, convenient, and affordable care.

CVS’s purchase of Aetna and Cigna Express Scripts is aimed at quick, cheaper care provided at clinics and pharmacies, while cutting into spending on hospital services. Walmart has 4,700 pharmacies nationwide with limited clinics. They could easily use their retail footprint to create low-cost outpatient services. However, health systems have the edge with their valuable experience in outpatient care which allows them to transform as quickly as possible to stay ahead of the curve.

Health system responses

Where they can, health systems are delivering healthcare services in lower-cost outpatient settings, but with the caution that must be taken with certain higher-risk patients who may need to continue to be seen by hospital providers.

Many systems in order to compete, are looking at smaller clinics deployed throughout a community that feature spaces designed for learning, community events, and showcase technology. These are likely to spread. These commonly position the clinician as a coach or teacher working with the patient rather than an expert performing services on a patient. Design layouts for these types of clinics feature “thrive” bars, booth seating and group tables more commonly associated with an Apple store or a boutique hotel than a physician’s office.

The health systems that are a part of our member network are quite innovative. They collaborate with potential outside disruptors, and they also create change from within their own health systems to ensure continuous improvement. Today, payment models reward quality and outcomes rather than volume. Therefore, their challenge is to deliver better care at a lower cost. These health systems work with our Innovation Lab to incubate solutions that help to address this challenge. Tapping clinicians and other staff members for their ideas, and encouraging innovation, are an essential part of their daily culture. As they are placed into new types of care settings, new innovations will surely evolve to fulfill the need for more portable, efficient technologies.

These health systems must leverage technology to gain a competitive edge. Avera Health, for example, has introduced GeneFolio, a simple, yet innovative DNA test that predicts which medications best match a patient’s specific genome. They have partnered with the Innovation Institute to expand this offering to others. The test will let physicians know which medicine is best suited for the patient based on their ability to metabolize it. Avera has also achieved $62 million in healthcare savings through its eCare telehealth program, which has helped reduce length of ICU stay, mortality, cost of care and clinical burnout.

Franciscan Missionaries of Our Lady Health System created its Healthy Lives program, a comprehensive health and wellness service. Eventually, the wholly-owned subsidiary expanded to provide population-based analytics, health risk assessments and screenings, customized wellness programming, holistic health coaching, Patient-Centered Medical Home (PCMH) delivery model and consulting services. This program was partnered with the Innovation Institute as inHealth Strategies, and has now expanded to provide these services across the US.

CHOC Children’s, a pediatric healthcare system, has completed a much-needed Mental Health Inpatient Center that fills a gap in a long-fragmented system that left children younger than 12 with no inpatient services in Orange County. The intention is for this center to be scalable and replicable by other health systems nationwide.

Providence St. Joseph Health has just launched its own telehealth network with more than 100 locations across the West Coast to provide an infrastructure that can “survive in a world of rapid change.”

Mercy Health plans to achieve new efficiencies by having just deployed a cloud-based clinical communications platform across its 23 hospitals and hundreds of clinics, urgent care, and medical center locations. The phone app allows the clinical care member to quickly and securely collaborate on any given patient, thus minimizing clinical variation and reducing risk among patients.

In addition to implementing new technology, these health systems are transforming structurally too. Bon Secours Health has broken ground on a $40 million renovation of Bon Secours Community Hospital in Port Jervis, and 43,000 square feet of that will be transformed into an inviting medical village. The medical village concept will allow patients to receive comprehensive care at one location.

This new era has made healthcare better. We are less accepting of the state in which we were, and we are more determined to transform through innovation and learning about the smartest paths to take as we move intelligently into the new horizon of healthcare. It’s interesting and exciting to fold in practices of outside industries to create health systems and new thinking that can lead the way into a healthy future for the patients we serve.

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