Healthcare: Denying, delaying and dodging its digital destiny

Healthcare costs in this country are already unsustainable and, alarmingly, rising.

In response, the entire spectrum of the health care industry is experiencing a wave of consolidations, mergers, acquisitions, and partnerships. In addition, the lines that once segmented our industry are becoming blurred as payers, providers, networks and even vendors are all working to protect revenue, maintain share and improve customer value by leveraging scale economies and service efficiencies through creative alliances, collaborations, and joint-ventures. Payers are becoming providers; providers are becoming payers. Within operating units, most health care organizations are working to consolidate services, eliminate variation, and reduce expenses. To do so, many are adopting manufacturing principles and techniques such as Lean and Six Sigma. Though all of these efforts are likely necessary and beneficial in the near term, they do not address the root cause of our industry’s growing cost-structure challenges, and they certainly do not offer a resolution. These efforts and initiatives are likely to fall woefully short in that they fail to adequately consider the full impact of the way our industry must reinvent itself in order to serve an increasingly connected, ever mobile and rapidly evolving "digital society."

There are almost 1 billion physician office visits in this country each year. That’s about three visits per person per year. When we include emergency room visits, that number jumps to about four visits per person, every year. Some studies suggest that 50-70 percent of in-person visits are unnecessary, meaning that the individual actually did not need to be seen, in-person, by the care provider. Whatever the actual unnecessary visit percentage, many in-person visits could be avoided by leveraging digitally connected monitoring and health management technologies or by remote consultation with a physician or qualified care provider by telephone, text, email, or live video-chat.

The challenge is that most physicians are paid for seeing patients face-to-face. That model must change. Healthcare providers must be compensated for using digital connections to keep healthy individuals and medically managed patients from utilizing costly, in-person clinic, hospital, and emergency room services. To reduce costs and improve both service and satisfaction, our industry must embrace its digital destiny. We must transition from the paid-for-service health providers of today and become the paid-for-subscription health monitors, disease managers and medical care providers (by exception) of tomorrow. Make no mistake: everyone – including you, me and everyone we know – wants to manage their health and health care just like they manage every other aspect of their lives – banking, shopping, travel, entertainment, even intimate personal relationships – digitally.

Our clinical care model must be re-imagined through the lens of the current digital reality. The existing model is built on the sacrosanct relationship between a physician and his or her patients. Today, that one-to-one relationship is threatened by the one-to-too-many relationships necessitated by large patient panels and the closely monitored productivity metrics that drive most physician compensation models. To the positive, the one-to-many relationship represents a half-step toward our digital destiny. The full-stride must also include remote monitoring and medical management utilizing wearable, implantable and ingestible sensors; connected, self-service diagnostic tests and monitors; automated, from-home check-ins and checkups; automated health status and compliance reporting; and the provision of in-person counseling, therapeutic treatments and medical care only as necessary by exception. Leveraging these digital health channels will increase access, improve satisfaction, and reduce cost. It may even help to alleviate the troubling physician burnout concern. How would physicians feel about their profession if they were able to spend more high-quality time with the 30-50% of individuals and patients – the exceptions – who really need to be seen in-person? Whatever the final solution to the physician burnout problem, smaller patient panels comprised of just those individuals who really need to be seen in-person by a doctor should be a primary consideration.

Go digital and stay home. Healthy individuals and medically managed patients with chronic, but well-controlled conditions clearly want greater responsibility for their personal health. Wearable devices and Smartphone apps have already ushered in this not-new-anymore reality. Devices such as weight scales, exercise equipment, kitchen appliances, even coffee makers can now be connected and enabled to monitor routines, track compliance or flag negative trends and anomalies, and connected, self-service tests for diagnostic, management and monitoring purposes are already available or pending approval. Our "present" is digital. Our future is something else entirely.

Tomorrow’s health maintenance and health care services will actually focus on providing our customers want they want: prediction, prevention and provision. And it will be very personal. Individuals within the populations we will monitor and manage will expect us to predict their disease, help prevent their disease, and then, failing prevention, provide treatment for their disease. Our resources will include DNA-specific medication formulations informed by predictive analytic routines enabled by powerful artificial intelligence engines like IBM’s Watson or Google’s DeepMind, and our personalized treatments and individualized therapies will feature augmented and virtualized realities. Connected drones are already delivering pizzas and packages. Can medical supplies and medication refills be far behind? Our future, and everything in it, is digitally connected. And our industry is still trying to optimize its analog past.

Go digital or go home. Hospital stays and clinic visits will be loss leaders in a population health, value-based world. People, not just patients, will become a health system’s to monitor and manage appropriately. Done well, the benefits – quality of life, convenience, and cost savings – will accrue to the person, the payer, the provider and the public. Not monitored remotely and managed by exception? Payer and provider margins will continue to contract. In response, health care systems will continue to consolidate and health care leaders will aggressively work to cut costs and find additional patients or supplemental revenue streams to offset service line losses or add contribution margin. It won’t work. This is yesterday's management response to a market contraction distressing yesterday’s clinical business model. Our market will be digital. We need a digital clinical business model.

Healthcare is a retail industry that doesn’t yet know it’s a retail industry. And retail is digital. Before they were gone, Blockbuster, Borders, 1-Hour Photo and countless others did exactly what our industry is doing today – consolidating and optimizing the existing business model by cutting costs, leveraging scale, pressuring productivity and working to develop additional revenue opportunities. These efforts were the death throes of organizations that failed to understand that they needed to become digital companies, not pander to the market with a patchwork "Internet presence," "digital engagement strategy" or creative "digital marketing" campaign. Ask Circuit City. Ask Sports Authority. Ask Sears. Then ask Amazon. Today, digital companies are putting the gesturing monoliths out of business. Even Wal-Mart, once an unstoppable retail force, is "transforming" to become a more “Amazon-like” digital retail broker as evidenced by their recent purchase of Jet.com. The future of health care is digital. And we must transform from healthcare providers offering digital services to become digital providers offering health care services.

Please don’t get me wrong. The essence of our calling will always be a deeply personal, absolutely human-to-human interaction – knowledgeable, skilled and compassionate physicians, nurses and allied health professionals working to prevent, to cure, and to comfort. But how do we make the “before, during and after” episodic care more convenient, more efficient and more affordable? The answer is a new health and health care model that includes digitally-enabled diagnostic and clinical self-service; remote monitoring and medical management; and in-person clinical intervention and medical treatment only when necessary and appropriate. And the data we have collected in electronic medical records (EMRs), application databases and clinical data repositories will be the keys to preferences, personalization, and a pleasurable customer experience. Any health system strategy that does not explicitly acknowledge and enable this digital reality is simply not worth the effort. Healthcare must embrace its digital destiny.

Sutter Health’s Senior Vice President and Chief Information Officer since 2006, Jonathan Manis is a former U.S. Marine Corps ground combat officer who saw the promise of technology in healthcare. With more than 25 years of HIT leadership experience, he is currently helping to lead Sutter Health’s digital health transformation.

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