Efficiency in healthcare: Lessons to learn from Amazon and Walmart

In healthcare, inefficiency has been par for the course. As a surgeon, I saw firsthand the waste in the OR — surgical instruments, if not used in surgery, are thrown away.

Additionally, hospitals pay doctors who aren’t working while they wait months for their credentials to be processed, and physicians are tasked with doing so much admin work that they aren’t able to spend adequate time with patients. These are just a few examples, but they highlight how wastefully our healthcare system operates, making it easier to understand why it’s the most expensive in the world.

Could retail behemoths be the catalysts that finally bring efficiency to the United States healthcare system? By tapping into the systems used to build their empires, companies like Amazon and Walmart are circumventing the tried-and-true models of healthcare and are, instead, creating prototypes of patient care that have the potential to change everything.

These companies are putting their years of experience creating innovative systems to work in healthcare. What can we learn from them? Here are a few of my favorite lessons:

Amazon plays connect the dots with patient health records

In 2017, Amazon boasted an annual revenue of $177.9 billion, covering half the world’s population and making it the fourth most valuable company in the world. The company’s segue into healthcare has been noticeable. Last summer, Amazon partnered with Berkshire Hathaway and JPMorgan Chase & Co. on a venture aiming to improve and reduce the costs of healthcare for their employees and, eventually, everyone.

Additionally, the company launched Amazon Comprehend Medical, machine learning software that digitizes medical records using natural language processing with the goal of tackling the largely ineffective utilization of patient health data as it is today. In an article on MedCity News, reporter Kevin Truong notes, “Amazon says that the tool, which is available through an API call, can both highlight important medical information in records and identify relevant relationships. For example being able to understand how a diagnosis for a condition is related to a specific medication prescription and dosage.”

The software can also help eliminate unnecessary medical tests, which are estimated to cost the U.S. $200 billion annually.

Big takeaway: By giving physicians access to more comprehensive patient health data, Amazon is setting a new bar for patient experience. They are also changing the way we pay for healthcare, providing more affordable alternatives to its 1.2 million employees, and larger healthcare payers are getting nervous — UnitedHealth is now suing the newly formed group.

Walmart finds efficiency through innovation, technology, and collaboration

Walmart “operates more than 11,700 stores under 59 company names, with 2.3 million employees in 28 countries around the world while managing an average of $32 billion in inventory,” according to Supply Chain Digest. In other words, there is precious little room for amateurish systems within this retail giant. Almost a million of their 1.5 million employees are self-insured, making Walmart the nation’s largest private employer and a heavy influencer on the U.S. healthcare market.

The retail giant has long been praised for its supply chain management; most notably, what they take out of the chain that makes the whole system more efficient. An article published on TradeGecko summarizes by saying, “technology plays a key role in Walmart’s supply chain, serving as the foundation of their supply chain strategy. Walmart has the largest information technology infrastructure of any private company in the world, and it is this state-of-the-art technology and network design that allows Walmart to accurately forecast demand, track and predict inventory levels, create highly efficient transportation routes, manage customer relationships, and service response logistics.”

Taking things further, Walmart is “moving beyond the store’s four walls” by transforming extra parking lot space into town centers. Among other services, the spaces will provide health clinics, creating a truly one-stop shop for customers and making healthcare much more accessible and routine.

Big takeaway: Where, in healthcare, can we remove unnecessary links in the chain that connects physicians and patients? One process that bogs down every area of healthcare is provider credentialing. The countless hours it takes practice staff to ensure all of their providers are in compliance with the extensive list of credentialing and insurance mandates is inefficient, to say the least. Switching to a cloud-based system allows organizations to save time and money while reducing the risk of clawbacks.

What these two companies have in common is simple: They succeed because of efficiency. About Amazon’s 100,000 robots in their fulfillment center, reporter Nate Lanxon wrote an article for Bloomberg in which he notes: “What it lacks in personality, it makes up for with an efficiency and precision with logistics operations that no human could dream of.” That’s not to say that healthcare can (or should) be run by robots — human touch is an essential part of value-based care. But we can (and should) look at the lessons from Amazon and Walmart as priceless insider information to bring efficiency to healthcare.

America’s healthcare system today is by far the most expensive in the world with far from the best outcomes. We spend enough in the country to have a world-class system, but a lot of the money is going toward things that don’t help patients. By tackling healthcare’s biggest efficiency issues, we, as a sector, have an amazing opportunity to reduce costs and improve the value delivered.

Kirk Heath, M.D., F.A.C.S., is CEO and Founder of Modio Health. Modio is a physician-owned and operated platform making credentialing and career management simple, transparent, and efficient for healthcare professionals.

 

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