Big data expert Pam Baker says that in the momentum of big data use, few realize that the business models they are anchoring their work to today could set them adrift in the future—if they continue to hold to old ways of doing things instead of moving to new healthcare models.
While the healthcare industry is focused on digitalizing patient information and using big data to do everything from finding new cures to cutting costs and improving profits, few realize that the business models they are anchoring their work to today are crumbling away and setting them adrift. This places current healthcare work and planning in a precarious state. But this is only a scary position if you continue to hold to the old ways rather than make the leap to form and leverage new healthcare models.
In order to do that, one must first recognize the shifts that are currently underway.
1. “The patient will see you now” – a shift from provider to patient control.
For the past few years, patients have become more involved in their healthcare for better or worse. Examples are plentiful and diverse. These range from patients actively seeking healthcare from providers they perceive to be top performers or as less expensive (sometimes going so far as traveling to another country for medical procedures) to patients requesting/dictating specific medications in the doctor’s office in the U.S., to patients outright avoiding hospitals in areas affected by the recent Ebola outbreak.
That trend is already escalating. Just as social media shifted power and control from businesses to consumers, so too are big data, 3D printers, health apps, and wearables shifting power and control from healthcare providers to patients.
Already there are documented cases of patients bringing 3D printed models of their ailments to physicians to aid treatment and sometimes even to correct a physician’s misdiagnosis. Examples of these two situations can be found in the articles “Southampton hospital patient's 3D kidney model used in operation” and “Man Saves Wife’s Sight by 3D Printing Her Tumor.”
For more information about these trends and others in patient empowerment, you might want to read the new book The Patient Will See You Now by cardiologist Eric Topol, M.D. who directs the Scripps Translational Science Institute in California. You may also want to read his earlier book “The Creative Destruction of Medicine” published in 2012. For an opposing view, albeit a very weak argument against patient empowerment technologies, you might want to read this post in the NY Times by another doctor, Abigail Zuger, M.D
In the very near future, patients will select providers based on more sophisticated big data analytics that reveal a provider’s actual performance ratings and failure rates, costs, availability, bedside manner, peer respect, office waiting times, and other highly detailed factors. In addition, they will use telemedicine and automated medicine to treat routine ills thereby skirting traditional, locally-based healthcare providers for this care. Automated medicine, just to be clear, uses technology to diagnosis the problem and automatically dispense medications -- initially through automated prescription dispenses to pharmacies but eventually moving to medicine production on home 3D printers.
Responding to this new patient empowerment (and even patient oversight) will be challenging for many healthcare organizations. Being slow to do so will negatively impact providers. Look for ways to proactively enable increased patient involvement and information and for ways to provide at least some healthcare outside the traditional office and lab.
2. Healthcare pricing is about to become the primary driver in healthcare choices.
For decades now there has been much handwringing over healthcare costs and numerous attempts by governments and insurers to cut or at least contain those costs. Through it all, patients have been kept in the dark about pricing. This is changing fast. Two examples of that are the U.S. Health and Human Services (HHS) release of data showing significant pricing variation and data reflecting physician pay and services. As another example, the U.S. Centers for Medicare & Medicaid Services (CMS) launched Hospital Compare, which enables consumers to select multiple hospitals and directly compare performance measure information related to heart attack, heart failure, pneumonia, surgery, and other conditions.
Add to that a recent change in how private insurers are handling pricing data and it’s obvious that consumer shopping is about to become a major driver in healthcare changes.
Not so long ago, private insurers in the U.S. routinely forced doctors, hospitals and other providers to accept significantly lower pay and follow dictated medical processes all under contractual gag orders to keep patients from learning about pricing and insurer control tactics. But this proved ineffectual and unsustainable as a practice and it created serious friction between insurers and providers. Now that tactic is changing in a big way as evidenced by Blue Cross Blue Shield of North Carolina’s unveiling this month of its healthcare pricing online calculator.
It is called the “National Consumer Cost Tool” and it is not available to plan members only, but to the public at large.
“The state’s largest health insurer has unveiled an online cost tool that exposes wide disparities in billing patterns among North Carolina’s doctors and hospitals,” writes John Murawshi in his Charlotte Observer newspaper post. “Blue Cross and Blue Shield’s online feature shows price differences of thousands of dollars for the same procedure among the state’s health care providers. Just within the Charlotte region, costs for a knee replacement range from about $20,000 to $40,000. A screening colonoscopy for Blue Cross customers in the region ranges from $852 to $8,170, the new report shows. Those numbers show what Blue Cross pays providers for all aspects of the procedure, including anesthesia and facility fees.”
Why are private insurers moving to release competitive pricing data to consumers? For the same reason government insurers are: to spur consumer price shopping which creates a market force to drive down healthcare costs through market competition – a tried and true hallmark of capitalism.
But even capitalism as we know it is set for disruption according to Jeremy Rifkin, who is “an influential American writer whose best-selling [book] Third Industrial Revolution arguably provided the blueprint for Germany’s transition to a low-carbon economy, and China’s strategic acceptance of climate policy” explains a post in EurActiv.
3. The eclipse of capitalism – or at least a major shakeup.
Jeremy Rifkin is a highly influential American economic and social theorist and he is slated to speak at the CeBIT Global Conference in Germany this March. His speech will be on his theories on the “Eclipse of Capitalism” springing from zero marginal costs fueled by big data, the Internet of Things and the Collaborative Commons. To get a basic understanding of this concept, view this video:
While Rifkin’s video (and likely his CeBIT speech as well) does not address healthcare specifically, these changes will unquestionably be impacting all industries. He is speaking of the end of the Second Industrial Revolution and the beginning of the Third Industrial Revolution. The inherent shift is in consumers becoming prosumers which is essentially the shift I was referring to in the first two points of this post.
I agree with Rifkin in that these disruptive changes are indeed swiftly coming and that they will be profound. However, I don’t think this represents the “fall” of capitalism but rather a shift in power within the capitalist systems. Perhaps this is why the title of Rifkin’s speech changed from the fall of capitalism in this video to the “eclipse” of capitalism on the CeBIT announcement and schedule (which I think is a better but still not perfect description of the upcoming impact.)
It is true that traditional business models across the board, including those in healthcare, will soon come tumbling down. But it is also true that new company models will arise to fill the void and continue the pattern of wealth accumulation and power hierarchies through capitalism.
For example, Uber, a ride-sharing company, and Prosper, a peer-to-peer lender, are nonetheless organized companies making substantial money and while their business models are new, they still fall firmly within the overall capitalism structure.
Whether you agree or disagree with me or Rifkin on the ultimate impact on capitalism, the lesson to all industries of any economic system remains the same: current business models will not hold. Consumer empowerment will rule the day.
Therefore, healthcare organizations should be factoring in these major shifts in their big data analyses and organizational strategies. Your goals should include getting ahead of and leveraging these shifts to your organization’s advantage.
Also, be proactively looking for ways to cut your overhead by taking a “sharing economy” approach on costly investments. For example, look for ways to share the costs of acquiring and maintaining expensive medical equipment with other healthcare providers, your community, and even with the manufacturers. The hallmark of the Collaborative Commons (generally referred to as the Collaborative Economy in the U.S.) is movement away from the ownership of things and towards the sharing of things. There’s no reason businesses can’t take the same tact.
If you want to read more about the rise of the Collaborative Economy and ways to profit from it, see Chapter 8 in my new book Data Divination: Big Data Strategies.
Here’s wishing you success in your endeavors. Please share your thoughts in the comments below or send me an email. Have a specific question? Let me know and I’ll try to address it in a future post for you.
Pam Baker is a regular nuviun contributor, the editor of FierceBigData and author of Data Divination: Big Data Strategies. For more expert insights from Pam, follow her on Twitter @bakercom1 and at FierceBigData.
The nuviun blog is intended to contribute to discussion and stimulate debate on important issues in global digital health. The views are solely those of the author.