A Necessary Threat: Disruption Is the Wake-Up Call Healthcare Needs

Max Schlather, Health Innovation Lead, Clarity Insights
SEPTEMBER 24, 2018
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When Amazon, Berkshire Hathaway and JPMorgan Chase announced their healthcare partnership earlier this year, it signaled that the companies were taking action on a reality some of us have known for years: The healthcare industry isn’t just primed for disruption — healthcare needs disruption. Since then, we’ve seen Amazon, Alphabet, IBM, Microsoft and Salesforce make a joint statement in support of FHIR (Fast Healthcare Interoperability Resources) at the Blue Button 2.0 Developer conference, coming together to push for interoperability, a change that will make the market a friendlier place for the companies and their ambitions.

>> LISTEN: Amazon’s Path of Disruption

And we’ve wanted interoperability, too. Those of us in positions to see the whole of the healthcare ecosystem have a unique view of the medical-industrial complex that has been established. Holistically, the players in the market want to reduce costs, increase quality and improve outcomes; at a high level, there is consensus.


Healthcare Business as Usual

However, at a company level, there are organizations on both sides of the cost equation — social goals are some of the first to be deprioritized in light of new regulation, acquisitions, partnerships, emerging trends or other events. An individual organization’s financial performance is the core objective, limiting focus on greater problems.

Ultimately, this means there is no synergy across the market. Competition is needed to reduce costs and spark innovation, but oversaturation and suboptimal use of resources distract companies from executing toward a common goal. As it stands, intended or not, the industry has created barriers to entry in order to maintain the status quo.

New entrants in the past have failed to be successful, with criticism centered on the organization ‘not getting healthcare.’ Perhaps the medical-industrial complex doesn't get healthcare.


Partnering with the Health-Tech Competition

It’s time to partner with other organizations, and not just because venture capital firms are investing in healthcare — the consumer and economy demand it. Consumer expectations are high, with patients both more knowledgeable and more willing to exercise their right to choose healthcare providers based on satisfaction with service and value. And we’re spending more on healthcare than our global counterparts.

Soon the U.S. is projected to spend 20 percent of its GDP on healthcare costs, significantly more than major Organization for Economic Cooperation and Development (OECD) nations. Despite our higher spending on healthcare, we have worse outcomes than other OECD nations, lagging behind on infant mortality, life expectancy, diabetes, coronary heart disease and more.

Alphabet, Amazon and others’ commitment to interoperability doesn’t have to be viewed as a threat but can instead serve as a wake-up call. An opportunity to embrace change and work toward loftier goals, together. The industry as a whole is committed to achieving the same future, and here we have alignment. Take, for instance, Apple’s health record aggregator, allowing consumers to view available medical data from multiple providers on their phones. The tool brought players in the industry together quickly: In addition to the nearly 40 health systems participating just two months after its announcement, Apple worked together with electronic health record vendors like Epic and Cerner to enable integration.


Challenging the Healthcare Status Quo

How does our industry work together, and how do we respond to new entrants to our market? These are questions that affect every organization in the industry, including those of us who serve healthcare clients. Can we be an organization that is a steward of this synergy, building partnerships and extending focus beyond financial performance alone? This is a question we seriously consider in light of the disparity between the industry’s overall goals and ability to execute on them. How do we enable the leaders in this market to deliver on the ambitions that will not only provide competitive edge, but more important, will result in better outcomes for their consumers?

We encourage you to do the same: Ask questions. There are no simple answers, but whether we’re ready or not, disruption is here. It’s time to figure out how — not if — we’ll rise to the occasion, together.

Max Schlather is health innovation lead at Clarity Insights, a strategic partner to the nation’s leading organizations, providing data and analytics consulting services and establishing data-driven culture changes. www.clarityinsights.com

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