• Revenue Cycle Management
  • COVID-19
  • Reimbursement
  • Diabetes Awareness Month
  • Risk Management
  • Patient Retention
  • Staffing
  • Medical Economics® 100th Anniversary
  • Coding and documentation
  • Business of Endocrinology
  • Telehealth
  • Physicians Financial News
  • Cybersecurity
  • Cardiovascular Clinical Consult
  • Locum Tenens, brought to you by LocumLife®
  • Weight Management
  • Business of Women's Health
  • Practice Efficiency
  • Finance and Wealth
  • EHRs
  • Remote Patient Monitoring
  • Sponsored Webinars
  • Medical Technology
  • Billing and collections
  • Acute Pain Management
  • Exclusive Content
  • Value-based Care
  • Business of Pediatrics
  • Concierge Medicine 2.0 by Castle Connolly Private Health Partners
  • Practice Growth
  • Concierge Medicine
  • Business of Cardiology
  • Implementing the Topcon Ocular Telehealth Platform
  • Malpractice
  • Influenza
  • Sexual Health
  • Chronic Conditions
  • Technology
  • Legal and Policy
  • Money
  • Opinion
  • Vaccines
  • Practice Management
  • Patient Relations
  • Careers

Silicon Valley’s vision to transform healthcare


Technology giants such as Google, Apple, and IBM seek to revolutionize how healthcare is delivered.

It wasn’t only the aging demographic that prompted high-tech firms to throw their hats in the healthcare ring.  Nor was it the market opportunities created by the Affordable Care Act (ACA), or investor enthusiasm for software solutions that may solve some of the healthcare industry’s most pressing problems. It was all three.

Over the last five years, tech titans including Google, Intel, IBM, and Apple have set their sights on the roughly $40 billion healthcare IT market, joining a proliferation of Silicon Valley startups that are developing new products to help achieve the “Triple Aim” of better care, improved outcomes, and lower costs.  
“Since passage of the Affordable Care Act [in 2010], these trends have combined and we’ve now got more than $10 billion of new venture capital dollars flowing into the healthcare IT industry, and more than 500 new companies created,” says Bob Kocher, MD, an internist and partner with venture capital firm Venrock in Palo Alto, California, which invests primarily in healthcare and technology.  

Making EHR alerts work for your practice

An additional 17 million Americans, he notes, have gained health insurance coverage under the ACA, aka Obamacare, at a time when retiring Baby Boomers are already fueling a spike in demand for healthcare services. “We’re adding 10,000 Medicare beneficiaries every day and older people spend more on healthcare, so from a purely economic standpoint, the opportunity in the  healthcare market is enormous, interesting, and growing,” says Kocher.

Next: Healthcare as an 'information business'


Spending on medical services, including hospital visits, medications, and other healthcare services, will account for nearly 20% of U.S. gross domestic product by 2021, according to government projections.
Other catalysts for IT innovation: the Health Information Technology for Economic and Clinical Health Act of 2009, which incentivized doctors to purchase electronic health record (EHR)  systems, and the federal Health Data Initiative, which requires providers to report on cost and quality data.   
“Quality data is oxygen to companies that want to build healthcare products,” says Kocher, adding that new payment models that reward for value also are boosting demand for clinical information technology and administrative solutions.

Telehealth: The balance between access and ethics

Globally, the healthcare IT market, which includes EHRs, telemedicine, and computerized provider order entry systems, is expected to top $105 billion by 2020, up from $41 billion in 2013, according to market research firm Grand View Research in San Francisco. To a large degree, that growth is being powered by the cloud, clinical- and claims-based analytics, and mobile technologies.

Healthcare as ‘an information business’

Sam Glick, a partner with New York-based management consulting firm Oliver Wyman, says IT innovators are uniquely positioned to uncover new sources of value  as payers and providers digitize patient records and researchers aggregate mountains of medical data.

Next: Evolution of healthcare


“Over the past decade, healthcare has evolved to become an information business,” he says. “It’s not just about scientific innovation, not just about finding new ways to engage people, but increasingly it’s about how do we know which patients are going to be the sickest sooner, what costs are going to be the most significant, and how can we predict which patients we should reach out to today? These are information questions that the Googles and Apples of the world are very well equipped to answer.”  
Their foray into healthcare, he notes, follows a more pervasive corporate trend. “There is a move across all industries, from hospitality to financial services to retail, to empower consumers and find new ways to engage them,” says Glick. “Companies are using big data to make for a better, more convenient, more targeted consumer experience.” It’s a move towards mass personalization, he says, in which service providers have the power to customize for the individual-and healthcare is no exception.
Analytics, simulation models, and optimization programs are already giving early adopters the insight to deliver more personalized, proactive care. A 2014 Price Waterhouse Coopers survey found that 63% of healthcare executives say they’ve changed the way they make important decisions as a result of “big data,” such as whether they should change their delivery model, collaborate with competitors, commit to a major business investment, or encourage the use of mobile health technologies.
The survey found that some 40% rely primarily on data and analytic inputs, 29% draw on their own experience and intuition, and 31% look first to the relevant experience of others. Many of the larger medical groups who  responded also said they had recently created a dedicated data insights team to inform strategic decisions.

Next: Productive partnerships


Healthcare IT includes an array of technologies to store, share, and analyze health information. For patients, it enables better access to care via telemedicine and patient portals. For researchers, it allows for more granular analysis of health data for the development of new therapies, and for providers it helps identify opportunities to improve efficiency and outcomes.
Many of the latest innovations are aimed at personal health treatment for patients–particularly those suffering from chronic illness, which consumes 86% of the nation’s healthcare costs, the Centers for Disease Control and Prevention reports.

Productive partnerships

“Most of the ‘hot’ stories in healthcare IT today are related to patient care/outcomes,” says Spencer Nam, a senior research fellow for healthcare at the San Mateo, California-based Clayton Christensen Institute for Disruptive Innovation, who was interviewed by e-mail. “Even if the solution itself is more related to operational improvements, they are still being positioned and marketed as ‘patient outcome’-related solutions,” says Nam.
In part, that’s because administrative functions are largely tied to-and limited by-EHRs, for which the Affordable Care Act mandated systematic adoption. “So, from the EHR space, the model is trying to develop new applications that could interface with existing EHR solutions to deliver greater efficiency,” says Nam. “While there are a ton of companies working on these solutions, they have to deal with the restrictions imposed by the EHR players, so it is a bit more difficult to make a business case.”

Next: The high-stakes race of DNA data storage


It’s far easier to develop more universal solutions that improve patient care and outcomes, including physician concierge services, data mining services, and scheduling apps that attract more investors and public attention, he says.  
IBM’s Watson Health Cloud is an example. Launched in 2015, the open technology platform is designed specifically to enhance the quality and effectiveness of personal healthcare using language processing and machine learning. It is intended to help doctors, researchers, and others in the healthcare field to automate and improve patient outreach, boost patient engagement, and reduce costly hospital readmissions.
Google Genomics and Amazon Web Services also are jockeying for position in the high-stakes race to store DNA data. Both companies are marketing their cloud databases to drug makers and research institutions, which are themselves rushing to sequence hundreds of thousands of human genomes for medical research and development.
Tech firms bring a unique skill set to the market, says Glick. “They bring expertise in technology, but also in consumer engagement,” he says. “People love Google and Apple and Amazon for the user experience they provide. They are much more beloved by the average consumer than most hospitals or health plans.”  

Next: Substantial commitments to healthcare IT


Recently, the most substantial commitments to healthcare IT have been partnerships between tech firms and medical researchers, which lend not only scientific credibility to their discoveries, but multidisciplinary expertise. “Pharmacists, nurses, and doctors are among the most trusted professionals in the U.S. so these partnerships are really important right now,” says Glick, who adds that that may change as delivery channels evolve.
“Today, most patients go into their doctor’s office to receive care, but I could envision a world 10 years from now where instead of going to a clinic or urgent care center, they might click on Google and find a link across the top of the page next to ‘news’ that says ‘medical visit’ where they could be seen using telehealth technology.”
Collaborations between IT firms and medical organizations also enable access to health data, which tech firms need to develop new products and service platforms. Due to regulatory and legal constraints, they would otherwise be forced to gather such data on their own, which would be time consuming and costly, but potentially better for the industry, says Nam.  “Partnering with healthcare enterprises expedites time to access and obviates the need for ‘reinventing the wheels’ of gathering data,” he says.
But there’s always a risk of tech companies being exposed to the existing bias of their partners. “To some extent, I wish tech companies were bolder and more innovative by running their own trials, gathering data themselves (with help of in-house experts, of course), and presenting them to the medical community,” says Nam, noting that’s the likely next step in their evolution. “But, for now, these newly built relationships allow the tech companies to speed up on their healthcare domain knowledge as well as gain hard-to-access patient data.”

Next: Big names bring attention to healthcare


Wearable tech and cognitive computing may sound futuristic, but they’re also good examples of disruptive innovation.  The Carnegie Mellon University Disruptive Health Technology Institute defines disruptive technology as the process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up-market, eventually displacing established competitors to yield an unexpected benefit to consumers.

Aided by new diagnostic and therapeutic tools,  non-physician providers (nurse practitioners, for example) now can treat conditions that once required the expertise of a physician at clinics in CVS, Walgreens, and Wal-Mart stores. That same evolution is enabling physicians to perform tests and procedures in the exam room that once required a high-priced specialist or hospital admission.

Big names bring attention to healthcare

By all accounts, innovation is the cure to fix the ailing healthcare system. New gadgets and gizmos, however, are just the beginning. As big data redefines the way doctors deliver care, medical schools, payers and providers will need to keep pace, says Glick.
“Right now we have a lot of experiments between Apple and the Mayo Clinic, for example, but if we get to the point where big data tells us that we should be treating patients differently, that this population of patients needs more care and these need less, we’re going to have to adjust our entire healthcare system,”  Glick says.
Doctors may no longer need a stethoscope, but learn instead to wield a smartphone app that defines more precisely what each patient needs. “Training may have to focus more on information skills,” says Glick. “We may need a whole new category of professionals who are able to interpret genetic test results, or coaches who help people change behaviors and stay healthy.”
At the same time, payers will need to alter their reimbursement structure so providers at all levels get paid fairly for the work they do. “It’s an exciting time and I’m very optimistic, but if we succeed, and I think we will, we’re going to have to think about how the rest of the system needs to evolve.”
Kocher agrees. By bringing their resources to bear and soliciting input from healthcare decision makers, he says, Silicon Valley can help doctors deliver more cost-effective, patient-centered care.
Their foray into the field is already paying dividends. “There’s no question that the interest of these tech companies is a good thing because it draws more attention, creativity and resources to healthcare,” says Kocher.  “When you have (Google co-founder) Larry Page talking about healthcare to investors on a Google call, that’s a whole lot of people who wouldn’t have thought about glucose monitoring.”

Related Videos