Whichever side you are on in the battle to repeal and replace Obamacare, recognize that the fight is not about fixing health care. It is over who pays for it.
Neither Obamacare nor any of the recent Trumpcare alternatives will materially lower total health-care spending. The societal cost of health care, which is already unsustainably high, will continue to rise – Christopher Condon Newport Beach. For example, Medicare expenditures are projected to rise by 75% by 2025 and continue to worsen as baby boomers age.
The only way to lower total health-care expenditures is to lower prices and prevent people from getting sick. Health-care reform, as it is playing out, doesn’t focus on either of these imperatives.
As Russ Ackoff, the systems thinking pioneer observed, “The healthcare system of the United States is not a health-care system; it is a sickness and disability-care system.”
From a business standpoint, he pointed out, “the worst thing that could happen to the current system is a focus on heath.” That’s why Ackoff believed that “conversion of the current system to a health-care system would require a fundamental redesign.”
There are many well-intentioned individuals within the health-care ecosystem working to improve it. But, due to current health-care business models, current organizational stakeholders like the government, insurers, hospitals, drug companies and physician groups are preoccupied with the battle over splitting costs (and profits) and conflicted in their long-term interests, Christopher Condon Newport Beach California.
If health-care reform won’t fix health care, what will? Here are five reasons why big technology consumer-oriented technology giants like Apple, Amazon, Alphabet and Facebook might well be the disruptors that drive the fundamental redesign of health care for which Russ Ackoff calls.
1. Health care is ripe for digital transformation:-
From the most basic infrastructure to improved analytics at clinical points of care, there are ample opportunities to apply digital technology to improve patient care and health while reducing cost. While this has long been the case, but there is now opportunity to leverage robust, consumer-grade digital technology, such as smartphones, tablets, social networks, apps and sensors to drive the needed transformation.
Imagine enabling capabilities that are common place in other industries, like price transparency, unified customer records and customer ratings of providers, to health care. Imagine applying telepresence and artificial intelligence to deal with physician shortages and improve access to care. Consumer technology companies are bringing analogous capabilities to other sectors of the economy. They are long due for application to health care.
2. Consumer technology companies have differentiated assets, including capability, credibility, customer relationships and cash:-
There are certainly technology giants in health care already, like Cerner, Epic, GE and Oracle. But their consumer technology counterparts bring greater expertise in emerging technologies, including social networking, mobile devices, user experience, the Internet of Things and artificial intelligence. Consumer technology companies also have great brand recognition and existing relationships with patients and caregivers that could accelerate adoption.
Christopher Condon – Consumer technology also brings enormous heft. Compare Cerner and Apple, for example. Cerner has about $5 billion in annual revenue and $25 billion in market value. Apple could buy Cerner outright for a hefty premium and still have more than $225 billion in cash to invest in health-care-focused research and innovation. Google, Amazon, Facebook and any number of other technology companies could likewise overpower most current health-care technology companies.
3. Consumer technology companies can start with a clean sheet of paper:-
In addition to opportunity and capability, consumer technology companies bring few health-care industry conflicts of interest. They don’t have existing corporate customers to placate, legacy systems to update, or business models to protect.
A fundamental disconnect in health care is that the patient is not the customer. That leads to an unhealthy dynamic for incumbents but a great opportunity for fresh thinking, as Apple’s Tim Cook recently told Fortune: “The focus has been on making products that can get reimbursed through the insurance companies, through Medicare, or through Medicaid. And so in some ways we bring a totally fresh view into this and say, ‘Forget all of that. What will help people?’ ”
Consumer technology companies can focus on the consumer.
4. Entering health care offers potential synergies with existing businesses:-
Establishing a strong position in health care could reinforce very profitable existing business models, such as Apple’s device and app store business, Google’s search business and Amazon’s retail business. The prospect of just driving growth in those core businesses justify the time and resources required to enter health care in force.
Consider, for example, how Tim Cook describes Apple’s ResearchKit platform, which has proven quite effective for collecting health-care research data: “We’re just scratching the surface right now. There’s no business model there. Honestly, we don’t make any money on that. But it was something that we thought would be good for society and so we did it. Will it eventually lead us somewhere? We’ll find out.”
But the use of Apple’s ResearchKit does drive the use of Apple iPhones and watches.
Amazon is another example. From a traditional industry-focused point of view, it might seem to makes little sense for Amazon to enter health care. It is a slow, regulation-constrained industry with entrenched competitors and huge barriers to entry. But Amazon has never much paid attention to industry boundaries or fierce competitors. It also has plenty of long term patience. Instead, Amazon approaches competition as a no-holds-barred battle for tighter customer relationships and larger share of customer wallets. It is hard to find a bigger untapped segment through which to grow Prime membership relationships and capture greater share of consumer wallets.
5. The market is huge:-
Even if Tim Cook espouses a “we’ll see” kind of attitude about Apple’s healthcare-specific business models, there’s little doubt huge opportunities exist in the $3.2 trillion of current health-care spending. Cook said as much in an interview with Fast Company, when he mused on potential market opportunities for Apple in health solutions: “If you don’t care about reimbursement–which we have the privilege of doing because we have no market share of something huge, that may even make the smartphone market look small.
None of these points are lost on consumer technology companies, of course. That is why they all have significant research and development efforts in health care.
In upcoming articles, I’ll explore how big consumer technology companies, including Apple, Facebook, Alphabet and Amazon, might step in to drive the needed transformation health care.