What if your cell phone could detect cancer cells circulating in your blood or warn you of an imminent heart attack? Ubiquity of smart phones, bandwidth, pervasive connectivity, social networking, genome sequencing, powerful computers, imaging capabilities, information systems, and regulations are converging to create an unprecedented perfect storm in the U.S. healthcare industry. We are going to cover five major trends that are impacting the healthcare industry.
First, Regulatory Reform
Lately, healthcare reform is the most talked about topic in the US. Not a day goes by without a healthcare headline. Regardless of the political spectrum, Affordable Care Act (ACA) has been the most disruptive legislation for the industry. Since the introduction of Social Security, Medicare & Medicaid in the sixties, many attempts have been made to amend healthcare. However, ACA has proved to the most successful catalyst. ACA expanded coverage, shrunk the toughto- nut crack of uninsured population, introduced value (vs volume) based reimbursement , cuts in medicare reimbursements, bundled payments among providers, health grades for providers, readmission penalties, quality of care expectations, factored patient satisfaction into reimbursements, pushed for digital records, interoperability among providers and many more. As a result of this multi-faceted approach, we are witnessing unprecedented changes in the industry with mergers of payers (ex. Aetna & Humana), hospitals, pharmacies, physicians. New entrants are stepping in with lower cost of care models (e.g. Walmart). Every constituent is forced to evolve and come up with innovative ways of doing business for survival.
Changing demographics are impacting care composition. With growing income levels in the last century, we are living longer, eating richer food, do less physical activity, picked up unhealthy habits of excessive tobacco and alcohol, and resulting in an aging and unhealthy population. The facts are staggering – nearly 75 cents of every healthcare dollar goes towards chronic diseases such as obesity, diabetes, heart and lung diseases. 5 percent of population consumes more than half of all healthcare spending. With wearables (e.g. Fitbit, iWatch), and thousands of smart phone apps, there is growing trend of consumers wanting to own their healthcare data, monitor the key stats, and modify their behavior towards better health. Change in life styles could have positive impact on healthcare spending.
Third, Genomics and DNA Sequencing
First time in the history of modern science, a human can be digitized (human genome has 6 billion digits). Human DNA could be mapped for under $1,000, less than a cost of a traditional chest x-ray. This emerging market is going to have wide ranging implications in medicine. With every human being, as a digital box. and a source of big data, good and bad genome life codes could be identified very early, even before birth. Knowing the propensity of an individual towards a disease, care could be personalized, and shift from ‘reactive’ to ‘proactive’ medicine. With early detection of a likely disease, mass mammograms and prostrate exams could be replaced by proactive individualized care, thus avoiding unnecessary tests and saving billions of dollars. Unfortunately most care providers don’t know how to read a DNA map and provide medical advice; however a lot of innovative research in this area is pushing towards a positive trend.
Fourth, Computing Power, Data Explosion
We are all aware of explosive growth in computing power and steep drop in computing costs, compared with a decade ago. With a push towards EMRs, meaningful use initiatives, and interoperability, US is addressing the foundational aspects of building a national digital healthcare system. These efforts coupled with data rich DNAs, consumer apps, and wearables, are going to generate explosive amounts of raw data that need to be processed, stored and analyzed. New massively powerful computing platforms, and pay-as-you-go cloud models that weren’t available to common folk a decade ago, could be accessed for data processing and analysis. As transactional data needs are addressed in the next few years, focus will shift to innovation in actionable and predictive analytics.
Fifth, Consumerism, Wearables, Personalized Data
Smartphone could arguably be one of the most disruptive devices in the last fifty years. With 80 percent of the world having access to a cell signal, mobile is taking over the world. With every human connected, cell phones could become the most potent tools in healthcare delivery. Today, a person in remote part of Africa can monitor their EKG on a wearable device paired with a cell phone and send their EKG data to a US Cardiologist seeking advice. There are thousands of phone apps in the market today that touch many aspects of healthcare. With more awareness for copay, out-of-pocket costs, and reimbursements, savvy consumers are leveraging social media for knowledge, reaching out to like-minded people, price-shopping providers and questioning the cost of care. With increased mobility, and data in the cloud, consumers want to own their healthcare data, and share it with whoever, whenever, wherever they want to in the world. These trends raise lots of concerns about data security, reliability, compliance, billing, and liability. Yet, consumers are taking care into their own hands, like never before, forcing providers and payers to adapt to a new trend in consumerism.
In conclusion, massive trends are forcing healthcare industry to rethink on how they do business and prepare for the upcoming tsunami of changes. The mantra simply is ‘Either Innovate or Die!’ Most importantly, doors are opening for outsiders who have no vested interest in the legacy, to look at the massive healthcare industry with an unbiased look, challenge the status quo with disruptive ideas. Coming years will present the most exciting opportunities for innovative ideas in healthcare.