I’ve got a long shopping list this month. Thanks to clever apps on my phone and the ubiquity of holiday sales, I won’t have much trouble spending my dollars. I can compare brands, read reviews, and find the goods I want at a price I’m comfortable with. I wish the same were true in health care.
As patients, we aren’t empowered to be consumers because we operate with limited information. Want to find a cheap lab to have your blood drawn? Wondering which hospital in your city has the lowest readmission rates? Good luck finding answers. If you ask a doctor the cost of a procedure, few will know…and even fewer will have a clue where to send you for the cheapest one at equal quality. Compared to the rest of the information economy, health care’s information deficit is embarrassing and preventing Americans from performing one of our favorite pastimes: shopping.
We’re drowning in the wrong technology
Over the past two decades, hospitals and physician groups have transitioned their health records from one disconnected, static platform—paper—to another: pre-Internet software. Closed information systems hoard data, even when it would be better for patient care if information was shared. Disconnected, fragmented health IT has proven its inability to effectively share the basics of patient information, like medical condition and history, amongst health care institutions. Because the underlying chassis is broken, we haven’t been able to eliminate redundancy in the system or track that sweet spot where low-cost and high-quality care intersect to create value.
Protective legislation is burying innovation
Technology, however open, won’t be the silver bullet to spur information sharing at scale. Brokers of information need to be compensated for serving up valuable information and facilitating faithful execution, just as they are in other industries. Kayak.com receives a percentage of the profit every time an airline ticket is booked seamlessly via their site. So, too, should doctors and information ‘curators’ be paid for adding value to the market. Today, it is illegal under the Anti-Kickback and Stark Laws for health care providers to be reimbursed for sharing health information in connection with a patient referral. We need to expand our bench of information brokers by empowering them with legal guidelines for this work, not penalties.
There’s no demand curve
It’s common wisdom that 20% of patients account for 80% of our health care system’s costs. This maxim generally refers to the sickest 20%, whose unmanaged conditions generate massive costs borne by the rest of the system. This is largely a failing of our health care reimbursement model, which rewards providers for the volume of services and procedures they provide, rather than for the value of those services. Providers simply aren’t incented to compete on price and quality. Most health plans don’t reward patients for judiciously managing their health, either. Even with the advent of high deductible plans, health care is still largely an all-you-can-eat buffet; there is little incentive to change consumption patterns (by doctors or patients) without a reward for good behavior. Health care needs many more diverse health care plans competing on price and product so that consumers can shop for policies as well as for where they elect their individual episodes of care. Patients need to be their own health care brokers in a marketplace that rewards the careful selection of benefits; they need health data applied in innovative ways by new companies to make those selections.
With such high barriers, it’s no surprise there aren’t enough entrepreneurs game for the fight. Few market entrants have been able to gather the raw materials or find the tailwinds from market forces to prompt true shopping in healthcare to take hold. To stoke this competition, we need open platforms that let disruptive innovators in. Health IT must expose its APIs so that innovators can integrate new functionality directly onto the underlying platforms from which healthcare operates. Some tools, like Castlight, already exist to help patients shop, but they aren’t as helpful as they could be due to massive gaps in information. Once we achieve true data liquidity and system interoperability, providers will be forced to compete on cost and quality. Entrepreneurial startups will offer patients new services and choices, unleashing the most powerful consumer waterfall health care has ever seen, and patients will become the shoppers they were born to be.
I hope there are entrepreneurs out there reading this, excited because they are working on the next best solutions that will disrupt the current model. If so, give me a shout. I’d love to work with you.
Jonathan Bush is CEO and President of athenahealth Inc, which provides cloud-based services and mobile applications for medical groups and health systems.