The advancement of digital health has been greatly bottlenecked by problems surrounding healthcare data. As healthcare industry trends and the pressures of COVID-19 increase the necessity of digital health solutions, so does the importance of resolving these problems. Fortunately, these developments and new regulations are converging to create tailwinds favorable for healthtech innovation, and will lead to a new era of tech-empowered healthcare.
Opinions expressed here are my own.
Introduction
In the last few weeks, the world has turned upside down. COVID-19 has quickly gone from a distant concern to overwhelming hospitals and the economy. World leaders and renowned figures are increasingly concerned as the impact of this disease grows exponentially dire — America and the world is in a state of emergency. This recent frenzy around coronavirus has shifted the public gaze towards health and, consequently, the healthcare system.
The newfound attention is timely — the deep flaws and frustrations of American healthcare are now even more top of mind as the system’s limits are tested by the pandemic. Patients are running into a wall of complexity and inconvenience when attempting to navigate their care (if they can afford it in the first place), healthcare professionals are reaching peak levels of burnout as health systems struggle with resourcing, payers are facing severe administrative problems and operational challenges, and this is just scratching the surface.
As the pressure to deliver care mounts, so is the urgency to solve these problems in a faster, better way, and this is where digital health comes into the foray. Healthcare has been historically a slow moving industry, but like financial services, retail, transportation, etc., it’s been slowly evolving into one driven by digital innovation, and the pandemic has put the foot down on the gas pedal. But of course, just as there’s no such thing as free lunch, there’s a massive bottleneck impeding the speed at which these digital health solutions arise, and their utility when they are built. (spoiler alert: read the title again!)
In this series, I’m going to elaborate on the following:
- The current healthcare landscape: its key stakeholders, dynamics, recent trends
- The growth of digital health and the impact of COVID-19
- Healthcare data as a bottleneck: what it is, how it developed, how it’s impacted healthcare
- The impact of this bottleneck in the development of digital health companies
- An opportunity in healthcare data — new developments and precedent that foreshadow the emergence of new players and a new era of healthcare
The above hyperlinks will take you to posts where I go into the respective topic in detail. Below you will find a summarized perspective on the problem in bullet points, and the key series takeaway at the very bottom.
Thanks for reading and, if you want to start from the top, here’s Part 1!
Overview
The current healthcare landscape: its key stakeholders, dynamics, recent trends
- If they can even access care in the first place, patients are using larger shares of their income to pay for a healthcare experience that is unnavigable and broken, so they need the right tools to better navigate their care and have improved. outcomes. However, this also means patients have increased leverage.
- Health systems need to meet patient demands and improve outcomes to optimize margins as costs related to burnout, waste, and inefficient processes pile up to staggering amounts.
- Formerly at the top of the healthcare pyramid, payers now face an existential threat as patients command more leverage and the attention of new healthcare entrants/competitors. They too need to innovate through personalized patient experiences, tech-enabled services, and process efficiencies to differentiate in a much more competitive market.
- Value-based care initiatives are driving payer-provider partnerships in which each focus on respective strengths in order to create a differentiated consumer experience. This in turn requires tighter collaboration between the two stakeholders.
The growth of digital health and the impact of COVID-19
- The increasing demands of the three stakeholders of healthcare have lead to the explosive growth of the digital health industry and the subsequent interest of venture funding and big tech.
- The COVID-19 crisis has created pressure to expedite development and deployment of digital health. Resultant changes to healthcare will have a lasting impact on stakeholder expectations.
Healthcare data as a bottleneck: what it is, how it developed, how it’s impacted healthcare
- All healthcare data suffers from two key problems — interoperability and usefulness.
- The administration of healthcare is highly complex with multiple touchpoints and data transactions between many stakeholders, including patient, provider, and payer. As fall off can occur at each step, the problems of inaccurate data (patient, provider, claims) and inefficient data sharing processes snowball into severe administrative waste, a multi-billion dollar problem
- Current solutions are poor fits to solve for these problems. Manual processes are unscalable, and incumbent software solutions do little to provide operational lift.
- Health systems widely adopted expensive EHRs that are cumbersome products designed around logging information rather than to create meaningful use of healthcare data.
- EHRs are historically uncooperative with each other, with other software, and even internally. This creates multiple, disparate data silos throughout the healthcare landscape. Efforts to encourage interoperability have been so far unimpactful.
- Claims systems and provider directories suffer from similar problems, making provider-payer transactions difficult and slowing the progress of value-based care.
- Physicians are paying for this with burnout, and patients have worse outcomes.
- Health data is continually increasing in quantity and variety, but the healthcare industry is unable to take advantage because of these issues.
The impact of this bottleneck in the development of digital health companies
- To be successful, digital health companies have to solve for an improved patient experience through two paths: partner with incumbent players and integrate existing data sources, or replace incumbents and build their own infrastructure.
- Integrating existing sources is expensive, time-consuming, and difficult. Variables in the process mean that this has to be repeated for each new sales cycle, becoming a critical scaling issue decreasing business health and increasing employee backlogs.
- Building new data infrastructure is impossible in and of itself, but managing that data’s usability significantly adds complexity.
- Both of these paths cause each healthtech start-up to reinvent the wheel, creating a bottleneck.
- As healthcare data increases in quantity and variety, the opportunity to create a healthcare ecosystem that works for every stakeholder is larger than ever. Healthcare’s data bottleneck actively impedes this from happening, driving fragmentation instead of synergy.
- The HHS released new rulings that require stakeholders to promote interoperability, through API implementation and unimpeded data exchange.
- This, combined with recent trends, points to the current moment being an inflection point in healthcare.
- Solutions to the new rules’ requirements, such as API interoperability infrastructure, will lay the groundwork for the new era of tech-empowered healthcare. Companies providing these solutions can follow the precedent of startups in other industries (Stripe, Plaid, etc.) in becoming unicorns.
