Recently, I stumbled upon some incredibly thought-provoking essays by the team at Social Capital. Alex Danco’s posts have really transformed how I think about innovation and how value is captured by new companies. One of the series, Emergent Layers, is a set of posts that tries to provide a framework to understand how and why certain companies achieve explosive growth. At the end of the series, Alex creates a Mad Lib to apply the theories set forth. Here is a potential one for healthcare:
In current industry healthcare, customers are overserved by medical services: they spend too much of their time, money, or other on healthcare (via insurance, hospital visits, taxes, etc.), and it feels inefficient, saturated or wasteful. The real reason they’re served by medical services in the first place is because they have a higher-level need, to stay healthy. Unfortunately, it’s difficult to serve these customers at this level directly because of some constraint, limited physician time, which is often difficult to recognize.
However, that constraint melts away when personalized medical information* becomes abstracted away into something scalable and abundant because of personalized and contextualized electronic medical records.** When this happens, doctors/healthcare institutions can now serve customers directly at their higher-level need, to stay healthy, by leveraging the abundant element personalized medical information in brand new ways that never existed before. When this happens, a new scarce resource, medical interventions and treatments, emerges. Over time, the company that makes all the money is the one who gains a monopoly hold on timely and appropriate medical interventions and become the only game in town.
Healthcare is an incredibly hard topic to fit into the Mad Lib because of its inherent complexity. Patients simply want good healthcare to stay healthy in order to accomplish other aspects of their lives. Looking through the lens of aggregation theory, the current healthcare industry tightly bundles medical information (diagnostics) and services (interventions) together. The bundle is a logical and necessary approach for healthcare because doctors are able to fulfill both services. This model has also allowed healthcare institutions to sustain the necessary revenues to support healthcare operations. The bundle, however, leans heavily towards medical services because that is where the financial incentives are. Just look at the state of electronic medical records (in fact, think of your own medical records) and juxtapose that with hospital systems spending a lot of money to construct high-throughput medical procedure buildings. It’s a stark contrast and it significantly affects patient care.
As a patient today, there is an overwhelming amount of medical information. Patients frequently Google their symptoms and diseases before doctors’ appointments to learn more about their condition. In fact, some patients are more familiar with the disease than their doctors because doctors are responsible for an unsurmountable amount of medical information that grows larger every day. Since medical information is so abundant, it is easy for patients get information, however this information is not applied to their own health situation. It is general medical information. Further, patients frequently experience confusion about their own health information and decisions. For instance, patients who have been diagnosed with hyperlipidemia (high cholesterol) may go online and read about how statins (i.e. Lipitor) are the recommended medication for this condition. Furthermore, they learn that their friends and family are taking statins for hyperlipidemia. However, the patients are confused why their doctor has not prescribed a statin for their hyperlipidemia. The patients do not understand or do not have access to the clinical indications for medical intervention. This scenario is a paradigm of the health information asymmetry between doctors and patients. The scenario also reveals a constraining factor in healthcare which is the doctor’s time to apply medical information to patients’ health situations and address the patients’ questions and concerns.
In summary, this leads to one of my theses in healthcare: medical information is abundant, personalized medical information is scarce. Current healthcare institutions exploit this scarcity by bundling it together with medical interventions since it is more financially rewarding. Looking forward, the bundle might be unbundled because increasing medical information and complexity in diagnostics will supersede the capabilities of doctors. Today, though, there are no great solutions to making this scarce resource abundant. Complexity and disorganization in medical record keeping is a major barrier that is preventing personalized medical information from becoming abundant. In addition, genomic and digital medical technologies will just exacerbate this issue. Patients should be more empowered than ever to learn about their medical issues and then make healthcare decisions. The distribution of information costs almost zero with modern technology. (As seen with news, music, and television). Yet, in healthcare, this is not the case since both the traditional practice of medicine and lingering medical paternalism hinder any advancements on improving personalized medical information. More on that later!
*Personalized medical information is a term derived from personalized medicine (also termed precision medicine). Essentially, it is medical information that is entirely based on your own diagnostics, medical history, and other demographic information. The information will begin to include your genomic information and potentially more “-omes”.
**These are records that would encompass what personalized medicine is based on. The records would capture ALL aspects of your health. Medical information would be processed and delivered in contextualized and readable format to patients and caregivers, alike. Interventions based on precision medicine research for best health outcomes would be recommended through the medical record. Yes, it’s a utopian version of medical records and health information in general.
