Will Platforms Cure Healthcare Ills?
Digital marketplaces are slowly gaining acceptance in the traditional healthcare sector
By Paula Klein
Digital platform models may not be the single elixir for healthcare industry ills, but they are a step in the right direction, according to speakers at MIT’s healthcare platform conference held July 14 in Cambridge, Mass.
Notorious problems facing U.S. healthcare today range from high costs and insufficient care, to poor access and bureaucratic lethargy. But overcoming these barriers in an entrenched and highly regulated market sector is complex. Experts are bracing for upheaval as private companies — from startup tech firms to giant platforms like Uber; niche service companies to medical incumbents — vie for consumers and provider attention. They also predict a wave of mega-mergers, acquisitions, super-apps, and government regulatory intervention to protect patients and their care from the onslaught.
Welcome to the healthcare platform market.
Speakers at the inaugural event — The Platform Revolution Comes to Healthcare, an offshoot of the 10-year-old MIT Platform Strategy Summit — acknowledge that their industry is lagging when it comes to leveraging network effects to improve processes and medical services. But there is steady progress and the potential is great. “Healthcare is more than a decade behind other industries in [platform] adoption,” noted Vince Kuraitis, Principal and Founder, Better Health Technologies, but executives are starting to see it as a “must-have” going forward.
What’s needed, he said, is to “make platforms central to the business and to operations.” Despite mandated electronic health records (EHR) and a rise in digital investments, interoperability is a vexing problem. “We are not there yet.” Kuraitis said.
Randall Williams, an MD and Managing Director, at Digital Care Advisors, also set the scene saying that healthcare “is beginning to understand the economic power and value of exchanging data. Surescripts is a poster child for this,” he said. Surescripts offers patients access to prescription drugs, clinicians, and medical information via a national marketplace of pharmacies and providers.
In theory, the use of platforms is straightforward: Share and match resources with consumers much as rides and work spaces are shared. In reality, however, healthcare is unique and suffers from a “cold start” dilemma: traditional patients are reticent of change. They have to be convinced that the convenience, costs, and services offered on platforms really are superior.
Jonathan J. Bush Jr., Founder and CEO of Zus Health, told conference leader and MIT IDE fellow, Geoff Parker, that regulation and “safety nets” are bogging down progress. “The safety net is jacked up so far, there’s no room for individuation,” he said. Protecting patients while still innovating is a delicate balance.
Breaking Through Cultural Barriers
“Cultural habits and barriers need to be broken,” agrees Ellen Herlacher, a Principal at LRVHealth, but “applying tech to an analog industry” where sales reps are used to freely walking in to a doctor’s office, is a big shift.
Adam Grossman, a Partner, Deerfield Management Company, noted that reliance on local referrals is also a longstanding practice holding back change. “Patients go to doctors they know, and doctors refer their peers. It’s all very personal and hard to break.” Healthcare companies are loath to share their data, as well, he said.
But the tide is turning, and investors like Herlacher and Grossman see lots of opportunities ahead. Throughout the day, speakers described financial investments and incremental changes taking place. Nearly $30 billion in capital investment in digital health was made in 2021 — a 25% year-over-year growth rate.
And while critics point to the snail’s pace of change coming from the U.S. government, Micky Tripathi, National Coordinator for Health Information Technology at the U.S. Department of Health and Human Services, has already taken action in his first year on the job. By October 2022, all certified healthcare providers are required to make available all EHR APIs — including unstructured data — under the fast healthcare interaction regulations [FHIR].
Tripathi said that moving to EHR was deliberately slow because the industry wasn’t ready and platforms and APIs weren’t mature enough to support 50 million transactions per day. “We’re still a long way from a perfect level of integration,” he said, “but standardization is improving and the ecosystem is opening up. We are starting to move beyond interoperability to interactivity, raising the floor incrementally,” he said.
And that’s healthy progress.