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Healthcare’s tipping point? Two little-noticed events that will change how consumers engage in healthcare

Change how consumers engage in healthcare

The people at Google were apparently a little surprised.

On March 13th, as president Trump announced a national emergency over the COVID-19 pandemic, he made the now-famous point of assuring the country that one of its leading companies – Google – had 1,700 engineers at work creating a website for Americans to find out where they could be tested for the virus.

The reality was different. Google’s sister company, Verily, was indeed working on a COVID-19 pilot site for healthcare workers in the Bay area. But eight days later, Google released a rather basic site detailing information about the virus and links to CDC and World Health Organization data. The president, in his way, declared victory and demanded an apology from the media.

The important thing was not the “did-Google-or-didn’t Google” do what the president said, but rather that people wanted to believe that Google had created an online testing tool for COVID-19 – and many were ready to give “virtual healthcare” a try.

But that was the second big healthcare technology story of that week. The bigger one happened on Monday, March 9th, when the U.S. Department of Health and Human Services announced its long-awaited rules on interoperability. In plain English, HHS set in place the rules that allow patients to hold, access and share their medical health information in the same way they do their financial, travel or shopping records, something mandated by the 21st Century Cures Act, signed into law in the final days of the Obama administration.

And with those two events, we live in a different world. Similar to how, 26 years earlier, Jeff Bezos changed the way people shopped, and 10 years earlier, Travis Kalanick and Garrett Camp changed the way people moved around town with Uber, healthcare reached a proverbial tipping point and was moving even more toward the consumer.

Technology has been making an impact on health for some time. But unlike selling books or getting a taxi, the healthcare customer the industry has cared most about – the purchasing customer, really – has traditionally been hospitals and the doctors who work there, as well as the large payor organizations that agree to pricing terms with these hospitals and individual insurance plans.

The end-user, the patient, was obviously critically important as well (if your patient doesn’t get better, it’s all academic) – but patients found themselves at the opposite side of the industry’s commercial logic. Even so, the power of technology to lower expenses made it seem as though it couldn’t fail in healthcare.

Not so. Witness IBM Watson Health. Begun as an answer to an IBM Grand Challenge in 2005, Watson Health had initially showed a great deal of promise. In 2013 IBM announced that MD Anderson Cancer Center, one of the country’s most respected and progressive cancer organizations, was “using the IBM Watson cognitive computing system for its mission to eradicate cancer.”

Part of the problem was the enthusiasm for the promise of Watson Health. The issue was that the application of the Watson technology was almost exclusively directed at only one side – and that side was not the patient. MD Anderson eventually shut down its IBM Watson pilot after three years and an estimated cost of $62 million.

And there is a long list of other big busts. The French pharmaceutical company Sanofi began a joint venture with Verily in 2016 focused on technology solutions for another global pandemic, diabetes – connected health devices, professional coaches and software to manage that disease – with a reported $500 million put into the venture. In December 2019, three years after the Sanofi/Verily venture began and on his 100th day as Sanofi’s new leader, CEO Paul Hudson announced that the company would be scaling back its ambitions with Verily, saying Sanofi had “over-invested” in the JV.

Here is what so much of the big healthcare technology investment has missed: The history of technology and market transformation happens when a service or product becomes easier for the end-user to engage with and the payment model changes, usually becoming less expensive. And up until this point in our lives, has there been any service more difficult to engage with or with a more difficult payment model than healthcare?

The fact that HHS has confirmed that consumers may control their electronic healthcare information will open up opportunities we probably cannot quite grasp at the moment (similar to anyone predicting the impact of an Amazon or Google in 1999). But we have seen signs of where this is all going.

1-800-CONTACTS started virtual eye exams for existing patients to update their eye exam in 2016 – and the American Optometric Association tried to shut them down almost immediately (unsuccessfully). Telehealth outfit Hims is now turning from selling ED and hair loss products online to marketing primary care services like care for allergies, colds and rashes. Capsule, PillPack and Alto are literally blowing up the pharmacy experience. And GoodRx and – wait for it! – Amazon Care are taking down the traditional healthcare structure from both a cost and a care delivery standpoint.

Healthcare’s internet moment is happening. The consumer is now empowered (through the new HHS rules) and also appears ready to try new forms of service delivery on a large scale.

Staying the course with the traditional approach then appears bound to eventually fail.

But healthcare companies – pharma in particular – have a problem moving away from the traditional approach. In terms of commercial operations, many literally hate to innovate – because there is risk. Well, what’s the bigger risk? Are you comfortable being Blockbuster when you see Netflix on the horizon? Hilton when Airbnb is entering? Do you want to be Kodak?

Healthcare’s internet moment gives the chance to reinvent our business, for us to deliver our services in a new way. The pandemic isn’t responsible for the change we’re about to experience – but it will no doubt accelerate it. And given that healthcare comprises about 10% of most countries’ GDP, the scale of this shift may be unlike anything we have experienced. Build for a new way that more directly involves the consumer in their health – or be yet another business left behind to a world that has shifted.

Ned Russell is managing partner, healthcare, for the Anomaly Alliance.

The post Healthcare’s tipping point? Two little-noticed events that will change how consumers engage in healthcare appeared first on MM&M – Medical Marketing and Media.

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