Hope or Hype?

Information technology has changed the way we shop, watch TV, listen to music, bank, and travel. Can it have the same impact on healthcare? Despite several highly publicized failed attempts by information technology companies to transform the health sector, several industry leaders recently announced new initiatives targeting the health sector. Are these announcements cause for hope or just more unfulfilled hype?

Like many Canadians, I shopped online for Christmas presents this year and continue to expand the number of items that I purchase on-line. Not only are the prices compelling, but the convenience of having my purchases delivered right to my doorstep makes online shopping nearly irresistible.

Since of one of my “go-to” sources when considering an on-line purchase is Amazon, I was intrigued by recent headlines such as “Amazon makes health care costs its next world to conquer.” The headlines referred to a January 30, 2018 media release from Amazon, Berkshire Hathaway and JPMorgan Chase & Co. announcing that they were “partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs.”

While the announcement was short on details, the three companies stated that they will form an independent company whose focus will be on “technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.”

Having fundamentally altered the landscape of retail books sales, Amazon has earned a reputation of disrupting the industries that it targets. When Amazon announced last year that it was purchasing Whole Foods, the share price of other retail food companies such as Costco and Kroger fell. Similarly, Amazon’s recent announcement caused a sell off of shares of health-care companies.

Unlike other industries, the health sector has been, to date, highly resistant to digital disruption. A New York Time commentary on the Amazon, Berkshire Hathaway and JP Morgan Chase initiative notes that “classic disruption rarely applies in health care” because this model is based on new entrants offering a “product that is lower in value than that of market incumbents but much lower in cost.” While this strategy works well with commodities such as airline tickets, the article contends that it doesn’t work in the health sector because “consumers don’t usually want to settle for a lower-quality product, even it is substantially cheaper.”

Derek Newell, president of the health tech company Castlight Health, contends that consumers alone won’t transform the healthcare system. Change, he suggests, “will come from employers and health plans that alter how the system pays for care”, an approach that appears to be in line with what Amazon, Berkshire Hathaway and JP Morgan Chase are proposing to do. Mr. Newell believes that such a change “will empower consumers to make better choices and to utilize technology and monitoring tools that help them stay well.”

Although the Amazon, Berkshire Hathaway and JP Morgan Chase initiative only targets their own employees, analysts such as Art Hogan, Chief Market Strategist at investment bank R. Riley FBR notes that if it works well they may offer it as a service to other companies or, at the very least, “could act as model for other companies to do the same thing.”

Around the same time that Amazon, Berkshire Hathaway and JP Morgan Chase made their announcement, Apple made its own, though somewhat lower key, announcement regarding a new feature in the soon to be released iOS 11.3. A new “Health Records” section in the existing Health app will let users gather and view medical records from participating healthcare organizations.

Working with arguably the top two hospital information system vendors in North America – Epic and Cerner – Apple is leveraging the Fast Healthcare Interoperability Resources (FHIR) standard to facilitate the transfer of medical record information from healthcare providers to a patient’s iPhone or iPad.

Dr. Joseph Kvedar, founder and Vice President of the Center for Connected Health at Partners HealthCare, cites three concerns about Apple’s most recent attempt to give patients access to their medical records:

• “Access to medical records is just not that compelling for the average consumer.”
• “Access to personal health records will not magically improve clinical outcomes, or even motivate individuals to better manage their health and wellness.”
• “What about those committed to devices that run on Android operating system?”

Despite these concerns, Dr. Kvedar notes that if Apple can “bring something to the table that inspires consumers to care (and Apple knows how to do this), that could be transformational.”

What are your thoughts on these and other more recent attempts by information technology leaders to target the health sector? Do they offer hope or are they just more hype from companies that fail to understand the complexities of the health system?

You can check out my blog at eHealthmusings.ca and my wife Tracy’s blog offering a patient’s perspective at tthemadnessmaven.ca

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