GAFAMS, STARTUPS & INNOVATION IN HEALTHCARE by PHARMAGEEK

National Health IT week (NHIT Week). Healthcare IT has gone through dramatic changes in the past decade. Driven by a need to rein in runaway healthcare cost increases, the federal govt passed the Affordable Care Act (ACA) and its companion HITECH Act that used the Meaningful Use program of financial incentives to promote the implementation of electronic health record (EHR) systems. During this time, we have gone from what was largely a paper-based healthcare ecosystem to almost total penetration of digitized medical records. Health systems are now at the cusp of the next wave of IT-led transformation defined by these questions:

• What do we do with all the EHR data?
• What do we do about the explosion of new data?
• How is the market changing on us?

The coming years will see the transformation of healthcare delivery, driven by three important trends as they pertain to the role of information technology:

Data, analytics and artificial intelligence (AI)

The first AI-powered diagnosis of images was approved by the FDA this week. The arrival of data-driven, algorithmic decision-making using advanced computing infrastructure augments and enhances the capability of human physicians in the delivery of care. As the volume and variety of data have exploded in the past few years, so have the opportunities to derive additional meaning to predict and manage disease conditions. The digital transformation of healthcare is predicated on harnessing the power of data and analytics, and billions of dollars in venture capital money are pursuing that goal. However, AI has a “black box” problem which will impact adoption rates, as will ongoing concerns about data privacy, security, and ransomware.

 

What to look for: Increased adoption and transparency with AI models, increased use of personal genomic data, and the use of advanced analytics to solve public health issues such as the opioid crisis.

Changing healthcare markets

The healthcare consumer has long suffered the rising costs of healthcare. However, we may be approaching an inversion point driven by the burning questions of affordability and accountability in healthcare. Employers are taking matters into their hands and underwriting their employee healthcare costs, as we are beginning to see from the examples of GM and Walmart. By plying employees with wellness screenings and preventive care models, and by contracting directly with healthcare providers, employers hope to bring healthcare expenses under control while keeping their employees healthy.  Other factors at play; high deductible health plans have sharply reduced healthcare consumption among the older population while the younger generation is eschewing traditional paternalistic healthcare provider relationships for convenience and virtual care models. Digital health upstarts are coming up with innovative new models, built largely on the premise of virtual, AI-enabled, superior experiences enabled on smartphones and powered by remote data collection. Healthcare providers, for their part, find themselves sandwiched between giant pharma companies and health insurance companies, struggling to consolidate to gain and maintain negotiating power.

 

What to look for: M&A, industry consolidation, and the emergence of non-traditional players, all looking to use technology to “own” the healthcare consumer of the future. Case in point: the new Amazon-Berkshire Hathaway-JP Morgan healthcare venture led by Dr. Atul Gawande.

The digital health platform of the future

The past decade has been an incredible windfall for a handful of dominant EHR vendors who hit the lottery when the ACA and HITECH Acts came into being. However, the rapid, large-scale implementation of EHR systems with poor user experience design created an epidemic of physician burnout even as hospitals digitized clinical workflows and patient medical records. The physician community has pushed back, even as the Office of the National Coordinator for Health IT (ONC) has waged war on the lack of data interoperability between proprietary vendor systems. While EHR maintenance and optimization continue to consume a significant portion of enterprise IT budgets, a new breed of challengers, including large tech firms with deep pockets and vast experience in building consumer-focused platforms, is looking to dominate the digital health landscape of the future. EHR vendors are rising to the challenge, enhancing their platforms and embracing the growing adoption of emerging industry standards such as Fast Health Interoperability Resources (FHIR).

 

What to look for: A breakout digital health platform by a big tech firm such as Apple or Amazon that will integrate EHR data and create superior experiences with last mile solutions while lowering healthcare costs through predictive and preventive care models.

A recent study on blockchain adoption in health care by Blackbook Market Research indicated that a large percentage of payers surveyed, and a small but growing percentage of providers, were either considering deploying or were in the process of implementing, some blockchain solution sets. Blockchain appears to have moved from the awareness and education phase to actual deployment of solutions.

 

“Blockchain can solve two of the biggest problems in health care today," says Lidia Fonseca, CIO of Quest Diagnostics, a leader in lab testing services. She is referring to the gnarly issues of interoperability and data quality. While data quality has long been an issue in health care, the interoperability challenge is a legacy of the massive digitization of patient medical records over the past eight years which have left us with proprietary electronic health record (EHR) systems that don't "talk" to one another. The result is inefficiency and waste, as stand-alone information systems slow down processes and create redundant work. 

Taking a look at the healthcare blockchain pioneers

Some technology solution providers, including IBM and Change health care, along with a number of other companies listed in the Blackbook Research study, have made initial moves in establishing blockchain capabilities and launching solutions. Federal agencies such as FDA and CDC have expressed interest in applying blockchain to find solutions for public health issues.

 

Amazon, with its long-awaited entry into health care, recently announced the launch of blockchain templates for health care, aimed at making it easier for developers to create blockchain-based projects and deploy blockchain networks via open source frameworks. In a sense, Amazon has started the democratization of the blockchain-enabled application development, something we saw before with machine learning algorithms in the wake of the big data and analytics hype a few years ago.

 

A group of large healthcare enterprises, including large payers such as Humana and United Health Group (UHG), along with Quest Diagnostics, UHG subsidiary Optum, and Multiplan Health recently came together to launch a blockchain pilot program to solve for one of the most significant data challenges in health care today – provider data management. Provider data, a fundamental enabler for all manner of healthcare transactions, is a key building block for processing claims and maintaining up-to-date provider directories. Today, most provider data is stored in siloed and independent databases. Provider data quality is estimated to be a $2.1 billion problem today, according to a report by CAHQ, a non-profit alliance focused on creating shared initiatives to streamline the business of health care. By streamlining the inefficiencies in provider data maintenance, participants can have a "single source of truth." It is estimated that up to 75 percent of provider data management costs can be eliminated using blockchain solutions.

What it will take for blockchain initiatives to succeed

While blockchain is coming of age in health care, we’re still in the early stages of the hype cycle for blockchain. The initial mania around bitcoin, the very first use case for blockchain, is now giving way to more carefully considered use cases for business with tangible benefits. Healthcare, a sector that generally lags in the adoption of technologies, is currently in a wait-and-watch mode; notwithstanding the high levels of interest among payer organizations, the Blackbook survey also points to low levels of interest among health systems, citing the undetermined cost of blockchain solutions as the major issue that stops health system executives from committing to a timeframe for deploying the technology. Our best hope is that the early pilots will bring tangible proof points and provide more confidence to the industry in the technology.

 

Health care is a team sport and so is blockchain. The more participants there are in a blockchain network, the better it is for the network and the industry. Pilot programs such as the provider data management initiative by Quest Diagnostics and others will need a much higher level of participation across the industry to reap the benefits of the network effects.

 

As with most transformative technologies, the big challenge is usually not the technology; it’s managing culture and workflow changes, driving collaboration, and an execution focus. In blockchain, there is an added dimension of a commitment and willingness to work across company boundaries, which is an entirely new paradigm for most health care enterprises.

In a unique development, a group of health care industry executives has come together to launch a peer-reviewed blockchain journal to share both the positive and the negative experiences with blockchain in health care.

 

The potential for blockchain to improve health care operating efficiencies is significant. High-value use cases include revenue cycle management, supply chain, clinical trials, and provider data management. The initial pilots will need to demonstrate the real benefits of the technology and lead to higher adoption of blockchain in the coming year.