Innovation and Disruption

Healthcare disruptor Glen Tullman says providers need more of a consumer-centric approach

At a recent conference, the founder of Livongo and Transcarent explained why the healthcare industry’s current operating and business models won’t cut it for much longer.

April 25, 2023 3:21 pm

One of the country’s most prominent healthcare entrepreneurs has a warning for legacy healthcare stakeholders.

“Many of you in the audience are leading major health systems, and you’re the hub for healthcare today,” Glen Tullman said during a presentation at the HIMSS Global Health Conference and Exhibition, which took place the week of April 17 in Chicago. “But it doesn’t have to be that way. It may not stay that way, and you’re at real risk because there’s a number of people who would like to disintermediate you, and some already have.”

To counter that trend, he said, health systems “need to own the health consumer experience. And part of that means you need to create the experience. The good news is, in most of your markets, you’re well-known, you’re local and you’re trusted. But the challenge still remains that you have to communicate that message to help consumers who are making decisions every day.”

Tullman, who was the CEO of Allscripts before launching Livongo and more recently Transcarent, has a history of spearheading efforts to improve the healthcare experience. He hopes stakeholders can “think bigger, think differently and maybe take some risk. Because without that, we’re not going to be able to move forward.”

The need for innovation is increasingly vital as healthcare costs take a toll on U.S. society, “crushing our ability to make really important investments” in areas such as education, the environment, infrastructure and defense, Tullman said.

The situation is likely to get more dire, he added, citing projections of a 25% inflationary increase in healthcare costs over the next three years even as providers in 2022-23 “are scheduled to have some of the worst financial results that they’ve had in years.”

Overhauling the payment infrastructure

For providers to bolster their standing in the industry, Tullman said, one vital step is to update the payment model. He contrasted healthcare with retail experiences such as going to a coffee shop.

“If you say, ‘I might pay you in six months,’ that’s not a good strategy, and chances are you won’t get served,” he said. “And yet healthcare remains the only place where that’s happening today.”

Tullman said his company Transcarent, which launched in early 2021 as a platform to improve healthcare transparency and access for consumers, has come up with “this revolutionary new system.” Yet in fact, as he quickly clarified, the approach is revolutionary only in the context of healthcare.

“It’s used in every other industry: When our partners deliver care, we pay them on the same day,” he said.

Provider organizations should be considering whom they can partner with and how they can restructure relationships to get closer to achieving such a payment system.

“All of you deserve to be paid for services just the same way that I would pay my plumber,” Tullman said.

In addition, health systems should be pushing for the adoption of payment models “where we get rewarded for keeping populations healthier.” A key group of partners in that endeavor is self-insured employers “because they are someone who owns the risk. Without that, there’s no incentive, and you become a commoditized deliverer of services, and there’s only one way to go” — toward maintaining the status quo of a system hampered by inefficiency and waste, he said.

Taking stock of key trends

For anyone who doubts the consequences of failing to act, Tullman pointed to pharmacy benefit managers (PBMs) that have lost market share in recent years to entities such as GoodRx and PillPack.

 The legacy PBMs “said, ‘No, we control what’s going to happen.’ They missed the fact that some entrepreneurs are going to come along and say, ‘If we just give consumers the right information, they’ll actually take charge of this.’”

Among the trends Tullman says stakeholders already should be preparing for:

Consumers in charge. “Our task as an industry is to build a new and different relationship” with health consumers, Tullman said.

Accessing many types of healthcare should be similar to using a ride-sharing app in terms of quickly and seamlessly being guided through a series of basic choices that have accompanying price information.

“There’s no reason you can’t create that experience for all of your current patients, members, health consumers,” he said.

AI as a driver. “Let me be clear: AI is coming and coming quickly to healthcare,” Tullman said, adding that the industry should embrace the technology rather than be wary of it.

“It can remove a lot of the paperwork and a lot of the clinical challenges that people have with documenting what goes on in a healthcare transaction,” he said.

AI also can guide clinical decision-making in a way that alleviates physician burnout, while advanced chatbot technology can serve as a quick and effective initial interaction for consumers seeking care for common maladies such as sinus infections or urinary tract infections.

In fact, Tullman emphasized, a significant amount of care can and should happen within 60 seconds of a consumer’s initial touchpoint.

Collaboration over competition

Tullman has been described as a disruptor or maverick. But he isn’t sure such terms describe what’s needed in healthcare.

“I think today we’re at a very different time,” he said. “And this isn’t about disrupting, it’s not about challenging the status quo as much as it is about collaboration. We don’t really have time today to rip out the existing system, compete with [or] challenge the existing providers, whether they be health systems or payers or PBMs.

“It’s more about: How do we work through the existing structure to accelerate getting where we want to get to?”


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