We are seeing a movement in the healthcare industry that is not centered around payers or providers. It is spurred by employers, representing the demand side in health care, which are frustrated with increased health benefit costs and no correlating ROI. In response, employers are empowered to act and form nontraditional partnerships to decrease spend and improve the health of their employees.
If health systems do not heed the signs of this new market direction and continue to operate in a business-as-usual mode, they risk being supplanted and losing this population base—and their associated commercial reimbursement model—to their new competition.
The movement is clear. In 2018, Apple launched its first two AC Wellness primary care clinics for employees in Santa Clara County, California. The company’s iOS 12 for the iPhone allows the transfer of data between its health app and third-party apps, and courtesy of the Fast Healthcare Interoperability Resources (FHIR) data standards, patients now can access their electronic health records (EHR). More recently, Apple announced its Apple Watch 4 received Food and Drug Administration (FDA) permission to conduct electrocardiograms and send alerts if it detects atrial fibrillation. The ability to collect, transfer, manipulate, and interpret health information is a considerable step in the direction of influencing utilization patterns, including point-of-care and treatment options.
The computer giant is among the latest of many companies to offer health services to employees. Walmart Inc., which has an internally run employee-health program, entered a five-year partnership with Microsoft Corp. to leverage its cloud-based services to optimize Walmart’s supply chain and shipping services. In all likelihood, the partnership eventually will turn its eyes to connect its pharmacy, healthcare, online and delivery services. Microsoft has filed more than 70 healthcare-related patents primarily focused on artificial intelligence (AI) and patient monitoring.
It’s clear that the Amazon, Berkshire Hathaway Inc., and JPMorgan Chase & Co. partnership is an incubator that grows ominous when considered in the context of Amazon’s recent purchases. A handful of these purchases include a robotics company for machines and storage functionality; an education platform; ALEXA; an Israel-based microelectronics company feeding semiconductors to cloud growth; Whole Foods, which provides additional data and a storefront for potential pharmaceutical interactions; an infographics company; a lab focused on human- aware AI that understands 3D body; and a national prescription drug business.
Atul Gawande, MD, MPH, the surgeon and writer tapped to head the Amazon-Berkshire Hathaway-JPMorgan Chase partnership, intends to remove the middleman from health care. Does he mean the health system or the carrier, or both?
Insurance carriers see the signs and already are putting partnerships and strategies in place to compete. However, health systems are slow to respond. Championed by the demand side, health care is moving into the work site, community, and home. When given the tools, patients are encouraged to take more interest and responsibility for their health. Care becomes less esoteric and accessible, and the movement will bring care to the masses in a capitalistic environment.
Health systems that understand what’s at stake and embrace the new paradigm—where the demand side is causing the supply side to reinvent itself —can curb the rising level of disruption and increase revenue and market share, and create longstanding relationships rather than lose them, by building upon their strengths and intentionally helping employers cut costs and improve worker health.
Retail and consumer-facing technology companies are on the cusp of changing the healthcare- delivery system. While their impact has yet to be determined, their intent is clear: force health care out of the traditional setting. Consider Apple’s valuation at a trillion dollars; that’s a lot of economic muscle behind them.
Health systems now have the opportunity to shore up employer relationships and show value by showcasing their expertise and using the right technology. They also should stop showing the cracks in the current system and stop thinking patients will continue to come to them. Health systems have the expertise, services, and potential to become the disruptors instead of simply allowing disruption to occur.
Robert P. Chamberlain is chairman and CEO of Applied Health Analytics, Nashville, Tenn.