At our last HealthStartup event on at-home-care we organized a panel debate on the question of whether digital health startups could drive disruptive innovation in healthcare. The answer, in short, was yes, but it’ll take while before the structure of the system and the various roles in it begin changing in any fundamental way (as seems to be the case in the area of at-home-care/remote care).
The main barriers to structural change are the difficulty of changing current reimbursement models and healthcare legislation – interest groups (doctors, hospitals, pharmacists, etc) are all protecting their turf, understandably since being at the sore end of a disruptive process isn’t fun. This creates a unique problem for startups in the healthcare field, since ‘fast iteration’ (that admired characteristic of web startups in other fields) is almost impossible in a situation where new products need to undergo long testing phases and where it isn’t clear who will pay for the product.
I’d like to argue, however, that the underlying drivers of change are firmly in place and have already led to significant change in the way medical and healthcare knowledge is created, disseminated and applied. This matters, because healthcare is a knowledge-intensive industry.
Let’s take a closer look at the information ‘value chain’ in the healthcare sector. I’m probably simplifying things here but essentially we can talk about three reasonably distinct information ‘markets’ and steps in the value chain.
Firstly, medical knowledge is created. Traditionally this is done by universities (and their affiliated hospitals) and pharmaceutical companies via lab-based research and clinical trials. These entities compete for R&D budgets and grants that come from government, pharmaceutical companies and various types of charities. ‘Systemic’ knowledge (knowledge about who’s who in the healthcare system, how things work, how much things cost, what works, what doesn’t) too is largely an in-house affair, and much of it isn’t formalized, existing only in people’s heads.
Secondly, medical knowledge is disseminated. In the past this ‘market’ was monopolized by universities (who train clinicians), pharmaceutical companies (who don’t disseminate knowledge as such – it’s IP, to be protected and commercialized), and academic publishers, who publish research in prohibitively expensive journals that only university libraries can afford. Systemic knowledge is learned informally by lieu of being in the system (e.g. doctors learn who the reputable specialists are in their field, they figure out who is good, who isn’t, which clinic is better than others, etc, mainly on the basis of informal professional networks). As a patient you’re in the dark, or must rely on the gossip mill.
Thirdly, medical knowledge is applied. Doctors (and hospitals at an institutional level) apply their medical knowledge in clinical practice; pharmaceutical companies develop and commercialize drugs.
Now let’s take look at what technological advances such as the internet and sensing devices are doing to this value chain. Via services such as Patientslikeme and Curetogether patients are sharing ‘their’ medical data and experiences with medical treatments. This data in turn is analyzed, producing new medical insights that are publically available.
This trend, where patients-consumers increasingly recognize and leverage the fact that they ‘own’ valuable data and start using intelligent aggregation and analytical services to put that data to work, will likely continue as (personal & medical) health records become connected and genome data enters the fray (I’ll be watching Genomera).
Universities and pharmaceutical companies aren’t about to stop doing medical research, but they’re not the only ones creating knowledge anymore, and the debate about who owns what data has only just begun.
Also at a systemic level, services like HealthTap and CastLight are creating knowledge about professional and institutional reputations, costs and outcomes. If HealthTap works near you, you’ll no longer need to rely on the gossip mill to find a suitable doctor. Michael Porter’s vision of a more effective market for healthcare services that is based on transparent cost and outcomes data, is in sight.
In the knowledge dissemination ‘market’, patients have been using the internet for years now to make sense of their symptoms and evaluate treatments (to the consternation of many clinicians accustomed to a more paternal role). PatientslikeMe and CureTogether take things a step further by creating entirely new knowledge and making that available to their communities.
The Open Data wave will reach healthcare too as public authorities begin making public health data available to third party developers.
Startups like IvorMedical are giving you the knowledge and tools to do CPR with confidence. For the really motivated patients-consumers it will be only a matter of time before fully fledged medical courses become available online at low to no cost (as two Stanford professors are doing in the field of Artificial Intelligence).
Academic publishers are under tremendous pressure as researchers begin boycotting their titles and online/free alternatives start emerging.
Finally, in the area of knowledge application, consumers-patients and clinicians have access to an increasing range of information services and applications that will make them smarter and more capable as stakeholders in the healthcare process. Consumers are taking control of their health management via body sensors, social networks, digital coaching, health games and personal health records (or rather, health management systems). Clinicians, from primary care nurses to specialist physicians, also are becoming better and safer clinicians as they make use of clinical decision support tools and tele-medicine technology.
And we haven’t even begun to talk about genome sequencing, personalized medicine and Big Data (the latter is the topic for the next HealthStartup event).
If you look at it this way, I’d say we’ve come rather a long way already. And the future looks brighter still. Startups are clearly driving a disruptive form of innovation in the way medical/healthcare knowledge is created, disseminated and applied. That’s changing the power dynamic in the sector and hence will, eventually, change the structure of the market.