Fixing Healthcare Requires Netflix-Like Disruption

Healthcare is broken. No one disputes that. No one lacks perspective on how to fix it, either. The challenge, though, is disrupting a system that makes more money treating sickness than it does preventing it. Technology and innovation can play a part, but so can flipping the entire care model on its head.

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Mon, December 09, 2013

CIO — "I need to see a doctor."

For centuries, that has been the lament of the sick, the wounded and the troubled. As advances in modern medicine help people live longer, surviving conditions that in the past would have killed them, more and more people say that every day.

To Fix Healthcare, Organizations Must Be Disruptive

Over time, this has placed tremendous strain on the healthcare industry. This is true in all parts of the world — but perhaps nowhere more so than the United States, where healthcare spending will approach $2.8 trillion in 2013 and reports that the yearly rate of increase is falling counts as "good" news.

There's no shortage of ideas about how to fix what the Institute of Medicine deemed the quality chasm back in 2001. The federal government is encouraging providers to use electronic health records (and penalizing those who don't), requiring a switch to the ICD-10 code set to identify diseases and treatments for billing purposes, establishing state-run health information exchanges to better share patient data, and implementing broad-based healthcare reform aimed at phasing out the lucrative fee-for-service payment model.

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However well-intended, such initiatives, so far, aren't yet working. More than one speaker at last week's MIT Innovations in Healthcare Conference described healthcare in the United States as "embarrassing," while another half-jokingly thanked the audience for letting its tax dollars fund the care of dual-eligible, frequent-flier patients in Camden, N.J. — one of whom made 113 emergency room visits in a single year.

The conference, a joint product of MIT's Sloan School of Management and its Industrial Liaison Program, covered a wide range of topics, from entrepreneurship and academia's role in innovation to patient engagement and data analytics. As the event progressed, though, a common theme did emerge — perhaps patients don't need to see a doctor right away, or even at all, to solve many of their health problems.

Healthcare Facing 'Blockbuster Video Moment'

Dr. Jeffrey Brenner, executive director and co-founder of the Camden Coalition of Healthcare Providers, says healthcare is at its "Blockbuster Video moment." The industry faces a Netflix-like disruption. Healthcare can either point to patients who begrudgingly continue to visit the nation's volume-based, fee-for-service hospitals and call them satisfied, much like customers wandering the aisles of a video store on a weekend night, or it can embrace change before the bubble bursts.

Brenner's healthcare delivery organization aims to do nothing more than bend the cost curve in one of the nation's poorest cities. (He's the one who thanked taxpayers for their support.) A 9-year analysis of the city's three hospitals ERs showed that most visits involved low-income mothers and their children in need of care but unable to get appointments with a physician. The hospitals happily oblige; treating head colds is more profitable and easier than addressing more complicated conditions, as there are no referrals or consultations to manage.

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