Aug 31
2018
Will Industry Outsiders Save Healthcare Dollars Through Data?
By Luke Bonney, co-founder and CEO, Redox.
With every sector of the economy feeling the effects of ever-increasing healthcare costs and no relief in sight, it’s no wonder household names outside of traditional healthcare are stepping in and attempting to improve what could only be characterized as a problematic system.
Industry outsiders take an interest in “solving” healthcare
This year began with three modern-day titans of industry declaring they are ready to disrupt healthcare. Jeff Bezos of Amazon, Warren E. Buffett of Berkshire Hathaway, and Jamie Dimon of JP Morgan Chase announced they were forming an independent healthcare company for their employees. By June they named a CEO for this venture: Dr. Atul Gawande. A Harvard surgeon, author, and executive director for Ariadne Labs, Dr. Gawande has built his career on examining how medicine is practiced in the US.
While the details of their effort remain scarce, Dimon has shared some broad strokes of what the triad is focused on, his list ranges from improving wellness programs aimed at smoking and obesity to using big data and virtual technology to align incentives.
Industry outsiders see data as a key leverage point
What is noticeably apparent with this surge in “healthcare outsiders” is that none of these big players are attempting to remake all of healthcare. To remake a system as vast and complex as the US healthcare system is more than any one company or consortium can reasonably hope to do.
However, they all do seem to be focused on data as the key point of leverage for disrupting and remaking a segment of healthcare. Gathering and processing data into diagnostic, predictive, or operational information is seen as the leverage point for ultimately making healthcare more efficient and effective.
Some of these industry outsiders are focusing their efforts directly on finding and exploiting opportunities for cost savings. Here are some examples.
Optimizing the pharmacy purchasing experience
Making the patient purchasing experience for pharmaceuticals, medical devices, and medical supplies seamless and reliable has drawn the attention of Amazon.
For the patient ordering and refilling prescriptions, the process could be automated and culminate in same-day delivery to the patient’s door. To some extent, patients will be able to comparison shop for non-prescription items and bundle purchases. For the seller inventories and distribution can be centralized and possibly some operational savings can be realized.
Finding a more efficient way of selling and delivering medical supplies will increase convenience for patients. But patients rarely pay the full cost of their prescriptions, so the cost drivers present in optimizing retail sales aren’t present at the pharmacy.