How Much of The Healthcare Business Is Healthcare?

This post was originally featured on EMRandHIPAA.

In The Great Re-Bundling of Healthcare, I argued that healthcare will be rebundled along new dimensions because technology will break assumptions that predicated bundling in the analog era of healthcare delivery.

In that post, I noted that a few industries have been completely dismantled and rebundled by technology:

The print publishing industry – newspaper and magazines – thought that their unique value was in their core product – news, editorials, and classifieds. But the unique value they delivered was in printing and distribution. When the Internet reduced the cost of printing and distribution to effectively $0 and free news became the standard, their businesses collapsed. Print publishers are left servicing the paper news market, which is a fraction the size of the overall digital news market.

Taxi companies thought that their local, retail, administrative, and regulatory overhead was necessary to solve the get-from-point-a-to-point-b problem. Using the Internet, Uber, Lyft, and SideCar proved that none of those overhead functions matter, enabling a new era of get-from-point-a-to-point-b solutions. Taxi companies are left servicing the I-haven’t-heard-of-Uber and there-aren’t-enough-Uber-drivers markets, both of which are rapidly shrinking.

Hotels thought constructing buildings and staffing employees was the only way to solve the get-a-place-to-stay-for-the-night problem. Using the Internet, AirBnB proved that anyone can solve the get-a-place-to-sleep-for-the-night problem for anyone else. Hotels are left servicing the high-end, premium service market in the get-a-place-to-stay-for-the-night business.

These examples beg the question: when healthcare is completely rebundled around digital delivery, what businesses will healthcare providers really be in?

In the examples above, the Internet empowered laymen to circumvent legacy establishments. Using the Internet, laymen performed the same tasks more affordably than traditional retail businesses.

With Watson-like self-diagnostics; an army of cheap, connected, sensors; and a wealth of freely available information on the web, laymen will increasingly self-diagnose and self-medicate whenever and however possible. This process will start at the low end – the simple stuff such as common colds, simple bumps and bruises – and increasingly move up market.

Over time, tri-corders (such as Scanadu), smartphone EKGs (such as AliveCor), smartphone ultrasounds, CTs, MRIs, and blood tests will empower patients to gather all of the necessary diagnostic information without ever visiting a retail medical facility. Patients will send data to providers electronically and consult with providers via video conference. The web will obviate the need for most retail overhead, capital expenditure, and labor cost associated with most care delivery.

Medicine will be disrupted from the bottom up. Hospitals won’t completely go away, but they will be left servicing the high-end of the market – ICUs, surgery, labor and delivery, and other high-acuity conditions – just as hotels, print publications, and taxis service the most expensive segments of their respective markets. The vast majority of care will be delivered as virtually and cost effectively as possible.

By circumventing retail establishments, medicine will centralize as geography loses relevance. Just as the hotel and taxi industries consolidated around mega-platforms such as Uber and AirBnB, healthcare will consolidate around provider hubs that service enormous populations. The mega healthcare systems will have the tools to centrally manage populations and interact with them contextually. The major health systems of the analog era that were bounded by geography will battle to become national behemoths as geography becomes irrelevant. Mayo Clinic, Cleveland Clinic, and others are already doing this by establishing virtual clinics across the country.

Why did the publishing industry, taxi industry, hotel industry, and travel agency industries collapse? Why will all of the old practices of medicine collapse? Cost. The most costly aspects of delivering care are labor and retail overhead. As increasingly small, localized, connected computers gather an increasingly large amount of data, computers will help patients self-diagnose and self-medicate without the need for expensive retail or labor overhead. Computers will automate inherently repetitive processes.

So how do I answer the question I posed in the title of this post? I’ll do some high level math. About 15% of the cost of delivering care is associated with billing and administrative overhead. About 40-50% is provider labor. There’s another 5-10% is spent on other miscellaneous expenses. And the remainder of costs are in capital expenditures including retail overhead. I suspect that 50-60% of total healthcare costs could be cut when healthcare is fully digital.

What is Passion?

Pristine is an organization built on the yin and yang of freedom and responsibility. Many organizations struggle to manage that delicate balance. We haven't figured it out, but we work towards it.

We've identified eight values that detail what freedom and responsibility mean.

Curiosity
Passion
Simplicity
Excellence
Selflessness
Communication
Respect
Accountability

This is the second in a series of posts that will explore what each value means at Pristine.

Passion, like most of our Pristine values, is cliche. "Passion" has devolved to mean virtually nothing. This post attempts to define and substantiate passion at Pristine.

To understand passion at Pristine, one must first understand Pristine's vision for the future of healthcare delivery:

In 10 years, why won't all medical professionals have wireless, handsfree audio, video, and text-based communications at all times?

Passion isn't a thing. It's not an act. It's not a thought. It doesn't exist at any particular point in time. Rather, passion is a guiding principle, a set of beliefs that act as the foundation for all of one's actions.

As a Founder and CEO, I make it clear to everyone that I interact with that I'm insanely passionate; in fact, many can be turned off by my over-to-top passion. That's fine. For everyone that finds me to be "too much" or too eccentric, there are five that love it. I am damn proud and don't care what anyone else thinks. I intentionally emanate hyper-passion at all times. It makes me, me.

We fight many uphill battles. Pristine's business is based on beta hardware, a beta OS, and a beta video stack; we must overcome new human computer interaction challenges, privacy concerns, and legal concerns; we must convince people to change behaviors. If the status quo has its way with us, we will fail spectacularly. It's our job to break the status quo across many dimensions.

Breaking the status quo is extraordinarily difficult. Only those who are guided by unwavering belief and vision will overcome the inertia of the status quo. Passion is thus the motivation to get up every morning and kick ass; to sacrifice now for later; to break the status quo; to substantiate dreams.

On a daily basis, passion manifests as many things. Most importantly, passion is embodied in acting in what you believe is in Pristine's best interest. Passionate people care too much to let the chips fall where they may, or to let the world happen to them. Instead, passionate people dictate the course of action to the world.

The world will not know you, remember you, or care about you unless you give the world a reason to. Passionate people are brimming with reason in everything they do.

I encourage everyone on the Pristine team to tell me that I'm wrong, even in public settings. Our best employees are those who tell me that I'm wrong most frequently.

Overcoming the Challenge of Checklists: Access

In The Checklist Manifesto, Dr. Atul Gawande outlines some of the challenges associated with implementing checklists in clinical environments.

Checklists cannot take longer than 90 - 120 seconds to complete
Checklists have to assume a basic level of competency; they cannot be too basic or menial
Checklists must contextual in light of a variety of clinical scenarios and workflows
Checklists must be either READ-DO or DO-CONFIRM. A given checklist cannot mix and match READ-DO and DO-CONFIRM items.

Every medical professional we've interacted with - both clinical and administrative - understands the value of checklists. We are yet to encounter anyone that doesn't understand or believe in the value that checklists create.

Checklists can be used in any context in which there's a repeatable set of steps in which the cost of forgetting a step can be substantial. There are hundreds of workflows in hospitals in which forgetting a step can be detrimental to patient outcomes.

Despite this, adoption of checklists has been remarkably slow. Checklists are still only used in a narrow set of clinical environments. Why? Why aren't checklists being adopted in pharmacies, labs, in drug administration, or the ER?

People don't like doing more stuff. Medical professionals (MPs) are already overburdened with clinical documentation, meaningful use, defensive practices, etc. Although checklists can materially improve outcomes in many settings, they also introduce friction into existing workflows. As such, providers have only been adopting checklists in settings in which the cost of being wrong is extraordinarily high. Surgery is the highest acuity and riskiest avenue of care, but it's not the only that can materially improve from checklists.

How can we reduce the friction that checklists introduce? Let's consider the steps involved in completing a checklist:

First, the MP must recognize that a checklist should be used; second, the MP must physically access the checklist, which may be on paper, a wall, or computer; third, the MP must complete each item of checklist and document that each step was completed.

Pristine isn't tackling the first point of friction, yet. But we are dramatically reducing the friction required to complete items #2 and #3. By reducing friction, we are driving improved compliance, and ultimately improved outcomes and reduced costs. How do we reduce friction?

While wearing Pristine Glass, MPs just have to gently rock their head back, and say

"Ok Glass, start central line checklist"
"Ok Glass, start IV checklist"
"Ok Glass, start intubation checklist"

With Pristine CheckLists, MPs can access checklists without thinking, without going anywhere, and without using their hands. Pristine CheckLists dramatically reduce the friction between MPs and checklists.

Once the checklist has been initiated, MPs can navigate checklists with contextual voice commands such as:

"Washed hands"
"Prepped site with aseptic technique"
"Wore sterile gloves"

With Pristine CheckLists, MPs can access and complete checklists without interrupting their workflow. MPs can interact with and complete checklists while providing care. Pristine CheckLists represent an enormous leap forward in access and ease of use that will drive adoption of checklists in many places where they simply weren't practical or possible before.

Google Glass is Fueling Telemedicine Innovation

Telemedicine is the most profound initiative happening in medicine today. Telemedicine will do more to curb costs, increase access, and improve quality of life for both patients and providers than any single other initiative. With Google Glass fueling telemedicine innovation, these benefits will occur even faster.

Google Glass based telemedicine will have profound implications across many avenues of care:

1) Home visits - it's difficult for providers in a patient's home to beam in a consult. This is simply an ergonomics problem and Glass solves it.

2) ER - in ERs, Glass handily defeats telemedicine carts. The carts are clunky, in the way, and provide poor viewing angles

3) EMTs - EMTs still don't have a good way to beam in a remote consult. Glass is clearly the solution.

4) ORs - intra-operative surgical consults are virtually non-existant today. Glass will power intra-operative consults. In the same light, Glass will also drive improvements in surgical education through first person video.

5) Anesthesia - anesthesiologists are in many environments one layer-removed through CRNAs. CRNAs will wear Glass in the future to beam in anesthesiologists on demand.

6) Floor nurses - floor nurses will beam in a doctor on demand through Glass. 

Even without Google glass, telemedicine will power more than 50% of all care in the next 10 years. In 20 years, probably over 75%. According to BCC Research, the global telemedicine market will grow from $9.8 billion in 2010 to $27.3 billion in 2016, a CAGR of 18.6%.

Growth in telemedicine will fragment across many avenues:

1) Skype-like consults - American Well, Teladoc, Doctor on Demand, Vheda Healthcare. A few major providers such as Mayo Clinic are also extending themselves across the country. HealthSpot is offering telemedicine kiosks that will be placed in pharmacies and retail locations.
2) At-home monitoring - e.g., Qualcomm Life, Verizon, AT&T. Validic and Human API are also trying to provide a lot of the technology connectivity to bring this future to life.
3) Telemedicine carts - e.g., Rubbermaid, Telemedicine Systems, Polycom, Cisco.
4) Remotely drivable robots - e.g., Beam, Vgo, iRobot.

Avenues #1 and #2 are the hottest today. Startups and established companies are tackling telemedicine along these fronts. Perhaps the most dominant trend at the mHealth Summit was avenue #2.

Telemedicine carts have been around for sometime, and they are growing quickly. However, there has been little innovation in this space. That shouldn't be surprising since this market is serviced almost exclusively by established companies with dozens of business divisions.

Remotely drivable robots are a recent phenomenon. Although these robots can vary in look, there is almost no variability in function. These robots serve exclusively as as an autonomous iPad on wheels. They present an interesting vision of the future: a future in which doctors come to the hospital as little as possible because it's too time consuming to do so. I'm not entirely sure what that means for the future of hospital-based medicine.

The future of telemedicine is incredibly exciting. With Google Glass fueling telemedicine innovation, and other exciting trends, new energy and possibilities are emerging every day.

Communication is a Means to an End

Healthcare delivery is perhaps the most fragmented service on Earth. Medicine continues to fragment and specialize further every year. In The Checklist Manifesto, Dr. Atul Gawande joked that surgeons are specializing in left ear and right ear surgery. Healthcare delivery is fragmented across medical disciplines, job classes, job functions, geographies, and even within and among buildings on a medical campus.

Pristine envisions a future in which medical professionals communicate seamlessly with one another without thinking. Eyeware computers such as Google Glass will be the enabling technology.

Let's examine a few use cases:

For a general consult: "OK Glass, start an EyeSight call with Dr. Smith."

For a derm consult: "OK Glass, start an EyeSight call with a dermatologist."

With a CRNA wearing Glass in the OR: "OK Glass, start an EyeSight call with an anesthesiologist."

For a concerned nurse: "OK Glass, text Sally 'the patient in room 3 is doing fine.'"

For a physician in clinic: "OK Glass, text Dr. Johnson 'we discharged the patient in room 5.'"

For an EMT in the field: "OK Glass, start an EyeSight call with a trauma specialist, stat."

For a wound care nurse: "OK Glass, start an EyeSight call with a wound care specialist."

For an intensivist resident: "OK Glass, start an EyeSight call with my attending."

Glass presents the foundation to support the ultimate Pristine communication platform. Communication platforms have traditionally imposed a significant cost on medical professionals: using hands. But in many circumstances, medical professionals can't and shouldn't use their hands even though they need to communicate with others. Pristine's handsfree communication platform will open new communication channels.

Communication is a means to an end, not an end in and of itself. The most important result of seamless communication in medicine is that patients will have more access to better, more cost effective care. Communication lies at the crux of the triple aim: cost, quality, and access.