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Why Healthcare Is Incapable of "Plugging In" New Solutions

The first time I heard Par8o’s tagline “Healthcare’s Operating System,” I remember thinking to myself, “what the hell does that mean?”

I now think I have a pretty good idea.

Over the last two and a half years, my partners and I have been on a journey to transform the healthcare consumer experience. We began this journey by developing a patent-pending process for creating virtual health insurance cards. Beyond providing consumers real-time information on plan benefits, the virtual insurance cards serve as a digital token to enable smartphone-based transactions.

What do I mean by that? Well, most simplistically, think of using your smartphone to check through security at the airport. This is pretty common now, and for frequent travelers, an absolute must. But in our vision, we were not just allowing patients simple, “touchless” check-ins (a pretty powerful value-proposition in its own right), but also supporting an up front cost estimate.

We developed the solution and presented it to the industry, and other than a collegial pat on the back and assurances that our technology would be pervasive in the next couple of years, crickets.

The problem is that healthcare fundamentally lacks scaleable and extensible technology infrastructure. While I could lament the perverted incentive structures that presently inhibit technology adoption - and they are ever-present - the truth is that healthcare is incapable of “plugging-in” new solutions.

It goes well beyond the lack of standards that make data sharing deliberately difficult. Everyone’s technology is so customized and silo’d that adding new, seemingly “out-of-the-box” technologies is a major undertaking. This lack of a kernel-level interface creates extraordinarily high entry costs which ultimately limits adoption of new technology. Hence, the need for an “operating system.”

During our journey to get to the bottom of this, we have discovered the true value and power of accurate provider information. First, healthcare, like the airline industry, is fundamentally the business of putting “bums in seats,” as Captain Eddie Rickenbacker of Eastern Airlines was fond of saying. To do so, healthcare organizations require effective inventory management systems.

Seems pretty obvious, but I’ve yet to meet a healthcare organization that has complete visibility into the availability of their assets (providers and facilities). Can you imagine an airline not knowing the routes and times their aircraft fly, nor what seats are available? Welcome to healthcare.

To give you an example, I know an organization that is doing ground-breaking work in the field of genomics. They are sequencing the DNA of cancerous tumors to better understand how different types of cancer respond to different treatment protocols. Their work is no doubt moving the aspirations of precision medicine closer to realization. Yet, this same organization doesn’t include 25% of their cardiologists on their own website. As important as their research is to advancing medical knowledge, which do you think is more critical to their core business operations?

Tracking inventory is just the first step, though. Clinicians are quite a bit more sophisticated and nuanced than those ever-shrinking airline seats we’ve all endured. In other words, not all physicians are the same. Nor are all physicians within a particular specialty the same. Nevertheless, go to any health system directory and check out their provider profiles. They’re abysmal. They’re artifacts of an earlier age.

Is it really such a surprise then that health systems are losing hundreds of millions of dollars a year because of patient out-migration, or referral “leakage”? Doctors are going to send their patients to other clinicians they trust, or at a minimum, respect. Today, those relationships are incredibly limited, which ultimately leads to doctors sending their patients to the same dozen usual suspects. The right technology can help providers expand their networks in ways that are beneficial to the health system and to their patients.

Finally, provider-based referrals are not the only way appointments are scheduled. In fact, healthcare is rapidly becoming retailized, which means more and more patients are looking to online tools, including social media, to find and schedule appointments with their doctors. This represents a dramatic shift in the landscape, and those organizations that are the first to recognize it will be the major winners.

Consider that by the mid-1970s, all the major airlines were operating on virtually the same underlying airline reservation system (Eastern-based PARS or “PARS 2”). Yet, within a three to four year period, American and United turned their respective systems, Sabre and APOLLO, into what the other airlines would describe as “anti-competitive weapons” that gave them monopoly power over distribution.

What was their major crime? Recognizing that their industry was becoming retailized. In other words, more and more tickets were being sold through travel agents rather than through their own ticketing offices. By placing their reservation systems in travel agent offices, American and United were able to secure a competitive advantage over the other airlines.

The good news for healthcare providers is that there’s no need to create the distribution channels to reach this new retail marketplace - they already exist. Clinicians just need to make sure they are using them appropriately. In other words, create informative, rich and compelling profiles that are differentiated, including schedule availability, and propagate that information across relevant consumer channels. It’s not rocket science.

A platform that allows organizations to manage and disseminate provider and other asset information is not only the single most important solution for business success, it will serve as the gateway to eventual provider and consumer engagement. So excuse Par8o if their claim seems exaggerated. It is not.

Nevertheless, while I adamantly share the belief that a provider data management platform - in the parlance of the airline industry, think global distribution system - will transform all of healthcare technology, I think a more precise comparison is to an active directory.

If you consider the function of Microsoft’s Active Directory to an enterprise, which is to manage end-user credentials, identity, and access to enterprise resources and applications, you’re about halfway there. Now add in the ability to maintain rich data that can be used to support advanced marketing concepts, both internally (referral-based marketing) and externally (consumer-facing channels), and you arrive at what I think is more accurately described as a dynamic directory.

Pretty soon, consumers will be able to shop for providers online. They’ll be able to do advanced searches to find just the right provider for them, based on any number of variables. The experience will probably be a lot like finding a flight on Travelocity or Expedia. And just as both websites are powered by Sabre and APOLLO, consumer health channels will be powered by a dynamic directory or a health operating system. You decide.