New Brunswick Launches Canada’s First Innovation Hub to Support Tech Solutions for Aging
The Canadian province of New Brunswick recently launched the country's first innovation hub focused on tech solutions for the aging.
The New Brunswick Health Research Foundation (NBHRF), in collaboration with the AGE–WELL Network of Centres of Excellence (NCE), is launching Advancing Policies and Practices in Technology and Aging (APPTA), an innovation hub dedicated to building tech that supports healthy aging.
AGE-WELL NCE said the APPTA hub, which officially opened on May 16 in Fredericton, will focus mainly on developing technologies and solutions for policy, program, and service challenges in the field of technology and aging. The hub is meant to allow Canadians to benefit from emerging technologies that foster independent living and improve the quality of life for aging adults.
The goal is to help entrepreneurs get to market with their products and services designed to support healthy aging.
Lisa Harris, New Brunswick’s minister of seniors and long-term care [said], “We are delighted to be the host province for a hub that will be a national resource for policymakers, researchers, clinicians, and others working to implement novel technologies that will improve the health and wellbeing of older Canadians and their caregivers.”
The APPTA hub will help entrepreneurs take their ideas to market by connecting them to end users, policymakers, and service providers. AGE-WELL NCE said it will also bring training opportunities for graduate students and post-doctoral fellows from the field of technology and aging. AGE-WELL and NBHRF will jointly fund the salaries of four individuals annually.
“This hub will promote knowledge-sharing and effective transfer of needed technologies right across Canada," [said] Bruno Battistini, president, CEO, and scientific director of NBHRF and a co-sponsor of the hub.
Conversa’s Doctor-to-Patient Platform Gets $8M Round of Funding
San Francisco-based Conversa Health will use the funds to make improvements to the platform and to scale up its operations in Portland, OR.
The Series A round was led by New York-based Northwell Ventures and also included Epic Ventures, Healthgrades, and other existing investors in the company.
Conversa’s Portland office was established in 2012 and works on the company’s technology, engineering, product development/management and operations functions. The company currently has ten employees based there, with plans to grow the office after the recent funding round.
The company's biggest personnel addition to the Portland office comes from Web MD.
Last month, the company added its new VP of Operations, digital health vet Becky James, to the office. James formerly spent twelve years in leadership positions at Web MD’s Portland office, most recently serving as the company’s senior director of client delivery.
The company's goals are familiar: improve patient engagement and health outcomes and lower costs.
Conversa offers more than 50 automated “conversation programs,” platforms that allow care teams to communicate with patients. The platforms are each tailored to different conditions, including asthma, congestive heart failure, diabetes and joint replacement.
Pharmacy App Capsule Secures $20M Funding Round for Offering Free Home Delivery in NYC
Thrive Capital is leading the new round of funding for Capsule, with additional support coming from Sound Ventures and Virgin Group.
[T]he company is working to establish itself apart from other such virtual pharmacies like Blink Health and PillPack, as well as the behemoth pharmacy benefits manager Express Scripts.
“We are building the first holistic pharmacy system that works for everyone — the technology platform for consumers, doctors, hospitals, insurers, and manufacturers to exchange information about medication in real time feedback loops,” Capsule CEO and founder Eric Kinariwala wrote in a post on Medium.
What's revolutionary about Capsule, says Kinariwala is that it capitalizes on the "natural engagement point" of the moment when a doctor is prescribing a medication.
[T]he pharmacy, accessed through an app...allows doctors to order directly through Capsule. From there, Capsule deploys a delivery person to pick up the prescription and deliver it anywhere in New York City within two hours at no extra cost to the patient – they accept all major insurance and copays don’t change. Patients do not have to have a Capsule account for their doctor to prescribe the first time, but if they like what they get, they can transfer refills from their old pharmacy to Capsule to keep the relationship going from there.
“Medication is disconnected from the rest of healthcare. By building tools and harnessing data to connect medication back to the system, Capsule is the platform which modernizes medication, leading to better experiences and better health outcomes to everyone’s benefit,” Kinariwala writes.
The Capsule team business acumen and pharmaceutical experience to this chronic problem of the lack of data visibility between stakeholders in medication adherence--a problem in the current system that begins with whether or not a patient ever even picks up the medication from the pharmacy.
Kinariwala worked in investing at Bain Capital and Perry Capital, and Chief Pharmacists Sonia Patel has over 10 years experience in the pharmacy industry and was selected by Walmart to help troubleshoot underperforming pharmacies. The company cites figures demonstrative of a clunky, inefficient system as reasons they were prompted to create Capsule, such as the fact that nearly 40 percent of people have to make repeat trips to their pharmacy because it is out of stock and average wait times of an hour.
Capsule is not the only startup in the field looking to solve these issues.
Startups looking to improve the pharmacy experience through faster, cheaper service and simple user interfaces have been attracting a lot of investment as of late. Blink Health, also based in New York City, just scored $90 million in second stage funding in April. Their approach is a little different than Capsule, in that they work like traditional pharmacy benefits managers (PBMs) to negotiate prices but with a decidedly different goal of lowering costs. Manchester, New Hampshire-based PillPack, which functions as a virtual pharmacy as well as medication adherence app, now reports funding at $93.1 million thanks to an additional $31.1 million round in September.
SilverRide Offers Mobility Solutions for Bay Area’s Aging, Disabled
San Francisco-based SilverRide was founded in 2007, with a mission to meet the transportation needs of older adults with ambulatory or other limitations.
“When you get a ride from us, it’s a lot more than a ride,” said Jeff Maltz, who launched SilverRide in 2007 after hearing about older adults facing transportation problems.
Drivers for SilverRide undergo background checks and random drug testing, but they also get training in transporting people with special needs of all kinds, physical and cognitive.
“The truth is, it’s a little easier to help someone in a wheelchair,” Maltz said. “If you’re helping somebody with a cane or walker, there’s a higher risk of fall.” SilverRide calls the service “door-through-door.” Drivers don’t pull up to the curb and wait for the passenger to hop in. Instead they provide a safe escort from indoors to the car and back indoors again at the destination.
Drivers, who get liability insurance coverage from SilverRide, also shuttle customers to and from medical procedures that involve anesthesia, where doctors recommend against patients driving themselves.
SilverRide staff additionally develop the profile of each rider when they sign up, allowing for more individualized service.
[For example, the] company... gathers information about whether there are steps outside clients’ homes, how to reach their emergency contacts, how often a client likes to go out and where he or she likes to go. The company promises to keep those details and preferences on file and confidential.
...For an additional fee, SilverRide drivers will stay with clients who can’t or don’t want to be on their own, accompanying them to games, shows and other events. Those costs range from $45 to $85 an hour. The company says its drivers spend 70 percent of their time in that capacity.
Like most transportation services designed for older adults, SilverRide does not presume smartphone usage.
Riders can summon SilverRide with a phone call or by email, convenient options for those who aren’t adept with smartphones. “We have a [smartphone] app,” Maltz said. “Zero people use it.”
Cities and States across the country are confronting the transportation needs of their aging populations, and many partnerships with startups--or more established companies like Uber or Lyft--are springing up.
“There are lots of models that have aspects of what is offered in SilverRide,” said Virginia Rize, co-director of the National Aging and Disability Transportation Center. “I think we’re in a period where there is tremendous development and enhancement of transportation options.”
The reason for this wave of developments nationally is a growing need that will be challenging to meet. The Americans with Disabilities Act requires local governments to provide rides for anyone who can’t use ordinary public transportation. Often, what’s provided are minibuses that carry multiple people, each to a different destination, while others ride along waiting for their stops. It can be a slow and inconvenient way to get around. In addition, these services are struggling to stretch their capacity for an aging population.
SilverRide hopes to expand into other markets to meet some of this growing demand.
[Founder Maltz] believes accessible transportation can translate into better health for aging people by enabling them to socialize and take part in activities they would otherwise miss. He gave an example by telling a story.
SilverRide got a call from someone whose uncle had been told he had two weeks to live, Maltz said. The uncle wanted to visit a gay bar one more time before he died. After making sure the man was OK to travel, SilverRide drove him to the bar and handed him off safely to the bartender.
“On the way back, the guy asked if we could take him again the next day. We told him we’d take him as many times as he wanted to go,” Maltz recalled. “The guy wound up going to gay bars three to five times a week — for the next five years.”
One Year After Launch, Israeli Digital Health Incubator has First Portfolio Company
A year ago, at MedCity INVEST, their national healthcare investing conference, eHealth ventures announced that it had secured a tender from the Office of the Chief Scientist in Israel to run a digital health incubator. Now, the incubator has invested in its first portfolio business.
Tom Sudow, director of business development with Cleveland Clinic Innovations, which is a partner in the fund...gave an update on the venture in a phone interview with MedCity News.
TikTalk2Me is a digital health company taking on speech therapy. Its approach combines gaming with speech therapy and voice recognition technology, according to a brief description of the business emailed by Sudow.
The Israeli incubator is also reviewing two more companies for investment, following their selection in its startup competition.
Pending a due diligence review, it is considering a company focused on food allergies and another with a connected cap for insulin pens.
AllerGuard is an early stage company that claims it is developing a matchbox-sized personal allergen hazard sensor to help people with strong food allergies. It can detect the chemical properties of the allergy-inducing compounds and alert users, according to a description of the company on the F6S website.
Insulog is developing a connected insulin pen cap for disposable insulin pens to support adherence. It is designed to detect and count the insulin units injected and enable that information to be tracked by users.
These tenders from the Office of the Chief Scientist, which last eight years, have sparked some other interesting collaborations in digital health.
In 2015, Medtronic and IBM won a grant to set up a digital medicine incubator in Haifa with Pitango Venture Capital and Rambam Hospital. Although it was initially called Health 02, it launched last year as MindUp. The digital health incubator has one portfolio company to date — Hemonitor Medical. The company develops an autonomous, continuous, non-invasive ultrasound device for patient monitoring, according to MindUp’s website.
Johnson & Johnson opened a biotech accelerator with OrbiMed Israel and Takeda Pharmaceuticals called FutuRx and has built a portfolio of nine companies spanning pre-clinical treatments for cancer to Orphan diseases such as Wiskott-Aldrich syndrome and X-linked thrombocytopenia.
Teva and Philips’ Sanara Ventures has six companies in its portfolio such as home monitoring business spirCare and telehealth business My HomeDoc.
With a goal of making Israeli companies competitive in the U.S. market, the incubators all follow the same structure dictated by the grant.
As part of the program, incubators are given budgets ranging from $500,000 to $800,000 and 85 percent of that comes from the government through a grant — the rest is financed by the incubators. Each early stage company in the program pays the government 3 percent to 5 percent of royalties from the revenue they generate until the full amount of the grant, including interest, is repaid, according to a website for the program.
Forbes Speculates on How People 50+ Will Live in the Future
PBS' Next Avenue, a service journalism project dedicated the 50+ consumer, recently turned five, and in honor of that birthday, they decided to look at the future of aging in America--and make some predictions. Contributing writer Shayla Stern's piece--posted by Forbes--focused on elements of "living" for the 50+. Not surprisingly, technology plays a large role in her vision.
The future of the way people 50 and older live and learn will be increasingly more connected and networked — social networks, cloud-based networks and actual real-live human networks.
For this article, we reached out to leaders and creative thinkers in areas covered in our Living & Learning channel to predict and imagine how we will live and learn in five years, 10 years and way, way down the road — the Jetsons prediction, as we've been calling it internally.
The Five Year Prediction: More Pervasive Home Automation
Scott Moody is the CEO and founder of K4Connect, a tech company that serves older adults and people with disabilities through software platforms that integrate devices, systems and applications into a single system that can work together and be managed as one form of application. Moody believes that in five years there will be a more seamless approach to accessing apps and managing household items — something we currently think about as the “Internet of Things” (IoT), or home automation.
“We’ve seen all these new ideas, products and applications coming out, but look: You can’t put 50,000 apps on your device and live a good life,” he said. "A lot of people talk about IoT and home automation, but it hasn’t really been successful.”
This is because the Internet of Things is not simple enough to use now. Companies like Moody's are working to overcome this.
So what does a "more ideal" smart home look like?
In a perfect IoT system, an older person could stand up in the middle of the night and a light would automatically turn on and potentially prevent a fall. Or if the person missed taking a medication, an alert would come over his or her in-house stereo system. Moody's company is working to assure that doorbells, door locks, motion sensors, streaming music, blood pressure monitors and pill reminders, as well as video chat and photo sharing, are automated through a central platform that can be controlled by a user’s smartphone or tablet.
Will this revolution really happen in the next five years?
[It] is “definitely coming,” [Moody] said, “but is it a few years? Is it five? It might be a little bit more” for a majority of older adults to be able to have such systems involved in their homes or retirement communities.
“It has to be an open system — a very open system, in my opinion — and not this monstrosity of individual things to make home automation really work,” Moody added. “New products and new ideas will have to be able to come out without a complete revamp of a whole system.”
However, Moody points out, we may see an important consideration with older adults in 10 years: income-level changes.
The Ten-Year Prediction: Tech That is Truly For an Aging Population
Americans in the next decade likely will retire with far less savings than their parents did. “The fact of the matter is the population we serve is, in fact, going to be very financially challenged in the future,” Moody said. “People today have pensions and insurance programs, but now people are retiring with maybe $25,000 in a 401(k). It’s going to be financially challenging for them.”
Because of this, tech-based systems for living will have to become not only more seamless, but also more affordable.
Will that affordable solution be lots of robots, to handle everything from housecleaning to caregiving? Moody doesn't think so.
[He says] the lack of humanity (and affordability) of robots makes him believe they will be less prevalent than some predict.
Additionally, Moody hopes that technological development will skew to being created with older adults in mind. “All these products are coming out every day and some of them are pretty neat. They’re all being designed for 25-year-olds, not the people we serve," he said. "Then someone slaps a bigger font on it and says they’ve adapted it for 90-year-olds."
More importantly, older adults do not all see themselves as ill, and even if they are, living in a fulfilling way means they want to address more than just their health issues.
In a recent essay posted on Next Avenue, Joseph F. Coughlin, director of the MIT AgeLab, warned against conflating growing older with health issues, which he said will be an especially important distinction to make for developers and inventors seeking to make innovations in the way we live as we age. "Older people, especially the oldest among us, are more likely to suffer from multiple chronic conditions and require significant care," Coughlin wrote. "But while this may be the story for some older adults, illness and older age are not equivalents. And even elderly patients managing chronic disease want to do things that do not involve their ‘conditions’."
Moody agreed, noting that as a boomer himself, he was especially sensitive to tech innovators treating older people like patients as they consider design.
“Too many people look at you when you turn 65 like you’re a patient and they want to tell you what to do,” he said. “At the end of the day, we all want purpose, and sometimes that purpose is the ability to take some level of care of myself. That whole idea of providing technology so I can live the life I want — that’s what I really want."
The Distant Future...Has Arrived
The piece finished up with a roundup of some more possibilities that may not be so far-fetched as they sound.
The Jetsons, you'll recall, lived in a flying saucer-like apartment building on the tallest stilts you’ve seen, accessible only by space car or jetpack, with a robotic maid and cool contraptions like smartwatches and 3D printers for food that actually exist today.
3D printed houses (that can be finished in 8 hours)
Homes with appliances that can look, speak and teach like humans
‘Smart threads’ that can allow fabric on your furniture to change color instantly and frequently
Homes equipped with virtual reality as a means of helping with dementia or distracting from pain
Did the Fully Integrated Smart Home Just Get a Whole Lot Closer?
The truly integrated smart home is still primarily a project--and an investment--for gadget-loving early adopters. But this week, the prototype of a new kind of sensor was announced, promising to be that one simple device which could connect everything in the room.
That’s the idea behind Synthetic Sensors, a Carnegie Mellon University project that promises to make creating a smart, context-aware home a snap. The tiny device, unveiled this week at the big ACM CHI computer interaction conference, can capture all of the the environmental data needed to transform a wide variety of ordinary household objects into smart devices. It’s a prototype for now, but as a proof of concept it’s damn impressive.
Plug the module into an electrical outlet and it becomes the eyes and ears of the room, its 10 embedded sensors logging information like sound, humidity, electromagnetic noise, motion, and light (the researchers excluded a camera for privacy reasons). Machine learning algorithms translate that data into context-specific information about what’s happening in the room. Synthetic Sensors can tell you, for example, if you forgot to turn off the oven, how much water your leaky faucet is wasting...
Products like Nest, Sen.se, and Notion have brought smart sensors into the home, but the ubiquitous sensor that could track and interpret data from multiple devices--both smart and dumb--has long been a tantalizing and seemingly remote possibilities for designers.
[S]ensors have gotten so small and sophisticated that gathering the data wasn’t hard. The challenge was doing something with it....
Using data captured by the sensor module, the researchers assign each object or action a unique signature. Opening the fridge, for example, produces a wealth of data: You hear the creak, see the light, and feel the movement. To a suite of sensors, it looks and sounds very different from a running faucet, which produces its own data. Laput and his team trained machine learning algorithms to recognize these signatures, building a vast library of senseable objects and actions. The variety of sensors is key. “These are all inferences from the data,” says Irfan Essa, director of Georgia Tech’s Interdisciplinary Research Center for Machine Learning. “If you had just one sensor, it would be much harder to distinguish.”
But while this type of machine learning is very promising and exciting, it must still catch up to the complexity of an ordinary human life.
A truly useful universal sensor must recognize and understand the nuances of constantly changing inputs. For example, it should be able to discern your coffeemaker from your blender, even if you move the appliance from one counter to another. Likewise, adding a new appliance to your kitchen can’t derail the whole system. Ensuring that level of robustness is a matter of improving the machine learning, which could fall to the system’s end user. “The easy solution in the short term is coming up with an interface that makes it easier for users to point out problems and retrain the system,” Rowe says.
For now, the Synthetic Sensors product is all data tracking and interpretation and no user interface.
Laput says he might eventually build an app to control the system, but the bigger idea is to incorporate Synthetic Sensor technology into smart home hubs as a way to capture more fine-grained data without the need for a camera (cough, Alexa). “If you embed more sensors into Alexa, you’ll potentially have a more knowledgable Alexa,” he says, referring to Amazon’s digital assistant. And that, Laput says, is the end goal of a smart home: building an environment that knows more about itself than you do.
Entrepreneurs for the 50+, take note: the possibilities for this kind of universal sensor in the home of those seeking to age-in-place are endless. We look forward to tracking the collaborations.
When Will Pharma Really Adopt Digital Health Tools and Not Simply Dabble?
Pharma's role in digital health innovation has been making news lately--from the number of deals and the sheer quantity of dollars flying around to fund startups, launch their pilot projects, and announce early partnerships. Pfizer recently announced its first digital health accelerator and Bayer has a full ground team in Silicon Valley to keep its finger on the pulse of what's new with digital health startups.
But at a recent media roundtable at Veeva System's Global Commercial and Medical Summit, says MedCity News' Stephanie Baum, experts discussed when pharma will move beyond these digital health "experiments" and really adopt its tools.
Digital health is at an interesting point in its evolution. Not only are some providers and payers connecting patients and members with apps and connected devices but also pharma companies are collaborating with startups and growth stage companies to develop applications to address challenges such as medication adherence. But which groups are further along in the adoption of these tools beyond the pilot phase? And how can the data these tools generate be harnessed for the greatest benefit?
Those were some of the questions addressed in a media roundtable at Veeva System’s Global Commerical and Medical Summit with Daniel Gandor, the head of Takeda Digital Accelerator U.S., and Stephen Davies, research director on Gartner’s healthcare team, spoke with Arno Sosa, Veeva vice president of product strategy.
Everyone agrees the potential for widespread change would skyrocket if pharma were to move beyond experimentation and truly adopt some of the these technologies. But what is required for that to happen?
Asked what it would take for digital health to stop being an experiment and get mainstream adoption from pharma companies like Takeda, Gandor responded in an email following the talk.
“For digital health tools to truly become mainstream they must be integrated within the overall patient experience, provide tangible value for customers, and have credible, scientific evidence proving that value,” Gandor said in email after the talk “When these tools are embedded earlier within the R&D process, it creates an opportunity to not only capture this evidence but potentially fundamentally change what the solution for patients might be.
“To see solutions that might result in completely new business models for our industry, I believe the approach has a higher likelihood of being disruptive when considered as early upstream as possible. Digital health tools can also certainly be added onto products on the market, and there are quite successful beyond the pill initiatives out there. Ultimately a balanced and simultaneous approach will help drive digital health tools to become more mainstream over time.”
Integration may sound like a straightforward goal, but the details of how health data is collected and managed in our current disjointed healthcare system mean that we are still a long way from achieving it.
The challenge of products generating lots of data to gain insight into the patient experience, such as measuring the effectiveness of certain drugs and treatment protocols over time, is that it’s tough to integrate and contextualize all that data in one place. Despite the likes of Validic and other companies creating tools to de-silo that data from apps and connected devices, and for all the talk of the benefits of interoperability, health systems, electronic health record vendors and yes, pharma companies, tend to fiercely guard their patient data — de-identified and otherwise.
Davies noted a couple of challenges with the push by pharma, medical device companies, payers and providers to satisfy their hunger for data to produce insights on the patient experience. There’s no one way patients can access this data. It can also be tough for healthcare organizations to take action from the insights they gain.
With Blue Cross Blue Shield Partnership, Lyft Continues to Expand Healthcare Mobility Services
Lyft has been pursuing strategic partnerships in the the patient transportation market with vigor, telling MobiHealthNews recently that they have hundreds of healthcare partners. This week Blue Cross Blue Shield became their largest partnership yet.
“Transportation is a really important piece to have to solve problems of healthcare access, and with over 100 million members, Blue Cross Blue Shield can have a big impact,” Gyre Renwick, Lyft’s head of healthcare partnerships told MobiHealthNews. “An important piece is patients do not need to do anything else to get the benefit of the service. Many people we are transporting today for medical appointments do not have a smartphone or the technical capabilities, so our goal is to remove the barrier to individual consumers even having to call a ride.”
The San Francisco-based ride-sharing company proactively reached out to BCBS, and the service will begin rolling out over the next few months at no cost to patients. Prior to launching the service, BCBS will work to incorporate Lyft’s platform into a yet-to-be-determined delivery model, and it will function as a service carried out on BCBS’s behalf.
Blue Cross Blue Shield joins the ranks of large payers and providers who have recognized healthcare solutions are not always about improving a healthcare service.
"Many Americans live in areas where medical care is beyond the reach of walking, biking or public transportation. As a result, they struggle to access critical health care services, even when they have health insurance," Dr. Trent Haywood, BCBSA chief medical officer and president of the BCBS Institute said in a statement. "We are committed to addressing issues like transportation that are inextricably linked to health outcomes, yet can't be tackled through health care resources alone."
With 106 million BCBS members, the two partners are already discussing how their datasets could be combined to reveal--and ultimately improve--community health.
While Renwick said its too early to say just what that data marriage and analysis will look like, the basic plan is to leverage local data such as transportation, nutrition and environment to understand zip code-level factors that impact individual health.
A few highlights that made news among Lyft's many healthcare partnerships:
In January 2016, Lyft announced a partnership with Medtrans Network in New York City, and a few months later teamed up with appointment scheduling app Everseat. Both Lyft and their primary competitor Uber (which also works with UK statup Cera to give rides to NHS caregivers and patients) partner with health organizations to help get patients to clinical trial sites. Not for-profit-hospital system Ascension tapped Lyft in December 2016 to provide patient rides, and in February of this year, Lyft teamed up with non-emergency medical transportation company LogistiCare to expand access to Medicare, Medicaid and elderly patients.
Can Tesla Teach Healthcare Innovators a Few Lessons?
Lee Lewis, consultant for several Fortune 500 companies looking to control their healthcare costs, argues that the disruption already occurring in the auto industry by Tesla can be a "blueprint" for the kind of disruption needed--and to some extent already happening--in the healthcare industry.
The healthcare industry, much like the auto industry, is heavily entrenched, government-protected, inefficient – and is being quietly disrupted. When Tesla Motors recently announced its vision for the future – affordable Model 3 cars for more of the population, bolstered by its unique distribution and software model – the media rightfully effused with predictions of auto-industry transformation and the end of outdated business models. What no one mentioned was that the trends disrupting the auto industry are nearly identical to those in healthcare, just more mature. Also, in the spirit of giving away Hyperloop designs and battery patents, Tesla just inadvertently gave the healthcare industry a blueprint for thriving through the coming industry overhaul.
Tesla succeeds amid revolution in the auto industry because it is a different kind of automobile manufacturer: it sells direct-to-consumer instead of through dealerships; it focuses on automobile experience instead of automobile mechanics; and it occupies a leading position in the market shift away from “owning a car” to “paying for transportation.” These three trends are a shockingly close parallel to three disruptive trends transforming healthcare and benefits.
A closer look at each of these trends reveals the same "quiet disruptions" are already happening in healthcare.
First Trend: Selling Directly to Consumers
Since the 1920s, manufacturers with car-dealership partners have been legally required to sell only to the dealerships, not to end customers, which makes dealerships the primary customers of car manufacturers. Tesla isn't subject to many of those laws, because it’s never had dealerships. Instead, it sells cars directly to car buyers, who are its primary customers.
Similarly, healthcare has been burdened by insurance companies and employers getting between patients and doctors. In our current system, insurance companies are the primary customers of medical providers, and employers are the primary customers of insurance companies. Patients are disenfranchised; they aren't anyone's primary customers.
Direct-to-consumer services are available for primary care, surgical care and even hospital care.
Innovations in the healthcare model are reestablishing the relationship between provider and patient. Direct primary care (DPC) clinics across the country are accepting affordable, direct monthly payments from people in exchange for unlimited-access primary care. New surgical centers and hospitals, too, are upending the market by showing prices to patients and taking direct payments from them, cutting the insurance company and often the employer out of the relationship, as with any other purchase. For instance, surgeon Keith Smith founded the Surgical Center of Oklahoma to realize his vision of bringing a market sensibility to healthcare by providing needed services direct to patients at a reasonable, plainly displayed, all-inclusive cash price.
Telehealth innovations further facilitate this direct-to-consumer model at the same time that the doctor's "house call" is making a comeback, even for health emergencies.
Doctor on Demand and American Well offer simple smartphone apps that, with the click of a button, enable anyone, regardless of insurance status, to video-chat with a doctor at any time day or night, from anywhere, for only $39 [and] California innovator Heal is bringing MDs to your home, 8am-8pm, 7 days a week, for $99 cash – without need for insurance. This exciting service can replace a PCP for routine physicals, checkups, and many urgent-care needs.
Even emergency room and ambulance services are being disrupted by a direct-to-patient model. Denver-based company Dispatch Health predicts it can replace a fifth or more of potential $2,000+ ambulance rides and ER visits by sending an emergency-equipped Ford Expedition straight to your home with a board-certified, ER-trained medical professional and an EMT on board. Without requiring insurance, Dispatch accepts an easy, flat-fee cash payment that is around a tenth (or less) of the ambulance/ER cost.
This trend is still in its early stages, and in order to thrive as it gains momentum, healthcare companies should continue following Tesla’s example and establish the patient as the primary customer.
Second Trend: Designing Experiential Rather than Mechanical Innovation
Over time, most automobile innovations have been incremental mechanical improvements, such as power windows and extra horsepower. However, new mechanical innovations are quickly copied and offer only a fleeting advantage. Improvements to the transportation experience, however, through software innovation, can offer substantial competitive advantages to manufacturers...Tesla fully captures this opportunity. From the beginning, it has focused equally on software and mechanics, which is why it’s the only auto company whose fleet is upgradable via the cloud, as opposed to a dealership visit.
Innovations in health and benefits strategy follow the same “mechanical” vs. experiential trend. Consumer health-insurance products – the vehicles through which we access healthcare – are provided to most people by their employers. Employers design the policies offered, but have few adjustable aspects (e.g., raising deductibles, optimizing a network, or lowering copays) to improve quality or reduce cost. As with cars, real breakthroughs in healthcare and insurance come through improvements to the experience that are often driven by digital health software, rather than plan adjustments. Numerous small innovations to treatment methods, diagnosis accuracy, care access, and affordability are, when aggregated for an employer’s population, transforming the healthcare experience with significant cost and quality improvement.
Critical to these upgrades is the efficiency with which they can be disseminated to the population. This is enabled through mobile healthcare engagement hubs such as Jiff and Castlight Health, which “download” new solutions added by the employer and sort them via artificial intelligence to the members who benefit from them. Companies that design benefits that coordinate these innovations for their employees will deliver superior healthcare experiences at a lower cost than those who stay within the traditional insurance carrier model.
Third Trend: Market Shift from "Services" to "Health"
Just as Tesla is contributing to the market shift of car ownership being replaced by paid transportation (whether through an owned, hired, or shared vehicle), the healthcare industry existing as a collection of fee-based services is being replaced by well-being as a “job to be done”. Each year, more hospitals accept the risk of keeping a population healthy for a flat fee through Accountable Care Organization (ACO) models and employer direct contracts where an employer pays fees for unlimited employee access. A micro-version of this paradigm that’s gaining in popularity is increasing episode-of-care payments, where a flat fee is paid for the full range of treatment for a person’s medical condition, including any unexpected complications. We get what we pay for, and as we begin to pay for results (i.e., feeling healthy) rather than endless tests, scans, prods, and pokes, we will have more of the former and less of the latter.
The healthcare industry’s rising cost, flat quality, and inaccessibility is unsustainable. This is a good thing, because unsustainable systems, by definition, will be replaced. Healthcare’s disruption will not be global and swift, like Blackberry or Blockbuster, but will be more of a nicheruption, accomplished through the transformation of a thousand small corners of the industry. Those in healthcare can learn much from Tesla’s auto industry playbook so they, too, can travel the roads ahead with an equally enjoyable ride.