Disruptive Innovation - How Technology Will Change Healthcare
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1 Disruptive Innovation - How Technology Will Change Healthcare EXPLORE! Oklahoma Healthcare Summit 2015 Norman, Oklahoma August 13, 2015 David N. Gans, MSHA, FACMPE Senior Fellow Industry Affairs Medical Group Management Association The presenter has nothing to disclose. Copyright 2015 Medical Group Management Association (MGMA ). All rights reserved.
2 Healthcare Is Changing - What Will Happen Next? The future ain't what it used to be. Yogi Berra Baseball Hall of Fame Player, Coach, and Manager
3 Learning Objectives This session will provide you with the knowledge to: 1. Describe how disruptive innovations affected other industries, where no organization was too big to fail and how the most critical predictor of success in the future was the ability to adapt to change 2. Describe how new technologies, innovations in care delivery, and alternative forms of patient access are disruptive innovations that will transform healthcare 3. Describe how you can prepare your practice to succeed in a changed healthcare environment 3
4 Learning Objective 1: Describe how disruptive innovations affected other industries, where no organization was too big to fail and how the most critical predictor of success in the future was the ability to adapt to change Copyright 2015 Medical Group Management Association (MGMA ). All rights reserved.
5 Failure to Adopt to Disruptive Innovation Has Consequences What do doctors and hospitals have in common with U.S. Steel, Chrysler, Control Data Corporation, Kodak, Woolworths, and the Encyclopedia Britannica?
6 Disruptive Innovation Common characteristics: makes a good or service simpler, allows use of lower skilled workers, and initially requires some sacrifice of functionality compared to the incumbent good or service.1 Christensen CM, Bohmer R, Kenagy J. Will Disruptive Innovation Cure Health Care? Harvard Bus Rev. 2000;78:
7 Disruptive Technologies Are Often Overlooked by Market Dominate Businesses Organizations who listen to their best customers and focus on products that promise greater profitability and growth rarely invest in disruptive technologies until it is too late. Being simpler, cheaper, more reliable, and convenient does not necessarily translate to profitability Lower profit margins discourage mainstream business from adopting the technology The most profitable customers generally don t want, and initially may not use products based on disruptive technologies Disruptive technologies are often initially embraced by the least profitable customers in a market
8 Learning Objective 2: Describe how new technologies, innovations in care delivery, and alternative forms of patient access are disruptive innovations that will transform healthcare Copyright 2015 Medical Group Management Association (MGMA ). All rights reserved.
9 NIH Strategic Vision for the Future: From Curative to Preemptive Medicine Research will allow us to predict how, when, and in whom a disease will develop. We will be able to precisely target treatment on a personalized basis to those who need it, avoiding treatment to those who do not. This individualized approach will allow us to preempt disease before it occurs, utilizing the participation of individuals, communities, and healthcare providers throughout the natural cycle of a disease process. Elias A. Zerhouni, M.D. Director, National Institutes of Health FY 2009 Director's Budget Request Statement March 5, 2008
10 Venture Capital Is Flocking to Healthcare
11 Follow the Money on Venture Capital s Investment in Digital Health
12 Technology Will Change Healthcare In Ways We Cannot Imagine Patient Room 2020 by NXT Health The hospital room of the future by Eric J. Topol, MD, Director of Scripps Translational Science Institute
13 Some Change Has Already Happened
14 While Other Changes Are Coming
15 State-of-the Art Medical Centers Don t Always Have Beds Press Release November 7, 2014 Montefiore Hutchinson Campus raises the bar for efficiency and innovation in healthcare. The 11-floor, 280,000-square-foot facility includes 12 operating rooms and four procedure rooms; an advanced imaging center; onsite laboratory services and pharmacy; as well as new primary and specialty care practices. The $152 million complex is expected eventually to handle more than 10,000 outpatient operations and 300,000 patient visits a year.
16 Virtual Visits Will Be Common in an Era of Value Based and Capitation Payment
17 Telemedicine Has a New Look
18 Telemedicine Includes Hardware Oto HOME Oto CLINIC Easy Steps to Faster Relief for Your Child: 1. Take a video of your child's ear with Oto HOME 2. Submit the exam to your own pediatrician 3. Receive a diagnosis and prescription, if necessary
19 Telemedicine Is Not Only in the U.S. Since the launch of the Lybrate app in January this year, the company has seen a massive growth with more than 80,000 doctors from various specialties from across India currently connected with its service. With more than half a million downloads in the last five months and over 100,000 patients visiting the platform every day, Lybrate's popularity has been growing exponentially. Lybrate, Inc. press release: July 8,
20 Will Patients Adopt Telemedicine?
21 Start Trek Medicine Will Be Here Soon (January 27, 2016, to Be Exact) Qualcomm Tricorder XPRIZE Challenge: Accurately diagnose 16 health conditions and capturing five real-time health vital signs, independent of a health care worker or facility, and in a way that provides a compelling consumer experience. Required Core Health Conditions (13): Anemia, Atrial Fibrillation (AFib), Chronic Obstructive Pulmonary Disease (COPD), Diabetes, Hepatitis A, Leukocytosis, Pneumonia, Otitis Media, Sleep Apnea, Stroke, Tuberculosis, Urinary Tract Infection, Absence of condition. Elective Health Conditions (Choice of 3): Allergens (airborne), Cholesterol Screen, Food-borne Illness, HIV Screen, Hypertension, Hypothyroidism/Hyperthyroidism, Melanoma, Mononucleosis, Osteoporosis, Pertussis (Whooping Cough), Shingles, Strep Throat. Required Health Vital Signs (5): Blood Pressure, Heart Rate, Oxygen Saturation, Respiratory Rate, Temperature.
22 Established Brick and Mortar Businesses Are Especially Vulnerable to Technology Elizabeth Holmes dropped out of Stanford with she was 19, to found nanosample blood testing company, Theranos. It s now worth more than $9 billion, offers more than 200 and is ramping up to offer more than 1,000 of the most commonly ordered blood diagnostic tests, all without the need for a syringe. Fortune, June 30, 2014, Theranos wellness center at the Walgreen s drugstore in downtown Palo Alto.
23 Patients Have a Choice Where They Go for Health Care
24 Retail Medicine Will Involve National Healthcare Systems
25 Retail Businesses May Be Your Next Competitor
26 Merging Disruptive Innovations: Retail Medicine and Telehealth
27 Consumer Products May Replace Medical Telemetry
28 Technology Will Provide New Tools for Physicians
29 Medical Telemetry Will Collect Terabytes of Data What Will You Do With It? Google Smart Contact Lens One reading per second X 60 seconds X 60 minutes X 24 hours = 86,400 readings per day and 31,536,000 readings per year per patient
30 Accessing Exabytes* of Data Requires New Technologies (*1 billion gigabytes)
31 Understanding the Human Genome Will Enable True Personalized Medicine
32 Quality Can Be Guaranteed
33 3-D Printing Could Revolutionize Healthcare Scaffolding: custom design of orthopedic prostheses to the exact dimensions of the patient Medical devices Human tissue Integration of electronics and a manufactured body part, device, or tissue
34 3D Printing Can Disrupt Other Health Industries
35 Learning Objective 3: Describe how you can prepare your practice to succeed in a changed healthcare environment Copyright 2015 Medical Group Management Association (MGMA ). All rights reserved.
36 Why Healthcare Is Susceptible to Disruptive Innovation Factors that have historically discouraged disruptive innovation Low price sensitivity, due in part to third party payment Fee-for-service payment mechanism Provider profit incentives Regulations which protect professional turf Lack of transparency Factors that will increase disruptive innovation in the future Increasing price sensitivity due to higher patient cost sharing Move to bundled payments and Accountable Care Organizations Decline in physician private practice Decreasing influence of professional societies Increasingly transparent prices, quality and outcomes Stakeholders influenced Patients, Providers, Payers Providers, Payers Providers Providers Patients, Providers, Payers The Coming Golden Age of Disruptive Innovation in Health Care, Zimlichman, and Levin-Scherz. J Gen Intern Med, January (7):865 7
37 Future Payment Will Be Based on Outcomes and Patient Experience
38 In the Future, the Successful Practice Will Balance Value and Costs Both financial and nonfinancial metrics are needed Quality and patient experience metrics will be the basis for payment The practice s information system will need to aggregate data from multiple sources and time periods Quality Satisfaction Revenue 38
39 Physicians Need the Right Stuff The future competitive environment of accountable care will reward practices who have: Lower utilization Better quality Better patient satisfaction Better patient outcomes Lower cost to the insurer Which are the same factors that enable a practice to thrive in today s fee-for-service payment system Good management will make the difference 39
40 Adopting to Change I think more exciting than surprising is how disruptive technology is helping to reinvent healthcare. Whether it's the role technology plays in advancing medical research or the ability for personal technologies to impact how we as individuals monitor and improve our own health, we are on the cusp of a new era in healthcare. It seems that more and more entrepreneurs, as well as healthcare organizations, are asking questions like, 'Why can't we?' and 'What if?' I'm looking forward to seeing what technology will do next to help us move forward. Steven C. Arner, President, Carilion Medical Center and Chief Operating Officer Carilion Clinic, Roanoke, VA Becker s Hospital Review July 24, 2015
41 A Black Swan Event* Can Change Everything *A black swan event, described by economist Nassim Nicholas Taleb, comes as a surprise, has a major effect, and is rationalized in hindsight as if it could have been expected.
42 Healthcare Is Changing. What Will You Do? Will you adopt or become as obsolete as a medieval empiric? Paul Fürst, Der Doctor Schnabel von Rom
43 Who Will Succeed? It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change. Charles Darwin It is not necessary to change. Survival is not mandatory. W. Edwards Deming We are confronted with insurmountable opportunities. Walt Kelly
44 Are there any questions? David N. Gans, MSHA, FACMPE Senior Fellow Industry Affairs MGMA x1270 Copyright 2015 Medical Group Management Association (MGMA ). All rights reserved.
45 About MGMA Since 1926 the Medical Group Management Association (MGMA) has been the leading association for medical practice administrators and executives. MGMA assists practices improve performance with education, advocacy, networking opportunities, and robust performance information. Through its industry-leading ACMPE Board Certification and Fellowship programs, MGMA advances the profession of medical practice management. Through its national membership and 50 state affiliates, MGMA represents more than 33,000 medical practice administrators and executives in practices of all sizes, types, structures and specialties. MGMA is headquartered in Englewood, Colo., with a Government Affairs office in Washington, D.C.
46 Biographical Summary Mr. Gans is a national authority on medical practice operations, patient safety, quality, payment methodologies, and health systems organization. He advises the Medical Group Management Association staff and members on all areas of medical group practice, sharing expertise through personal communications, workgroups, presentations, webinars, member community postings, and journal articles. Mr. Gans received his Bachelor of Arts degree in Government from the University of Notre Dame, a Masters of Science degree in Education from the University of Southern California, and a Master of Science in Health Administration degree from the University of Colorado. Mr. Gans retired from the United States Army Medical Service Corps in the grade of Colonel, U.S. Army Reserve, is a Certified Medical Practice Executive and a Fellow in the American College of Medical Practice Executives. Address: MGMA, 104 Inverness Terrace East, Englewood, CO Phone: (303) , ext dgans@mgma.org
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