Healthcare, like most industries, is comprised of analysts and domain-trained professionals. These individuals are laser-focused on optimizing their business and tend to think linearly. For example, if challenged to treat 200 patients a day, when they currently treat 100 patients, the call would be to double the staffing.
That’s linear thinking.
In the book, “Exponential Organizations: Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it),” Salim Ismail and Michael Malone explore why organizations that think linear often get out maneuvered by those who can use data to change their approach. Their premise is that if you can think ‘exponentially’ you can make dramatic change in your business. If you fail to adopt this approach, someone else will.
So how might this work in healthcare?
Ismail and Malone explore the case of what happened with mobile phones and mapping when Nokia bought Navteq in 2007 to compete with Apple and Google. Navteq owned Traffic.com which used sensors embedded in the roads to supply real time traffic information. The problems for Nokia began when a startup called Waze launched a few months later. Waze achieved better results without the need for imbedded sensors. How? By leveraging the GPS sensors already installed in everyone’s smartphone. Within a couple of years, Waze had 100 times more sensors generating data, and paid nothing. Navteq (and in reality, Nokia) failed.
The idea is using data, often that already exists and is freely available, to drive new business models without the need for high capital expenditure. The model is clearly visible in other companies like AccuWeather, AirBnB and Uber.
Each of these examples radically changed their industries by solving consumer problems, not industry problems. The Taxi industry didn’t have a problem that Uber solved; fare paying passengers did. Hotels didn’t have a problem that AirBnB solved; those of us who were paying too much for a poor experience did. Consumers are always at the heart of an exponential organization because your existing network and customer sets are, by their nature of their existing relationships, typically unable to grow exponentially.
A majority of funds in healthcare follow a linear model in the current fee-for-service approach. You see your doctor, they get paid. You fill your prescription, pharmacy gets paid. You have surgery, someone gets billed so others can be paid. This is probably as good a definition of a linear world as anything.
Navteq viewed their scale based on the number of sensors they could embed in roads. Their value was wrapped up in physical assets and it was hard to see, accept and then embrace an alternative that devalued that approach.
The challenge for healthcare is the same. Healthcare views its scale based on the number of people they can see in a given day. Their value is wrapped up in the ability to receive payment for seeing those people face to face.
Since the challenge for healthcare is the same as the Navtec/Waze example, so may be the solution. The question healthcare has to ask is this: how do we leverage data collected by consumers on their smartphones to radically transform their healthcare experience? Once you have answered that question, you get to answer a second question: how do we radically change the healthcare business model to support that newly transformed healthcare experience? The wrong approach, which most of healthcare seems to be persistently doing, is trying to answer the second question first.
Interestingly, there is an echo of ‘second question first’ in the Uber story. The first use of Uber only allowed users to order a black luxury car and the price was 1.5x that of a taxi. They approached the challenges of taxi usage by fixing the dispatching problem. They even changed their name to UberCab to deal with the industry push-back. It wasn’t until UberX came around that non-luxury vehicles joined the mix. They had answered the first question first. You can read this history here.
So how does healthcare not answer the second question first?
Wellsmith and the PCP
At Wellsmith, we are focused on the ‘first question first’. How can we use the data collected on smartphones to radically transform a consumer’s health experience? Our focus in sufferers of chronic diseases like Type 2 Diabetes (T2D), which, incidentally, use up 75% of healthcare resources.
Similar to the Waze solution, the Wellsmith solution focuses on using mobile sensors and other clinical digital sensors (such as glucometers and blood pressure cuffs) to collect data on each individual. That data is fed in to each person’s individual Care Plan, and the Care Plan acts similar to Waze; it tells the user when to perform a certain task and it “reroutes” those who have strayed off their plan. This helps Wellsmith answer the first question first. We solved the consumer problem by simplifying the management of a chronic condition.
What makes Wellsmith different from the thousands of other apps trying to do the same thing? We combine three different domain skills to achieve this solution. Yes, we are clearly an app technology company and we also have, as a team, years of experience in consumer marketing and behavior and we work daily with dedicated healthcare professionals. As a result, our solution lives at the intersection of these three domains. It is clear to us that this approach can transform peoples’ lives and start to reverse some of the impacts of T2D on their lives. I covered some of our results in this blog.
Now to the second question. How do we radically change the healthcare business model at the same time? The answer to this is an exponential change in the world of the Primary Care Provider (PCP).
In the linear world, there seem to be three ways to practically scale the economics of PCPs.
- Hire more doctors – increase revenue
- Consolidate practices to achieve back-office economies of scale – reduce costs
- Reduce the time you spend with patients – increase panel sizes
But what if we could eliminate a vast majority of these appointments?
If chronic diseases patients comprise vast majority of a PCP’s daily appointments (as PCPs have told us), then finding a way to eliminate half of these appointments, while still allowing PCPs to manage those patients, could allow PCPs to double their panel sizes. Then for the first time, PCPs could not only achieve exponential growth, they could actually spend more time with people who really need their help. What is unusual here is that not only could PCPs get growth in panel sizes, they could probably do a better job of supporting chronic Illness sufferers by empowering them with a technology that (we’ve demonstrated) changes lives.
Wellsmith doesn’t cure people with T2D. What it does is enablethose with T2D to stay engaged with their doctor-prescribed care plans. This engagement can lead them to live healthier and happier lives. We have tested this same approach with Chronic Obstructive Pulmonary Disease(COPD) and believe it will work well with Congestive Heart Failure(CHF), Hypertensionand other chronic, lifestyle-based illnesses.
Wellsmith also doesn’t fix the economics of PCPs and healthcare. What it does is enable the ‘last mile’ between physicians and patients to help patients engage and maybe even activate themselves as their own care givers.
If we can activate people who live with these conditions to live healthier lives, we not only significantly reduce the burden on the health system, we can also help people achieve better health for longer amounts of time.
That’s what our mission is and how we go about achieving it.