The healthcare industry has seemingly been immune to the kind of dramatic disruption that has plowed through other industries. Since 2000, 52% of Fortune 500 companies have vanished, but healthcare has seemingly churned along with its notoriously difficult to unravel complexity and rising costs.
Amazon, JPMorgan and Berkshire Hathaway announced a joint venture to provide their own healthcare coverage for their employees. Healthcare stocks trembled and JPMorgan found itself reassuring its own clients.
Why so much fretting when there’s not even an actual plan in place, and there are already similar models out there? Well, because it’s Amazon. When Amazon points a spotlight at you, you take notice. And this was Amazon’s intent: To poke and prod and accelerate the slowly-building transformation in healthcare into a full on big-bang disruption.
But does that mean disruption has truly arrived in healthcare, or is it just another blip on the radar as the behemoth industry resists all temptation to drastic change?
The signals of disruption
To determine whether healthcare is truly on the precipice of major disruption, we have to ask whether the agents of disruption are there.
Exponential technologies must be present if an industry is going to undergo a radical shift, meaning tech that is cheaper and better than the current offering. This provides the platform for change, such as the proliferation of robotics in manufacturing or the shift to cloud storage in web development.
In healthcare there seems to be a teeming pool of technologies ready to enable a wave of significant disruption. Healthcare is a fragmented industry, where the act of getting diagnosed with an illness and getting medicine is actually a complex series of processes. But the digitization of assets is breaking down silos. With better data storage and streamlined access to information, complicated processes can become simplified, faster and automated. The shift to digital makes it easier for innovative actors to understand and improve outdated processes and models, one of the signs that an industry is primed for disruption.
Healthcare, perhaps more than any other industry, relies on expert labor. This is one of the main reasons the industry has been able to resist change for so long, but with increased advancements in medical tools and equipment, the requirements for expert labor are easing up. More people can get trained faster, and in some cases the technology eliminates the need for expert labor altogether. The advancement of artificial intelligence will continue this trend. An AI programmer will be able to empower innovation, whether they went to medical school or not. It’s a shift that reveals the dynamics of disruption are indeed present.
Technical mobility and the proliferation of smart devices is another signal of imminent disruption in healthcare. When information can flow seamlessly between devices, and patients hold the power to get a diagnosis in the palm of their hands, the potential for new business models quickly emerges.
The actors of change
It seems that the technological requirements are there, but for disruption to truly arrive in healthcare, there must be innovative actors pressuring the industry.
Regulations have traditionally been one of the biggest hurdles for disruption in healthcare. But recent changes, like the 21st Century Cures Act, are not only opening the doors for innovation, they’re encouraging it. The 21st Century Cures Act allows pharmaceutical companies to shift to utilizing real-world data to verify a drug’s safety and efficacy, placing value on patient outcome over sales or clinical trials. This signals a shift in government regulation that will make it easier for innovation to occur in healthcare, removing one of the biggest obstacles to disruption.
While regulators are certainly important, third-party agencies must promote disruption as well. Prime Health is an example of an innovative organization in this space, whose mission is to “[accelerate] the adoption and implementation of digital health technologies that enhance access to care, improve clinical outcomes and reduce costs.” Prime Health runs a yearly innovation summit, a Shark Tank-like opportunity for companies to pitch the latest in healthcare tech innovations and get connected with investors. Prime Health is providing a platform that is quickly accelerating innovation in the medical space.
While all of these actors are important, perhaps it is disease and illness itself that will ultimately become the tipping point. When technology can enable patients to receive a diagnosis remotely, the likelihood of spreading illness decreases dramatically, which is a win not just for patients and doctors, but society as a whole. With technology at a point where it can provide the platform, disease becomes a major incentive for rapid innovation.
Is this the tipping point?
Amazon wants to prod the industry to embrace and develop change — why else announce its intentions before it has a plan? While it’s significant for a tech titan to throw its weight into the healthcare arena, change won’t materialize immediately.
The signs are there: disruption is coming, sooner or later. We’ll only be able to point to the spike once it’s happened. Is it here now? It’s hard to know definitively, but we can say that all the factors needed for disruption to occur are in place.
One thing is clear: The time is now to embrace the inevitability of disruption and lead the charge, or risk being left behind.