What the Story of a Much Talked-About Bay Area Startup Tells Us About the Future of Health IT

In 2004, I was managing a hospital division at the University of Chicago and our clinic director walked into my office and asked whether I thought that all physicians should be issued with smartphones. My first internal thought was, “Hmm, what’s a smartphone?”

Today, we all know how dramatically different mobile phones are than they were a year or two ago, much less back in 2004. But as the power of mobile technology increases, tech entrepreneurs have taken a lead on challenging old rules that haven’t been discussed in decades. What if the development of the smartphone could give us some clues into the future of healthcare IT?

Recently, I was on a business trip to Boston and met a friend for dinner. As we discussed where to go, I wanted to go someplace close, thinking that getting a taxi would be a pain. My friend pulled out his smartphone and requested a car to pick us up through the car-sharing service Uber. If you haven’t heard of Uber, or Sidecar, or Lyft, the essence is that the headache, the wait, and sometimes the expense of getting a taxi are virtually eliminated.

In many American cities, there are not enough taxis to service the number of people who want a ride. Before Uber, it could take a long time to get a taxi, and people would wind up…stuck. Recently, ride-sharing companies have launched, using smartphones to connect aspiring passengers with would-be drivers. Result? More rides, better prices, improved availability. Conclusion: happy passengers.

What’s instructive about Uber is that while passengers love it, regulators and incumbent companies do not and, in fact, have worked to shut it down. Their belief is that without strict oversight, the quality of rides will diminish, and passengers will be worse off. Brian Chen, reporter for the New York Times, spoke over the issue with Professor Daniel Sperling, Director of the Institute of Transportation Studies at University of California, Davis. “Transportation has been one of the least innovative sectors in our society,” says Dr. Sperling. “When I look at these new mobility companies coming, where they’re using information and communication technology, at a very high level it’s long overdue and should be embraced with open arms.”

If healthcare took a page out of the Uber book, what could healthcare software enable over the next few years?

The parallels between healthcare facilities and taxis are strikingly similar. Regulators not only control the number of taxis, they also control the number of healthcare facilities allowed to open. While most Americans don’t realize it, there is a set of laws called “Certificate of Need” or “CON” laws. These laws lead to the same outcome as the scarcity of taxis. Joseph Miller, at the Antitrust Division of the United States Department of Justice, said CON laws “…undercut consumer choice, weaken markets’ ability to contain healthcare costs, and stifle innovation.”

Today, a new hospital or healthcare organization, in order to get permission to open up shop, needs to demonstrate that wait times are so long at current hospitals, that a new hospital could open up without harming the profit of a hospital already in operation. But, getting that type of data is nearly impossible, or has been, until now.

Imagine a scenario where patients could share the data on when they made an appointment, how long of a wait time they had for the appointment, and then how long they had to wait in an exam room. Patients have, by law, the right to their healthcare information, but in the past people have mostly been interested in clinical information, not in practice management data. However, what if we, the patients, could send our practice management data to a central database? New healthcare businesses could use that data to get permission to open up new clinics, new hospitals, and other services that could strengthen customer choice, increase the markets’ ability to contain healthcare costs, and make innovation explode.

Where could this matter the most? In Massachusetts, after healthcare reform, wait times more than tripled for primary care appointments.

The reason was straightforward. The number of patients dramatically increased but the number of doctors and the number of hospitals stayed the same. Scarcity was on the rise, just like taxis on New Years Eve. High in demand, but not a free one in sight. Healthcare reform has, of course, become a national phenomenon, which means that if data and technology can be used to increase access to healthcare facilities, such a development could dramatically improve patient satisfaction nation-wide.

Smartphones allowed us all to become better connected, but the real disruption came from breaking down barriers that previously nobody had the data or the coordination abilities to address. Is it really a stretch to think that healthcare IT doesn’t have the same future?

That would be really cool. Maybe even Uber-cool.

Jacob Plummer is Vice President of Business Development for Allscripts, a global healthcare IT company. Previously, Jacob managed a hospital division at University of Chicago Medical Center.

7 replies »

  1. “What’s instructive about Uber is that while passengers love it, regulators and incumbent companies do not and, in fact, have worked to shut it down”

    This is the precisely the reaction when actor networked innovation enters fixed systems, and why the Internet has been blocked from entering Healthcare on a transport level that would provide customer satisfaction, however, there is no stopping it.

    I actually briefly drove a cab in college where there were only a few cabs, unlike say NYC.

    There were a large and odd set of rules one had to follow, since the only people who took cabs were students coming home from break to the dorms, people who took cabs to the local supermarket 2 blocks away, and then had you carry the groceries upstairs, picking up people from bars, and the occasional visiting rock stars who didn’t understand that no one actually took cabs and just wanted some local color.

    There are powerful symmetries with healthcare. The one rule that I had heard, and had a hard time believing was that if you picked up a pimp and he did not pay you, you were supposed to confiscate his pimp hat, which was then left at the cab lot dispatcher’s office until he paid the fare. Oddly enough this exact thing happened over a dollar fare and the pimp knew the rule.

    The Internet has gathered up the pimp hats of Health Care IT transport and they will be available in the office when the fare is paid.

  2. the other issue of course is that taxi drivers – much like our more profit-focused orthopedic surgeons or oncologists or cardiologists – have little or no incentive to participate in the system. Being sensible guys at heart most have figured out that there is a balance between being an efficient taxi driver and maximizing their income. I like the idea of building uber health technology – sign me up, please – but how do you get people to use it? how do you deal with the counter argument that using the uber health platform will make my business less profitable by forcing me to be more efficient and will make me work harder (not a little harder, MUCH harder) – that’s the thinking you’re going to have to deal with – opening up new markets good – but more work and less money bad …

  3. ” What if we could get a really good differenential diagnosis without needing to access a facility–like on our smart phone.”

    What if we could use a Transporter to access any facility we wanted?

  4. What we are really talking about at least in part is access to medical information and diagnosis– which is not entirely about access to a facility. What if we could get a really good differenential diagnosis without needing to access a facility–like on our smart phone. This would support some huge and important shifts in how we access care. Some of the spend now used to diagonse and treat could shift to treatment. And some group of potential “patients” would understand that self care without ever accessing a facility or a clinician is their next best step.

  5. “that could strengthen customer choice, increase the markets’ ability to contain healthcare costs, and make innovation explode.”

    I’ve never seen it proven that more health care providers will lower cost. In fact the studies I can remember reading say the opposite.

    If there’s one doctor in town he generates x medical business, when there’s two doctors in town they generate 3x medical business.

    With all the “innovation” in medical care you’d think we’d have the cheapest system in the world. We have the greatest access, the most equipment and doctors and yet the most expensive system.

  6. I think some of the biggest improvements we’ll see in healthcare will come from translating innovations from other industries, especially how innovative businesses use open data, crowdsourced data, and internal data — in real-time with geo-located and context relevant filters.

    We’ll start seeing more examples of Uber-like tools in healthcare as more entrepreneurs develop new software, hardware, and operational processes. However, it’s important for techies and business people to spend time with patients, clinicians, in home and clinical settings to really understand the pain points and feasability of ways to solve them.

    For example, to complement your analogy of Uber transportation and publicly displayed wait times, could develop something like Waze for health…BUT with the caveat that interpreting wait times is tricky in healthcare because there is so much variability in what different patients need — especially the sickest patients take up more time at an office visit etc. If you are very sick and your doctor decides to spend 21 minutes with you instead of 10 minutes, a poorly designed ratings system will erroneously label this as a bad doctor because he’s technically 11 minutes behind schedule.

    One way supply and demand of healthcare will be affected in the future is consumer health devices will eventually become mass market and change the relationship between patients and physicians/clinics/hospitals. If there are sensors, apps, and videocalls that can help diagnose a patient at home, then it would mean only the sickest patients that can’t be treated remotely will end up physically visiting the doctor. It’s hard to tell what volume of visits this would effect, especially from a workforce planning perspective.

  7. Praise the Lord! I never thought I would ever read any criticism of certificates of need. I didn’t know they even existed until I got a post-retirement job with a healthcare organization. When I learned how they worked I mentally filed it away with the rest of the politics-driven encumbrances the system has accumulated over the years.

    Oddly enough, the same people who argue the merits of free enterprise, complaining about regulatory burdens, often favor systems and exceptions that feed their investment portfolios. CONs serve the same purpose as tax loopholes, insuring that giant operations have minimal competition. It’s something like franchising, but with political types (in loco parentis, a parent company) drawing territorial lines. Think telecommunications model applied to health care.

    Couple CONs with giant so-called “non-profits” that launder money for very profitable clinics, specialty centers, drug companies and a veritable hive of private practices…. and you have the perfect revenue generator for a comfortable club of Very Serious And Important People. Here’s the money quote (pun intended):

    “Today, a new hospital or healthcare organization, in order to get permission to open up shop, needs to demonstrate that wait times are so long at current hospitals, that a new hospital could open upwithout harming the profit of a hospital already in operation.”

    Somebody just pinned the tail on the donkey.
    Or if you prefer, pointed a finger at the naked king.

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