Healthcare delivery is a simple supply chain – and with that comes the threat and potential of digitization. One of the primary challenges within healthcare internationally is the requirement for high levels of skill across the chain, which limits the supply of labour as well as exponentially increasing costs of delivery. Secondly, cost has skyrocketed over the last decade due to other external factors. Healthcare expenditure has been at the forefront of political conversation over the last years, especially as the US spent 3.2 trillion dollars on healthcare in 2015, the federal government being the largest sponsor. Often healthcare is deemed an unchangeable market, requiring face-to-face care, and a specific flow of care; the combination of the two has led to a large amount of time being spent on reducing the costs within hospitals. Digitization of healthcare via telemedicine disrupts this mentality and offers large healthcare chains to deal with concerns of costs as well as labor supply. Although not a new digital innovation, telemedicine can be as small as a nurse to call when blood pressure changes, or go as far as Medically Home, a start-up that offers services to set up a small hospital within your home.
Partners Healthcare, while having a robust technology department, is much more dependent on patients coming to their hospital to access care. Within the last year it has made a commitment to cut over $600 billion in cost, targeting a multitude of areas, including insurance, supply chain, care delivery, and research. Partners, in this cost cutting strategy should take note of the impact that the growing market of telemedicine can have on in-hospital stays, an expensive portion of healthcare. Chronic diseases, for example, account for 85% of health care costs, but simple innovations can minimize this. Brick and Mortar programs can be easily converted into digital technologies: managing End Stage Renal Disease (covered by Medicare) in the comfort of one’s home can diminish costs by 90%, by switching both the method of treatment and having a doctor on-call via mobile messaging. Due to a new Medicaid and Medicare change covering some digital technologies, Partners can begin to change chronic disease care delivery systems to focus on management of these diseases, while still maintaining a similar payback rate.
Partners, in the short term, should, therefore, double-down on their Connected Health Department which focuses primarily on tele-monitoring. The department has many things in the pipeline, including an exercise app, and an Atrial Fibrillation monitoring system. In the short-term, therefore, focus should be placed on actually extending the services offered. There seems to be a threat felt by the healthcare field that these technologies will cannibalize the in-house care, but because the cost of care has sky rocketed, chronic diseases have become highly predominant, and inefficiencies are maximized when treating these diseases, moving towards a digital solution could be hugely effective. By either developing in-house apps, or partnering with apps that have already been rigorously tested, Partners could become the forefront provider for telemonitoring in Massachusetts. In addition, the burden on the system for labour could diminish, changing the bottlenecks to other locations in the line of care delivery.
In the long term, threats will no longer come from managing chronic diseases, but instead start-ups like Medically Home. Telemedicine can offer a cheaper, more comfortable solution to going to a hospital for even emergency care. This approach is two pronged – monitoring can provide identification and prevention of treatment related errors, and prediction of problems before it occurs. However, studies are sparser on safety of telemedicine that provides in-care home on discrete disease states. As the field increases in volumes, small start-ups with higher risk profiles will be able to capitalize and move into that space, cannibalizing opportunities from larger hospitals like Partners. For this reason, research should move from a cautious regard to much more aggressive targeting of long term effects of telemedicine and the best implementation methods. Due to high regulation on medicine, a large national hospital chain will face higher scrutiny than many smaller companies, but placing a focus on novel safety research while innovations emerge will allow for quicker long-term implementation.
How can an organization with as much breadth as Partners diversify effectively into the telemedicine space, while still maintaining their focus on high quality care?
What factors would lead you as a user to opt into telemedicine over brick and mortar healthcare?
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