Far too often, we see medical mixups and even deaths caused by interoperability obstacles in our healthcare system. Patients in critical conditions cannot speak to their past medical history in an emergency in these situations. Upon their recovery but through no fault of their healthcare providers, they are left footing a massive medical bill or facing other severe financial repercussions. Lack of access to data causes these terrible outcomes and is also part of why our healthcare costs are nearly 18% of the GDP and growing.
Among the many reasons healthcare data isn’t more digitally accessible is a straightforward one: fear that it will be misused. Patients are scared their data will be used against them. This could happen in several ways. The most obvious is the threat that insurance companies will use health data to deny people coverage or that employers will use the data to exclude people when hiring. That’s why health data privacy rules and regulations are so stringent.
So, how can investors advance (and capitalize on) tech development around this issue and help eradicate this fear?
Investors take note.
We know funding for healthcare and digital health companies has not been a problem, but profitability has. Many of these companies are still struggling financially under a fee-for-service business required by most insurance companies, Medicaid and Medicare. There are severe inefficiencies in the fee-for-service system: It creates the wrong alignment of interests, doesn’t favor the consumer, is complicated by CPT codes (the numerical codes used to identify medical services and procedures), high copayments and deductibles;,and is riddled by waste and abuse.
If the investor community bets on companies that continue to embrace a model many agree is broken, how can we expect outsized returns? To lower costs and reduce inefficiencies, we must abandon the existing structure and put the customer first.
The key here is to look at companies that are genuinely trying to solve not just one piece of this puzzle but those that are attempting to create an end-to-end solution that connects the employer, member, hospital, specialists, pharmaceutical companies, primary care doctors, and claims adjusters, powered by digital health data — all while making it more affordable for the consumer.
Look for those moving away from the fee-for-service structure and focused on employer-driven systems. Employers are appropriately aligned with patients, as bad health outcomes and financial stress negatively impact productivity. Employers are also concentrated on KPIs in their business; they’re used to measuring and tracking results, making them great candidates for data-focused healthcare companies.
Most importantly, in a labor market where companies are clamoring to attract employees, employers wmustwork with healthcare technology companies that pprovide remium data security because their current and potential employees will demand it.
