Health care, the industry that's both begging for disruption and virtually disruption-proof


(Washington Post illustration; iStock)

In 2016, IBM employees in the Raleigh-Durham area were offered access to a handy new health-care app with tools to help patients navigate the many choices they face when they fall ill.

The app offered a symptom checker, an overview of the options for care, a map of nearby facilities covered by the person’s insurance, free video consults with a doctor 24 hours a day and a breakdown of the out-of-pocket costs people would face at different locations.

The pilot feasibility study, a collaborative effort between a Harvard Medical School physician, the health insurer Anthem and IBM was designed to test the waters: Would employees and insurers both benefit from putting more power in the hands of patients?

Two years later, it is defunct.

“The short answer is nobody really used the tool,” said Ateev Mehrotra, an associate professor of health-care policy at Harvard. “For a variety of reasons, they just forgot about it. This is what I would say in my defense: I still think it’s a good idea.”

The $3.3 trillion American health-care system is seen by most everyone as ripe for disruption. Its inefficiency and complexity are apparent to providers and patients alike — and consumer technology giants, such as Amazon and Apple, have made it clear they’re interested in shaking things up.

But the tech companies that have excelled at disrupting industries, from bookstores to taxis, have typically done it by improving and transforming the consumer experience. Efforts to upend health care in the same way face a major challenge: Most consumers engage with the system infrequently and, when they do, patient choice tends to be superseded by health insurance plans and doctors.

The first problem the app faced was simply getting people to download it. Emails and letters to 400 IBM employees offering a $20 gift card yielded just 30 sign-ups. The recruitment letter was tweaked and the bonus was upped to $50, but out of 700 letters sent out, only 60 people signed up. The second problem was getting people to use it. Although users told the Harvard research team that they thought the app had a good interface and functionality, it was out of sight and out of mind when they got sick.

Mehrotra is the first to admit that he isn’t an expert at developing killer apps — he’s a professor and physician studying how innovation affects the cost and quality of care. A disappointing pilot at a single employer is by no means evidence that technology won’t transform health care. But it is a reminder that this is a special sector of American life where consumer engagement has been puzzlingly hard.

Derek Newell, president of the health tech company Castlight Health, compared being a patient in the traditional American health-care system to going to a restaurant with a rich uncle who pays, while the waiter chooses the food. The patient may get to pick the restaurant, but the rich uncle is the insurance company and the waiter is the doctor, who is motivated to keep bringing more entrees and expensive wine.

That system is changing. First, high-deductible health plans put consumers on the hook for their choices — effectively forcing consumers to pay for the first $5,000 of dinner with the rich uncle.

And the payment system is gradually shifting away from “fee for service,” or paying for each procedure. Instead, doctors and hospitals are increasingly paid for keeping people healthy — making costly procedures less attractive as a potential revenue stream.

Consumer tools are proliferating to help people, but that’s left the health-care landscape littered with digital walled gardens — Web portals where patients can access their medical records, insurance company websites with information about their plan, fitness apps where patients collect their own data. A person might find a doctor on one website, but have to log in somewhere else to find out whether the physician is covered by their plan. People who search for their symptoms don’t automatically get served information linked to their benefits, advising them on where they could go and how much it will cost.

“The industry is trying to push people to become more consumer-centric. When you go out to dinner, you can be booking airfare — you go to Travelocity, you try to get a good deal. That hasn’t been there in medicine,” said Manish Oza, a regional vice president at Anthem. “The challenge I think we see is when members are trying to make a decision. … They don’t say, ‘I have a question or issue — let me go to Anthem.com.’ ”

Castlight has collaborated with Anthem to build an app called Engage, the next iteration in trying to solve this problem. The app provides transparency tools to empower customers to make informed choices and alerts them to gaps in care — such as if they’re overdue for an important preventive test.

Newell said one of the biggest challenges his company has faced is getting the brand recognition so that people realize the app is a central place for health information. To increase people’s engagement, Castlight has tied its app deeply into health plans and the person’s specific benefits, giving people financial rewards for good health behavior. Members who receive cash bonuses for taking a certain number of steps or inputting blood glucose measurements a few times a week if they have diabetes can get a discount on their premium — while managing their disease better. At the same time, they become more familiar with the app.

To Newell, consumers can’t upend the health-care system alone — change will come from employers and health plans that alter how the system pays for care. That, in turn, will empower consumers to make better choices and to utilize technology and monitoring tools that help them stay well.

“It’s a slow revolution,” Newell said. “Consumers drive change, but policy and benefit design and insurance drive more change in health care, more than anything. It’s not a consumer market in the same way.”

So far, tech companies have been focused far more on the tax rate, privacy and other issues that hit their industry directly, according to Dan Mendelson, president of Avalere Health, a consulting firm.

“One thing I’ve found is that tech companies have not been present in the debate around reimbursement or payment and delivery reform,” Mendelson said. “If they put their muscle behind aligning the health-care system to make sure that tech is embraced in the health-care system, that would be very productive. It will happen when they decide it’s of sufficient strategic importance.”

That day may be coming soon. One of Mehrotra’s takeaways from the feasibility study is that the information in the app would be more powerful if it were seamlessly integrated into a platform people use regularly. A website that people already use every day — say Google, or Amazon — that linked up with health insurance information and benefit design could be a powerful way to drive consumer behavior.

“What if Alexa said, ‘You haven’t had your mammogram this year.’ What if you said, ‘I’ve got a sore throat; what are my options?’ ” Oza said, describing a possible vision of the future. “It’s something we’re working on that we’re trying to figure out.”

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