How to reduce the 40 percent of the $3 trillion the U.S. spends on healthcare each year

smart care team 4smart care teamHealthcare providers and insurers in the U.S. may be efficient and effective in their individual roles, but the system as a whole, hamstrung by regulation and dysfunctional fee-for-service economics, is not.

By most estimates, about 40 percent of the $3 trillion the U.S. spends on healthcare each year could have been avoided.

That represents an enormous pot of potential profits for companies that successfully disrupt the system.

The U.S. may not deserve to be ranked dead last in healthcare compared to our peer nations, as it was in a recent report from Commonwealth Fund. But considering that most of those peers spend less than half what we do, there are clearly issues of value.

And in a time of rising consumer expectations, the user experience of healthcare is falling behind. Particularly when compared to Uber for personal transport, Amazon for shopping, or Open Table for picking a restaurant and making a reservation.

In healthcare, nearly everything is inconvenient, slow, confusing, and opaque. It is hard to determine which doctor to see and even harder to know if they are following evidence based guidelines, taking a holistic approach to medicine, or are priced in line with the market.

And so the tech entrepreneurs are doing what they do best, redefining the rules and tipping value their way, creating magnetic new products and services that eliminate hassles and delight consumers. Some provide general health information (such as Greatist or WebMD), help consumers prepare healthy meals (Zipongo), or even provide live, video-based personal training sessions (Wello). Others drive personalized engagement by aligning consumer actions and behaviors with incentives and rewards (Welltok), offer primary care based on a whole new model (Iora Health), or enable consumers to find doctors, make appointments, and identify low-cost opportunities (Castlight and ZocDoc).

Consumers have responded. WebMD attracts 180 million unique visitors each month to its network of websites. Jawbone’s Up band, one of the leaders in fitness tracking, recently registered its trillionth step. There are between 50,000 and 100,000 health and fitness apps, mostly monitoring for exercise and eating, some tied to wearable sensors or biometric devices. According to the research firm Research2Guidance, the top 10 health and fitness apps generate up to 4 million free and 300,000 paid downloads each day. The top-ranked, MyFitnessPal, says it has more than 40 million registered users.


If $10,000 is a reasonable price for keeping Fred engaged and healthy, what’s the best way to spend it?

What combination of traditional medicine, biometric monitoring, coaching, nutrition, medication management, and early intervention programs will produce the best results?

And what kind of healthcare system do we need to deliver it?

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We are approaching a time when the EHR will incorporate real-time data on multiple metrics, and the conversation between doctor and patient will have the intensity of an ICU consultation, but backed by insight gleaned from the patient’s daily living information.

Finally, imagine the impact when trillions of personal data points are connected to a big-data analytical engine that can perceive patterns and dispense advice. Consumers will soon have access to IBM’s Watson computing system for personalized advice on health and wellness. Welltok’s integrated CaféWell platform connects health plan members to a wide range of health improvement programs, devices, health and lifestyle information, and applications in a single consumer interface.

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Connie’s comments:  Cost reduction can be achieved starting from the consumers who will drive down the need and cost based on healthy choices, information, health care team availability and cooperation and more.


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