Uber-Like Innovation Is Coming: Are Physicians Ready?

Tara Haelle

March 04, 2016

Imagine if patients could use an app to see which physician's office had an open appointment or which emergency room had the shortest wait, and then schedule their appointment on the telephone, regardless of who their primary care physician was. Or, what if patients ditched their primary care physicians altogether and went with private companies outside the traditional healthcare system, which they saw as more reliable, convenient, and accessible?

That is what's coming for those within the healthcare industry who do not embrace innovation now, write Allan S. Detsky, MD, PhD, from the University of Toronto Department of Medicine and the Mount Sinai Hospital in Toronto, Ontario, Canada, and Alan M. Garber, MD, PhD, from Harvard University in Cambridge, Massachusetts, in a perspective article published in the March 3 issue of the New England Journal of Medicine. They argue that the healthcare industry is ripe for the same kind of disruption the taxi service industry experienced when customers gained access to other options.

"Uber's message for health care is clear," they write. "Providers have three choices: ignore innovators and hope for the best; call for increasing regulation to make it harder for innovators to enter the market; or compete on quality and efficiency, disruptive though that might be." They suggest providers take the last option and hop on the innovation bus before it drives off without them.

"Taxi service was vulnerable to disruption because poor (some would say archaic) service had been established as the norm, in part because it was difficult for higher-quality alternatives to fill the gap," they write. The taxi industry had an essential ingredient in a highly competitive market — many sellers who were each independently too small to affect overall prices with supply changes — but had operated for decades as part of regulated monopolies.

Despite pushback from the taxi and limo industry, Uber has won many legal battles and continues to expand. "This growth came at the expense of Uber's traditional competitors, eroding the earnings of many people who drove taxis and limousines in the regulated part of the sector," Dr Detsky and Dr Garber write.

They acknowledge that the healthcare industry is shielded by many factors from the level of disruption Uber introduced to the taxi industry, starting with "a web of regulations, contractual obligations, interlocking financial interests, and providers' political influence." Insurer and hospital consolidation, paired with market power and existing monopolies, further discourage new competitors, and "strategies for delivering lower-cost alternatives by using non-physician providers are limited by scope-of-practice regulations." And, of course, picking a physician involves significantly higher stakes than choosing transportation to the grocery store.

Innovation Is No Stranger to Healthcare

The authors also point out that past attempts at innovation have had a minor effect on the healthcare industry, but "if past changes have fallen short of expectations, that doesn't mean that disruption won't come," because market forces will fill the void between what consumers want and what they are able to get. Some barriers to entry, for example, could be removed without risk to patient safety: "state-based licensure, country-specific board certification, educational prerequisites that prolong training for physicians who perform technology-based procedures, the Health Insurance Portability and Accountability Act (HIPAA), poor interoperability of electronic health records, and restricted referral networks."

Further, successful innovators will overcome other barriers, either from a large-scale effort or by "nibbling at the edges in ways that could ultimately disrupt the industry." Dr Detsky and Dr Garber include a chart of venture-funded innovative healthcare companies and how they have disrupted the industry while providing value, such as Theranos, ZocDoc, Intarcia Therapeutics, Oscar Health Insurance, Proteus Digital Health, and 23andMe.

Adam Powell, PhD, a health economist and president of Payer+Provider Syndicate, agrees with the authors' overarching message. "The best approach is to both embrace innovations and confront innovations by finding ways to deliver more value, rather than by enacting new regulatory barriers," Dr Powell told Medscape Medical News.

He points out how ZocDoc has disrupted the patient/physician relationship without fundamentally altering the process with care, making it a tougher target for regulatory stifling. "Just as some cab drivers have found they can increase their earnings through participating in ride-sharing services, physicians who actively engage with scheduling tools such as ZocDoc may be able to experience a net benefit," he said.

Yet Dr Powell cautioned that there are obvious areas where such innovations should stop short. An unregulated market for brain surgery, for example, clearly should not exist, he said.

"Given that it can be difficult for patients to determine physician quality, a strong regulatory mechanism has been established over the years," he said. "Quality standards and regulatory safeguards have often been put in place for good reason and should be used when necessary to protect public health."

For example, he points to the recent findings of the US Food and Drug Administration on Theranos, a company included on Dr Detsky and Dr Garber's chart, as "a prime example of why regulations need to be enforced even when someone tries to do something different." A person can more easily judge the quality of an Uber driver than the accuracy of laboratory result interpretations.

Safety and Quality Control Must Remain a Priority

Another long-time observer of healthcare innovations, David States, MD, PhD, also agreed with the authors that the highly regulated nature of the US healthcare industry can result in higher prices and worse service, thereby creating an opportunity in the healthcare sector for new approaches.

Dr States, a retired professor of human genetics at the University of Michigan and now chief medical officer of the pharmaceutical company Affigen, albeit speaking only for himself and not for his company, described other notable innovation successes in healthcare. Concierge medicine offers superior service and availability by reducing physician administrative overhead, for example, and CVS MinuteClinics and Walmart clinics offer enhanced accessibility and lower prices for routine outpatient care. Costco similarly offers good-quality optical and hearing aid services and equipment at competitively low prices, and their pharmacy posts drug prices online so consumers can compare costs, not unlike some outpatient surgery and radiology clinics have begun to do.

"The eBay/Uber model where buyers rate sellers and sellers rate buyers may be interesting in some aspects of healthcare," he also told Medscape Medical News, "but you need a lot of transactions to build up a meaningful reputation." He does not expect such a model would work for healthcare providers because it is too difficult for patients to effectively evaluate their quality of care.

In contrast, opening up data among providers could be a huge disruption, Dr States pointed out. "Physicians are often interested in looking for 'patients like mine' to see how similar patients were cared for and what the outcomes were, but [electronic medical records] do not support this," he said, partly due to HIPAA. Yet, "opening up records more would clean up many abuses because physicians are very sensitive to peer reputation," he said. "Knowing that your colleagues will be seeing how you are practicing is a very strong motivation to practice your best medicine all the time."

Still, he emphasized that the barriers to disruption in healthcare, which represents one fifth of the US economy, are much higher than in other industries such as taxi services: "Small facets of healthcare represent markets as big the entire taxi industry," he said. Despite continued innovation and occasional disruption, "the Queen Mary does not turn quickly," he said.

Further, the penalties for violations in the healthcare industry are often severe, and "people die if some rules are not followed," Dr States said. "There is a long history of charlatans in medicine, and experience shows that they need to be dealt with harshly."

Similar to Dr Powell and Dr States, Dr Detsky and Dr Garber noted the long history of innovation in healthcare but point out that flaws in industry continue to offer opportunities for innovators to develop alternatives.

"If health care professionals and hospitals welcome, enable, and embrace our Uber-equivalents (as we've done many times before), we will be able to offer valued and affordable services," they conclude. "Most important, we will sustain and enhance our roles in health care by earning and maintaining our patients' trust."

The article did not use external funding. Dr. Garber reports other support from Castlight Health, Inc. Dr Detsky has disclosed no relevant financial relationships. Dr Powell is president of the Payer+Provider Syndicate, serves on the scientific advisory board of the nonprofit digital mental health tool guide PsyberGuide, and serves on the editorial board of >JMIR Mental Health, an mHealth journal. Dr States is presently Chief Medical Officer of the pharmaceutical company Affigen.

N Engl J Med. 374;9:806-809. Abstract

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