The Technological Evolution of US Healthcare

The disease management industry, which focuses on reducing or delaying the use of expensive treatments or costly procedures, has passed its prime as a unique approach to controlling escalating costs attributed to chronic conditions.

It worked on the sickest of the sick, but as patient conditions progressed and engagement levels decreased, it gradually lost its effectiveness.

The industry hit a growth ceiling when health clients no longer found that cost savings justified the high care management fees charged by DM companies, especially when applying a DM approach to patients with less severe chronic conditions.

Since 2008, health clients, especially insurers and integrated health systems, have modified DM approaches, which has proven more cost effective. However, the entire healthcare industry has recognized that prevention should occur much earlier in a patient’s care continuum.

Detecting early signs of problems and engaging consumers with preventive care services, proactive education and effective self-care is the current thinking. That approach shows greater promise to address fundamentally the cost problems inflicted on the health insurance industry as well as the quality-of-life impact on patients themselves.

Managing Population Health

That recognition has triggered a new round of experiments in tackling the chronic condition epidemic in the U.S. Other terms that describe similar approaches exist, but healthcare industry constituents increasingly use the term “population health management” to refer to a set of practices that focus on early management of and engagement with consumers with moderate to severe chronic condition risks. The word “population” connotes that the approach will manage a large swath of consumers with heterogeneous chronic risk profiles and demographic/socioeconomic backgrounds.

The challenges of doing “population health” right include the following:

• Motivating consumers who many not realize they are at risk
• Building a new culture and incorporating incentives for primary care doctors to help engage consumers
• Giving consumers the right tools and information to take on self-care
• Personalizing the experience to keep consumers engaged

As self-care tools, wearables are particularly well-suited solutions to help consumers manage their own care and provide a personalized experience. They also assist care professionals and population health management companies by feeding data into a larger personal health information pool, the use of which can improve program effectiveness and contribute to timely clinical decision support.

Fortunately, there are tailwinds behind the U.S. healthcare industry that encourage broader adoption of population health management programs. They include the following:

• The Accountable Care Act, passed in 2010, has been in full swing since late 2012.
• New care models, such as accountable care organizations and patient-centered medical home, have accelerated care model transformation.
• Health information technology adoption rose rapidly.

Some headwinds in the healthcare industry can offset these tailwinds. For one, Obamacare faces significant political opposition from the Republican Party, which now controls both the Senate and the House. Although it survived the latest challenge in the King v. Burwell case, the outcome of the next presidential election could disrupt the continual implementation of the ACA, and even scrub Obamacare completely.

Parks Associates believes that new health reforms from the GOP would incorporate many elements of Obamacare, but the political mess could delay implementation of new care models and disrupt the pace of population health management programs’ technology adoption, including that for wearables.

Trying on Wearables

In practice today, many population health management organizations — along with their clients in the health insurance, hospital and integrated health system businesses — have shown a strong interest in integrating wearable devices for collecting data on health vital signs. This interest has spurred a race between technology providers from the consumer market and traditional health IT vendors.

Health IT vendors, including top players such as Epic Systems, Cerner, McKesson, Allscripts and major contenders such as AthenaHealth, are eying IT tools for population health management as the next big growth opportunity.

Those tools, which target physicians and nurses as adopters who manage patient populations, include modules that either aggregate vital signs from devices used by patients in a prescribed home health monitoring program or feature interfaces that directly connect devices to clinical databases through a patient portal application.

Most vendors claim that their device integration interfaces and back-end technologies can support whatever devices a consumer uses. In practice, however, their software and databases are likely to connect to only a small number of wearable health tracking devices.

That is because their solutions’ use cases are centered on doctor-prescribed devices that have the permission to interface with the electronic medical record. That limitation is the Achilles’ heel of these health IT vendors; wearable device makers may find it a resource drain to work with myriad proprietary EMR systems designed by these vendors.

It is possible that device integration can take place at the cloud level — that is, a wearable device maker’s own cloud interacts with an EMR vendor’s cloud — but the cloud infrastructure of traditional EMR vendors is relatively weak, and their reputation on cloud API integration is poor.

Vendor Variety

Another group consists of a diverse range of technology vendors that share the same attribute of not being a traditional health IT vendor. Many used to be health monitoring hardware vendors but shifted focus to software and integration services (e.g., Intel-GE Care Innovations, AMC Health, Ideal Life, Numera).

Many startup companies also are building their solutions with the latest cloud infrastructure and data integration technology. Notable players include Welltok, Virtual Health, Wellframe and Vivify Health.

Some may even have their own population health management service built on top of their respective technology platform; examples include Wellness & Prevention from Johnson & Johnson, Conversa Health, and RedBrick Health.

Finally, there are pure data aggregation and integration platforms that serve clients in the population health management industry; examples include Microsoft’s HealthVault, Qualcomm’s 2net, Validic and HealthKit from Apple. Those providers can serve the other three categories of vendors within this group.

Picking the Right Partners

For pure-play wearable device makers, those vendors — both EMR vendors and others — are all potential partners that can help them find ways to distribute wearable health devices to end users through a population health management program.

As our analysis suggests, however, the population health technology market today is very fragmented with no clear leaders. That makes finding the right partnerships difficult.

Wearable device makers have a large opportunity and need to identify partners with solid business relationships with population health service providers, work with vendors offering future-proof technologies and long-term growth goals, and influence consumers through marketing, which will indirectly influence health clients hiring population health service providers.