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It has not yet been 20 years since the term Digital Healthcare was defined in the year 2000. Yet arguably the most important day in the history of Digital Health occurred on September 24th, 2019, and relatively few in the healthcare sector even took note. On this one single day, five simultaneous, but uncoordinated announcements were made that collectively signaled the beginning of a seismic shift in the healthcare sector.

The first announcement, in Forbes magazine, indicated that analysts at Morgan Stanley are predicting that healthcare may eventually become a bigger business for Best Buy than selling electronics. “Health monitoring services for seniors and other digital health initiatives … could generate anywhere between $11 billion and $46 billion. This study was commissioned because a non-healthcare company wanted to assess its potential ROI in the health sector and they found it to be significant.  The article also sheds light on the electronics giants’ intentions to offer healthcare services, not just sell health related digital electronics. Secondly, Walmart announced its plans to build a healthcare workforce to fill future healthcare jobs at Walmart and Sam’s stores. They will accomplish this by offering 7 health related college degrees and certificate programs for $1 per day. That’s a full bachelor’s degree for $365 per year, to build a healthcare workforce for stores, not hospitals. Thirdly, Humana & Walgreens announced an expansion of their full-service primary care clinics for seniors, some of which are in Walgreens stores.  This partnership, unlike the current versions of the CVS Health efforts located at CVS stores and Minute Clinics, are designed to offer full service primary care. Anything a traditional primary care provider can do in their office or hospital, will now be done in a Walgreens store. Fourth, Amazon launched “Amazon Care”, a 100% virtual health clinic with in-home follow-ups.  Here individuals can see a health provider via a mobile app or website. They can text a nurse on any health topic any time and if follow-up care is needed, a nurse goes to the home. The patient goes nowhere. If medicines are needed Amazon will prescribe medications within a few hours for immediate pick up or in some cases delivery by drone. No hospital involved or needed! And Finally, CVS Health announced the availability of their first purely digital therapy which uses an avatar to provide behavior modification therapy to treat insomnia. No doctor involved. No prescription needed.

Individually, these announcements could appear to be of relatively minor importance.  Collectively they also could be seen as of little importance because they do nothing to fundamentally change the practice of medicine. They do collectively however they do signal an effort, that if ultimately successful, would at scale, represent a seismic shift in the organization and delivery of healthcare. None of these solutions were conceived with the belief that the hospital is a critical or central cornerstone of healthcare service delivery. The fact that all five of these announcements occurred on the same day, by tech companies and payors, suggests the speed and seriousness at which the market is moving, compared to traditional healthcare-initiated practice and policy changes. Finally, the current national and international footprint and consumer reach of the companies involved in these announcements, makes them able to serve large numbers of consumers relatively quickly, should they choose to scale nationally and beyond. Traditional hospital CEO’s, health systems administrators and even astute medical providers should now be able to appreciate the reality that digital technologies will bring significant change to the historic organization and delivery of healthcare in addition to changing the practice of medicine and traditional business models.  Digital Health can no longer be credibly viewed as a fad, an app, or snake oil. In reality, it represents a significant, clear and present threat to the current healthcare system. Only those CEO’s who understand this reality and move aggressively to adapt, stand the best chance of surviving.  The good news is that the end of the story has not yet been written. With the right effort, some traditional healthcare organizations may not only survive, but become health and care leaders in the emerging digital economy.

In our next blog we will discuss the impact of Digital Health on the patient experience and what this will mean for the healthcare sector.

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The response from those in attendance at the Colorado Hospital Association meeting where I recently gave a keynote presentation was simply amazing! It was so overwhelmingly positive that I have decided to share some of the presentation with you who were not able to attend. Here is what I believe will be the top 10 effects of digital innovation on hospitals and the health sector for patients and consumers. I would love to hear what you think! Do you agree? What are your thoughts?

Top 10 effects of digital innovation on hospitals

  1. Insurance companies will become Health Companies.
  2. Retail stores, pharmacies & post-offices become health centers.
  3. Your TV (and any other screen) will become your doctor’s office.
  4. Your smartphone will become a health device.
  5. Consumer technology, smart clothes & health apps etc. will assist with health management.
  6. Patients will support each other through social media, VR and AR.
  7. Doctor’s will treat environments not just patients.
  8. Our medicines will tell us when they need to be taken.
  9. Your car will become your ambulance.
  10. Your Home will become your hospital.

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Telehealth is the use of telecommunications equipment and infrastructure to enable or facilitate health related activities. The use of Telehealth is growing rapidly in the US. As this occurs the types of technologies and the ways in which they are used in healthcare is also rapidly changing. Today, telehealth services are delivered in 4 basic ways. These include a) live video-based interactions between two individuals b) the transmission of prerecorded digital pictures and images c) remote patient monitoring which is the collection and wireless transmission of health information from an individual in one location to someone in another location and d) mHealth which involves the use of mobile hardware (phones, tablets etc.) and software (apps) to enable or facilitate health activities.

The delivery of telehealth services is often organized in one of three ways or models. When a large healthcare system is the primary provider of telehealth services to smaller often rural hospitals, this is called the hub and spoke model of telehealth organization and delivery. Alternatively, telehealth services can be delivered through a network model. In this model health care facilities are connected to each other, creating large networks and smaller subnetworks which work at times, independently and at other times together, to provide a range of telehealth services to patients and caregivers. Thirdly, due in large part to advances in broadband network availability and reliability, telehealth is increasingly being deployed in a “direct to consumer” model where consumers using their own devices can directly connect with health personnel and services anytime, anyplace.

So, what impact will telehealth have on the health sector in the future? Over the next decade we will continue to see tremendous innovation and evolution in the telehealth space. This will continue until most patients and most providers will be delivering health services using some form of telecommunications technology and or infrastructure. Consumer telehealth devices will go far beyond cell phones, tablets and apps to include voice activated systems like Amazon Alexa or Google Home, automobiles and even homes and buildings themselves. There will be tremendous growth in the types of data that can and will be collected from patients.  There will also be rapid growth in the number of ways in which this data can be collected. Many everyday consumer devices will not only capture data and send it somewhere to be analyzed, but these devices will also, in the future, be able to appropriately act of the collected information, in real time without the direct involvement of a healthcare professional or family caregiver.  This is the basis of what are known as “smart devices”.  They are smart because computing power will have advanced to the point where it can be put not only into desktop computers and cell phones but into devices as small as dust or blood cells.  They will not need batteries, because they will be able to run using the electricity generated by our bodies. Finally, they will in many cases, transfer information using low power medical body area networks which will enable the automatic capture and transmission of information from multiple body worn sensors simultaneously and wirelessly. The introduction of 5G networks will enable an era of continuous connectivity (or pervasive computing as it is also known). This will allow patients, caregivers and providers alike to monitor important health information continuously. (in real time, at all times, no matter where a patient, consumer or provider is located). Finally, there will be further evolution in the models of care delivery. Current models of telehealth all require an individual to decide to provide or receive a telehealth-based service. These models of Telehealth can be said to be “active” models because they require a person to do something in order to receive the or deliver the service. In the future, telehealth services will be delivered, in many cases, automatically, as the need arises. At times, patients will not even realize they are receiving health services at all, because delivery or receipt of the services will not require any active action and the spaces in which will live, work and play, will all be connected and smart. In this future, health care providers will oversee the development of the “brains” of these systems but will not always need to be involved in deciding or implementing the appropriate action to address the health concern. Broadband based technologies like telehealth are changing the world in exciting ways that are sometimes hard to imagine. They also have the potential to make the possibility of health a reality, for all.

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Yesterday CVS Health announced that it has agreed to buy Aetna for $69 billion. If the deal goes through, it should send shock waves through the health care system. CVS is not only the largest pharmacy chain in the US, but it is also the 7th largest company in the US with approximately 9600 retail stores in 2016. But CVS Health has plans to move beyond being just a pharmacy and convenience store to become a bona fide healthcare company. The emerging 3-part strategy is potentially powerful! One part of the strategy is to expand the current offerings of CVS pharmacy’s to included more traditional healthcare services that formerly required hospital or doctor’s office visits. Given that CVS Health already provides healthcare services through its more than 1,100 MinuteClinic medical clinics as well as their Diabetes Care Centers currently located within CVS stores this transition is likely doable. The second part of the strategy appears to be aimed at driving down healthcare costs through creating a virtually wholly owned prescription drug ecosystem, not unlike the IOS ecosystem created by Apple. which is on the brink of becoming the first trillion-dollar and most successful company in the world. The third part of the strategy, which builds on the first two parts, is focused on driving value for consumers. While some may doubt their ability to accomplish this goal, the rising popularity of retail healthcare outlets, the potential for vastly enhanced consumer healthcare experience (little to no waiting lines or delays in seeing providers, easy access to medical facilities located in local communities, lower medication and care delivery costs, familiar, trusted care delivery settings combined with convenience shopping opportunities) strongly suggests that the essential elements are indeed in place. Interestingly, this vision and emerging strategy is in line with that of Aetna the 3rd largest health insurance company in America. Aetna’s CEO, Mark Bertolini took things even a step further last month while speaking at the Healthcare of tomorrow conference where he said that it will soon be possible to provide the bulk of care patients need, in the home and community. So, in the near future, “if you must go to the hospital, [the healthcare system] will have failed you”. In this new world traditional high cost, brick and mortar tertiary healthcare systems will simply not be able to compete on costs, convenience and as the evidence is beginning to indicate, not even quality. Their ability to pivot to a more sustainable care delivery model that substantially improves patient experience and value, will be limited. As such, the classic scenario for disruption, as originally articulated by Harvard Business School Professor, Clayton Christensen, and as applied to the organization and delivery of healthcare by Johns Hopkins experts  Gibbons and Shaikh, is in place and could eventually significantly impact the traditional healthcare system as we know it. Rather than sticking their heads in the sand, CVS and Aetna appear to be embracing the challenges that lay ahead and seizing the opportunities these changes bring. It remains to be seen, if others will join them, or be left behind.