The digitization of the consumer experience is disrupting healthcare as it has in nearly every industry. Not long ago, healthcare data was manually captured on paper charts. This was a small data set that reflected a snapshot in time — captured during the patient visit. Fast forward less than two decades, nearly every healthcare system has digitized patient charts, and data capture is increasingly automated. In addition, the data richness has increased in depth and breadth. For example, biometrics data is being captured continuously during and between visits, diagnostic data volumes are growing rapidly, and DNA sequencing is becoming more common. To provide context on the scale, healthcare generates about 30% of the world’s data volume and growing at an estimated compound annual growth rate (CAGR) of 36% — a rate faster than any industry.
To understand the opportunity created by this explosion of data, looking at the industries that have already been disrupted is helpful. A good example is retail. Before online retailers like Amazon, brick-and-mortar retailers only had consumer purchase data. With that data, leading retailers used market basket analysis methods to discover consumer purchase behavior insights. They used these insights to optimize the physical store experience, target relevant ads and streamline the supply chain, among other strategic initiatives. This was a decisive competitive advantage at the time, but that was about to change with the introduction of online shopping.
Online retailers not only had access to the same purchase data as brick-and-mortar, e-commerce captured nearly every aspect of the virtual retail experience – what door the consumer walked through, where they came from, what aisles they walked down, what products they looked at, what products they touched, what they put back on the shelf, how long they spent in the store and where, etc. With this massive dataset, leading retailers tailored the store experience for every consumer, created personalized products and services, and dramatically streamlined operations through automation. This wasn’t just competitive, this was disruptive.
As you might guess, to survive and thrive in this online business landscape, retailers developed capabilities to capture, integrate and leverage these massive datasets. They also evolved data-driven cultures where everyone was fluent in data innovation.
We are at the beginning of this journey in healthcare with the potential to improve patient lives and healthcare experience, enrich the working environment for providers by allowing them to spend more time with patients and less time distilling data and filling out forms, and reduce the costs of operations while improving quality and speed. Those who can capitalize on this opportunity will thrive, and those who can’t will be left behind. The ultimate beneficiary will be the consumer.
So, why now? It is justified to be more than a little cynical. Over the past decade, provider organizations have attempted similar journeys in partnership with leading technology companies like IBM, Google, Microsoft, and Amazon, and innovative start-ups we no longer remember. In time, the hype fades away and the status quo remains largely unchanged — healthcare costs continue to rise, outcomes are not keeping pace with high-income countries, patient experience is declining, and physician and nurse burnout continues to grow.
However, there is reason to be hopeful. We have learned a lot from past experiences that have made us humble and wiser as we embark on this next journey. Also, the business landscape has changed. There are a number of powerful forces that are demanding and enabling change.
- Costs continue to grow at a rate that is not sustainable. In 2021, healthcare expenditure was $4.3 trillion and accounted for 18.3% of the Gross Domestic Product (GDP) — growing at the same rate as the GDP. This gives the US the dubious recognition of spending more on healthcare per individual than any other country while ranking last in healthcare outcomes for high-income countries. In response, there is growing pressure and incentives to shift from a fee-for-service to a value-based care business model to reduce costs and improve outcomes.
- In addition to improving the quality of care, consumers are demanding improved access and convenience. With just a few clicks on their laptop or mobile device, these individuals can purchase goods, schedule vacations, make reservations, and order groceries anywhere. They are now looking for the same ease, speed, and personalization in healthcare. To capitalize on these opportunities, investors have contributed billions of dollars to form online primary care, and complementary services, that make scheduling and receiving care at home quick and easy. Even digital natives like Amazon are leveraging their digital experience and scale to capitalize on this opportunity — perhaps making primary care another feature of Amazon Prime. In addition, established brick-and-mortar retailers like Walmart, CVS, and Walgreens are leveraging their physical presence to bring primary care clinics close to home.
- The Centers for Medicare & Medicaid Services (CMS) recently began to enforce price transparency so that patients know the cost of a covered item or service before receiving care. In addition, the Office of the National Coordinator (ONC), by the authority of the 21st Century Cures Act, has begun to enforce and evolve standards and practices that promote easier exchange and integration of patient data (with patient consent) across provider organizations and EHR technologies. This makes it easier to access and use data to improve patient care delivery and outcomes and shifts patient data control from the healthcare organization and its vendors to the consumer.
- It is hard to go a day without seeing another article about provider burnout or demand outpacing capacity — and the trends are not encouraging. According to a report from the Association of American Medical Colleges (AAMC), the U.S. will face a shortage of up to 139,000 physicians by 2033, with demand outpacing supply in primary care and specialty fields. Similar story for nursing. By 2025, McKinsey & Company estimates the United States gap may be between 200,000 to 450,000 nurses — or 10 to 20 percent. The current state is not acceptable or sustainable.
- It would be impossible to discuss forces for change without highlighting health equity that cuts across the quadruple aim — better outcomes, improved patient experience, improved provider experience, and lower cost. Everyone deserves to live a healthy and dignified life. This benefits not only the individual but society overall. Not only do we have a moral obligation, but no single action would also likely do more to advance the quadruple aim.
- Technology transforms every aspect of our lives, and healthcare is no different. The healthcare industry has historically been seen as a laggard in leveraging technology. Over the next decade, I anticipate the healthcare industry will become the leader as innovation and competition grows, and new models of care are adopted. Technology that will power this evolution includes telemedicine, wearable devices (IoT), virtual and augmented reality, 3D printing, system medicine, gene therapy, immunotherapy, tissue engineering, robotic surgery, cloud computing, and 5G. Probably the one technology that will make all other technologies magnitudes better is Artificial Intelligence (AI).
As we embark on this journey to accelerate data innovation to help people live healthier lives, digitizing the patient experience is the jet fuel, and the analytics-AI ecosystem is the engine that powers this journey. One only needs to look at how companies like Amazon reshaped retail, Expedia reshaped travel, and Airbnb reshaped hospitality to appreciate the magnitude of the impact on healthcare. Chen Qiufan, a globally recognized leader in advancing AI, noted in his new book, AI 2041, that “When we look back in 2041, we will likely see healthcare as the industry most transformed by AI.” Eric Topel has authored several excellent books describing this future of medicine. His latest book, Deep Medicine, delves into how analytics-AI will and is changing the healthcare landscape.
This is an exciting time to be in healthcare. The potential is great to improve lives, the wind is in our favor, we have the technology, and other industries have shown us the way. The rest is creativity, grit, hard work, and the will and courage to change. Some healthcare leaders are already showing us the way by leveraging this ecosystem to improve health outcomes, achieve and maintain health equity, strengthen communities, enrich the patient and employee experience, accelerate research, promote growth and streamline operations.
With this backdrop, let’s honor our reality. As far along as we are in our data innovation journey, we still have a long, long way to go. More important, we aren’t moving fast enough. The good news is that we can accelerate the journey and thrive over the next decade. Over the next five months, I will introduce a data innovation framework for accelerating your analytics-AI journey. This framework is proven. Leaders in other industries have leveraged some form of this, and some healthcare leaders have adapted it with early success.
This series aims to expand the use of this data innovation framework across healthcare by introducing the idea and how it is already being used, and engaging with the analytics-AI community to make it greater — something we can all use to enrich the lives of our patients, workforce, and communities. Looking forward to the discussion — starting with this article.
So, let’s get started and explore how you can accelerate your data innovation journey. Here are the topics for the upcoming articles. Please let me know if something is missing that you want to see and discuss.
Accelerating your journey requires operating like a startup. We will explore a federated operating model that leverages tools and practices used by startups to start small and scale rapidly — delivering value incrementally and often. This environment also promotes innovation, productivity, and satisfaction. This operating model is absent structures usually found in healthcare to prioritize and coordinate work — steering committees, heavy processes, project managers, or ticketing systems. That said, it introduces strong governance that is deeply integrated into the organization's fabric.
Accelerating your journey requires thinking like an entrepreneur. The right operating model will only succeed with the right mindset. I have experienced great operating models that fail and poorly conceived operating models that have succeeded. Sound familiar. In the end, the defining factor was the people and mindset. If you can get that right, nearly any operating model will work. We will explore the value of an entrepreneurial mindset and how to nurture and shift to this mindset in healthcare organizations that tend to be more traditional and hierarchical. We will also discuss the importance of talent density and how to nurture it.
Accelerating your journey requires an Action Plan. This is the starting point for establishing or reframing the analytics-AI program to accelerate your journey. We’ll share the process for doing just enough planning to get started, and how to evolve that plan over time. We’ll also explore existing maturity models that can be leveraged to establish the current state and track progress on your journey.
Accelerating your journey requires a data and analytics-AI platform. Organizations and operating models are often constrained or liberated by the technology that supports them. We’ll discuss the components of the data and analytics-AI platform, and how it enables the federated operating model and empowers the analytics-AI community.
Accelerating your journey will reshape healthcare. This is where we explore the potential and how to leverage the analytics-AI ecosystem to realize that potential — short and long-term. We’ll discuss how healthcare systems drive value today and explore future trends.
Over the next month, I have suggested reading to get the creative juices flowing. These books and articles provide context for the first article in the series: Accelerating your journey requires thinking like an entrepreneur.
The books I suggest are Competing in the Age of AI, co-authored by Marco Iansiti and Karim R. Lakhani, and Fail Fast, Learn Faster by Randy Bean. These books do a wonderful job describing the impact of this digital operating model. The first book discusses how digital natives (Amazon, Ant Financial, etc.) have leveraged this model to disrupt industries (retail, finance, hospitality, etc.). There are no healthcare examples, as we have only begun that journey. I found reading this book a great creative exercise as I adapted the concepts to healthcare – it forced me to really think outside the box. The second book does a nice job of describing how traditional organizations that survived made the transition. This book is much easier to translate to healthcare but doesn’t get as deep into the digital operating model.
As for articles, I suggest two. The first is a paper published in Learning Health System about the Seattle Children’s Hospital data innovation journey titled “Successful Operational Integration of Healthcare Analytics at Seattle Children's.” This provides a good case study for how the digital operating model can be leveraged in healthcare. The other article was published by McKinsey & Company, “How to Unlock the Full Value of Data? Manage It Like a Product.” A core element of the operating model is shifting from a project management framework to a product management framework. This article does a nice job of introducing this idea and steps to get started. If you like this article, a version goes into more detail in Harvard Business Review.
Let the journey begin.