The Impact Advisor 4Q18

The Impact Advisor 4Q18

The Impact Advisor - Impact Advisors' Quarterly eNewsletter

The Impact Advisor is a digital newsletter focused on what we believe are the most important news topics, trends, and disruptors impacting the healthcare industry. We’re committed to delivering value through this quarterly publication. Please engage with us (by subscribing), so we may continue to share our insights and lessons learned with you.  Subscribe


November 1, 2018

TECH GIANTS PLEDGE TO IGNITE THE FHIR OF INTEROPERABILITY?

In what some observers interpreted as a message to enterprise EHR vendors, Amazon, Google, IBM, Microsoft, Oracle, and Salesforce issued a joint statement pushing for better interoperability in healthcare – especially as it pertains to cloud-based technologies and AI. According to the statement, “open standards, open specifications, and open source tools are essential to facilitate frictionless data exchange.”  Notably, the six tech giants explicitly called for broader support of FHIR (“Fast Healthcare Interoperability Resources”), a highly-publicized interoperability framework from HL7.

Amazon Google IBM Microsoft Oracle and Saleforce logos

Why It Matters:

More than anything, we see this joint statement as the latest reminder that ongoing issues with EHR interoperability continue to hold back innovation and disruption.  Tech giants are aggressively trying to gain more traction in healthcare, but the reality is there is only so much that can be done without secure and reliable access to the valuable data in enterprise EHRs.  The issue of EHR interoperability is a complicated one though, so we don’t think the relative lack of progress is the “fault” of any one group of stakeholders.  Adoption of frameworks like FHIR is certainly part of the solution, but there are also other technical issues to overcome, as well as very real workflow challenges and competitive considerations to address. Bottom line, we believe that success will require significant work and collaboration between EHR vendors and providers – with input from major technology companies, niche healthcare IT vendors, standards organizations, and even federal agencies being important, too.

 

PATIENT-PROVIDER RELATIONSHIP BEATS VIRTUAL CONVENIENCE

An interesting new survey from Rock Health finds that while “digital health solutions promise impactful, even life-altering outcomes for patients, consumers are still transitioning to testing out – and sustainably integrating – these [digital health] solutions into their lives.”  According to Rock Health, although 87% of surveyed consumers adopted at least one “digital health tool” in 2017, “the needle has not moved equally across every subgroup of the population – nor across every type of digital health solution.”

Also worth noting is that the patient-provider relationship appeared to have an impact on telemedicine satisfaction – at least among surveyed consumers.  Specifically, Rock Health found that “respondents who had a prior, in-person visit followed by a telemedicine interaction were significantly more likely to be satisfied with their telemedicine visit.”

Consumer Adoption 2017 Chart

Source: “Healthcare Consumers in a Digital Transition,” Rock Health, August 2018

Consumer Adoption of Telemedicine 2017 Chart

Source: “Healthcare Consumers in a Digital Transition,” Rock Health, August 2018

Why It Matters:

We think this report as a whole shows how the narrative about digital health is starting to change.  Increasingly it is less about whether consumers “have used” a given tool, and more about how digital health tools provide tangible, sustained value – as defined by patients.  We also think the results about telemedicine satisfaction are worth calling out, if only as a good reminder that the patient-provider relationship can be an important advantage that health systems have over many non-traditional competitors.  Look no further than the next story below…

 

VIDEO KILLED THE RADIO STAR… WHAT WILL IT DO TO TRADITIONAL HEALTHCARE PROVIDERS?

Underscoring the increasing pressure that provider organizations are facing from non-traditional competitors, CVS Health announced the launch of MinuteClinic Video Visits. Built on the Teladoc platform, MinuteClinic Video Visits is a mobile-based telemedicine solution for “patients with minor illnesses and injuries, skin conditions and other wellness needs.”  According to the press release, the MinuteClinic Video Visit offering – which costs $59 per visit – is currently available in nine states and Washington DC, and is “expected to be available nationwide, where allowed, by the end of 2018.”

MinuteClinic Video Visits

Screenshots of MinuteClinic Video Visit

Source: CVS Health, 8/8/18

Why It Matters:

This announcement is especially newsworthy given CVS Health is by far the biggest player in the retail clinic space, with more than 1,000 MinuteClinics across the country and 52% of total retail clinic market share.  The announcement is also important, because it underscores that non-traditional competitors are going to keep evolving and trying to expand their reach.  To succeed, providers will need to find innovative ways to differentiate their brand and services, whether it is trying to compete directly with retail clinics on convenience and access, or focusing instead on differentiators such as clinical expertise, depth of services, and the patient-provider relationship.

 

CHART-TOPPING BREACHES AND HEART-STOPPING COSTS

The Ponemon Institute’s annual study on information security finds that for the 8th consecutive year, the costs associated with a data breach in healthcare were higher than any other industry.  In fact, healthcare organizations’ estimated $408 per lost or stolen record was almost three times higher the cross-industry average.  The chart below from the Ponemon Institute and IBM on the average cost per lost or stolen record reflects the direct costs, indirect costs, and opportunity costs (i.e., lost business) associated with a breach.

Per capita data breach cost by industry sector
(measured in U.S. $)

Chart showing cost of healthcare data breach at 3 times higher than industry average

Source: “2018 Cost of a Data Breach Study,” Ponemon Institute & IBM, July 2018
Note: Call-outs added by Impact Advisors

Why It Matters:

The chart above speaks for itself and is yet another reminder of how critically important it is for health delivery organizations to have a robust and proactive information security program.

For a healthcare organization, establishing a strong security posture involves the creation of a clinical and business aligned security strategy – in other words, a strategy that benefits both areas. Executive and senior management and the information security manager must forge a relationship that enables a consistent message with regards to the priority the organization places on protecting valuable information and intellectual property assets. For example, all requests for technology expenditures should include associated security risks and mitigation requirements as part of the cost-benefit analysis. 

To be proactive, performing a security risk analysis will help determine where the challenges lie and what needs to be done to mature the security program. Without a visible level of security monitoring, the implementation of an information security strategy will result in inconsistent compliance  and continue to erode progress while giving false comfort regarding information and asset protection.

Bottom line: No security program is perfect and no security team has all the resources they need.  But if the focus is on business enablement and addressing potential vulnerabilities, risks and threats, the security program will be more successful in minimizing costly breaches.

 

VENTURE CAPITALISTS ❤️ DIGITAL HEALTH

Per Mercom Capital Group, digital health companies raised $4.9 billion in venture funding in the first half of 2018 – an increase of 22% from the $4 billion raised in the first half of 2017.  Could this translate into more opportunities for hospitals and health systems to advance their digital health initiatives?

According to the report from Mercom Capital Group, the top funded areas in the first half of 2018 were Analytics ($911 million) and Telemedicine ($701 million).  The increase in digital health funding through the first six months of this year is particularly notable given the record year that was 2017.

Top-Funded Digital Health / Healthcare IT Categories in 1H 2018
(in millions $)

Chart showing Analytics and Telemedicine as top-funded digital health categories in 2018

Source: Adapted from “1H and Q2 2018 Digital Health Funding and M&A Report,” Mercom Capital Group

Why It Matters:

Venture capital funding always provides an interesting look at which areas investors think represent the biggest opportunity for disruption in healthcare IT.  However, we think the growing increase in VC funding is also important to monitor because it could mean more opportunities for forward-thinking provider organizations to establish partnerships with digital health vendors and gain valuable experience with emerging AI, telehealth, and patient engagement solutions.

 

FREE CONSULTING

Q: With all the hype surrounding the disruptive potential of artificial intelligence in healthcare, what is the single most important thing that providers can be doing right now to prepare for the future?

A: The ability of computers to think for themselves (artificial intelligence) is predicated on the availability of high quality data. To start, healthcare organizations have to be very deliberate about understanding the data they have today and thinking through what they will need in the future, then building a framework for gathering and stewarding that data – essentially creating a data supply chain. But that’s only half of it. They also have to sell the value of that data to their organization, which involves changing mindsets and positioning your leadership team to embrace a data-driven culture. At stake are next generation patient outcomes, organization performance, and new medical discovery. 

(Response provided by Tim Zoph, Executive Strategist & Digital Health Expert at Impact Advisors)