By Bashir Agboola, VP & CTO, Hospital for Special Surgery
The healthcare sector represents a large part of the global economy and is the fastest-growing sector in many countries. According to the Economist Intelligence Unit, healthcare spending as a percentage of GDP averages 10.3% globally in 2021, with significant variation across economies – 17.5% in North America and 6.5% in the Middle East and Africa. Global health spending is also expected to rise at a 3.9% CAGR between 2020 and 2024. Per capita spending on healthcare also varies widely between countries, with spending expected to increase, albeit unevenly, to $12,703 in the United States and just $37 in Pakistan, by 2024.
Significant problems plague healthcare systems worldwide, and governments and players in the industry struggle to address challenges that cause an ever-rising cost of healthcare without commensurate improvements in access and quality.
A silver lining in the global gloom experienced during the COVID-19 pandemic is the rapid acceleration of certain trends in the healthcare industry. These trends promise stronger growth towards achieving the triple aims of healthcare and help to address the challenges noted above.
Integrating digital modalities offer tremendous potential for cost savings and will provide a holistic view of a consumer’s health.
The “Triple Aim”, a framework developed by the Institute for Healthcare Improvement, is widely recognized as the preeminent framework for achieving healthcare transformation at scale. It refers to the “simultaneous pursuit of improving the patient experience of care, improving the health of populations, and reducing the per capita cost of health care”. The more expansive definition of patient experience in the framework focuses on six dimensions of patient experience as defined by the Institute of Medicine: safe, effective, patient-centered, timely, efficient, and equitable. The triple aim framework has been at the heart of many of the healthcare transformation efforts in the industry. Many organizations model their digital transformation programs loosely around the triple aim.
The changes to care delivery during the COVID-19 pandemic highlighted the acceleration of certain trends that promise faster achievement of the triple aim. These interrelated trends include an increase in digitally-enabled care delivery, surging venture capital investments in digital health, and the entrance of big tech, retail, and telecommunications giants into healthcare services.
Increasing Digitally Enabled Care Delivery
Digital health enables the shift of focus in care from treating illness, to health and well-being, as well as the reallocation of resources along the healthcare value chain from the end of the chain (treatment of disease and aftercare) to the beginning, through increased access to primary care, early diagnosis, and prioritizing wellness and changes in lifestyle. Several technological advances, particularly in AI, have led to a boom in digitally-enabled healthcare tools. These range from the traditional EHR systems to newer technologies that enable virtual care and use data in EHRs or real-time data from consumer devices like smartphones and fitness trackers to track health metrics, predict the onset, progression, or outcome of disease, as well as optimal treatment protocols.
The potential for digital health to reduce the per-capita cost of healthcare is huge. McKinsey analysts estimate that digital health can save healthcare systems 10 to 15% in healthcare spending (depending on the country), and that a quarter trillion dollars of current US healthcare spending for outpatient services could be moved to virtual care.
Digital health allows shifting many forms of care from the high fixed-cost hospital environments to lower-cost outpatient settings (clinics and in-home). An Emergency Room visit is considerably more expensive than a telehealth visit to the same Emergency Room. Efforts to virtualize care at scale include programs like the St. Louis-based Mercy Hospital’s Virtual Care Center, the first fully virtual hospital in the United States, where an array of digital tools are used to remotely monitor and care for patients. These types of digitally-enabled care models can help lower the per-capita cost of healthcare as well as improve patient experience. Also, access to specialties that are not readily available at small or rural hospital settings can be augmented by digitally enabled tools that provide local primary care physicians specialized diagnostic capabilities (e.g., Google’s dermatology app that, in a study, proved more accurate than primary care physicians and nurses in identifying 26 skin conditions).
There are numerous digital apps that promise to improve consumer access to care (e.g., telemedicine apps, apps that use smartphone cameras to measure blood pressure, and smartwatches to measure ECG). Behavioral health apps remain a top category for digital health apps. Integrating digital modalities offer tremendous potential for cost savings and will provide a holistic view of a consumer’s health.
The boom in digital health is also correlated with record-breaking venture capital investments. Over $14B was invested in digital health in 2020, 72% higher than the previous high in 2018. That record fundraise was surpassed by the end of Q2 in 2021, with $15B raised, and 30% of that going towards telehealth. This was accompanied by record M&A activity.
Lastly, the large healthcare sector has proven attractive to big tech companies like Google and Amazon, large retailers like Walmart and Best Buy, and major telecom players like Comcast and Cox Communications. All of them have made significant investments in digital health and are leveraging their expertise in digital technologies, as well as their existing connections with consumers, to offer care solutions. These organizations bring much-needed digital maturity to the healthcare industry and create competitive pressures that force established industry players to digitally reinvent themselves.
Avoiding Digital Pitfalls
To succeed with digital health and avoid creating unintended consequences, organizations can benefit from aligning their programs with the triple aim framework and being proactive in addressing gaps (e.g., the “digital divide” that limits the poor’s access to technology) that could worsen healthcare disparities, as they adopt more digital health solutions. Ethical issues relating to AI need to be addressed. For example, the use of multivariate predictive analysis of EHR data to predict mortality (and thus the prioritization of care) is not without controversy. Also, in 2019, an AI algorithm was used by many providers to predict which patients will need the most care favored white patients over black patients. Notwithstanding all the above, digital health promises to bring us closer to achieving the triple aims of healthcare than we have ever been.