How the healthcare industry continues to evolve.
I spent considerable time earlier this month listening to presentations on how the healthcare industry is evolving and prioritizing changes. For this post, I’ve decided to focus on the call to keep things as “simple as possible”.
Many panelists spoke about it in different ways whether they talked about looking past the latest shiny thing or the need to be really selective in choosing solutions and partners.
In other words, there are nice to haves and then there are must haves. The healthcare systems are focusing on the must haves and carefully selecting partners to extend and innovate on the services that they provide.
With that said, I would like to offer some ways to think about the state of change.
1/ Frameworks to evaluate the evolution of care.
Early in my career, I attended a Venture Capital conference. One of my most valuable takeaways from that conference was the framework for assessing medical technology.
The framework is similar to Maslow’s Hierarchy of Needs in that you ideally want to reach the top of the hierarchy. The top of the Medical Technology framework is rejuvenation and the bottom is remove. In between is repair and replace.
When thinking about medical services, you can use the framework to understand how advanced the science is in relation to the service. Then engage with physicians in the respective specialties to understand how the science is evolving.
2/ Improving and enhancing health.
New devices, characterized as shiny objects, can improve and enhance our health but the additional 50 years of youthful life will come from advances in medicine.
New devices used to track and evaluate our health and wellbeing are shifting to diagnostics or addressing age related deficits. The clear winners are yet to be determined.
Healthcare systems will be selective when choosing devices for their patient populations. However, consumers will be empowered to manage their health as long as they are willing to pay out-of-pocket.
3/ Repairing the foundation to curb cost.
Healthcare systems are taking one of the most important steps forward in bending the cost curve. They are getting out of the hospitals and into the homes of their patients where they can observe the needs firsthand.
For many people, the foundation of Maslow’s Hierarchy of Needs is cracked and eroding due to the lack of financial resources. Some of the issues can be resolved with the right services and devices whereas others require changes in business practices and policy.
Stakeholder Capitalism solves some of the issues because it curbs the destructive business practices that contribute to societal’s big issues such as wealth inequality and global warming. If you haven’t already done so, it’s worth your time to read Larry Fink’s annual letter to CEOs.
“Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ‘woke.” – Larry Fink, BlackRock CEO
Government policy is needed to address the remaining issues such as the cost of housing.
4/ Supporting the transformation.
Housing is a problem that could hinder the transformation of the healthcare industry. If people don’t have a safe home with internet connectivity, efforts to shift more services to the home and improve population health will be stymied.
Simply building more housing doesn’t work. Building more housing and/or more density reportedly doesn’t solve the issue because the increased value of the land is realized by the developers. The higher land value is passed on to the homeowners or renters through the cost of housing. Many of which are reportedly spending 25-50% of their income on housing. It’s an overallocation of their income.
Policy changes will be controversial because many people are using housing to subsidize their lifestyle or make a living. Given the sensitive nature of the topic, it’s worth your time to watch The Economist’s clip on housing policy.
The clip contrasts current housing policy with the policies of countries with more affordable housing and higher rates of wellbeing.