Innovating in a Crowded Marketplace for Healthcare Delivery

Posted by | May 1, 2017

Every patient desires high-quality care at a cost-efficient price.  Studies have shown that these two characteristics are not always in conflict, as less-expensive sites may deliver similar quality care as more expensive sites.  But patients, and thus their providers, tend to prioritize quality over cost or vice versa. This is beginning to lead to a bifurcation among healthcare providers – those offering cost-effective care and easy access to treatment, and those offering cutting-edge, research-based medicine. Sustained merger activity and the constriction of operating budgets are exacerbating this divide.

Put another way, on one end, large academic medical centers, practicing cutting-edge medicine, can attract prestigious doctors and a bevy of resources. On the other, the democratization of healthcare at retail clinics and urgent care centers provides access to care on the nearest street corner.

Although academic medical centers account for 6% of all hospitals, they provide 25% of U.S. clinical care and provide the majority of specialized services, such as comprehensive cancer care.[1]  At the same time, Wal-Mart and Walgreens are becoming a reality for occasional medical care, as the number of retail health clinics is expected to eclipse 2,800 this year.[2]

So-called “middle of the road” providers – community health systems and private practices – are being squeezed by these trends.  

Fortunately, this competitive environment has brought more innovators to the industry. Patient-centric technologies, offering convenience alongside improved outcomes, can help community health systems and private practices gain an edge in the battle to retain existing patients and attract new ones.

At Safeguard, we are keen on emerging solutions that increase the competitiveness of healthcare providers, from large systems to individual practices. Here are a few representative examples from two of our partner companies and one other innovative company in the market:

Bring precision medicine to community health systems

An increasing number of health systems want to offer precision medicine programs, often starting in oncology.  In particular, community health systems see such a program as a way to keep oncology patients within their system rather than losing a patient to an academic medical center.  Palo Alto-based Syapse is one of the leading companies bringing precision medicine to community health systems. Syapse’s software, which has attracted the attention of leading community health systems like Intermountain Healthcare and Providence St. Joseph Health, enhances an oncologist’s workflow, supports decision-making, and tracks outcomes by bringing together all of the relevant clinical and molecular data into a single platform. Starting with the oncology precision network (OPeN), Syapse facilitates networks of health systems to support data-sharing across providers. This brings the power of the network to individual providers, which features a more robust data-set than nearly any single academic medical center. Syapse is also partnering with other stakeholders in the precision medicine value chain to provide increased value to community health systems and their patients.

Provide care at a patient’s fingertips

Zipnosis, a Minneapolis-based telehealth company, is minimizing the barriers to healthcare with an easy-to-use alternative to in-person doctor’s visits. Zipnosis can leverage its technology to enable health systems to provide care at a distance even closer than a patient’s nearest retail clinic or urgent care center. And while the quality of care at these locations may be unproven, Zipnosis offers care delivered by clinicians from a patient’s local health system.  Zipnosis allows health systems to “see” new and existing patients, all from the convenience of a patient and providers’ smartphone or tablet. Patients are typically charged a small fee, often less than a typical co-payment, for the service and receive treatment instructions and, when appropriate, a prescription without requiring travel or the hassle of a waiting room for an in-person visit with a doctor. The service also allows health systems to prioritize higher-acuity patients for in-person care while increasing the number of patients served each day. 

Offer fixed-price care for surgical procedures

Strong inflation in healthcare prices and the rise of high-deductible health plans means that employers and their employees are bearing more cost for their care than ever before. Compounding the problem, healthcare quality data is either unavailable or, when available, nearly impossible to decode, and often completely uncorrelated with price. Some employers have begun sending employees to a small number of academic medical centers for certain procedures at negotiated fixed prices. But this is a logistical hassle and makes follow-up care difficult.[3] Carrum Health brings the fixed-price “center of excellence” model for surgical procedures to a regional level. Partnering with Carrum and the company’s network of employers, community health systems distinguish themselves as leading providers of procedures like joint replacement and coronary artery bypass graft. Patients are assured of convenient, high-quality care, with no change in price even in complex cases. Employers often offer this benefit to employees at low/no co-pay, thereby aligning incentives to deliver care at these local health systems.

We see similar advantages for these innovative solutions. They increase revenue for providers while reducing the overall cost of care to the healthcare ecosystem. They improve provider workflow while also delivering a better experience to patients.  And the results are equal if not better outcomes to the current standard of care.  In other words, these companies all serve what is referred to as the “Quadruple Aim” of healthcare: higher quality, lower cost, better patient experience, and better provider experience.

We encourage providers, patients, and investors to look more closely at these technologies.  We believe that these solutions are critical pieces to help providers differentiate themselves in an increasingly competitive market. 

 

[1] The Future of Academic Medical Centers, (2013)

[2] US Retail Health Clinics Expected to Double As Focus Shifts to Clinical, Including EHRs, (2015)

[3] Cheaper Surgery Sends Lowe’s Flying to Cleveland Clinic, (2014)

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