Top Down Technology Needs Bottoms Up Demand

The following article, by Rob McCray, President & CEO, WLSA, has been used as the forward to the book, “mHealth Innovation” from HiMSS Books.  Are you attending HiMSS 2014 Annual Conference? Stop by the bookstore in Lobby C and pick up your copy or purchase it online at http://ebooks.himss.org/product/mhealth-innovation.

What is the state of mHealth?  When will this market mature?  How close is the inflection point when the markets for mHealth products and services will deliver measurable returns to patients, consumers, payors and investors?

These questions are uppermost in the minds of entrepreneurs, investors, providers, patients and consumers.   By whatever name[1] it is called, mHealth’s status has moved from “what is it?” to “when will it produce outcomes?”  Expectations are high.  Some may be unattainable.  Technology innovation is not the impediment to meeting expectations.  We have an adoption issue.

Institutions and consumers are slow to adopt tech-enabled solutions for common diseases if changes in workflow or behavior are required.  Moreover, much of the waste in health care spending[2] is accounted as revenue to thousands of organizations whose leadership, employees, owners and policy representatives are incentivized to maintain the status quo insofar as they benefit.

Nonetheless, key elements necessary to the disruption of the health care market and creation of the health market are in place.  Like energy, automobiles, retail and other industries before it, the health care sector will not be able to permanently sustain over-priced products and services for phantom or avoidable demand.  Like those industries, the disruption of health care and creation of the health market will be driven by consumers who are equipped with digital knowledge and tools and motivated by passion, self-interest and economics.  As with other industries, “outsiders” help consumers start the disruption and smart industry insiders will adapt to succeed.  Non-adapters will fail.

What are the elements of connected health care disruption?

• Transparency and knowledge.  It is now government policy to make information about the cost and quality of health care products and services available to the public[3].  Digital technologies and the Internet make it as easy to deliver this information in impactful ways to consumers as it is to deliver any other form of content.
• Economics.  Consumers are increasingly responsible for a rising portion of their own health care costs[4].  Employers cannot sustain the cost of health care for their employees and retirees.  Governments are going broke due to the cost of health care[5].
• Consumer demand.  People want health.  From time to time they need health care (though perhaps not as much as they previously thought).  Consumers hate paying for health care but as they are being forced to accept financial responsibility they gravitate to the resources that are affordable and convenient, features that are rarely associated with government or the health care sector.  A massive shift in popular thinking about health care is underway that will generate the bottoms up consumer-driven demand for institutional and policy changes necessary to enable consumers to get what they want.
• Technology.  Technology innovation, which is a top down process by the smartest among us, is creating the tools that will deliver what consumers want.  It is offering ways to measure outcomes, improve quality, make diagnosis less expensive and personalize therapeutic approaches to increase the likelihood of success.

While the process is slow and the results will not be perfect, I take it as a given that health care will be improved due to the application of these forces.  Waste will be reduced as diagnosis becomes more organized, therapies are more personalized and unnecessary services are avoided.  mHealth will play an important role in this development of a Connected Health Care system as it enables the long-recognized value of making health care more patient centric and continuous.

mHealth is equally important to the much larger opportunity that I envision – the establishment of the Connected Health market.

Connected Health focuses on the goal (health) more than a specific product or service (health care).  It recognizes that the best solution to a health problem may not be more health care.  It empowers individuals and families to take charge of their own health and avoid the need for health care services.  This is the big shift in thinking that drives change.  The addressable market that is related to this shift is the one-half (or more – estimates range to 70%) of health care spending that is caused by lifestyle/behavior.  mHealth tools are key to this shift because they literally connect users to data, knowledge, coaching and all the support services that help people to maintain a healthier lifestyle.

The health care sector will not create the market that reduces the demand for its own products and services.  Hospitals and doctors are focused on treating illness and injury where people are “patients.”  They do not understand “consumers”.

We can look to the history of other business sectors to understand the elements that will drive the creation of a new market and transformation of an old one.  The common elements are knowledge of better products or approaches to meeting a set of needs, technology to deliver them, and the energy of consumer movements that demand access to the new market and pay for them.  This demand in turn fuels investor interest, entrepreneurs and policy changes.

The energy industry is an example.  Prior to the 1970’s U.S. energy policy was driven by a primary goal of simply producing or acquiring more power supply.  Then a shift in our thinking  occurred and energy costs as a percentage of GDP peaked in 1981 at almost 14% of GDP but declined to 6% in 1998 during a long period of continuous growth in the US economy.[6]

What happened to drive this success?  Starting in the 1970’s, economists and environmentalists created a change in our thinking to focus on increasing the output of energy use (HVAC, lighting and productive capacity) rather than just the amount of energy capacity.  This established the conservation and clean-tech sectors and achieved virtually steady state spending (as a percent of GDP) on energy for 40 years while the GDP increased 400%.

Compare this success with health care spending which as a percentage of GDP doubled over this period  while  chronic disease more than doubled[7] and the percentage of the population that is uninsured grew by approximately 60%[8]

The auto industry is another example of success.  Compared to those built and sold in the 1970’s, cars today are safer, better equipped, more fuel efficient, cleaner and more fun to drive.  At the same time, they are cheaper in real dollar terms ( compare a 1970 Volkswagen beetle with a Toyota Prius).  In the 1970’s the competition from better and cheaper foreign vehicles began the destruction of the U.S. auto industry.  Citizen movements (Ralph Nader for safety, MADD for impaired driving) accelerated these market forces and drove the adoption of key policy changes and expectations.  Industry was pleased to respond to these developments with new products and services and ultimately the U.S. auto sector joined in, completing its “creative destruction.”

Knowledge of a better way to achieve a desired goal goal fueled by the self-interest and passion of consumers lead to the adoption of the laws, financing and regulatory features that enabled our progress in energy and automobiles (and entertainment, consumer electronics, retailing, publishing and a host of other sectors).

However, skeptics will suggest that these forces cannot work in health care where the expertise is so unbalanced and because of the weak results of programs for healthy behavior change.  Prevention and wellness programs historically underperform against expectations and this has lead to a common belief that we should not expect substantial reductions in health care demand from favorable population-level changes in behavior.  This is short sighted.  We are already benefiting from such changes in population behavior.

Consider driving safety.  The technology of cars makes them more likely to avoid an accident (ABS brakes) and safer in a crash (airbags and rigid structures).  However, two major changes in public behavior have also contributed to the decreased rate of fatal traffic accidents – (1) seat belt usage increased from zero to 75% today and (2) drunk driving is no longer socially acceptable[9].

Another example involves smoking and lung cancer.  The U.S. smoking rate at the beginning of the 1970’s was over 40%.  Today it is less than 20%.[10]  This smoking reduction has lead to a 40% decrease in lung cancer rates.[11]  That is, 40% of the demand for health care related to lung cancer has been eliminated through changes in behavior.  This was a consumer driven achievement supported by policy (place restrictions), taxes (applied to ad campaigns and health care) and culture (lead by the entertainment industry, smoking became unwelcome and uncool in many homes).

All the same elements are at play in Connected Health empowered by mHealth technologies.  Multiple websites are delivering information about the quality and cost of health care to consumers.[12]  Early adopters of medical and consumer technologies that enable personal measurement of activity, vital signs and other data that may be relevant to health (the “quantified self” movement) are demanding more personal control over their health and a more personalized health care system.  Thought leaders such as Dr. Eric Topol and Dr. Donald Berwick are articulating the insider’s case for the transformation of health care.

The beginnings of smart consumer spending can be seen in the “engaged health consumer” who is willing to spend her own money on products and services that she believes will lead to a more healthful life.  The supplement industry and brands such as Whole Foods, Lulemon, Garmin and Nike are winners in this market.   For these people, health is personal, it is  “cool” to be concerned about personal health.  They may be strong influencers within their communities.  An mHealth device has been anointed by an arbiter of fashion as “A list” technology for fashion insiders.[13]  In a recently reported study, chain restaurants that reduced their calorie counts improved same store sales by 5% while chains that did not do so suffered declines of 5%.[14]

The promise of mHealth is that it will enable a shift in our culture that reverses the growth of obesity, diabetes, heart disease and other behavior-driven chronic diseases.  It has a critical role to serve in the education and empowerment of consumers to become engaged in their own health and to empower them to take greater control of their own health care.

mHealth Innovation: Dispatches from the Frontlines of Digital Health delivers a comprehensive overview of the landscape of relevant issues including innovation, adoption, outcomes and regulation.  Editors Rick Krohn and David Metcalf have assembled a diverse group of authors from among the creators of the new and better health world that we collectively envision.  I have personally worked with many of them.  These are important voices to which the reader should listen.

Rob McCray

San Diego

[1] Note on terminology.  Multiple terms are used to describe the influence of technology on healthcare.  Commonly used adjectives include “mobile” or “m,” “digital”, “wireless”  and “electronic.”  The author prefers “connected health” as the term, which best describes the source of value derived from the convergence of technology and healthcare, including mobile communications infrastructure, digitized information, big data, cloud-based systems and behavioral economics.  It is also relevant to the human dimension of the matter.  Technology is an enabler; good health is the goal.