PA Consulting: 3 ways tech can boost US healthcare

14 January 2015

Healthcare as an industry is undergoing rapid, fundamental changes brought about by reform. The Affordable Care Act of 2010 turned the incentive system upside down for healthcare providers, moving them from fee-for-service payments to Accountable Care Models. Providers who previously made money by separately charging for each procedure and bore little financial risk for patient health, now get paid a single bundled amount for providing care for a group of people, with incentives to reduce the total cost of care and share in those savings. Taking a cue from Medicare and Medicaid, private health insurers are increasingly adopting similar payment models.

The challenges today
Doctors and nurses who had the responsibility to help sick people get better, are now expected to keep people healthy. Hospital administrators who were measured on financial metrics like bed utilisation are now expected to keep people out of hospitals. Traditional healthcare involved dealing with sick people who came in to hospitals and clinics. Tomorrow, healthcare will be about proactively engaging with healthy people and encouraging them to adopt behaviors that keep them healthy. This will involve outreach and engagement in entirely new ways that the modern healthcare industry has not done before.

Healthcare - Future
The future of healthcare 
The future of healthcare is outside the boundaries of what our modern healthcare industry knows how to do. Think about it. Many industries are facing disruptive innovation where the future of the industry is completely different from what has been the norm. For example, the PC industry with the rapid shift to tablets, or retail with the increasing move to online channels. However, both of those industries have always been subject to rapid innovation and players have learned to evolve rapidly. The transformation in healthcare is more profound because it is larger in scale and it has a much greater impact on people’s lives.
So what does the future of healthcare involve and how can technology help? There are three key elements that the healthcare industry has to learn to be more efficient and proactive:
Caring for the chronically sick more efficiently with wearables 
The rate of diabetes, heart conditions, obesity and other chronic conditions are projected to continually rise. The chronically ill consume a large proportion of healthcare, therefore any efficiency gained in providing care for them translates into significant savings in the overall health system. A recent study from Robert Wood Johnson University hospital found that 80 percent of all heart-attacks could have been prevented by simple changes in lifestyle. Changes in lifestyle will have a similar positive impact on other chronic conditions as well.


The key challenge is to encourage people to change their lifestyle and then to adhere to those changes. Innovative healthcare providers are looking at technology options such as wearables, connected health devices and connected homes to help manage chronic conditions more efficiently. Other low-tech options include partnering with local fitness centers to offer subsidised fitness programs. The costs for such programs is insignificant when compared to the benefits realised from improved health outcomes and reduced healthcare costs for the patients that participate and adhere to these programs.
Improving the quality of life for the elderly through online community 
The proportion of healthcare spending is disproportionately weighted to the later stages of life. Statistics from CMS show that the 65-plus age group accounts for 34 percent of healthcare spending and they only make up 13 percent of the population. While this is understandable, some of the issues that the elderly face can be attributed to quality of life issues and can be easily resolved in the home.
Falls are one of the largest sources of emergency room admissions for the elderly – the CDC says that one in three people over 65 falls every year leading to 2.4 million emergency room visits and 744,000 hospitalisations. Fall prevention programs are common but often stop at identifying risks. If healthcare providers move beyond risk identification to risk mitigation, for example by partnering with construction contractors to subsidise home improvements and make homes more accessible, they would achieve more significant results and their costs for such subsidies will easily be recovered from reduced hospital and emergency room visits.
Many of the developments in healthcare have focused on enabling the elderly to spend more time in their home. Successful independent living is assisted in many ways by the technologies mentioned elsewhere such as wearables for monitoring falls or medicine adherence. One downside to independent living however is a potential for increased isolation and depression – again however technology can help – for example if healthcare providers were to provide ICT training and devices to enable online socialisation and community building for otherwise homebound individuals.

Big Data techniques
Ensuring that those who are healthy stay healthy using big data 
Coverage for preventative care has been expanded significantly under the Affordable Care Act. However there are significant actions that can be taken beyond the annual checkup to a much more personalised, interactive form of preventative medicine specifically designed to keep an individual healthy. A first challenge is in identifying and reaching out to the healthy population. With a few notable exceptions, the healthcare provider industry has no experience in soliciting customers. Usually sick people just walk in the door. Proactively reaching out to healthy people is a paradigm shift that will take some time.
Fortunately, big data tools and predictive analytics techniques offer an approach to make outreach easier. With the prevalence of large sets of data about individuals in any given area such as socio-economic information, census data on demographics and social media data that provides clues to interests, it is now possible to identify the right people in the population to be targeted, thereby improving the effectiveness of outreach efforts.
Data is also key to personalising interventions and maximising their effectiveness by making them timely. For instance, wearable technology is one of the mechanisms to gather data. In a simple example – a person is much more likely to respond positively to a text message encouraging them to go out for a run if it arrives when they are at home and the weather outside is sunny.

Nilesh Chandra and Nick Mathisen - PA Consulting Group
Revisiting healthcare’s roots through technology 
In some ways many of the ideas above are not new concepts. Rather, they simply reflect a move back to the roots of healthcare. Before the modern era of large hospitals and highly specialised doctors and surgeons, most healthcare was delivered in communities by local physicians. Since these physicians lived among the population, they were able to observe high-risk behaviors and encourage people to manage their health. In our modern, highly specialised style of medicine, many of those personal interactions have been lost. However just as technology has created the separation which has prevented personal care, better use of technology to make individual connections possible will enable us to once again personalise healthcare delivery.

An article from Nilesh Chandra and Nick Mathisen, both healthcare experts at PA Consulting Group. This article was previously posted in Electronic Health Reporter.


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