Cheaper, smarter, customer focused
Governments across the Western world are struggling with the health troika. An ageing population, skyrocketing health costs and the medical industry’s refusal to accept reform. Medical cures for acute diseases like infections and trauma have doubled the average life expectancy. Infant mortality has dropped. Plagues no longer ravage populations. Common Western illness like cancer and cardiovascular disease are now linked to the aging process.
At the same time the medical industry has ballooned out, to become the wealthiest, most manipulative and most wasteful sector of western economies. One in six dollars in the American economy now flows through the health industry. Health care is the biggest employer in Australia.
75% of political lobbyists in America represent the health industry. Health pricing structures remain a close secret, preventing patients from shopping around to find cheaper services. Lucrative health contracts are often limited to one or two large companies, locking out cheaper competition. Pharmacutical companies may rebrand older, cheaper out-of-patent drugs into newer, more expensive in-patent drugs, in a process called evergreening. Some health product markups are estimated to be 600% to 1,000%.
The majority of Western governments welfare budget is being consumed by healthcare. The delivery of heath services, stripped of pharmaceutical drugs represent a whopping 72 percent of total health-care expenditures within Europe. In short, hospitals are the biggest cause of health spending.
Medical associations, health related unions and hospitals bureaucracy are notorious for resisting reform. Requests to publish hospital error rates is seen as a ‘doomsday’ style threat, despite the fact that it is the only proven way to bring hospital error rates down. Preventable hospital errors kill and main nine times more people than the Australian national road toll. One in three deaths in America is linked to a medical error.
Putting the breaks on the over servicing train seems impossible. 30% to 40% of health costs in America are estimated to be wasted on fraud, over servicing and unnecessary tests. Patients are easily manipulated into thinking that more is better. The general public can’t access information about Clinical Guidelines and statistics on proven outcomes for various medical treatments. Medicare fraud is rarely pursued in Australia. In America the FBI has a section dedicated to reclaiming the lost millions of dollars.
Linking up medical records with relevant data such as pharmacy information, hospital records and Medicare payments would highlight waste, and identify which health providers offer lower cost, higher quality care. However this kind of data matching is being resisted by conservative medical associations.
The concept of patients as informed consumers is often laughed at by the health industry. This is despite the wide variation in clinical practice that is allowed to exist across public and private hospitals. Out of pocket costs are kept secret until patients try to claim, leaving thousands of people in financial distress, despite paying private insurance. Many Australians drop their insurance altogether after experiencing the high out of pocket costs in private hospitals. Despite a Senate Inquiry into rising out of pocket medical costs in 2014, private health prices are still hidden from patients.
So what are the options?
Startups are a new business model. They are mostly, but not always tech companies. A startup is a company committed to searching for a unique ideas that can generate rapid growth and large profits. Startup culture embraces a casual, Gen X style culture and shows contempt for conservative, bricks and mortar services. The startup philosophy expounds ideas like like ‘disruption innovative’ and ‘move quickly and break things’.
Startups often use integrated technology and smartphone apps to provide their customers with problem solving services. Successful examples are Uber, peer2peer lending and Dropbox. The huge profits being made by a small number of these companies, fuels the startups willingness to tackle some of the biggest problems of the twenty-first century. From banking to hostel and post offices (remember them?), startups have slain overpriced, top heavy, old fashion and user unfriendly industries.
Health startups follow this same formula. Patients ‘pain points’ are analysed, and cheap, flexible solutions are offered. Health startups are marketed directly towards the patient/customer. Patriarchal relationships like doctor knows best are seen as old fashion. Home care and self empowerment are encouraged. Bricks and mortar hospitals are seen as a place of last resort.
Health startups are part of the internet culture of transparency and prices are openly displayed. While some doctors and hospital executives are expressing outrage, the public are starting to buy these products.
Below is just a tiny sample of Australian startups current available or coming soon.
Intensive Care at Home is a new Australian service, based on a European model that has worked successfully for over a decade. It focuses on a small but persistent set of Intensive Care patients who have a chronic respiratory disability requiring a tracheotomy and long term ventilation. This service can take patients home, provide equipment such as portable ventilators and 24-hour critical care trained nurses. It’s founder Patrik Hutzel is an intensive care nurse from Germany and hopes to bring this service to Australians. His company is nationally accredited. The cost? $3,000 per day, less than half the standard $5,000 a day for ICU beds.
Are you looking for quality medical advice that is both anonymous and free? Family Doctor Expert is a patient education website that provides short video explanations of typical general practice conditions. The videos are all taken by a Melbourne general practitioner Dr Grant Blashki. Grant hopes that the medical advice he provides will be helpful to people who are searching the web looking for medical advice. The site covered both physical issues like sexually transmitted diseases and mental issues like depression and anxiety. The price? Free.
Why pay $300 – $500 for a private emergency department only to sit and wait for hours? Hotdoc, GP2U and Attend Anywhere are Australian-based medical teleconferencing services. People can request a doctor on their mobile device or home computer, pay the Medicare gap of $40 for a GP or $200 – $400 for a specialist and get instant medical advice. The cost? The standard Medicare rebate.
Apps, cloud records and algorithms
People’s medical records should be up to date and accurate. ManageBGL was created by a father after his young daughter was diagnosed with type one diabetes. The cloud-based software enables approved people (like families and teachers) to enter blood sugar readings from any web browser, at any time. The data is linked to an algorithm, able to give a predictive analysis of likely times of hypoglycaemia episodes. The cost? Free.
What’s wrong with my heart is an app designed by an Australian Cardiologist. It allows people to track, store and view data related to their cardiac conditions. There is also a set of DVD’s giving information on cardiac disease and current treatments. The cost of the app? $4.99.
Migraine Pal is an app designed to help you track when your migraines occur, what the potential triggers are and how to reduce them. It has been designed by a man who suffered migraines for years and could not find a simple tool to assess his risks. The cost? Free
CareMonkey allows schools, clubs and businesses to keep people’s medical records up to date, synced across different locations, different staff members and different devices. Schools, clubs and businesses only have to collect medical information once. Parents, members and employees only have to fill out information once. A consent for school excursions only has to be filled out once. The cost? $2 per club member per year, $7.5 per school student per year, $30 per employee per year (GST not included in price)
Medical devices and genetic testing
Hearing aids can cost up to $10,000. Many people are putting off buying one due to the cost. Blamey and Saunders Hears can sell hearing aids for lower cost, while offering free on-line hearing assessments and ongoing post purchase support. How do they do it? By cutting out the middleman. Instead of booking in for audiology appointments people can login, have their hearing assessed and if need be, a suitable hearing aid recommended. The hearing aids come with a downloadable app. This syncs to the device and enables it to be adjusted for different environments. The cost? One-third of normal hearing aids.
What does your health future hold for you? What diseases are you at higher risk than average of developing? GMDx can detect mutation signatures with a high degree of accuracy. Their test can help you make more informed choices about lifestyle changes, personalised health monitoring and some medical treatments. Beta testing will commence in August 2015. When approved, standard pathology rebates should apply.
While the percent of the health dollar being used by these startups is tiny, their potential for growth is limitless. Governments and health insurance companies are slowly beginning to realise the potential to save billions of health dollars in unnecessary hospital visits. In America, money from private, public and corporate investors is being poured into health startups and the incubator programs that nurture them.
Back in Australia the health startup movement is rapidly expanding. There are now three large health startups groups in Australian, in Melbourne, Sydney and Brisbane. They have a growing market.
Australian patients are getting sick of the endless hidden charges in private hospitals. A sandwich and a seat in a crowded waiting room is not worth the $500 cash up front currently being charged by some private emergency departments. Public hospitals are collapsing under a tsunami of frail elderly people. The problem is inadequate access to palliative and 24 hour medical care in both the community and nursing homes. While politicians try to raise GST to 15% and mainstream media feeds on the blame game, both patients and startups are starting to find each other and do business.
Until now, the dinosaurs of the health industry have greedily consumed all the resources, while refusing to modernise.
But nature is about all about changing circumstances and the survival of the fittest.
“Adapt” as Darwin once said, “or die”.